Episode 264 | Will Kaigler & Megan Shaw | From Innovation to Impact: Crafting Medtech Culture and Success in Pittsburgh

Speaker A: Medical innovation starts with medical discussion. Talking about the future. What comes Next with Project MedTech?

Speaker B: Hello everybody, I'm Lindsay Deneen, Director of Marketing engagement at Project MedTech and welcome to another episode of the Project MedTech podcast. If we can help you in any way, or you would like to suggest a future guest, you can email us@infoorojectmedtech.com if conversations like this are helpful. That's exactly why we bring people together at our signature events, the Midwest Showcase, the Startup Symposium, and Coming to America. For more on our events that include networking, education and pitch competitions for startups, check them out@www.projectmedtech.com. we even have sponsorship options. If your company is also dedicated to accelerating medical technology to impact patient lives, reach out today to get involved. The Project MenTech podcast is proudly sponsored by Ward Law. WardLaw Office LLC is a boutique law firm specializing in the practice of uh, patent and trademark law. They are committed to providing inventors, entrepreneurs and businesses of all types with personal and professional services and are flexible to meet your unique needs. It is their goal to both educate on how to secure valuable patent and trademark protection and to provide high quality services at rates affordable to independent inventors, startups and small businesses alike. Without further ado, let's dive in.

Speaker A: Okay. Will, Megan, welcome to the podcast.

Speaker C: Great to be on.

Speaker A: Yeah, yeah. So Megan, we'll start with you and then move to Will, It'd be great if um, you can give an introduction to who you are, your background and kind of leading up to what you currently do.

Speaker C: Sure. So Megan Shaw, I'm currently the CEO of the Pittsburgh Life Sciences alliance and I have ah, a background in the um, business side of health tech. So started in strategy consulting and private equity, uh, and realized um, that I like to be on the operational side. I like building the companies as opposed to doing the diligence on them. Uh, and so was fortunate to be an early, um, the first employee at Hemasonics. And I think you actually had Bob Roda on a couple of uh, months ago, um, Hemasonic.

Speaker A: So that was there, you know, that's so funny. He literally came up, um, the other day, ah, someone was asking for ah, ah, an episode, like a really good episode to listen to as a, as an example. And I gave them Bob's, um, yeah, anyways, okay, so, so you were employee number one in hemisonics.

Speaker C: I was employee number one in Hemisonics, yeah. So that was super cool. Truly as it was starting just between spinning out a uva, uh, and so there really had the chance to do the whole startup soup to nuts. We raised about $30 million. You know, I developed all the product requirements, the back end infrastructure of the organization and ultimately led marketing and business development and saw uh, through our exit to diagnostic Estago. So got to go zero to exit there, which was fantastic and you know, really hooked me on health tech and life sciences. Um, then I, uh, led the life sciences group of a regional VC Innovation Works and launched a accelerator there in partnership with Highmark called Alpha Lab Health. That's where Will and I actually got to know each other, um, back in the early days of sovsage as well, um, and ultimately launched the Pittsburgh Life Sciences alliance in 2024 with the backing of our regional universities, University of Pittsburgh and Carnegie mellon university. Our two big integrated health systems, highmark and upmc, which are both $30 billion uh, institutions and then uh, our philanthropic community. And the goal of this organization is to uh, really develop Pittsburgh as a life sciences, uh, ecosystem and take advantage of the convergence we have here of tech and clinical research capabilities, uh, to grow and expand the ecosystem.

Speaker A: That's awesome. Uh, real quick, Will, before you go, Meghan, are you from Pittsburgh or. I know you mentioned uva, but I'm not.

Speaker C: I'm from Charlottesville originally. I've been in Philly, Columbus, Boston, New York, lots of places.

Speaker A: Yeah, Very cool. Okay. Uh, awesome. Uh, Will.

Speaker D: Yeah. Great to meet you. So I, uh, have been on this journey for 41 years now. Done a lot of different things, most of it in the home healthcare space. My background is mechanical engineering and I have an MBA from Carnegie Mellon. Um, spent uh, most of my career in uh, the industry called cpap, which is a treatment for obstructive sleep apnea. Uh, ran product development teams, ran mergers and acquisitions and innovation teams. Um, in 2000, 2001, I left uh, uh, uh, one of the large manufacturers in that space and started uh, my first company called Medsage Technologies. Actually technically it was my second. I co founded a company in Cleveland that was doing manufacturing before that. Um, and uh, uh, ran Medsage up, uh, and sold it uh, to Philips, the light bulb people, uh, in 2010. You might wonder why. By the way, Medsage was a, was a telemedicine platform for treating and managing patients that were on CPAP therapy. The um, first of its kind in that industry. You might wonder why a light bulb company would buy a telemedicine platform. But they had bought my previous employer, which was the manufacturer in the ensuing period. So it was kind of like coming home. I sold My company back to my previous company. Uh, great um, outcome. Uh, after that I did another startup in the long term care space which is uh, uh, a whole different story. Very different than home health care. People might associate them but they're very different. Um, and taught at Carnegie Mellon on faculty for a number of years in uh, the business school, teaching entrepreneurship, um, while I was on faculty at Carnegie Mellon. And I don't know how much you know about cmu, but uh, CMU and MIT are very widely recognized as the two best schools for computer science and artificial intelligence in particular these days. Um, so I had a lot of really brilliant computer science students and couldn't uh, help myself but start to apply that technology back to my previous uh, market. And that's where serviceage came from. Which is really kind of the next evolutionary step to uh, the company I sold to Philips. I currently am the co founder and CEO of that company.

Speaker A: Awesome. Um, yeah, I appreciate the background. Um, um, while we're talking about it, let's hear about what sovasage is because the one thing I want to focus on um, after that is both of you and your backgrounds. Um, you've successfully you know, founded, scaled exited companies and um, so there's a lot to glean for the listeners on those experiences from you and also I think just perspective in general, um, uh, for companies who are in the middle of it. So what does your current company you do? You mentioned that this would be um, uh an add on for Philips potentially.

Speaker D: Uh, not really. Oh, okay. So the fundamental issue is that um, if you're at all familiar with the sleep disorder called obstructive sleep apnea, there's a treatment for it that requires that a patient wear a mask at night for the rest of their life. Essentially. Um, it's a very, very effective therapy but it's very difficult to tolerate. Um, it is the same product I was designing and my team was designing when I worked for the manufacturer. Um, and the product that evolved a lot but how it was administered and how it was managed had not evolved hardly at all in 30 plus years. And uh, uh when I started Medsage, that Medsage was all about assisting home health care providers to um, you know, uh, provide uh, supplies to their patients which was the primary profit generator for the, for the healthcare provider. Um, Sovisage started with a very different mission. Right. Your motivation uh, as an entrepreneur changes as you grow older. You have a successful exit and the next one's less about uh, uh, the exit and more about the mission. Right. And sovastage is about changing that

Speaker C: disease,

Speaker D: uh, and how it's treated, um, at a macro level. Right. And perhaps even including how it's administered and paid for and so forth. So it's all about managing, uh, sleep apnea more effectively, more efficiently, um, uh, for the betterment of the patients and lowering of healthcare costs in general for the country.

Speaker A: Got, uh, it. Yeah. Uh, very interesting. Um, okay, so, so maybe, Megan, we'll start with you and we can, we can go to Will. Um, I'd like to hear your, your perspective on this. Uh, a lot of people will come on the podcast and talk about, you know, um, you have to build with the end in mind and, and focus with the end in mind of where, where you're trying to go and what you're trying to do. Um, I think it's a little bit harder to do that, um, for. It's not hard to do. I just think, um, it's somewhat difficult sometimes for startup companies, you know, when they're in the, the weeds every day fighting and having to, to go from path A to path B. And now you got to pivot and do this. Um, how much of that impracticality, um, was. Was with your experience with Hemisonics where you focused on that, and then how much of it was, hey, we're trying to get to an exit, but we also got to build a successful business too.

Speaker C: Yeah, it's a great question. Um, we really focused on building the best product and company, and that gave us optionality. Right. We were in a position where we could have kept running the company or we could have exited and both were on the table. So when we, um, did exit, we were simultaneously exploring, um, a series B that would have been a much larger round to build out the company and keep going on our own or exiting. And so I think having that optionality was really important. But it all came back to building a product that was truly differentiated and really being grounded in understanding the end user's needs, which for us were surgeons who were dealing with critically bleeding patients and had to make decisions, um, very quickly about how to treat these patients. And so we were just very, very rooted in, um, having a product that was rapid, uh, that was easy to understand, and that was directly tied to actionable outputs the clinician could take. Uh, and so that, I think, ultimately put us in a good position to have, again, multiple options.

Speaker A: Megan, does that optionality give you more leverage in negotiations with those exits as well? Because you have the ability to say, hey, if the valuation of the deal's not there, then we're happy to continue to go on doing what we're doing.

Speaker C: Yeah, absolutely. Uh, uh, the companies I'm on the board of, I very much encourage that. Right. I think you have to have multiple paths forward, and as soon as you only have one option, right. Then you're at the mercy of the person on the other side of the table. Uh, whereas if there are different paths forward, you can craft the right thing for the company.

Speaker A: Yeah, Makes total sense. Will, what about in your experiences as well? Because I would assume that, um, same thing with raising capital, and I would assume it's the same thing with going through an exit is like, if you've done it once, you've probably done it once. Right. There's different ways to get there. There's some similarities, but there's probably a lot of differences. So I'd be curious on your take on that as well.

Speaker D: Well, I mean, philosophically, as an entrepreneur myself, and also I mentor a lot of entrepreneurs. Um, if you go into this crazy journey, um, focusing only on the, uh, sale, the liquidation event, you're making a mistake, right? Because first of all, it probably won't happen the way you think it will. Um, it's generally more opportunistic like Megan's talking about. Uh, but secondly, um, if you're not focusing on providing real value for your customers, then you're not going to get there in the first place.

Speaker C: Right.

Speaker D: So from my perspective as an entrepreneur, my job is to. Is to create a great set of products and services that makes really valuable and loyal customers. Um, that. That creates a valuable company that will have optionality that Megan's talking about. Right. And, you know, you have to be fostering those options as well as you go along. Uh, but, uh, if you're focusing only on that endpoint, um, you're likely not to get the optimal solution, uh, uh, in the long run.

Speaker A: Yeah, well, I, we see this a lot too. When I think that when entrepreneurs go in so fixated on the exit, um, the. What ends up happening is like, this is. This is a long race. Um, it's. It's to stay motivated for that long. If it's just to get that liquidity event at the end, the minute it takes too long or you don't think it's coming, you see these entrepreneurs run out of juice because that's what they were motivated for. Um, so I totally agree with the motivation factor there. Um, let me start Will, with you on this one, and then we'll go to Megan. Um, talk to me about the importance of the team, um, through all of your entrepreneurial endeavors and you know, it could be with, with your specific companies or just startups. You advise how important is the, the early stage team, but also the transition to the team that takes that company to the next level?

Speaker D: Yeah, it's a great question. So, yeah, I've been through a number of these now. Um, and the first thing I'll say is, uh, the startup life is not for everybody. Right. It's very different than working for a big company. Uh, and honestly it's very different than working for yourself perhaps in a mom and pop kind of, uh, environment as well. Um, it's generally much higher paced. Uh, there's a much higher stress level to it because that stress is what gives you the sense of urgency that pushes things forward. Um, and it's not a process of immediate gratification kind of going back to what we were just talking about. You know, in many cases, if you join a startup as a member of a team and I look for this in my, uh, you know, my leadership team, uh, it's not about maximizing your salary today. It's about creating a scenario where you're comfortable enough that you can focus on the company but the payoff is down the road, um, and you're willing to make that trade off. And so that takes a special person, number one. Number two is there's just not enough room to have members of the team who are not contributing. Number one, you don't have the cash for that. Number two, it becomes toxic if it exists in a startup organization. And so you have to be really, really careful with the type of person you bring into your team. And they have to be the best in that area. Right. And, and that's, that's a small group. Right. A lot of that comes from your network as an entrepreneur, um, or your board's network, your investors network. Right. It generally doesn't come from just uh, the usual recruiting sources. It's, it's a networking process. Um, the last thing is that I don't. You gotta be very careful not to over hire too many entrepreneurs, raise a bunch of money, hire a bunch of people, then they have to have to go through layoffs when it takes longer than they think. Even a company that's successful, every startup takes longer than you think. Um, and uh, uh, you have to be prepared for that. So using, um, uh, bringing in team team members who can start on a contract, uh, basis and then roll in as uh, as their utilization is fully developed is a big part of it. It's also a great way to kind of gain experience with people. It is the most important thing you can do because you cannot do everything yourself. And by the way, a lot of entrepreneurs, and I will include myself in this, tend to want to have their fingers in everything. You can't afford to do that.

Speaker A: Good question, Megan.

Speaker C: Yeah, I agree with um, almost everything Will said. You know, I think that those first few hires are just pivotal for the culture. Right. So you have to uh, be really, really intentional with the first few people you bring on. And um, you know, they have to be willing to deal with a high level of ambiguity and to wear multiple hats. I mean we just can't have somebody who just does one thing as, as Will said. Um, and so I, I think being really intentional about the first few is, is vital. Um, you know, currently at plsa, uh, which is sort of my, my startup with a regional upside I'd say, as opposed to a traditional startup. Um, we are just, just brought on our eighth person. And so I've been building this team over the last two years and um, I think the, the one area I disagree a little bit with Will is we have actually had good, we've brought some people in through our network but we've had some good, some um, great people join from a more traditional recruiting process. But what we've done is run a really rigorous ah, interview process with uh, a bunch of steps, um, having them do uh, work and bring it in and present and engage with the team and you know, really do test out kind of their chops in advance and as part of that recruiting process. And I'd say that's actually been great because it's gotten us some diverse viewpoints that have brought in people from outside of my network. Um, but again it's not something we take lightly. It's been really important to uh, be very, very intentional and culture focused as well as competency focused.

Speaker A: Yeah, Megan, I'm going to circle back to a culture question because I've never asked someone um, about this, but I don't want to lose uh, this focus here on some of your advice for early state startup. So I'll circle back to it. Um, but uh, what was through, through both of your experiences, um, what was something that caught you off guard in terms of importance level with running a startup? You know, like, and I, and I mean that in like there's the classic advice which we give everyone at the very beginning. You know, we do a lot of really early stage support and you know, Will, I know you do this as well. So I'm probably. You probably. You probably hear the same thing. Reimbursement, clinical, commercial, and regulatory all need to be considered at the very beginning. Right. Um, you have to have those strategies. They're not done. Um, they're all done in parallel. They're not done step after step. Right. You don't do your regulatory and then figure out what your reimbursement is going to be and then figure out your clinical study after that. Right. Those are all things you need to consider at the very beginning. Um, to me, that feels like very common knowledge. But I'd be curious if there was something that popped out to you in your journey where it was like, maybe you heard people talk about it, but you were like, yeah, I don't know if it's that big of a deal, or maybe it just surprised you. It was like, hey, no one ever told me this was going to be this big of a deal throughout the journey. Um, and I know, Megan, we'll start with you on this one.

Speaker C: Sure. I've got kind of two very different ones. So one is, um, just the importance is we talked about, you start with a really small team, and then you keep growing and growing and growing. And so developing systems that can be handed off early, um, I think is something I wish I'd done more, at least the first time around, because I was just doing everything. So I was hr, I was legal, I was managing the cap table. I was everything. And then as we grew and I got to hand it off to other people, I didn't have it all systematized. I had it all in my head. Right. Because I was doing 85,000 other things. So now it's one of the things we try and be very disciplined about, is setting up our systems to hand off for growth. Um, so that's on the one side. On the other side, I'd say, Megan,

Speaker A: I gotta pause you super fast because, um, one of my co founders and our chief operating officer, he's gonna hear this. Maybe he doesn't listen to this episode, um, but he's gonna give me crap.

Speaker C: Ah.

Speaker A: For this. Because being me, I am the cloud in the sky. Big picture, guys. We need to be here two years from now. And, you know, he was always literally at our kitchen table, um, like, in my house. I can remember him being like, dwayne, we gotta set up a process.

Speaker D: Fab.

Speaker A: And I was like, aaron, we don't need to process. We gotta get here. You know, and he'd constantly do that. And I can tell you that we are living the benefits of that right now as our team is scaling. You know, before when it was three of us, it was no big deal, but now there's 20. It matters a ton because it's made things a whole heck of a lot easier. So I totally agree with your point. Um, but I had to share that because he's going to laugh at this when he, when he hears this. Yeah, that's right. Yeah, yeah, but go on your second one.

Speaker C: Yeah, uh, my second one was around, um, the real, uh, skill and importance of understanding, um, user requirements from the beginning on and how seeing, you know, because I've worked with a bunch of other companies and done this firsthand, uh, that that is a vital skill and art to really be able to go in with a hypothesis and test that with your end users, but listen deeply and be willing to pivot. And I've seen, um, so many companies go in with too strong a hypothesis and not be able to listen and ultimately build a product that is not what their users needed. And so highly, highly valuing that skill set early on is, I think, um, the other thing I'd say that's awesome.

Speaker D: Uh, Will, I don't know, uh, if you could see me, Megan, when you were saying that, but I was smiling because that's exactly, that's my biggest and most important point to make in this area. And so many entrepreneurs make this mistake. Um, as you're looking at an opportunity, you need to form hypotheses and then test them, right? And do that in the shortest possible increment that you possibly can. Because I see so many young entrepreneurs spending too much time on low value ad activities. Right. As an entrepreneur, you have to be looking at, where's my biggest risk, how do I mitigate that risk, how do I test to prove that I can? And that's how you build value in a company. And by the way, almost always in the beginning, your biggest risk is, you know, will this dog hunt, is this got enough value? Usually they've got a hypothesis that has a value statement that makes sense. The question is, does the customer value it enough to write a check for it? Um, and then write enough checks for it that it's a big enough opportunity. And getting to that quickly is an art. Um, but it's doable. You just have to think about your process differently and use very, very, just religiously used lean entrepreneurship techniques where you, you identify a risk, you create a hypothesis, you test that hypothesis, you move on.

Speaker C: Right?

Speaker D: And by doing that, it forces you to not spend money on attorneys and all these other things that are important but low value add relatively to those items in the early days. The other thing I'll say, because I just have to say this, Dwayne, is I'm very much like you. I'm very kind of, uh, I'm the, the vision person, the big picture person. I'm always driving towards what's the next big step. And I have found, and maybe you found it with your partner is as an entrepreneur, you have to recognize what you're good at and what you're not and where your weakness and where your strengths are. And for me, in every point of my career, when I've been the most successful, it's when I've had a partner or partners who, um, fill that weakness point. They're detail oriented. They're executors. I'm the visionary. We work together really well. Right? And some people are like that. Some people are different. But a lot of entrepreneurs are like us. And they have to realize, to have that detailed process person to help them, oh, 100%.

Speaker A: I mean, uh, uh, I will tell that story every day of the week. Um, uh, I have two co founders and both of them are incredibly detail oriented. Um, um, and, and I always give the analogy if, if we are looking at a staircase, I am looking at the top of the stairs. Um, and Aaron, our chief operating officer, is probably looking at the next, like three stairs. And Rich, who's our, our CFO is looking at that next stair. And, and all of that is super valuable, you know? Um, and, uh, but, but yeah, I totally agree with you. Um, there was one other piece I had to add, but I think, um, it escaped me now, which happens frequently on the podcast. Um, but, uh, okay, so this is super helpful. I love the feedback. Um, I love the customer journey piece. And honestly, it's funny to me because now I remember what it was. Imagine that the scientific method works. And as a chemist, I'm all in on that. But that's to your point, I think that people don't spend enough time there. Um, uh, which is weird to say because it is the most important part. And it's the part that I think people feel the most confident about. Um, which is interesting. So, um. All right, so let's talk about Pittsburgh. Um, uh, I don't know, Megan or Will, which one of you want to kind of lay the scene? You both kind of did it in your background, but Pittsburgh is obviously a really interesting city in terms of life sciences. Um, uh, Will, you talked about Carnegie Mellon. Um, I was familiar with their robotics program and what they do there and how that would probably translate into life science. And you could see that pretty easily. Um, uh, um, we're also very familiar with upmc, uh, um, as well. I know Allegheny is a major hospital system there, so everything is there. And then we're familiar with uh, lifx. Um, I've heard of Innovation Works before, which I think, Megan, you mentioned that, um, in your uh, background. But I'm just curious, fill in the gaps of what I just described because our audience is about 60 to 65% North American based and the rest are international. Uh, and so, um, lay that land for us of what is the current Pittsburgh ecosystem?

Speaker D: Megan, this is your thing. You want me to just start on the universities and then I'll let you go on the city park? I think, um, one of the greatest strengths that Pittsburgh has is its university network. Right. So Carnegie Mellon, uh, you may not know this about Carnegie Mellon is the location that neural networks and artificial intelligence was invented back in the early 70s in the basement of the business school. Uh, uh, it's uh, incredibly prolific on the engineering and computer science side. Uh, then you've got Pitt, which is a tremendous medical school. I mean it does a lot of things and Pitt's a huge, uh, university that does many things. But the thing that makes Pitt special in my opinion is its link to the healthcare industry in so many ways. Uh, and when you combine those two, uh, great computer science, great healthcare, great provider services, uh, that's a great breeding ground for healthcare innovation. Um, and uh, um, you know, it's been an area that has grown quite a bit. Uh, not just, you know, there's robotics and others as well, but that's been a great kind of foundation for the entrepreneurial community. And then you've got Megan and her great. So I'll let her go. And will.

Speaker A: Quick question on the universities too. Um, isn't Duquesne also in Pittsburgh as well?

Speaker D: Duquesne is all of the schools. Pittsburgh, Carnegie Mellon, uh, Duquesne have their own entrepreneurial programs and um, uh, they're all great in their own right. I know the most about Carnegie Mellon because I've, I've worked so much with those students. But uh, they tend to work very well together. Um, yeah. Complement each other. So.

Speaker A: Yeah, yeah, I was pretty impressed at the, um, I went to the Three Verse Venture Fair. That was my first introduction. This would have been years ago, uh, 22 or 23 somewhere in there. Um, and uh, that was my first introduction to how well they all work together. I didn't see a terribly big Duquesne presence, but I figured I'd ask just because I'm fairly positive they have a pharmacy school, because I think I applied to it. Um, and so, um, uh, anyways. But go ahead, Megan.

Speaker C: Yeah, I mean, I think Will did a really nice job just to throw in a few numbers. When we talk about the University of Pittsburgh, they're number seven in NIH funding nationally, which most people don't. Yeah, there's over $1.2 billion in life sciences R and D funding coming into this community. And then they're turning that into, you know, spin outs. Right. So they're number 23 in worldwide patents over at Pitt. So there's a huge innovation in Engine, uh, and likewise at cmu. I mean, the Swartz center. And what Meredith Grelli is doing there, I think is just phenomenal. And I mean, there is. It's the hottest place if you're a vc. They're just beating down the doors to see what's going on at CMU right now. Um, so we've got these two R1 universities and then these two massive integrated health systems. That's what's differentiated here is it's not that you just have an academic system. You have systems that are both the payer and the provider. UPMC you talked about, that's 40 hospitals, they're international. And then Highmark owns Allegheny Health Network and that's another $30 billion system. Um, they're the third largest blue in the country. Uh, and then they own 13 hospitals. So from a testing ground, you've got the innovation and the clinical deployment and the understanding of the payer side that I think is truly unique here. Then you add in the great talent that comes out of these universities, but also being, uh, the number one city for affordability. So it's just an incredibly capital efficient place to grow. And so what we've seen is really three, um, kind of clusters here. So one is around data driven health care. And that logically spins out of what we were talking about with the CMU expertise and the health systems here. These are companies like Teletracking. Um, Abridge is probably the best example of this. So Abridge is a founder that came out of, um, cmu, worked, uh, at UPMC Enterprises and their venture fund, and is a practicing cardiologist at upmc. For those of you who aren't familiar with Abridge, you should definitely look it up. But they are crushing the, um, clinical AI space, starting with ambient listening, um, and Their latest round was 300 million at a 5.3 billion valuation. So that's the kind of thing that Pittsburgh's creating in that data driven healthcare space, which is our first cluster. The second one is really this, uh, connected medical devices. And that's been the bread and butter of this region for a long time where we had great device companies coming out of our universities, uh, growing here and often being acquired. So Smith and, sorry, Blue Belt Technologies was a CMU robotics company that was acquired by Smith and Nephew. Now Smith and Nephew has a major R and D presence here in the region. Um, Medrad was one that was acquired by Bayer. Now Bayer has a major R and D and manufacturing presence in the region. We have Zoll, Humanetics, Thermo, Fisher, Philips, um, all of these are major medical device companies that have big presence in the region. So that's another big cluster. And then the third one is really Next gen Therapeutics. So emerging technologies, uh, and gene therapy, cell therapy. Um, we've seen these companies develop here and a couple proof points on that crystal, um, Biotech, which is one of the top two or three gene therapy companies worldwide, uh, is a Pittsburgh story. So they were um, founded here. All their biomanufacturing is here. The whole company is here in Pittsburgh. They have about an 8 and a half billion dollar market cap right now. I mean they're truly one of the only gene therapy companies that is actually really making money and doing well here. Um, then we have Elevate Bio which is putting their second base camp here. So a CDMO based out of Waltham that's seeing that potential. So those are the clusters that have sprung up and we're just seeing a tremendous M amount happening in all three of those. And it's a great place to be there.

Speaker A: Yeah, yeah, Megan. So this leads perfectly into the question I wanted to pivot back to. We talked about culture for startups. It's difficult, uh, enough. Right. And that's something I think you have more control over. Talk to me about building culture among a community and the difficulties there because you just named a bunch of things that could potentially make a ecosystem great. Right. And uh, you have all the ingredients, getting those ingredients. Because we've seen our focus at Project Medtech is we work with a lot of life science startups. Um, and a lot of our client base happens to be in areas that maybe aren't like the, I'll call the blue bloods of the uh, uh, life sciences. They're not in Boston, they're not in New York. They're not in San Francisco. Um, and so we've become very familiar with communities that have ingredients but just haven't put it together. And I think that is the difficult pieces. When you have all these things and they all have, um, different and potentially competing, um, um, missions or goals or where they want to go. How do you get them to build a culture that fosters innovation and that fosters the whole rising tide, raises all boats mentality? Um, it's not easy to do. So I'm curious, we talk about culture, how do you take that and then get an ecosystem to buy into that culture? Because you have to have it. Every, every good ecosystem that spins out opportunities has phenomenal culture and they have buy in from all the major players.

Speaker C: Yeah, it's a great question. I think it starts with some of the core ethos of the region. Right. And so in this region you have a very gritty, hard working and loyal mentality that I personally love. Like I really choose to be in Pittsburgh over any other place because I like that community. It is not flashy, um, but it is get it done. Put your head down and do really great work with tremendous thought leaders, uh, across these universities and out into the companies. You've got this baseline community of people that I think again is just a cool culture here as a region. And then there's a real spirit of collaboration. So we were talking about the universities. Well, there's an MD, PhD that you can do with Pitt and CMU. So there are structural ways that they are collaborating. Um, my board is Pitt, cmu, Highmark, UPMC and the regional philanthropies. Um, they come together and we speak about how do we build this region. And everybody is at the table. They are putting in money, time and effort, uh, to see this region grow. There's a real pride in Pittsburgh and with that there's a willingness to collaborate. And so we've seen if you give people the opportunity to collaborate in that forum, uh, there's absolutely a willingness to do it and the potential for the region. Making sure we're painting that picture, I, uh, think is a unifying North Star.

Speaker D: Yeah.

Speaker A: Will, uh, as an entrepreneur, how has your experience been in the Pittsburgh ecosystem? And maybe not so much in terms of, hey, yeah, we spun a technology out of CMU or upmc, but have you been able to engage some of those hospital systems, engage some of those, uh, other, uh, network, um, partners that are going to help startups grow and foster and build in Pittsburgh and stay in Pittsburgh? Um, and then what's one thing that Pittsburgh can improve upon, um, to make it even better.

Speaker D: Yeah, well, you covered a lot of ground with that question there. Uh, let me see if I can answer all the questions.

Speaker A: Listen, Will, I've been doing. This is like episode 265, you know,

Speaker D: so, uh, when I first was a student actually at Carnegie Mellon, not even when I was teaching there, uh, the head of the entrepreneurship program near the end of the uh, program would ask everybody who is working on a project, how many of you intend to stay and build this project in Pittsburgh? And the answer back then was almost all of them were leaving. Right. This is back in the 90s. Um, if you do that today, what you'll find is probably 60% of them are staying. Some will still leave, but a much higher percentage are staying. Um, why is that? Well, partly because over those ensuing 30 years we've built, I think, a very rich support program for early stage startups. Um, what Megan's doing, what Innovation Work's doing, you know, UPMC Enterprises is working with startups. Uh, Allegheny Health System through Alpha Lab Health is working with, uh, startups. And so there's actually a very rich support system for that. Not to mention each of the universities have their own incubator.

Speaker C: Right.

Speaker D: And so um, that has changed and evolved and has helped Pittsburgh. I think it's also combined with the fact that um, Megan mentioned the cost of living. What we have found is that it's just much more expensive to do a startup in the Valley than it is in Pittsburgh. Um, and you have all of the talent in here if you can convince them to stay here. That's becoming a lot easier to do now than certainly than it was when I, when I first went to school here. Um, so, uh, the early stage support network has been great. Um, in my particular case because my experience has mostly been in health care. Um, you know, UPMC is an investor in SOVA Stage, so is Allegheny Health Network. Um, now that's not necessarily common that both of them invest in a company like us. Um, but they've both been tremendously supportive of uh, what we've been doing, uh, and have provided us with opportunities for customers and testing and advisors, uh, uh, and referrals, et cetera. So um, uh, that takes a little time to build that network, but it can be very, very effective. And all the ingredients are here if you take the time to plug into that network. Um, from that perspective, Pittsburgh gets an A plus as far as I'm concerned. M probably the area that we're weakest is that next stage after you've created product market fit, you need growth capital, um, to get to, uh, a mature, not startup level company. Um, you generally have to go outside of Pittsburgh to get that kind of funding. Um, there is actually a lot of that funding available right now in the current investment environment. Uh, but most of it is not coming from within the Pittsburgh ecosystem. It's coming from New York, Boston.

Speaker A: Yeah, yeah. Um, when you were talking about why start in Pittsburgh, we, um, do an event in Europe, um, uh, called Coming to America. It's, it's based off, we named it after the Eddie Murphy movie. Um, but the idea is to talk about companies who are looking to come to the US and where they should set up shop. And we talk about the Midwest, which we have a pretty broad definition of the Midwest, but we're talking about areas like this, Pittsburgh, Cleveland, Columbus, Cincinnati, Detroit, Indianapolis, Chicago, you know, this area here. And the one thing we tell them is, uh, just based off rent and salaries alone, your money is doubled here in the Midwest. Um, but the other piece too is, you know, we hear that, hey, there's, there's not a lot of early stage capital. And I'm in full agreement with you on this is yes, you, you may have to, for growth stage capital, go to Boston, New York, San Francisco. Uh, but by that time, uh, that's okay. They're not asking you to relocate your company to come to the coast for that capital. Where the issue used to be was this early stage capital. And uh, after Covid, and this stat's old, so it may have gotten bigger, um, the average angel investor was 100 miles from where the startup company was founded. And after Covid, that number went to 600 miles. That was the average angel investor. And so I think there's a lot of capital to go around in the Midwest to keep these companies here. And if you're a company and if you're an investor, why wouldn't you want your startup company to be located in the Midwest? And what I mean by that is your end customers. There's a lot of top institutions. You just name two in one city in Pittsburgh. But a two hour drive from Pittsburgh is Cleveland, Cleveland Clinic, uh, Metro. Two hours from there is Columbus. Um, you have Ohio State, Ohio Health to, you know, another hour and a half from there is Cincinnati. Like these are all as a startup company, get your ass in the car and drive right Type of cities. Uh, you have Detroit not too far from there. You have Indianapolis not too far from there. Chicago's not too far from there. I mean, these Are there's a lot of big institutions there where uh, you know, you can um, uh, you know, talk to customers, test your thesis and get clients and so um, I'm totally on board with, with uh, what you talked about there. Um, okay. So, ah, for, for those listening in. I can't. We've been talking for 40 minutes. This has been great. Um, but the, for, for those who are listening in, are there, are there some events coming up in the Pittsburgh ecosystem? I know there was one recently in April, but are there things coming up later this year where if people are listening in, they want to get more involved in the Pittsburgh ecosystem? Or for people who are from uh, not in Pittsburgh but want to learn more about it, is there opportunities for them to engage coming up?

Speaker C: Yeah, I'd say the big one I'd highlight is the week of September 14th is going to be a citywide startup week. And so both universities are involved, both health systems. Um, it's going to start out kind of at the earlier stage and work its way later throughout the day with a week with um, of finishing uh, with the AI Horizons conference, uh, really focusing on AI related opportunities in the region. So that will be great. That Wednesday the 16th I believe, uh, is going to be a life Sciences day. We've got a whole bunch um, stacked throughout the day, uh, geared towards investors and strategics who are interested in learning more about the region. So if you're interested in that I would definitely uh, encourage you to reach out to us. We can provide more information. And um, both universities will be uh, as well as all of the Lifex and IW and everybody will be showcasing their companies that week as well.

Speaker A: Awesome. And there. Yeah.

Speaker D: So are you talking about Entrepreneurship Week? Is that what that is, Megan?

Speaker C: Yeah, it's the big regional.

Speaker D: Yeah. So that's evolved so much. It used to be just something that sort center at CMU and maybe Pitt did. Now it's all over the place with lots of different social events and pitching competitions and demo days. Um, the other thing that I would kind of. And by the way, you know, I, I, when I'm doing a startup I'm generally heads down. So I, I miss a lot of these uh, events. Uh, but um, one of the things I always make sure I take a look at is and this is again back to my CMU thing that the uh, the Swartz center at Carnegie Mellon does a newsletter usually on a weekly. I think it's a weekly basis that has a lot of events across the city, not just, not just Carnegie Mellon Um, and Megan, your organization might do something like that as well. I mean, there's a lot of those kind of things you can use to kind of keep up with the events that take place in the city. As an entrepreneur, you can't go to all of them. You gotta be picky. Uh, but there's a lot of great opportunity there.

Speaker C: Yeah, I'll just say. Well, we do have a bi monthly newsletter that lists upcoming events and they're also on our website. And we generally host quarterly events open to the community to bring together the regions. So keep an eye out for all of those.

Speaker A: Awesome. Yeah, we'll include a link, um, to both of your linkedins, um, but both your company's websites as well. So people can just click on the link up or down an inch, depending on the platform you're listening into. Um, and you can click there, go there, sign up for the newsletter. But, uh, Megan and Will, thank you so much for doing this and sitting down with me today. Um, hang on for one minute, we'll chat offline. Thanks, uh, again. Hi, I'm Freddy Coffey, Director of Marketing at Jumpstart. The Project MedTech podcast is proudly sponsored by Jumpstart Inc. Jumpstart's Trailblazer accelerator helps Ohio's most innovative early stage health tech startups fast track their growth with tailored advising from serial entrepreneurs, non dilutive funding to fuel their journey, and unrivaled access to a network of experts, resources and investment opportunities. Whether it's improving patient outcomes, advancing digital health, or reimagining care delivery, Jumpstart provides the high impact services and critical resources to bring big ideas to life. Learn more@jumpstartinc.org startups.

Speaker B: Thank you for listening. At our core, we at Project MedTech are networkers, educators and consultants. We meet you where you are to bring value and to create impact. We care deeply about helping medtech companies succeed right from the start through to exit by providing consulting and fractional services, hosting impactful industry events, and of course, sharing incredible guest insights like the ones you heard today through our podcast. Please reach out at any time. If we can be of assistance, check out our website at www.projectmedtech.com or email us at info@projectmedtech.com.