Stuart Moran has taken deep-rooted experience in the medical device industry, stemming back generations, and transformed it into a start-up that is causing shockwaves throughout the world of surgical instruments. How did he succeed in taking his passion and achieving a major breakthrough in an industry dominated by large-scale corporations? The journey has been wrought with strife and success.
Moran has been in handheld laparoscopic (minimal invasive surgery) instruments for his whole working life: He founded Surgical Innovations in the mid 90’s with his father, a surgeon, where they developed Endo Flex, a precursor to his current project, REVEEL. Both devices are liver retractors, the latter of which takes advantage of a unique non-slip design to securely hold the liver in place for ease of surgery on the stomach.
Moran established Retraction with funding from the Hong Kong government and private investors; he utilised connections from working in the US and Hong Kong and undertook the exigent challenge of running a medical device start-up.
What you will learn from this article:
1. Why is Hong Kong a great place to do business?
2. What obstacles have come up along the way?
3. How was this business plan a turning point for you?
4. This is part of the start-up experience, isn’t it? Dealing with rejection must be tough?
5. Pitching must be a fundamental skill as well?
6. Focusing more on the product, how do you feel about accounting?
7. What is your top tip for budding entrepreneurs?
1. Why is Hong Kong a great place to do business?
We have tremendous infrastructure all in one place including some of the world’s leading universities; we can, for example, test our devices in a much more cost-effective manner than in the UK or US. Where else in the world could I and three product engineers successfully create a prototype in two years? In this period we went from almost nothing to a release in the market. For medical devices, you have to take a global view, and Hong Kong is one of the best places to make it happen.
2. What obstacles have come up along the way?
What do you do when you run out of money? That’s what happened and luckily, I met Alex from FastLane at Paperclip, a co-working space in Hong Kong. I’m not a finance guy, I know basic numbers, but my business plan was not very well-defined. Alex said to me: ‘Right, let’s build it!’ I still use that business model today, it’s beautiful and it’s sophisticated. If you can’t present a business plan to investors you might as well not have come; if you don’t have a well-integrated model that’s believable with cost and revenue drivers you won’t get anywhere.
3. How was this business plan a turning point for you?
It led to us getting funding; they wired us the money before we even sent the documentation! It’s brutally difficult to get money in Hong Kong ; it was down to the hard work and accuracy of Alex that allowed us to secure funds. For people like me, who are keyed into the design and manufacture of the product, help from someone with legislative knowledge like Alex was useful. When you are small, you need to have these basics absolutely spot on, or big companies will not look at you. Trust me, we have experienced our fair share of rejection.
4. This is part of the start-up experience, isn’t it? Dealing with rejection must be tough?
You need to be able to deal with the setbacks and not be discouraged by deals that fall through at the last minute. You have to believe in what you are doing and know your product is worth the fight. Sometimes it can be hard to know whether you’re still following the right path, but in amongst the hardships of running a small business you get compliments from renowned surgeons and medical professionals, saying that this product has drastically improved surgery conditions; that is how you know that what you’re doing can really help patients.
3. How was this business plan a turning point for you?
It led to us getting funding; they wired us the money before we even sent the documentation! It’s brutally difficult to get money in Hong Kong ; it was down to the hard work and accuracy of Alex that allowed us to secure funds. For people like me, who are keyed into the design and manufacture of the product, help from someone with legislative knowledge like Alex was useful. When you are small, you need to have these basics absolutely spot on, or big companies will not look at you. Trust me, we have experienced our fair share of rejection.
4. This is part of the start-up experience, isn’t it? Dealing with rejection must be tough?
You need to be able to deal with the setbacks and not be discouraged by deals that fall through at the last minute. You have to believe in what you are doing and know your product is worth the fight. Sometimes it can be hard to know whether you’re still following the right path, but in amongst the hardships of running a small business you get compliments from renowned surgeons and medical professionals, saying that this product has drastically improved surgery conditions; that is how you know that what you’re doing can really help patients.
5. Pitching must be a fundamental skill as well?
Undoubtedly. Often times potential investors have been unable to understand the medical jargon, or have simplified asked to see the app. We are in a small and niche market; this is both a strength and a weakness. You have to have a fundamental belief: I’m making patients better, and quickly too. If you are ambivalent you have to give it up. Know what you are good at, and convince people that you are right.
6. Focusing more on the product, how do you feel about accounting?
It’s great to have Alex on board, as I prefer to focus my attention on the product rather than the accounting. I love my business model and I’m now a huge fan of Xero, but in terms of pulling accounts together; I don’t want to do it. We had trouble with the way we did it before, so the FastLane team has been extremely helpful to us. In comparison to other companies in our market and what they do for their monthly accounts, I have to say that our system looks fantastic. We have accurate and well-produced presentations that are impressive in board meetings; this is all thanks to the help from FastLane.
7. What is your top tip for budding entrepreneurs?
Raise more money than you need! Implementation takes a lot longer than you think. I would have raised more money, because getting the product in the market, especially in the US, is extremely difficult. Know your market, because when the right opportunities come you need to be able to take advantage of them. Being in the right place at the right time is only good with the right numbers. As a business owner, I am ultimately responsible and need support to stay on top of things. Most importantly, the balance sheet needs to be in order. Therefore, a good system is imperative. Thankfully, Xero takes the anxiety out of finding, presenting and sharing data.
8. How much comes downs to keeping investors happy?
A lot! I can easily show them how it’s all spent so they don’t go: ‘what did you do with my money’? Spending, debt, cash flow, margins, they are all there for us to show, and we own all the data too. However, we are in charge of our own destiny; board meetings are strategic and not wasted scrutinizing accounts, but talking business, markets and the details that will build our operations.
9. How do you train people in such a niche field?
Someone called us the ‘Shaolin Temple’ of medical devices because we take novices and turn them into experts. For operations, we are a micro company, and we can’t afford an in-house accounting team, as a result, we sometimes need support from others to focus our efforts on development and training, so Xero allows us to run this business working with Alex’s team to get those numbers all in order. Once you learn the principles and benefits of getting great numbers together and having secure cash flow, it all falls into place.