Medsider: Learn from MedTech and HealthTech Experts

The Importance of Having Investors as Customers: Interview with Eric Stone, CEO of Velano Vascular

March 16, 2017 Scott Nelson
Medsider: Learn from MedTech and HealthTech Experts
The Importance of Having Investors as Customers: Interview with Eric Stone, CEO of Velano Vascular
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Medsider: Learn from MedTech and HealthTech Experts
The Importance of Having Investors as Customers: Interview with Eric Stone, CEO of Velano Vascular
Mar 16, 2017
Scott Nelson

Eric Stone cofounded Velano Vascular with Dr. Pitou Devgon, an internal medicine physician. Velano’s first device, PIVO, enables needle-free blood draws directly from peripheral IV catheters. Velano Vascular is backed by a series of well-respected investment firms, leading U.S. health systems, and dozens of health industry veterans. Before starting Velano Vascular, Stone most recently served...[read more]

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Show Notes Transcript

Eric Stone cofounded Velano Vascular with Dr. Pitou Devgon, an internal medicine physician. Velano’s first device, PIVO, enables needle-free blood draws directly from peripheral IV catheters. Velano Vascular is backed by a series of well-respected investment firms, leading U.S. health systems, and dozens of health industry veterans. Before starting Velano Vascular, Stone most recently served...[read more]

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Scott Nelson:   0:08
Welcome to Med Cider, where you can learn from experienced medical device and med tech experts through uncut and unedited interviews. Now here's your host, Scott Nelson. Hey there, ladies and gents, welcome to another edition of Med cider Radio brought you from the W. C. G studios here in Minneapolis. If you're new to the program Med side of radios, where we learn from med, tech and other health care thought leaders through uncut and unedited interviews just a few quick messages before we get started. First, I sent out a free email newsletter about once per month, highlighting my favorite med tech and or health care related stories that once that I personally get a lot about you from, I don't send the newsletter out very often. But when I do, I really try to make sure it's valuable. So if you're interested, head on over to met cider dot com and enter your email address as a bonus, I'll send you a free e book on the strategies I personally used to make connections at conferences. I think you'll find the book pretty useful. And while you're online, head on over to iTunes and radar show a five star rating would really help us out. Second, for those of you that subscribe to the email newsletter, you're probably aware of this. But I recently joined the MedTech practice of W. C. G, a fully integrated marketing agency. So if you're looking for some marketing help, there's a few reasons you should consider our firm first were entirely focused on Med tech. Second, our wheelhouse is analytics, which drives all of our recommendations. And third, we're fully integrated, which means you don't have to source capabilities from another shop. So if you have a project in mind that you'd like to discuss, hit me up at Scott at med cider dot com again that Scott at med cider dot com. And lastly, speaking of marketing to generate more awareness for some of these interviews, I've recently started using a pretty unique system called pan optic stacking from the team over. Reach Fire digital. I know Pan optic stacking. It sounds sophisticated, right? Well, to be honest, it sort of is. But let me try and explain. First, they validated some of my messaging in real time and developed an automated customer pathway based on my audience. Your bedside then utilizing something called eco marketing. They're using behavioral targeting to move that same audience through a customized online journey. After executing my personalized pan optics back, I'm already seeing a really nice impact, and I'll share some of those results in future episodes. So if you're interested in learning more about the system, the team over reach fire. Digital has agreed to build a custom pan optic stacking blueprint for the 1st 15 men cider listeners that respond to this message. They normally charge 2500 bucks to build one blueprint, but because they're big fans of med cider, they're giving it to our 1st 15 listeners for free. So go to reach fire. Digital dot com Ford slash med cider again us. Reach fire digital dot com Ford Flash Med cider Grab that blueprint okay onto the upset. On today's program, we have Eric Stone, who co founded a lot of vascular with Dr P. Choo Debt Gone, an internal medicine physician. Alana's first device, Pivo, enables needle free blood draws directly from peripheral I V catheters. Villano Vascular is backed by a series of well respected investment firms leading US health systems and dozens of health industry veterans. People are starting Delano Vascular. Eric most recently served as V. P. Of sales and marketing for molecular health. Prior to that, he helped launched the world's first bio absorbable stent for Abbott while working out of their California and Belgium offices. He was also a founding member of Model INS Life Sciences Division and began his career in software marketing with Trilogy. Eric also holds advanced degrees in business administration and education from both the Wharton School and Harvard University here and a B A degree in English in psychology from the University of Pennsylvania. Here are a few of the things we're gonna learn in this interview with Ericsson why Eric has been referred to as the Steve Jobs of Drawing Blood. What brought Erik into health care after starting his career in software marketing? Why he pursued both an MBA and masters in education and how both degrees have benefited him both personally and professionally. The biggest lessons Eric learned while launching the first bio absorbable stent with Abbott how Eric first connected with Dr Dad Gone and the origin story for the Pivo device, the four milestones Erica's team accomplished in taking the PVA device, from initial idea to commercial prototype Eriks approach to garnering financial support from health care systems and raising money for Milano Vascular. And how that PIVO device fits into the value based health care equation. And, lastly, Eric's favorite business book, this CEO he admires most and what he tell his 25 year old self. So without further ado, let's get to the conversation with Eric Stone. Eric, welcome to the Med cider program. Appreciate you coming on.

Eric Stone:   4:25
Thank you for having me, Scott.

Scott Nelson:   4:27
All right, so let's dig right in. You know, you co founded your current company, Villano Vascular, back in the early 2012. So just I guess that's been about four years now. Go. Maybe what, Maybe a little bit over four years as we're recording this in late 2016. But you've won. You and your team have kind of racked up the rewards. Are the awards I should say, You know, from the Frost and Sullivan 2016 New Product Innovation Award. I think in a it was a Forbes piece. I can't remember exactly the publication you referred to as the Steve Jobs of Drawing Blood and so those are some cool sort of descriptions as well as awards. And so you know, when you think about your you know your time there over the last 4.5 years or so and what you and your team have accomplished what what sort of immediately comes to mind?

Eric Stone:   5:11
Well, it's undoubtedly been a journey, and I would consider it a journey of exceptional people and this overarching commitment to a vision that is human centered at its core. The company was started by a patient and a physician, and it was based on ah, question asked by a patient to our physician inventor. And since the early days, we've remained true to the unwavering effort to do the right thing and to do the right thing with clinical integrity and with cutting edge technical innovation and through the lens of human centered design. And I think a lot of times when we talk about human centered design in health care, we talk about patients, which is an important in the essential stakeholder. But from our perspective, it's both the patients and the practitioners whose interest we have in mind with all the technologies that we are and will continue to develop. I like in the folks that we work with to an extended family of like minded and open minded hospital partners and clinical collaborators. To our investors are advisors are employees. I see and view every one of those individuals and institutions as taking a bit of a risk personally, with respect to the role in their organization, in association with Delano, by respectfully challenging the status quo of, ah, extremely entrenched practice that practice where first technology is related to drawing blood from hospital in patients and you hear jokes of references of blood drawing, going back, centuries toe, blood letting. And while it seems comical in nature and easy to dismiss, if you live the life of a patient who's in the hospital repeatedly during the course of any given short period of time in the hospital for multiple days and nights 345 10 2030 days and blood draw is a fundamental aspect of clinical care. 70% of decisions are based on the data that comes from this blood draw, yet they're done at 4 a.m. and 5 a.m. When we're supposed to be sleeping and US healing And so what we've done with our technologies and our company is to respectfully challenge that status quo for how hospitals air drawing blood. Today, my team has taken very limited resource, is financial and human and otherwise, and thoughtfully deployed them. You asked about what we've accomplished, probably deployed them over the course of the last five years or so towards receiving to FDA clearances a European approval or C mark. They conducted tens of thousands of blood draws on hospital patients with our first marketed product, TiVo, and we've done this with some of the leading hospitals in the United States and soon to be overseas. We've identified a whole host of opportunities for enhancement and innovation in the hospital, all patient centered and practitioner centered in nature and all related to the vascular access domain, which I would posit has been a pretty underappreciated space, which is a bit ironic because our patients are becoming increasingly diva in nature, if you will a

Scott Nelson:   8:40
common reference

Eric Stone:   8:41
but not meant to be difficult. Venus access if you're familiar

Scott Nelson:   8:45
that we're

Eric Stone:   8:45
talking about obese patients were talking about the growing elderly population. We're talking about patients like myself that suffer from chronic illness and experience. Repeat hospitalizations were talking about diabetic population. These were all the fastest growing in patients in the hospital, estimated 30% of hospital in patients at any given time. And so while we've brought this initial technology to market, I do firmly feel that we've done it consistently and without falter, putting people first and our small company that attempting to make a significant difference has followed core values around impact of integrity and making a difference. Being passionate about our work and accountable while being compassionate and doing everything that we do it. Tenacity. So I looked back over the last five years, and at times it feels like it's been a 20 year journey, and at times it feel it seems like it happened in the blink of an eye. But I'm very,

Scott Nelson:   9:50
very proud

Eric Stone:   9:51
of everything. We've accomplished

Scott Nelson:   9:52
that on that. No, speaking of this people device, you mentioned that, you know, blood drying has has been sort of it. There hasn't been a lot of emphasis from innovation standpoint over, you know, I was going to say over the last 2030 years, but it dates back much, much longer than that. So can you can you could sort of help us better understand how your device is different than the way blood is currently drawn for patients in a hospital setting. And then and then once we have a better understanding of how that works well, we'll go back in time and let her learn a little bit more about your background. And then how have Llano Vascular came to be?

Eric Stone:   10:23
So we're talking about arguably the most common invasive medical procedure that we do in a hospital every day, the act of drawing blood yet at least from our experience over the last five years. In my experience of the patients over the last 25 years, it's overwhelmingly underappreciated by hospital administration and even in many respects by clinicians, your practitioners. So a given hospital could conduct hundreds of thousands of inpatient blood draws in a given year. Some of our larger hospital partners that have multiple hospitals in their network conduct upwards of one million inpatient blood draws in a calendar year, So take a step back for a second and absent taking vital signs, what else do you imagine? Ah hospital is doing a 1,000,000 times in a year.

Scott Nelson:   11:13
It's a really good point.

Eric Stone:   11:15
It's pretty astounding,

Scott Nelson:   11:16
Yeah, but the amount of

Eric Stone:   11:17
resource that has gone to innovation to your point. It's been 2030 years since we've had very modest or moderate innovation in the space. It's negligible. And so this is where we feel We've developed a really exciting opportunity that toe have an impact around the world. We're probably talking about well north of a 1,000,000,000 inpatient blood drugs every year in the United States. Grief for 500 million alone, and you can get to those numbers from a very simple bottoms up, a perspective of understanding how many inpatient stays There are a year, the average length of stay. We're talking about 4.8 days times 36 38 million stays and estimate how many blood draws patients are having on the given day. One blood drawn to blood draws. If we're in a critical care setting 345 blood drugs, it's an astounding number. So how do we do what we do? How do we draw blood without sticking patients repeatedly with needles? And it comes down to a technology that has been around for quite some time that nearly every hospital inpatient has in their hands or their arm called a peripheral i V catheter. These air short roughly one inch pieces of plastic. They're placed into the body over a needle upon admission to the hospital or entrance to the emergency room. And these short purple ivy catheters, replaced primarily for introduction of fluid into the body to infuse drugs. Nutrients sailing. The clinicians refer to this as access, and it's used in emergency situations for rapid infusion of fluids. But it's also used for daily antibiotics, failing introduction, whatever it may be, those Ivy catheters are extremely effective for infusion of fluid. Their primary purpose. We first place them. It's arguable. You may be able to draw blood directly off of them, but most hospitals have policy not to do that, because those ivy's is their integrity from at for aspiration of non human lives, lab quality samples very, very quickly, and so they become one way conduit to the vessel. But if you try to pull blood back off of them, it's either difficult to get blood back. Or if a practitioner is able to get blood back. Often times it symbolized the red blood cells are thorn or sheared, and the laboratory will then kick the sample back to the floor or to the e. R and ask the practitioner to redraw. You can imagine that it's difficult for the practitioner. It's difficult for the patient. It's a delay. Delays care to waste treatment delays, decision making, etcetera. So take that short purple ivy catheter that most in patients have in their body and utilize our single use disposable. A device called TiVo, which very simply and elegantly, is a tube in a tube concept, so our device attaches to the peripheral I V catheter. On the back of it, you attach either and evacuated tube holder or a syringe, depending on what your preferred mechanism is for drawing blood syringes. They're more commonly used in pediatrics in kids evacuated two boulders more commonly in adults and advance our device, pushing a very small saw flexible tube through the I V catheter. As that tube is going through the I V catheter, it's overcoming the reasons why IVF failed to aspirated non Himalayas lab samples back over time. The first is Qingqing, or collapse of the ivy. When you sucked back and our tube goes through and on kinks or un collapses the ivy. The second is that you'll get debris at the end of your I V Castor's, particularly if they're not frequently and well maintained by flushing with saline. And so our tube goes past the end of the I P past any debris into the vein or the vessel. And the third is you may be up against the vein wall or the vessel wall or up against some type of anatomical structure that precludes you from putting blood back. Well, our device can be adjusted, pushed forward, pulled back, turn left, turn right. So that if you are a budding a valve, a vain well, what have you You can get Flo

Scott Nelson:   15:25
Got any security? Go ahead. Sorry.

Eric Stone:   15:29
You said that the practitioner very simply draws the number of tubes that he or she requires for that blood draw and then retracts our device back. Unattached is it flushes the line and moves on to going about their day.

Scott Nelson:   15:43
It seems I mean, some of the statue you mentioned earlier just about the incidents, right? The number of times blood is drawn in a hospital setting and sort of the problematic nature of traditional blood drying. I think everyone knows either themselves have experienced or know someone that you know ends up with, you know, bruises all over there on the medial side of their elbow or some other form or something like that from Brad. Bad attempts at blood drawing and then hearing you describe you devices in the simplicity of it. It just kind of forced you to ask the question, Why? Why's that? Why's it this done before? So and we'll certainly get to that. We'll try to answer that question, you know, and learning a little bit more about how you went from idea, and you and your co founders were from idea to prototype toe commercialization. But let's use this time to actually go back, go back and learn a little bit more about your background. And what led you up to starting Delano Vascular when you graduated from from you pin in the late nineties and then spend a bit of time initially at Trilogy and then at model. And so what? What brought you Eric into the healthcare space originally,

Eric Stone:   16:42
So in part it was a bit by chance, and I think and believe you got it was, in part by my personal experiences. The crone's patient and diagnosed with this chronic illness inflammatory bowel disease 25 years ago is a teenager. And so, in my very first roll out of school, I was interested in marketing. And there was a large, privately held enterprise software company down in Austin, Texas, cultural aji that recruited on campus at my university and I was very much enamored by the company and its approach to marketing and very fortunate. Two. Join the organization moved down to Austin, Texas, where I knew almost no one except for a few classmates of mine from school, and to serve in an extremely entrepreneurial culture. In a particularly intra prin aerial role, where I learned a great deal about marketing and a great deal about building business, I would I would argue that some of the brightest and hardest working folks I've ever encountered as well as some of the most innovative professionals we're at Trilogy, and it was an exciting time. It was the late nineties. It was the tech boom. There was unfettered opportunity, unfettered innovation, and I was in Austin, Texas. I think They called it Silicon Hills, the time surrounded by folks that had big aspirations for building businesses and for impact. And so during the course of that time, I was fortunate enough to work for the leadership team down there on a number of initiatives and recognized that I truly was at heart a marketer,

Scott Nelson:   18:23
a colleague

Eric Stone:   18:23
of mine from Trilogy left and moved to the Bay Area to go work for an XL, K K are funded company called Model and and I followed him out to the Bay Area upon introduction and phenomenal exciting interview process with the model and team not knowing much about the platform technology space in the platform, technologies that they were developing wanted to be in the berry and part for personal reasons and was quite enamored with the leadership team At Model and serial successful entrepreneurs and exceptional backers with Excel Partners and Colbert Crawford's Rabbit KK are Kohlberg Kravis Roberts getting together and during the course of my years with Model N was really able to learn from a group, but that I would call true rock stars. It's now ah public company, and they have done exceptional work for some of the largest medical device and pharmaceutical companies out there around the world. At the time that I joined, the company was remaking itself. It was platform technology company and they were providing solutions in the construction industry and the beef, pork and poultry industry two spaces that I knew nothing about and, to be honest, wasn't particularly interested in working in and was fortunate enough to be placed on a project by our CEO to assess the life sciences market, life sciences market. And actually, I think back the utilities market. Those were the two spaces that I was charged with putting together a assessment of the market opportunity over a few months. Period. A member of eventually a Skunk Works team coming out of that market assessment of 10 to 12 industries that was designated to develop a life sciences business have specifically software applications for life sciences companies. That was really all that those of us on the team knew of our charge and we were set for us with time and resource is to conquer. And so I served as the head of marketing and business development it alongside our head of products and our head of sales and our general manager for the business. The four of us went out, then built aspirational solutions and sold to our very first customer division of Johnson and Johnson called Ortho Clinical Diagnostics. During the course of my years with model end, I had the opportunity to meet exceptional folks from companies like Boston Scientific and Johnson and Johnson and Medtronic to structure very important partnerships for the business with Accenture and Deloitte Consulting and other System integrator firms. And so now I look back 15 years later and a number of my early investors in Milano, We're colleagues and Model End

Scott Nelson:   21:16
and

Eric Stone:   21:17
Deloitte and our customers, the large device companies and its nose relationships that have helped me to learn and grow and grow my interest in the space over the course of the last decade and 1/2. So I somewhat fell into the space with soft, the intersection of software and health care.

Scott Nelson:   21:36
I've

Eric Stone:   21:36
always been passionate and motivated to find a way to give back and to participate in health care as a patient, and you feel really fortunate how it all worked out.

Scott Nelson:   21:46
Unfortunately, I've had a chance to interview a lot of Ah, med Tech and healthcare leaders like yourself. Eric and a lot of them have similar stories where early on in their career, based on sort of the projects where the company's there at they were able to forge relationships with other folks and which eventually, you know, maybe it didn't happen immediately. But 8 10 12 years down the road. You know, some of those same people are either helping them, you know, found other companies or investing in early stage early stage. Start up so interesting to hear that you've had similar experiences and I guess it, you know, the old adage of, you know, don't burn Bridges certainly proves itself true. Your scenarios well,

Eric Stone:   22:20
100%. I do believe that change and impact and innovation that it's really all on people

Scott Nelson:   22:28
and

Eric Stone:   22:29
so we wouldn't be able to do what we're doing without those folks. That took a risk and a bet on me 15 plus years ago, and you're doing it again today. It's really a pretty exciting opportunity to show those individuals who you look up to that you know what? I too, am ableto achieve something that's significant, just as you have in some respects following following your path.

Scott Nelson:   22:54
That's great. Let's I want to ask you a few questions about your time in Abbott Vascular because you were involved in a very interesting product launch with their bio absorbable coronary stent, which actually just recently launched here in the here in the United States. But before we go there, you've got both your MBA from Wharton as well as your master's in education from Harvard. And, you know, I think most people would understand the MBA from Wharton, But the master's in education. That's definitely an interesting sort of stat. You know, interesting finding or fact. You know, when someone looks at, it, looks in your background. So So why the decision to pursue both degrees? Help us understand that your your thought process from around both.

Eric Stone:   23:31
Well, my path has been anything but

Scott Nelson:   23:33
straight, and this is

Eric Stone:   23:34
yet another fork in the road that happened in part by chance and by intellectual curiosity. In some respects, you go back to my first rule out of school at Trilogy, when I worked for the CEO of the company and he had a professional coach, University of Michigan professor named Nolte, she knowl was the coach to a number of very large company, well known CEOs. And in working on a project with Noel, I became enamored with the world of organizational psychology, intersection of business and psychology, all coming back to human behavior. And so I very much considered getting a PhD or doctorate in organizational paper organizational psychology. And I remember a phone conversation with no when I was at model and where he suggested to me before you jump into 56 years of academic research, working in a silo and laborious process of fighting for tenure on a business school or university faculty. Maybe you should try this out from the perspective of War Masters and Harvard, which is unique in that it has to Human development departments and its human development department in the School of Education, dates back to when Erick Erickson taught there on subsequently has been staffed by just unbelievable experts in the domain of psychology. In the development the program enabled made a fashion my own master's program in human development in leadership studies. So I certainly learned about the education domain from my classmates. I was actually studying human development in leadership in the Education School in the business school in the Kennedy School of Government and the School of Arson Sciences. And from that experience, I was exposed to really unique approaches to thinking about building and sustaining organizations. I contemplated the doctorate, applied, deferred and then recognized that you know what? I would not make a very good academic and probably would be extremely ineffective. It even making my way through the doctor program. So with that said professionally, that experience those studies, those professors helped provide me with some of the frameworks for critical thinking as the business and the business steeped in attempting to effect positive change that I used today I looked to my master's degree in education, and my MBA is kind of building blocks upon which we're working, this melting pot of functions ranging from finance to marketing operations, to developing products to selling and, of course, the human behavior side of it. Everything really does come back to people.

Scott Nelson:   26:25
Isn't

Eric Stone:   26:25
the members, customers, partners, investors, And so some of the perspective from my time at Harvard has very much follow through to what what we do today and even even even my experience in my MBA program very much has carried force a lot of the value that we're creating a block today

Scott Nelson:   26:49
and that led up to your time it at Abbott Vascular. And I mentioned that you were I think you spent about 45 years there from 2011 about 2000 2007 to about 2011. But but we're involved in their in their launch of the violence. Horrible. You know, corner extent would, I would have to imagine was it was a pretty cool project to work on. So, you know, when you when you think about your time there at Abbott, you know, this is post your MBA from Wharton. You recall a couple challenges, or even, like some of the some of the biggest lessons that you learned during your you know, your 45 years an Abbott, which eventually led let up to, ah, the eventual formation of Lana.

Eric Stone:   27:26
Well, from a challenge perspective, definitely working on the bios, aural scaffold or sent program presented many of them. It presented opportunities and a riel air of excitement. At the same time. There was a lot of skepticism around. Is this product really differentiated? Is this product truly valuable and necessary, And is there a true market need? I think that the verdict is still out on that product portfolio, but it very much caused us on a daily basis. To think through our commercialization, planning and strategy spent a lot of time during the course of that time in Europe, with the teams helping the local market or geography teams think through. How would they go about selling this? How would they go about selling it in some respects against the company's own drug eluting stent pipeline or

Scott Nelson:   28:22
owner

Eric Stone:   28:23
pipeline But portfolio from ah, lessons perspectives Probably the most eye opening experience with living overseas with Abbott in Europe for a year and leading along with our head of international marketing, our next generation drug eluting stent product launch and a thick during the course of those 12 months, I traveled to Asia probably 10 times and traveled across Europe just about every week that I was not in the U. S. Or in Asia. And it was remarkable experience in understanding that not only is every country around the world quite unique and how they deliver health care, but even to the level of the hospital. There was a whole host of distinctions. One size definitely does not fit all yet what you're launching, a product building, a large business building, a small business that aspires to be a large business. You don't have the resources to customize your offering to every country and every hospital and go to those this day I and my colleagues here and that other companies from involved struggle with. How do you bring that level of personalization and customization to an extremely fragmented approach to delivering healthcare?

Scott Nelson:   29:45
Question. I think a lot of a lot of folks havin one that probably doesn't have ah, no definitive answer for anyone but you. Maybe Maybe the lesson learned is just to be cognizant of that. You know, as you know, whether you're in the prototyping stage or planning for eventual commercialization is that keeping in mind that each each country does have truly it's its own unique needs and challenges, you know, within their healthcare ecosystem. So your point about the absorb stent, the bio absorbable scaffolding, and it has been interesting to see that that launch here, at least in the US, and that the concept is definitely very disruptive in nature specific to that arena. But yet the clinical data hasn't necessarily followed. Hasn't necessarily. Then then there t to justify the use of that stand. It seems like anyway, based on my suntan, my my early analysis, but let's transition upto Delano vascular and learn a little bit more about the people. Oh, device. You've spent some time at molecular health, and then you had gotten to know, Doctor, I'm gonna not pronounce his name correctly correctly. Potato gun Pete, Pete, you have done is how is how it's pronounced. Exactly. Got how did you two How did you connect and take us back to that time when you know, before that when the pivo device was was really just maybe an idea on a napkin.

Eric Stone:   30:58
So I left Abbott then and I left Abbott with the support of an unbelievable group of leaders at the company. Actually, four retired Abbott corporate officers are investors in Milano and helped us to get this started. And I left to start a company and to take a technology to market. And during the course of roughly a three month period, I pursued an approach toe founder dating That's how we refer to that period in my life where I met with inventors and idea gators all over the country, all of whom were introduced through personal network or pushing network once removed and was looking for an idea that resonated personally with me and that I felt could truly have an impact and be a success in touching lives. And so during the course of that time, I certainly was moved by the ideas of a number of of these individuals joined a few different companies as a board member and as an investor. But I think back to that first meeting with P, too, in a bar in Philadelphia where he took out a prototype that he had fashioned in his kitchen, from products from the hospital where he worked, and right away and listening to him talk through the unmet need and the genesis for his idea. It dawned on me that this truly was a game changer, and not only would this be a great medical device, but this would eventually touch the lives of every human being on the planet and talk about impact. I believed it then, and I now know it will in fact, be the case because we were all stunned time in a hostel in our life that we will all need our blood drawn and whether the product is called pivo, where it's called something else. The new standard of care, even just five years from now, will be doing exactly what we have developed into the first to develop on the market. But so season going back to that period how we were introduced so peace who had gone through the warden Healthcare MBA program. After me, we didn't overlap. But as I was out pursuing this process of founder dating, I takes three distinct friends and classmates of mine suggested that I reach out to this position who after business school was practicing medicine and also working in healthcare venture capital. And I wasn't exactly certain what to expect in meeting with him. I knew, he added, idea that was in the vascular access domain but was relatively under wraps in R phone conversations and emails. The head of meeting and not only was I impressed and moved by the concept, but also by peaches, intellectual curiosity and this unrelenting ability that he had and has to tug it to thread of statements and perceived fact, which really is the end of the day is folklore at made by clinicians made by patients made by industry and a large medical device manufacturers. And that intellectual curiosity and that unrelenting desire to challenge the status quo along with his creativity was the foundation for now, a company five years later that has one commercial product and many more vascular access products waiting in the wings to be brought to the market in the years ahead. So I'm confident that that first meeting in a bar in Philadelphia five plus years ago is going to result in a new standard of care. The better senator care nationally and globally, and I do believe we're gonna touch every single one of us on the planet.

Scott Nelson:   34:52
That's such a cool story. And if you if you want, I want to get inside your head a little bit. When you you know, dating back to that that early time with with peach, you. And when you were a little bit more about the challenge, the market, you know what this device potentially could could address, You know, I think everyone that is bent towards, you know, has that sort of entrepreneurial streak in them has a dozen ideas, you know that if they're, you know, certain that they're circling in their heads. But you took an idea that you were excited about, you know, you know, executed on it, you know, flawlessly. And I want to ask you some questions about that process. But, you know, this early prototype that pizza developed, you know, it is in his kitchen. How did you take it? Through the process toe, where it eventually became a product that you know, is used or was used early on in an actual patient.

Eric Stone:   35:35
Well, the approach was a little bit anti establishment, Terry. I guess you could call it that. Just go back to your question statement, though. I appreciate the reference toe flawless execution. I aspired to get there. They're certainly

Scott Nelson:   35:48
the way.

Eric Stone:   35:50
We don't have a standard of care quitted just yet, but I think we're close. So thank you.

Scott Nelson:   35:54
But back when you get a lot in a short amount of

Eric Stone:   35:57
time,

Scott Nelson:   35:57
So I think I could be fair. You're being humble. Think you know if that flower is very, very good on your on your execution for sure. Go ahead. The

Eric Stone:   36:04
team is working hard, and we had great supporters. And of course, there's a little bit of luck along the way as well. But

Scott Nelson:   36:11
back to

Eric Stone:   36:11
the process that was potentially a little bit different. So for two years, my co founder and I had day jobs, and at the start of that two year period, the genesis of the company itself, we raised $150,000 from 10 individuals. Anyone of those 10 individuals, I'm quite confident, could have written the entirety of the check. But it was a purposeful fundraising strategy and a very cautionary, cautious I should say strategy of a crawl walk run philosophy that today to the day we still follow. And those individuals almost exclusively have background in the health care dough made from a interventional radiologist to end device company to an executive at Medtronic to senior executive, the Boston Scientific to an executive, and Abbott to, uh, healthcare. Venture capitalists who helped care bankers and every single one of those individuals back then into this day provided extensive amounts of guidance and counsel that far outweighs the relatively de minimus dollar figure investment. They made it the business. And during the course of those two years, we set forth to accomplish four milestones to determine if there really was a there. There, as folks say the first was to prove technical feasibility. Could we build prototypes networked in a bench setting to draw blood through a peripheral i v captor? And we found 1/3 party prototyping firm and worked quite aggressively with them on fast cycle time. It orations in some respects an approach we took when I was in the software world of Iterating Iterating rapidly to get to a point where we felt that from a bench setting perspective, we did accomplished feasibility. The second was around pre clinical functionality. Could we draw blood off a purple? I'd be castor through our device, not through the I V, but our device that was non him. Allies in nature, where the lab analyze results were parody to blood drawn out of a needle, one of today's standards of care. And we did that. We were very thoughtful about our work in the animal lab, and we showed results from eventual prototypes that accomplish this milestone. The third was around intellectual property and someone who comes from the medical device industry, and I'm sure you're well aware that that really is the foundation for any sustainable business and

Scott Nelson:   38:50
your

Eric Stone:   38:51
based. Initially, on Peter's invention, we had the seminal patent in the space issued and then moved on and quite aggressive fashion to develop additional intellectual property. And that has been a fundamental pillar upon which our business is built. The fourth milestone is an area that I've seen a lot of inventors and founders in entrepreneurs missed the boat on, which is market assessment and market development. If we build it, will they come? I

Scott Nelson:   39:24
think there's a

Eric Stone:   39:24
lot of great medical technologies that have been developed that are laying in a barren desert right now because there wasn't a market for them or the founders underappreciated the uphill battle to move towards regular used and re orders, if you will, to simplify it. And so during those two years, we spoke nights and weekends with hundreds of stakeholders, the patients to nurses, the hospital administrators and we built a long, long, long list of reasons not to believe where the hurdles would be and an equally lengthy list of reasons that we should do this during the course of those two years. The validation was so great that if you could make this work technically and clinically that, yes, if you build it, we will come. And that's what gave us the confidence, along with those other three milestones to leave our day jobs and raise the series A and go out and build a business and establish a standard of care.

Scott Nelson:   40:27
Yeah, that that those four milestones that you just you just described, I think are worthy of someone rewinding and listening to those over again. I mean, that's a great overview of kind of how you went about about going from your idea to prototype Thio. Eventual Commercialization Way could have probably separate conversations on each of those milestones, but nonetheless, it's a great It's a great sort of framework to think about on that note about raising a Siri's air. Thank you raised another round of financing and earlier this calendar year, I believe. But when I look at your the individuals and institutions that oven investigated in Milano Vascular, I noticed quite a few health care systems, so you can you help us understand a little bit more about your approach to raising money and sort of the you know, how you went about coalescing that group of investors that you have that you've got this far?

Eric Stone:   41:11
Well, our approach to finance in the business is not that dissimilar to our approach to identifying hospital partners to identifying the right employees, advisors and more. It's really about looking through the lens of the reasons to believe, as opposed to folks who are looking for a reason not to believe. And, of course, that there needs to be an element of realism to this right. It can't be unencumbered aspiration and hope, but we almost fell into this concept of customers as investors or hospitals as investors and partners. And the 1st 2 hospitals that invested the Children's Hospital of Philadelphia and Griffin Hospital resulted from conversations with two very visionary CEOs of each of those institutions who, unsolicited that this is interesting. This has an immense opportunity for impact. We would like to be a part of this in Can we, at best, those air, not hospitals that have venture or investment arms, Like many of the larger health systems, increasingly we're seeing now are creating as of late,

Scott Nelson:   42:23
but just

Eric Stone:   42:23
visionary individuals who saw the opportunity for impact and wanted to help us make it a reality. Now we've systemized that effort, systematized that effort more significantly since that time and just a few weeks ago announced that Sutter Health 24 Hospital System, based here in Sacramento, California, is also one of our investors. And there really is unparalleled alignment with hospitals investors. I feel very fortunate to have fallen into this. What has now become fundamental strategy for a business because while their investments may not make or break the business from the perspective of the size of the investment, and while a potential return on their investment may not determine the future of that hospital or hospital system, there isn't unbelievable alignment behind the mission orientation. What we're doing, which is they

Scott Nelson:   43:21
want this

Eric Stone:   43:21
product for their patients and their practitioners. They want to be able to deliver less painful, more human blood draws in a way that doesn't put a provider in the face of drawing blood, stay from HIV patient with Neil and thus can be safer for that practitioner in the way that the hospital could benefit financially. and otherwise through a more efficient, less costly procedure. So again, better to be lucky than smart. We started

Scott Nelson:   43:49
out with

Eric Stone:   43:50
hospital investors because of visionary CEOs, and I really think as we look at where the MedTech funding markets are now, it's certainly challenging. And we do

Scott Nelson:   44:02
have a traditional

Eric Stone:   44:03
med tech investors like Safeguard Scientifics. But we really have have gained quite a bit from the relationship of these hospitals and over three dozen angel investors who have run large companies like Abbott in Boston Scientific. We have run insurance companies run hospitals because there's I mentioned earlier with our initial angels. The money is important, but the advice and the counsel is priceless.

Scott Nelson:   44:27
Yeah, no doubt. I gotta think that's it. That would be a huge benefit to any early early stage company that can round up, you know and build out. You know, a group of health care systems that want to invest in their company does it is it doesn't help fund the company for, you know, future clinical trials and commercialization. But it's, you know, it's an open door to the health care system in and of itself. So cool here, get your thoughts on that. So I know we're running a little bit short on time here. I didn't want it before we get to the last three rapid fire questions I wanted to ask you about your thoughts on value based health care because it does seem that, you know, Pivo sort of sits at that classic intersection of improving the patient experience while also helping healthcare systems, you know, achieve a certain amount of financial stability or profitability. And so you know how you think Pivo fits into that equation, then maybe just your you know, your brief thoughts and value based health care. Overall, considering we've only got a few a few minutes left kind of a loaded question for a few minutes, but another timeline on it. And

Eric Stone:   45:25
there's a sea change, right with value based purchasing and the democratization of information. More competition amongst hospital's patients have more choice now with their insurance plans, and they have the Internet, which gives them information. And I think it's why, in part you see hospitals increasingly marketing and why you see billboards that suggest we are wait times in a city or a community that has more than one hospital I think it's hospitals that are buying in many respects for their own survival. And so tohave ah, technology in a serious of technology that is better for the patient, we believe enhances patient experience where we know their direct dollars from value based purchasing associated with that patient experience and patient loyalty and a procedure that can be stay for for the practitioner by removing the needle from the equation. That can potentially be safer for the patient if we touch central lines and large catheters that air surgically placed and are extremely effective for drawing blood off of. But we run the risk of a clap, see central and bloodstream infection every time we touch them. There truly is directed indirect dollars and cents. There is, of course, the efficiency argument, which in that diva patient, the practitioner can spend 30 minutes to an hour trying to get blood out of and sometimes multiple practitioners. And so when you look at those different domains, you look at the occupational health impact for providing an ideally safer experience by removing that needle for the practitioner, and we come back to that 30% of impatience that air divas not to mention the waste of materials and time in drawing blood across the procedure that we may do 19 tops our hospital. The dollars and cents quickly add up. We've been having a lot of fun working with our hostel partners and our customers, because the very first thing we do when we engage with them is we access every impatient blood draw that they did in a given calendar year. We slice it, we dice it when we come back and we tell them how many they did, what percentage were between the hours of 2 a.m. and 7 a.m. What percentage of their patients had 23 or more blood draws be given day, and I think the

Scott Nelson:   47:41
insights,

Eric Stone:   47:41
irrespective of our innovation, are quite profound. You see, hospitals, pianos, demos in Seattle is looking at one or another almost in shock, and it's really gratifying to be able to help them recognize what's happening. Our hospital, and then very quickly provide them a solution to some of those opportunities. So a technology, a procedure of practice, change it will not fly. If the dollars and cents don't add up, we're doing that work with our hospital partners now, and I'm quite confident that what we're gonna provide is gonna be better for everyone, including the hospital, and there will be significant dollar savings behind it.

Scott Nelson:   48:17
No doubt such a great story. It's been fun to have a conversation learn a little bit more about your background. Erica's well as the Delano Vascular store. It'll be fun to watch your progress, and I'll certainly link up to it in the show notes. But I would encourage everyone toe to Goto Milano vascular their websites fantastic and learn a little bit more about the about the device and what they're doing. So we're good. Let's go. It's gonna conclude the conversation with the last three rapid fire questions. Try to be brief here, considering concerning our limited time. But Eric, what's your favorite business book?

Eric Stone:   48:44
Undoubtedly on becoming the leader by my late mental warren Dennis?

Scott Nelson:   48:49
It is their CEO that you're following or one that's inspired you in the past.

Eric Stone:   48:54
So a CEO that inspired me in the past and inspires me today, Michael Oh, so he's the CEO of the Cones of Gladys Foundation of America Healthcare Nonprofit that I'm a national board member of and is affecting the lives of the 1.6 million Americans that have corns recall itis.

Scott Nelson:   49:10
Very cool on the last question for you, Eric, is if you could rewind the clock and give your 25 year old self some advice, what would it be?

Eric Stone:   49:17
That's a tough one.

Scott Nelson:   49:19
So

Eric Stone:   49:20
probably be patient. Be patient personally, professionally and even from perspective. Having impact will

Scott Nelson:   49:27
come. Good stuff. Good stuff will go in. Rat will go and call it good on that note. So thanks, Eric. All have you. Hold on the line. But for everyone listening. Thanks for your your attention over the last 45 minutes or so. And until the next episode of Insider, everyone take care. Thanks again, ladies and gents, for listening. This episode has been brought to you from the W C. G studios here in Minneapolis. And don't forget to grab your pan optic stacking blueprint by visiting reach. Fire digital dot com for slash met cider again. That's reached fire digital dot com forward slash met cider. Okay, bye. For now.