An industry roundtable event hosted in Edinburgh tested the boundaries of tech start-up thinking in the healthcare sector.
Senior NHS leaders gathered with corporate leaders, founders and investors to grapple with the difficulties of starting and growing a company in the medical technologies (med-tech) space.
The event in September was hosted at the National Robotarium at Heriot-Watt University by global transformation partner Zühlke, which has a rich history in engineering and technology innovation.
The discussion focused on areas including product development, business strategy, innovation, investment and finding a sustainable market – all common challenges faced by founders when trying to scale their businesses.
The med-tech industry is also a highly complex market, the event heard, with senior executives ruminating on some unique obstacles to the “move fast and break things” approach of the Facebook school of thought.
That applied to both the engineering and product design challenges of medical device innovations, which often rely on finely-tuned instrumentation, but also the regulatory regimes governing them.
In such specialised fields, any product or design failures tend to require significant investment capital and corporate patience to ensure they can find their way to eventual market entry and adoption.
“You have to be very careful how you enhance your product,” said an industry expert. “If you are forced to go back to square one, it costs a lot of time, and, of course, money.”
And then there was leadership. One executive with two decades of experience of working with 100-plus med-tech start-ups suggested that founders were not always the best people to take their companies from start-up to eventual corporate leviathan. “Founders are super creative, and super good at what they do in the early ideation, product development and market entry stages,” he said. “But when it comes to really accelerating and scaling the idea, they may not be the best person to run the operations. Quite often, we have changed the leadership team, which is a difficult but sometimes necessary thing to do. That can be difficult for the individuals, personally.”
Venture capital (VC) firms were now alive to this issue, an executive said, and it’s increasingly common to have these conversations “up front” with founders, to manage expectations about their own long-term involvement with the start-up they created. Complexity was also touched on during the hour-long session at the Robotarium. It is inherently challenging for engineers and product designers, with tight regulatory regimes limiting what founders can do to change course if an idea is not working as intended.
The £22.4 million National Robotarium was opened in 2022 thanks to a government grant and is home to 12 start-up companies specialising in robotics in a range of sectors, including healthcare. BioLiberty, one of the UK’s foremost robotics specialists for independent living, is among the more well-known tenanted companies at the facility. Ameca, the world’s most advanced human-shaped robot, is also based there. And there are cutting edge firms pushing the boundaries of research excellence on everything from remote surgery to “co-bots”, robots designed to assist humans in the home.
Hosted under the Chatham House rule, the roundtable allowed entrepreneurs, NHS executives and industry consultants to speak openly and frankly about the relationships that exist between the healthcare providers, the industry that supplies them, and the start-ups in between. In the UK, in particular, that landscape can be cluttered, with unclear lines of purchasing authority and decision-making. Getting a company’s product into the NHS was often as challenging as the innovation itself.
But there were also important caveats to that. One industry figure commented that many start-ups just weren’t aware of established “sign-posting” facilities, which could help them on the procurement journey.
The NHS should ideally be funded to do innovation, with a clear strategy to ensure that leaders were incentivised to use technology to deliver improved financial performance, said another. Investment was also an issue tackled by the experts, which included investors, trade body representatives, NHS clinicians and company advisers. According to a report by the ScaleUp Institute last year, healthcare was in the top three sectors for scale-up growth in Scotland. Despite its potential, however, it is held back by a “funding gap” of between £217m and £1.5bn.
And there were other challenges. “If you want to scale and grow, you have to be investor-ready,” said a seasoned executive. “And that’s where I think a lot of a lot of the smaller SMEs, the start-ups, they struggle. They might only have three or four people who are trying to do everything. And then you start to say, ‘Well, OK, so where’s your financial control, where’s your quality control, where’s your data?’”
At some point, founders need to realise that they can’t continue to act as a start-up, added another. Once they reach the point of market entry and then scaling, their systems need to start reflecting those of the organisations they serve.
“Any sort of transition to become more process-driven and less invention focused, it perhaps makes some people upset, as it’s the people in the company that drive the IP [intellectual property],” said an experienced figure.
Another, who had been part of a start-up that had been acquired, said the “boiling the frog” metaphor – whereby no-one notices the temperature rising until it’s too late – also applied. “Being ready to accept the changes and get with the programme can be a very painful process, but it’s necessary,” observed a third.
Zühlke’s own role in start-up ecosystems was also covered. The firm, founded in Switzerland in 1968, developed the UK’s NHS Covid-19 App during the pandemic, which was estimated to have saved up to 13,500 lives and averted about 600,000 Covid cases in its first three months. Zühlke Ventures also specialises in providing start-up financing in the healthcare sector. It is known as one of the original investors for the Dexter robot, which gives surgeons precision, dexterity and control while operating.
The company is now on a mission to transform healthcare in the UK, and overseas. It increasingly works with the NHS and government on ways to speed up the rate of innovation adoption. But organisational inertia, and difficulties with procurement, were not the only challenge, the event heard. Bringing the demand side and supply side together in physical places like the National Robotarium will also quicken the pace of innovation adoption.
The NHS is also structurally based on reactive care – and targeted against waiting lists; until it can be refocused on prevention, with technology and innovation as an enabler of that service paradigm, the systemic issues which led the UK Health Secretary to describe the NHS as “broken” will be harder to overcome, a senior executive said.
Leaders can also be seduced by technology hype. Generative AI is currently presenting itself as the “next big thing” in technology. While it may be sold by overzealous business development teams as a “sexy” product, it is the unglamorous work to join up data within organisations – and “get data flowing” – which has the greatest potential to fix some of the fundamental problems that hamper NHS modernisation. “We need to change the narrative, where we can make the boring stuff exciting,” said a senior leader.
“There is some really great work going on in Scotland, in the healthcare environment, but it doesn’t see the light of day because it’s not seen as exciting. That needs to change.”
Creating a thriving ecosystem
Having these types of events, where people from all parts of the ecosystem can speak openly and frankly, is a really useful exercise to understand where certain blockages or points of friction exist in the NHS and in the supply chain that exists to support it,” said Dr Angeli Möller, group chief health officer at Zühlke.
Möller, pictured left, also sits on the innovation and business board at UK Research and Innovation (UKRI)’s Science and Technology Facilities Council. The board was set up to accelerate end-to-end innovation and stimulate business growth, which is a major focus for policymakers in London and Edinburgh. She added: “We all want to see a thriving ecosystem for entrepreneurs, especially in the med-tech industry, where research is moving at such a fast pace right now.
“With interdisciplinary meet-ups like this, it really does provide an opportunity for connections to be made, especially to bridge the gaps in the public-private space where we are all working towards a single goal: improving healthcare.”
Innovation driven by big data
“The challenges that the NHS has can only be resolved if we get better at using data analytics to identify what is required and have a process-driven approach to adopting innovative solutions,” said Tom Steele, chair of the Scottish Ambulance Service, which has been working with Zühlke on improving how 999 calls are triaged and responded to.
“We are just at the dawn of using big data analysis to gain much deeper insights from the colossal amount of complex information held by the NHS,” he added.
Steele, pictured left, also co-chairs, with health chief scientist, Professor Dame Anna Dominiczak, NHS Scotland’s Innovation Design Authority (IDA). This group oversees a new approach to innovation adoption. Traditionally, spreading new technologies and scientific developments across 14 health boards has been very slow and patchy.
Now, programme managers and subject matter experts from finance and digital to health economics and procurement, have come together in a team called Accelerated National Innovation Adoption (ANIA).
This team horizon scans for new developments and assesses research-evidenced solutions from academia and industry. For those most promising, ANIA develops business cases for national adoption. Once IDA approved, ANIA is funded to work with NHS boards to deliver consistent implementation at speed.
Informed by new insights from sophisticated data analytics and supported by a new approach to innovation adoption, NHS Scotland is well-placed to transform how care is delivered in the years ahead.
Partner Content in association with Zühlke