Berkeley Lean LaunchPad 2015 engineering

1. Mentors
Mar Hershenson - Managing Partner, Pejman Mar Ventures
Jim Patterson - Chief Product Officer, BandPage
Supporting Officer Kevin Wang, Ph.D. candidate, MSE
InkSpace
Bringing comfort and a kind touch to MR imaging
Total Number of People Interviewed: 138 (+34 calls)
Priyanka Potdar
UG Econ/Bio
Joseph Corea
EECS Ph.D
Adrian Gomez
Haas MBA
Balthazar Lechene
EECS Postdoc
Onur Ergen
Physics Ph.D
*Let’s make sure that we can scan kids as well as scan adults*

2. Team Background
Team
Members Department Expertise Role
Joe
Corea
PhD Candidate,
Electrical Engineering
Prototyping, engineering
development
Developer of Coil
Domain Expert
Onur
Ergen
PhD Candidate, Physics
MS, Electrical Engineering
Energy harvesting and
conversion, nanoelectronics,
Condensed matter physics
Specs for coil
manufacture
Adrian
Gomez
MBA, Marketing &
Entrepreneurship
Energy Consulting,
Transportation VC
Sales, Business
Development
Balthazar
Lechêne
Post-doc,
Electrical Engineering
Solar Cell Manufacturing Coil Manufacture
Domain Expert
Priyanka
Potdar
BS, Applied Econ & Math
BS, Computational Biology
Neurotechnology,
software, AI
Research Medical
Companies
Mentors
Jim Patterson - Chief Product Officer, BandPage
Mar Hershenson - Managing Partner, Pejman Mar Ventures
Supporting Officer: Kevin Wang, Ph.D. candidate, MSE

3. Started with Trucks
Team Name: Sunny Drive
Original Idea:
“Use solar panels to power auxiliary powered refrigeration
units, reduce fuel consumption, save planet”
“If you can make a truck that never breaks, but runs
on $10 fuel I would buy that in a heartbeat”
-Owner Operator
Got out of the building:
21 interviews later

4. Started with Trucks
Team Name: Sunny Drive
Original Idea:
“Use solar panels to power auxiliary powered refrigeration
units, reduce fuel consumption, save planet”
Predictive Maintenance (A Truck that Never Breaks)
Got out of the building:
31 interviews later + (30 phone calls)

5. Started with Trucks
Team Name: Sunny Drive
Original Idea:
“Use solar panels to power auxiliary powered refrigeration
units, reduce fuel consumption, save planet”
Got out of the building:
51 interviews later + (30 phone calls)
“We love the idea of predictive maintenance so much
we have been doing it for 8 years now.”
-UPS Fleet manager

6. Startup Reboot: Week 5
“Go with what you (think you) know”
5th year Ph.D. & 2nd year Postdoc
Working on MRI Coils
Photograph of coil from Ph.D. work
Realization: We haven’t gone out of the building!
We really only have hypothesis!

7. Receive Coils MRI Scanner
Receive coils are resonant loops of wire
Hypothesized Problem:
Current receive coils are bulky, heavy, expensive, prone to failure, and
do not fit certain patients well.
Original Hypotheses
Pictures from Corea et al. “Screen Printed Flexible MRI Receive Coil” Nature Communications (Submitted)

8. Hypothesized Solution: Use electronic printing technologies to
drastically reduce cost, create an extremely flexible device to best
fit pediatric patients
Original Hypotheses
Pictures from Corea et al. “Screen Printed Flexible MRI Receive Coil” Nature Communications (Submitted)

9. Size of MRI market
in the US
Size of Pediatric MRI
procedures in the
US
Size of Pediatric MRI
procedures in
California
• $4.76bn
• 30 million scans in US
• 25% Spine, 22% Brain, 13%
Lower extremities, 40% Other
• 10% of MRI market →
3 million pediatric
scans per year in US
• Approx 200k pediatric
scans
InkSpace - Our market

10. Key Hypothesis: Radiologists at hospitals will buy our coils
InkSpace
Formed Business Model Canvas
Week 5
Reboot

11. Week 6
2 Radiologist
1 neurologist
1 Technician
Shreyas Vasanawala MD/PhD
LPCH Pediatric Radiologist
- Key source of flexible coil idea
Key Interview
How hospitals buy equipment

12. How hospitals buy equipment
Doctor wants
new equipment
Capital
CommitteeInfluencers
Technicians
Other Hospitals
Salespeople
Conferences
Doctor gets
new equipment
Fast
Week 6
Slow
Operational
Budget

13. How hospitals buy equipment
Week 7
Low Cost Disposable Coil
Doctor wants
new equipment
Capital
CommitteeInfluencers
Technicians
Other Hospitals
Salespeople
Conferences
Doctor gets
new equipment
Fast
Slow
Operational
Budget

14. How hospitals buy equipment
Week 8
Low Cost Disposable Coil
+7 Radiologist
+2 Medical Reimbursement experts
+3 Non-Coil Medical Manufacturer (endoscope)
Hospitals don’t replace a non-disposable items with a disposable ones.
“We would never pay for something ‘per scan’ that we don’t have to”
-UCSF Radiologist
Doctor wants
new equipment
Capital
CommitteeInfluencers
Technicians
Other Hospitals
Salespeople
Conferences
Doctor gets
new equipment
Fast
Slow
Operational
Budget

15. How hospitals buy equipment
Week 7
Team spent a day watching all pediatric MRI scans at Lucile Packard Children’s Hospital
Doctor wants
new equipment
Capital
CommitteeInfluencers
Technicians
Other Hospitals
Salespeople
Conferences
Doctor gets
new equipment
Fast
Slow
Operational
Budget
+4 Technicians/Center Directors
+1 Anesthesiologist
+2 Radiology Fellows
+1 Radiologist
+1 Nurse

16. “Talk to the sales people to know how things really are”
-Allan May (Life Science Angels)
How hospitals buy equipment
Week 8-10
Need to justify how this is going to make
the hospital money
1. Selling Directly to a hospital is very hard, uncommon, and
prohibitively slow.
2. A hospital is a business too!
+4 Technicians/Center Directors
+1 Anesthesiologist
+7 radiologists
+2 Nurse
Doctor wants
new equipment
Capital
CommitteeInfluencers
Technicians
Other Hospitals
Salespeople
Conferences
Doctor gets
new equipment
Fast
Slow
Operational
Budget
+1 Life Science Entrepreneur/Angel
+2 Medical Reimbursement experts
+3 GE Salespeople
+3 GE Researchers
+1 3rd Party Coil Builder
Avg. 3 years

17. So, how are coils bought?
Week 6
Radiologists at hospitals will buy our coils
InkSpace
Reminder: Hypothesis at restart

18. So, how are coils bought?
Week 7-10
Radiologists at hospitals will buy our coils
InkSpace
Reminder: Hypothesis at restart
It is extremely rare for hospitals to buy from small vendors.
95% of coil purchases are made bundled with scanner.
Doctors rarely have the budget after initial purchase to get additional coils.
+11 Technicians/Center Directors
+7 radiologists
+3 GE Salespeople
+3 GE Researchers
Got out of the building
“My budgets for hardware this year is $0” – Radiologist
“We don’t buy from small vendors because the majority of them go out of
business and we can’t get support” -Lead Technician

19. So, how are coils bought?
Week 7-10
It is extremely rare for hospitals to buy from small vendors.
95% of coil purchases are made bundled with scanner.
Doctors rarely have the budget after initial purchase to get additional coils.
OEM manufacturers are not gatekeepers nor distributors…
they are our customers.
+11 Technicians/Center Directors
+7 radiologists
+3 GE Salespeople
+3 GE Researchers
We need to focus on their pains and gains.

20. Week 6
What creates value?
Regulatory Approval Intellectual Property
What we knew about Regulatory Approval and Intellectual Property Before:
“These things are probably important”
(we didn’t know what we didn’t know)

21. Week 7-10
What creates value?
Regulatory Approval
Intellectual Property
“These are nice people, but they play hard. Protect
your IP as soon as you can.”
-Allan May Life Sciences Entrepreneur
“University has to make money on filing. Has to be
economically viable”
-Marc Oettinger UCB Tech Office
“[A small coil manufacture] sued GE for patent
infringement. GE bleed them of money until they lost.
….You have about 3-5 years before someone finds
their way around you”
-Ken Bradshaw Coil Designer
IP is important, but don’t always count on it to save you.
Critical to survival, need to go faster route
Get on as many existing Codes/Approvals as you can
- 510k vs. clinical trials for FDA Approval
- Get on an existing CPT code
+1 Life Science Entrepreneur/Angle
+2 Medical Reimbursement people
+1 3rd Party Coil Builder
+2 UCB Professors who have done 510k

22. Lessons Learned
A tangible MVP was way more effective
than pictures

23. Lessons Learned
After a semester, interview totals:
• Sunny drive: 53 interviews in person or video (and 26 phone calls)
• InkSpace: 71 interviews in person or video:
+ 17 doctors of various specialties (pediatrics,
anesthesiologists,..)
+ 7 radiologists
+ 11 MR technologists and nurses
+ 4 hospital managers
+ 4 hospital senior managers
+ 5 VC / Angels
+ 4 lawyers / patent experts
+ 13 healthcare business experts
+ 6 MR OEM business persons
+ 10 MR engineering experts
and 9 phone calls (consultants, VC, …)

24. Lessons Learned
● Figure out what you don’t know
● If you are going to fail, fail fast and cheap.
● Data rules and you need to be ‘deadly
objective’

25. Start a company?
More interviews are needed to figure out if we can be
successful selling to an OEM.
If we can sell to or through them: Yes
If we can’t: No
If we can find something else in our interviews that people
are willing to pay for: Of course!

26. APPENDIX

27. How hospitals buy equipment
Doctor wants new equipment
Large costs go to
Capital Committee
Small costs go to
operational budget
Comprised of hospital VP,
CFO, random doctors, and
advocate for new equipment
Hospital pays for it out of annual budgetAnnual budget determined by
patients/insurance money
Smaller team of doctors,
local financial people
Advocate argues
Safety, quality, obsolescence,
other hospitals, or if it enables a new service
Technicians Salespeople
ConferencesOther hospitals
Doctor gets new equipment
Faster
Week 6
Slower

28. Key Market Players
Imaging Market Key
Influencers (specialists)
MR OEM’s
MR Service
Providers
MR Coil
Manufacturers
• 27,570 radiologists in US (Physician
Specialty Data Book)
• 229,300 MRI technologists in US
• Locations (establishments v.
population): California, Florida, New
York, Texas
• OEM’s: Siemens Healthcare (24% of mkt
share), GE Healthcare (19%), Philips
Healthcare (13%), Toshiba Medical Systems
(12%)
• Profit Margins (Annual Results 2014): Siemens
(16.9% of revenue), GE (16.7%), Philips
(14.8%), Toshiba (11%)
• Main MR Service Suppliers: ScanMed,
InVivo, Bayer (MEDRAD), etc.
• Profit Margins: Bayer (9.44%), ScanMed
(Unable to find), InVivo (Unable to find)
• Main Coil Manufacturers: ScanMed,
MEDRAD, Advanced Imaging Research
Inc. (Sree Medical Systems), etc.

29. - Business model canvas : Week 11
Main updates:
validated the core hypothesis about the Value Proposition to hospitals
The identities of the different customers come in focus
validated hypothesis across the other boxes.
Key Updates:
1. No more single-use disposable coils. New hypothesis: Hybrid system (re-usable with many spares?)
2. Value proposition for OEM has changed (cost reduction / competitive advantage)
3. Value proposition for Radiologist has been nuanced (SNR / New features)
4. Left side considerably modified
5. Not ready to eliminate MRI technicians as influencers
6. Hospitals are used to paying $30-120 per MRI scan on consumables
7. Healthcare is very different in each state. Selling directly to hospitals will be incredibly hard (will most likely
need OEM’s as a channel or customer)

30. - Business model canvas : Week 10

31. - Business model canvas : Week 9

32. - Business model canvas : Week 8

33. - Business model canvas : Week 7

34. - Business model canvas : Week 6

35. - Business model canvas : Week 5

36. - Business model canvas : Week 4

37. - Business model canvas : Week 3

38. - Business model canvas : Week 2

39. - Business model canvas : Week 1