6 ms·

The FDA also provides a HUGE barrier to entry. Once a company makes it through the approval processes (if they make it), they will have a monopoly on that corn

The FDA also provides a HUGE barrier to entry. Once a company makes it through the approval processes (if they make it), they will have a monopoly on that corner of the medical market for many years. I agree its difficult, but the rewards are higher.

danieltillett 11y ago
You can still fail at the marketing level even if you make it all the way through the approval process (Affezza comes to mind as a good example of this [1]). My background is in biotech and I feel the risk/reward ratio is too great in this area. Still a gutsy move from YC. 1. http://www.fiercepharma.com/story/sanofi-tried-and-failed-afrezza-why-does-mannkind-still-think-it-can-win/2016-02-10 http://www.fiercepharma.com/story/sanofi-tried-and-failed-af...
- lisper 11y ago
  My very first angel investment was in a medical device company. They had FDA approval, patent protection, all the manufacturing in place, rave reviews from users, clear benefits over the competition... and they still failed because they couldn't get distribution. Ten years later I made another medical device investment. Again, good IP protection, FDA approved, clear data showing life-saving benefits. This one failed because the technical founders decided to go off the ranch and have a turf battle with the CEO. The Murphy factor in this sector seems pretty high to me.
  - danieltillett 11y ago
    Yes the bar in this area is very high as there are so many things that can go wrong. I think the difference is with pure software you are just dealing with human created complexity - with biotech you also have nature’s complexity to deal with too. Mix the two together and spice it up with some unbelievably stringent regulations and you have a recipe for a lot of heartburn.
neurotech1 11y ago
For low risk medical devices, startups can use a FDA 510(k) [0] to get approval if the device has a comparable (predicate) device already approved. This is how some startups get devices approved with relatively little red tape from the FDA. This may also work for some healthcare software apps. [0] http://www.emergogroup.com/resources/articles/fda-510k-clearance-process http://www.emergogroup.com/resources/articles/fda-510k-clear...
patrickk 11y ago
Perhaps it would be possible to attack this market using a different approach. The classic startup path is approximately --> geeks hammer out MVP product, get some funding and try to grow as quickly as possible, and either go big or fail. I got this idea after watching the Vice interview with Martin Shkreli (obviously not a role model)[1] Shkreli made the leap from hedge funds (betting against pharma companies) into becoming the CEO of a pharma company, which apparently does research in addition jacking up the prices of HIV drugs (Shkreli actually gives out chemistry lessons on youtube[2]). So maybe some geeks could try getting funding, buy up some underappreciated, undervalued but already FDA approved drugs, and using the cashflow to do further research, or develop cool new products or services in the healthcare space instead of the traditional, risky route. (I'm not advocating jacking up the prices of critical lifesaving drugs obviously). [1] https://www.youtube.com/watch?v=2PCb9mnrU1g https://www.youtube.com/watch?v=2PCb9mnrU1g [2] https://www.youtube.com/watch?v=zQljHkKuC2I https://www.youtube.com/watch?v=zQljHkKuC2I

danieltillett 11y ago

You can still fail at the marketing level even if you make it all the way through the approval process (Affezza comes to mind as a good example of this [1]). My background is in biotech and I feel the risk/reward ratio is too great in this area. Still a gutsy move from YC. 1. http://www.fiercepharma.com/story/sanofi-tried-and-failed-afrezza-why-does-mannkind-still-think-it-can-win/2016-02-10 http://www.fiercepharma.com/story/sanofi-tried-and-failed-af...

lisper 11y ago
My very first angel investment was in a medical device company. They had FDA approval, patent protection, all the manufacturing in place, rave reviews from users, clear benefits over the competition... and they still failed because they couldn't get distribution. Ten years later I made another medical device investment. Again, good IP protection, FDA approved, clear data showing life-saving benefits. This one failed because the technical founders decided to go off the ranch and have a turf battle with the CEO. The Murphy factor in this sector seems pretty high to me.
- danieltillett 11y ago
  Yes the bar in this area is very high as there are so many things that can go wrong. I think the difference is with pure software you are just dealing with human created complexity - with biotech you also have nature’s complexity to deal with too. Mix the two together and spice it up with some unbelievably stringent regulations and you have a recipe for a lot of heartburn.

neurotech1 11y ago

For low risk medical devices, startups can use a FDA 510(k) [0] to get approval if the device has a comparable (predicate) device already approved. This is how some startups get devices approved with relatively little red tape from the FDA. This may also work for some healthcare software apps. [0] http://www.emergogroup.com/resources/articles/fda-510k-clearance-process http://www.emergogroup.com/resources/articles/fda-510k-clear...

patrickk 11y ago

Perhaps it would be possible to attack this market using a different approach. The classic startup path is approximately --> geeks hammer out MVP product, get some funding and try to grow as quickly as possible, and either go big or fail. I got this idea after watching the Vice interview with Martin Shkreli (obviously not a role model)[1] Shkreli made the leap from hedge funds (betting against pharma companies) into becoming the CEO of a pharma company, which apparently does research in addition jacking up the prices of HIV drugs (Shkreli actually gives out chemistry lessons on youtube[2]). So maybe some geeks could try getting funding, buy up some underappreciated, undervalued but already FDA approved drugs, and using the cashflow to do further research, or develop cool new products or services in the healthcare space instead of the traditional, risky route. (I'm not advocating jacking up the prices of critical lifesaving drugs obviously). [1] https://www.youtube.com/watch?v=2PCb9mnrU1g https://www.youtube.com/watch?v=2PCb9mnrU1g [2] https://www.youtube.com/watch?v=zQljHkKuC2I https://www.youtube.com/watch?v=zQljHkKuC2I