1 00:00:00,000 --> 00:00:05,880 Kevin Mako: Hello, product innovators. Today we learn from someone who has been a part of eight hardware exits on how to ensure you reap big 2 00:00:05,880 --> 00:00:08,800 Kevin Mako: rewards by building a hardware startup quickly and correctly. 3 00:00:08,900 --> 00:00:16,560 Narrator: You're listening to the product startup podcast, a show to learn from top leaders in product development, prototyping, manufacturing, product selling, and everything in between. 4 00:00:16,780 --> 00:00:21,300 Narrator: Hosted by Kevin Mako, the leading expert on product development for physical product startups, sponsored 5 00:00:21,300 --> 00:00:29,880 Narrator: by PTC's two best in class 3D CAD product development software solutions, Onshape and Creo, and produced by Mako Design + Invent, the original firm providing world-class, 6 00:00:30,000 --> 00:00:35,060 Narrator: consumer product development services tailored specifically to startups, small manufacturers, and inventors. 7 00:00:35,220 --> 00:00:43,180 Kevin Mako: Welcome back, everyone. Today, I'm very excited to introduce Rich Walsh to the show. Rich is the CEO of CorVent Medical, which is the eighth company Rich has helped build. 8 00:00:43,560 --> 00:00:50,400 Kevin Mako: Prior to Corvent, Rich was a part of many different companies building them from early phases right to exiting through either acquisition or going public. 9 00:00:50,720 --> 00:00:56,360 Kevin Mako: He has been in the space for over 25 years. Today, Rich is going to share some valuable knowledge from vendor startups and small 10 00:00:56,360 --> 00:01:05,020 Kevin Mako: manufacturers on how rewarding building a hardware startup is, how to move. fast to accomplish big goals much faster than big companies and how to be a repeat serial hardware 11 00:01:05,020 --> 00:01:07,500 Kevin Mako: startup entrepreneur. Now on to the episode. 12 00:01:08,340 --> 00:01:15,640 Kevin Mako: Hey, Rich, welcome to the show. Thanks, Kevin. It's great to be here. We're excited today to talk to you about medical devices and hardware products in general, 13 00:01:15,860 --> 00:01:23,480 Kevin Mako: especially as a startup, encouraging the value of startup development, especially in the hardware space. Obviously, you hear lots of things around the world. 14 00:01:23,600 --> 00:01:31,560 Kevin Mako: Hardware, it's hard and it's difficult to make money, but that's simply not true. There are countless examples, stories, companies, more and more 15 00:01:31,560 --> 00:01:41,060 Kevin Mako: than ever before in 2023, emerging hardware startups changing the game, putting their innovations in place, disrupting even legacy marketplaces. 16 00:01:41,280 --> 00:01:49,760 Kevin Mako: And you're a prime example. You've had eight successful hardware startups in your career. You've been doing this for over 25 years. Before we get into all 17 00:01:49,760 --> 00:01:58,020 Kevin Mako: the best practices around motivating hardware startups to get the ball rolling, just give us a bit of a background. How did you get to be the big success story that you are today? 18 00:01:58,900 --> 00:02:08,220 Rich Walsh: Well, CorVent Medical is a company that really was founded during the pandemic, and we had a mission. A mission was to save lives. That's an incredible mission. 19 00:02:08,400 --> 00:02:15,780 Rich Walsh: It was so motivating for everybody because we built medical ventilators. 30 years ago, when I got into Med Device, I was transitioning from the 20 00:02:15,780 --> 00:02:24,980 Rich Walsh: military into sales and marketing, and I really had a lot of different opportunities and different paths I could have gone down. 21 00:02:25,540 --> 00:02:32,480 Rich Walsh: I was a pilot in the military. I could have stayed in aviation, but I really wanted to make a difference. I wanted to do things that would help people, 22 00:02:32,700 --> 00:02:35,560 Rich Walsh: help our communities, help mankind in general. 23 00:02:36,340 --> 00:02:40,400 Rich Walsh: And I met a person who was involved in medical device equipment. 24 00:02:41,180 --> 00:02:46,520 Rich Walsh: And they shared with me what they were doing. It was a new technology called laparoscopy. 25 00:02:47,180 --> 00:02:53,000 Rich Walsh: And, you know, really it allowed patients to go home in half the time that they 26 00:02:53,000 --> 00:03:02,920 Rich Walsh: would have stayed in the hospital with much less trauma and pain and suffering and post-operative recovery. And I thought that, wow, you know, you think about 27 00:03:02,920 --> 00:03:10,800 Rich Walsh: how many surgeries have done every year around the world. And if you could do that and you could simplify that by designing 28 00:03:10,800 --> 00:03:19,740 Rich Walsh: technologies like staplers, like scissors, like that could go into the body through small holes instead of making big incisions. 29 00:03:20,000 --> 00:03:21,340 Rich Walsh: And that's what laparoscopy is. 30 00:03:22,040 --> 00:03:30,340 Rich Walsh: And so I saw that this was the future. And I understood that, you know, the way surgery had been done for hundreds of years, 31 00:03:31,140 --> 00:03:37,020 Rich Walsh: you know, something had to change. And we launched laparoscopy pretty much at U.S. surgical 32 00:03:37,760 --> 00:03:45,320 Rich Walsh: and for general surgery and for GYN and for urology and almost any discipline you can think of in a surgical world. 33 00:03:46,180 --> 00:03:52,880 Rich Walsh: And it was very rewarding because again, you see patients that, let's say, had a gallbladder operation. 34 00:03:53,720 --> 00:04:02,900 Rich Walsh: Our engineers designed staplers and they designed clip pliers and they designed things called trocars that would allow the doctor to go inside the patient 35 00:04:02,900 --> 00:04:12,440 Rich Walsh: with miniature hands, essentially, miniature devices where the patient used to have an 8 to 10 inch incision. They now had two or three half inch incisions. 36 00:04:12,440 --> 00:04:20,380 Rich Walsh: So the patient's recovered faster. They went home faster, had a lot less pain and suffering, and the recovery was remarkable. 37 00:04:20,980 --> 00:04:30,800 Kevin Mako: And it's all because of mechanical engineering. It was all the hardware, just amazing technologies that were developed 30 years ago. That's amazing. 38 00:04:30,980 --> 00:04:36,840 Kevin Mako: So you saw the opportunity and you saw the pain points that are being created and you developed the product. 39 00:04:36,940 --> 00:04:45,940 Kevin Mako: You came up with these engineering marvels essentially that changed people's lives. And it all starts from vision, right? which is where so many hardware startups begin, 40 00:04:46,260 --> 00:04:55,860 Kevin Mako: they identify that core opportunity or that serious pain point or something like that. And then they see some sort of mechanical method to improve the situation. 41 00:04:56,320 --> 00:05:05,920 Kevin Mako: And that is how so many hardware companies start, so many medical device companies. I want to drill deeper into your story about your current business because it's pretty 42 00:05:05,920 --> 00:05:13,120 Kevin Mako: amazing how quickly with Corvent you were able to get off the ground. So you just started it at the beginning of COVID. 43 00:05:13,120 --> 00:05:21,260 Kevin Mako: and then in a very short time, you develop device, you're approved by the FDA, all the regulatory things were said and you're selling products. 44 00:05:21,460 --> 00:05:28,480 Kevin Mako: So talk a bit about that story because I think that's really inspirational for hardware startups. You know, if you're in medical, people think that 45 00:05:28,480 --> 00:05:33,560 Kevin Mako: it's really difficult or impossible to actually get a product out there. But again, that's not true. It happens. 46 00:05:33,960 --> 00:05:36,980 Kevin Mako: And especially if you've got a consumer product, there's, for the most part, 47 00:05:37,120 --> 00:05:45,580 Rich Walsh: much less regulation involved. And you went through it. So talk about that story and how it became a success in such a short amount of time, especially in the medical field. 48 00:05:45,760 --> 00:05:52,380 Rich Walsh: In March of 2020, it was an incredible shortage of medical ventilators around the world. 49 00:05:53,140 --> 00:06:01,640 Rich Walsh: And the U.S. government knew that our stockpile wasn't adequate. Our company was formed. We had an engineer. We had a physicist. 50 00:06:02,020 --> 00:06:03,200 Rich Walsh: We had a doctor. 51 00:06:03,880 --> 00:06:11,400 Rich Walsh: And we had a small design house out in California. In less than a year, we had ventilators on multiple continents saving lives. 52 00:06:12,220 --> 00:06:22,000 Rich Walsh: That process usually takes three to five years in big companies. You know, if you look at big companies, medical device companies, they design, they spend 53 00:06:22,000 --> 00:06:31,700 Rich Walsh: hundreds of millions of dollars designing. But because we had a great senior engineer, our chief technology officer, we had a great 54 00:06:31,700 --> 00:06:37,040 Rich Walsh: biomedical engineer, one of our founders, and we saved a lot of lives around the world. 55 00:06:37,080 --> 00:06:47,000 Kevin Mako: In fact, right now, we've got dozens of our ventilators in the Ukraine saving lives. And so very rewarding, very motivating. We make a difference every day. 56 00:06:47,460 --> 00:06:56,260 Kevin Mako: When we ship our products, we make a difference. We save lives. Yeah, it's amazing. It all spun from an idea. You seize the opportunity and you went after it. 57 00:06:56,340 --> 00:07:05,040 Kevin Mako: And obviously, execution is key. The other thing that I find amazing about what you're talking about here is how nimble and quick startups can be in relation to big corporate. 58 00:07:05,260 --> 00:07:13,620 Kevin Mako: And when you hear a lot of these stories about these crazy amounts of time, it takes for products, especially in the medical sphere, but in really all consumer products. 59 00:07:13,760 --> 00:07:19,800 Kevin Mako: I mean, the average traditionally is anywhere from two to seven years in development. And that's way too long for a startup. 60 00:07:20,060 --> 00:07:27,480 Kevin Mako: So even if I look at macro design clients, I mean, we're looking at anywhere from like nine to 12 months to be from concept to in the market. Right. 61 00:07:27,740 --> 00:07:36,580 Kevin Mako: Now, obviously, things can delay that. There's lots of things that can happen. But the reality is, if you are persistent and consistent, you can push things through very 62 00:07:36,580 --> 00:07:41,880 Kevin Mako: quickly, especially when there's an unmet need. And I think for the vast majority of hardware product companies out there, 63 00:07:41,980 --> 00:07:47,640 Kevin Mako: the vast majority of startups, you've already identified the unmet need. So now you need to chase that. Get the vision on board. 64 00:07:47,760 --> 00:07:52,080 Rich Walsh: If you need funding, get other people on board that understand that need like you did, Rich, 65 00:07:52,300 --> 00:08:00,660 Rich Walsh: and find other people that are willing to help out on the different elements of the product that you need to get a high-quality product, manufactured, certified, and 66 00:08:00,660 --> 00:08:09,000 Rich Walsh: out there selling to the market that needs the very thing that you're looking to develop. Yeah, I mean, you know, and you mentioned vision. I mean, that's part of our culture. 67 00:08:09,220 --> 00:08:11,960 Rich Walsh: Everybody in our company, and it's so incredibly important. 68 00:08:13,040 --> 00:08:20,240 Rich Walsh: having a great company culture. We were very lucky. We built this company from the ground up. You know, there was three founders, four founders. 69 00:08:20,620 --> 00:08:30,600 Rich Walsh: And then I came along and I was the happy go lucky CEO that, you know, was ready to commercialize worldwide and get things going. And we did. And it was a lot of fun. 70 00:08:30,760 --> 00:08:39,240 Rich Walsh: We had a lot of fun. We were very proud of what we were doing. Our chief technology officer who's an engineer, he, you know, nothing less than perfection. 71 00:08:39,720 --> 00:08:49,100 Rich Walsh: It has to be perfect. If it's not perfect, when not doing it. They push themselves so hard because, again, we had the opportunity to make a difference. And we still do. 72 00:08:49,180 --> 00:08:55,820 Rich Walsh: We pivoted after the pandemic. We're building critical care ventilators now here in Fargo, North Dakota. 73 00:08:56,540 --> 00:09:05,220 Rich Walsh: What's really important is that over 90% of all the ventilators worldwide are not made by American companies. And we're changing that. We're bringing that back to the U.S. 74 00:09:05,660 --> 00:09:13,440 Rich Walsh: with the same team of highly motivated engineers that worked tirelessly through the pandemic to get these design concepts out there. 75 00:09:13,960 --> 00:09:22,760 Rich Walsh: But more importantly, we did this in a year what it typically takes seven, six, five, six, seven years to do. And it was, it got through the 76 00:09:22,760 --> 00:09:30,520 Rich Walsh: FDA because the device is really, really, really, really designed incredibly well and built very well, built here in the United States. 77 00:09:30,600 --> 00:09:35,400 Rich Walsh: I think that we've added, we've doubled, we've tripled our engineering team now. 78 00:09:36,440 --> 00:09:39,440 Rich Walsh: We're starting our manufacturing here in Fargo. 79 00:09:39,980 --> 00:09:44,360 Kevin Mako: And moving warehouse, we're going from 3,000 square feet to 18,000 square feet. 80 00:09:45,020 --> 00:09:51,100 Kevin Mako: And 15,000 at the 18,000 square feet is dedicated to the R&D team manufacturing. 81 00:09:52,380 --> 00:09:55,360 Kevin Mako: And, you know, it's engineer heaven. They've got a brand new space. 82 00:09:56,400 --> 00:10:04,640 Kevin Mako: Everything's going to be shiny and brand new in the company. That's amazing story because you started out with the vision. You got a bunch of stakeholders on board that 83 00:10:04,640 --> 00:10:12,180 Kevin Mako: could execute on that vision. You designed, developed, engineer it to match what that vision was. You got it through the regulation. You got it to market. 84 00:10:12,540 --> 00:10:20,920 Kevin Mako: And now you're scaling up like crazy so big to the point where we're building your own manufacturing facility, your own R &D facility and really scaling it from there. 85 00:10:21,120 --> 00:10:29,540 Kevin Mako: I want to talk about the next step, not necessarily for this business, but something you've done in many businesses before, which is the exit, which could be one of the most 86 00:10:29,540 --> 00:10:36,680 Kevin Mako: rewarding parts of a hardware startup. And it's something that, especially if you're at the early days of a hardware startup, it seems so far in the future. 87 00:10:37,260 --> 00:10:44,640 Kevin Mako: But the reality is you've done this eight times now. And every time you've come to this amazing point where somebody else much bigger than you 88 00:10:44,640 --> 00:10:51,800 Rich Walsh: wants this thing so bad that they pay a lot of money to essentially buy you out. Talk a little bit about that process as you've seen it in the past. 89 00:10:52,020 --> 00:10:59,420 Rich Walsh: And something that hardware startups can be doing to be preparing for that or at least just looking forward to that as a potential. 90 00:10:59,540 --> 00:11:09,520 Rich Walsh: exit opportunity for the end game of their actual business idea. I've had the opportunity and the pleasure to have different types of exits. 91 00:11:09,760 --> 00:11:17,980 Rich Walsh: We've had M&A events where a huge company comes in like Johnson & Johnson or Abbott. Those are two companies that acquired two of my companies. 92 00:11:18,360 --> 00:11:26,880 Rich Walsh: Most recently, Teleflex purchased one of my companies that I was working for, and that was a $1.5 billion event. 93 00:11:28,560 --> 00:11:37,280 Rich Walsh: So startups are amazing. Do we want to be purchased by a company? I'm not sure. I think that growing, building a company here in Fargo 94 00:11:37,280 --> 00:11:44,520 Rich Walsh: and taking it out public someday, that's probably where we'll go. And that can create generational wealth. 95 00:11:44,740 --> 00:11:53,220 Rich Walsh: You know, if you're hanging there, you work hard at a startup, that's unbelievable, you know, what it does for everybody that was on board early and 96 00:11:53,220 --> 00:11:58,220 Rich Walsh: hung in there through the tough times. And, you know, it can be a really, really life-changing event. 97 00:11:58,600 --> 00:12:05,840 Rich Walsh: I will say that when the big companies buy you sometimes the ingenuity or I should say the vision gets lost. 98 00:12:05,960 --> 00:12:10,980 Rich Walsh: So that's not always a great thing for the company, but the company will grow. 99 00:12:11,180 --> 00:12:20,240 Kevin Mako: I've seen companies that were purchased at Neotrack, purchased by Teleflex. They've grown at that company tenfold over the last 10 years. 100 00:12:20,420 --> 00:12:28,660 Kevin Mako: And it's heavy in engineering. You know, the exits, exits are phenomenal. You just don't know what's going to happen. It's a roller coaster ride. 101 00:12:29,560 --> 00:12:37,980 Kevin Mako: And it's always been very rewarding the exit for all the ones that I've experienced over the years. And it's so amazing in your situation. 102 00:12:38,420 --> 00:12:44,420 Kevin Mako: You started early, which is something I know you talk about a lot. You really encourage people to start sooner than later. 103 00:12:44,580 --> 00:12:52,820 Kevin Mako: If you've got that invention idea or that proprietary technology, whatever it might be, the early you start, the better. And it's very simple. 104 00:12:53,020 --> 00:13:01,860 Kevin Mako: You've got time on your side. The sooner you start, the better it's going to be. over the course of time. And what's amazing in your situation is it not only did you start early. 105 00:13:02,320 --> 00:13:11,320 Kevin Mako: You started early. You went through the processes. You got a product to market. You then exited. And then you use that money, that experience, those connections to do it again and 106 00:13:11,320 --> 00:13:18,100 Kevin Mako: again and again. And I find that most hardware entrepreneurs that are doing it for the first time, it's not their first idea. 107 00:13:18,280 --> 00:13:26,740 Kevin Mako: Even if it's their only really good idea at the moment, every single one of them unanimously, especially when they become more and more successful, has more. 108 00:13:26,760 --> 00:13:33,440 Rich Walsh: ideas and can see more opportunities. And now that they understand how it's totally possible to go 109 00:13:33,440 --> 00:13:39,540 Rich Walsh: from idea to product on the shelves to then exiting for big bucks, when you see that that's a very 110 00:13:39,540 --> 00:13:47,520 Rich Walsh: real thing that can be done in this world, you then learn to do it over and over again. And you're a perfect case in example of you multiple times. 111 00:13:47,680 --> 00:13:56,400 Rich Walsh: And now with yet another game changing company here with the ventilation devices. Yeah, one of my daughters is an engineer. And I think she was about 14 to 15 years 112 00:13:56,400 --> 00:14:02,680 Rich Walsh: old and there was an article in Wall Street Journal. It was front page and it talked about how biomedical engineering was the future. 113 00:14:03,520 --> 00:14:12,380 Rich Walsh: And that I think it was like for 20, if you were going to be an engineer in 2022, you wanted to be a biomedical engineer. This is 10 years ago. And I cut that 114 00:14:12,380 --> 00:14:15,020 Rich Walsh: article out and I left it in her room. 115 00:14:15,760 --> 00:14:25,620 Kevin Mako: And three, four years later, she went and became a biomedical engineer. I graduated University of Delaware. She's on her, I think, third startup now. And she's had 116 00:14:25,620 --> 00:14:34,420 Kevin Mako: a couple of things it's ready. And it's, again, it's, you know, getting early and pick the right company where you're going to have fun. And that's really rewarding. 117 00:14:34,420 --> 00:14:43,980 Kevin Mako: When you see these exits that can happen and if it's a, it's successful exit, it can change your life. And it can be a great 118 00:14:43,980 --> 00:14:49,680 Kevin Mako: thing. Absolutely. And the reality is if you make a great product and you mentioned perfectionism, 119 00:14:49,780 --> 00:14:58,380 Kevin Mako: you really focus on quality of the product, making sure that you're identifying that opportunity and then creating an amazing hardware solution to solve that, the sales will come. 120 00:14:58,600 --> 00:15:04,440 Kevin Mako: Oh, that sales will come, right? If you have an amazing product, the rest of it will fall into place, both sales and fundraising, 121 00:15:04,800 --> 00:15:12,880 Kevin Mako: which is something that obviously continues to evolve as you scale bigger and bigger rounds of funding in a variety of ways, whether it's customer funding, meaning they're buying 122 00:15:12,880 --> 00:15:20,880 Rich Walsh: product and you need to fulfill it, or whether it's actual financing where you're raising various funding rounds from Angel and Seed, up through to venture capital, 123 00:15:21,080 --> 00:15:28,660 Rich Walsh: up through to your series rounds and potentially even on to public as you've done or even an exit with an M&A opportunity. I mean, financing grows with the business as well, 124 00:15:28,780 --> 00:15:33,680 Rich Walsh: but it all trickles down to a great product. You need to make a world-class product that's high 125 00:15:33,680 --> 00:15:42,640 Kevin Mako: quality, that's manufacturable that people want. And if you can achieve that, then that opens up a lot of doors for you and a lot of different avenues. No question. 126 00:15:42,880 --> 00:15:48,760 Rich Walsh: And again, I go back to if you have a great culture, you're going to have a great product. I've been very, very lucky to 127 00:15:48,760 --> 00:15:54,720 Rich Walsh: to work for some of the best med device CEOs in the world at U.S. surgical and intuitive and 128 00:15:55,400 --> 00:16:00,780 Rich Walsh: a claren't. If you have a high level integrity and, you know, you have a high level of 129 00:16:01,620 --> 00:16:10,040 Rich Walsh: ingenuity and you motivate people to be creative, nothing can stop you. Rich, amazing advice. Much appreciated for all your words of wisdom today. And we look forward 130 00:16:10,040 --> 00:16:16,340 Narrator: to talking to you again. Thanks, Kevin. Thanks again. Take care. Thanks for tuning in to this episode of the product startup podcast. 131 00:16:16,420 --> 00:16:22,340 Narrator: If you found some value in the show, please do us a huge favor and leave us a quick five-star review. If you have any questions, guest suggestions, 132 00:16:22,540 --> 00:16:32,020 Narrator: or anything else, feel free to reach out to us anytime at our email, podcast at MakoDesign.com. That's podcast at MakoDesign.com. This show is hosted by Kevin Mako. 133 00:16:32,160 --> 00:16:37,280 Narrator: North America's leading expert on product development for physical product startups. Huge thanks to our sponsors, 134 00:16:37,460 --> 00:16:46,360 Narrator: PTC, and their two best-in-class 3D CAD product development software solutions, Onshape and Creo, and Mako, design, and invent. The original firm providing world-class consumer 135 00:16:46,360 --> 00:16:53,120 Narrator: were product development services tailored specifically to startups, small manufacturers, and inventors. Thanks for joining and see you next time.