The secret weapon for Orthopedic startups

The secret weapon for Orthopedic startups

Ellipse was a VC funded startup without any bench strength in orthopedics. I joined in 2012 as the VP R&D. On paper, we had nothing. We had meager sales, finite funding, very few employees, few products, few customers and few regulatory clearances. However, we had a secret weapon. Our CEO coached us regularly that we had weapon that we could leverage against the competition every day – a high tolerance for risk.

The result was that we outran the big Orthos with rapid development of new technologies that solved unique clinical problems. After a couple of years, we literally had zero competition in our two market niches – remote control spinal growing rods and remote control limb lengthening.  In a span of 6 months, we had accomplished what Smith and Nephew had struggled to do in 5 years with limb lengthening.  The competition was in the rear view mirror and we never looked back. We booked annual sales of $1M, 6M, 12M, 24M and 42M before being acquired out by NUVA. During this doubling of sales, the employee count grew from about 12 to 120.

good people Your competition at the Big Orthos avoids risk at all costs. They play “not to lose”.  As a recruiter, I talk to  good people stuck in these Big Ortho companies each week. Even though they have massive resources to work with, they spend their time in group think exercises in endless meetings. Nobody can make a decision. Nobody is willing to stand up and take a chance because:

incremental improvements The big Orthos have completely forgotten how to innovate.  New products are incremental improvements .  It is no longer in their DNA to innovate. Their innovation strategy has defaulted down to a single tactic – acquiring small Orthos.

In a small Ortho, you are applauded for promoting creative ideas that challenge the way things are done. The result is that you will be given the latitude to test your crazy idea out. You may go down a rat hole and learn something for the company, or you may be a hero.

In the big Ortho, you are slowly pushed out (or fired) for promoting creative ideas that challenge the way things are done. The result is that you will undermine your career there.

In small Ortho, employees are evaluated based on what they are going to do for the company today, tomorrow, and this week. This is forward looking. In big Ortho, employees are evaluated based on what they did do for the company last year. This is backwards looking. I could go on and on here, but you can feel the cultural differences.

If you are leading a small orthopedic company, you must NEVER FORGET the unique leverage that you have over the competition is the ability to take on RISK.