Business Problem Solvers with Eric Alspaugh, Episode 10

In this episode of Business Problem Solvers, Eric Alspaugh speaks with Scott Johnson, president of DeviceAlliance and VP of Marketing and Business Development of M4D LLC, a medical device manufacturer, specializing in designing, developing, prototyping, testing, validating, and full-scale manufacturing novel endovascular technologies. DeviceAlliance is the only non-profit professional association offering an inclusive membership for all device professionals and is solely dedicated to serving the medical device industry of Southern California.

Tune in to the episode to hear about:

• Scott’s view on local trends, challenges, and opportunities in the MedTech industry, including access to capital and infrastructure supporting startups locally to retain entrepreneurs
• An explanation of Scott’s role at M4D, a company specializing in medical device manufacturing for neurovascular technologies, and its global influence
• The importance of the neurovascular niche in Orange County’s MedTech landscape
• The integration of AI and big data in MedTech, including regulatory challenges and potential innovations
• Recommendations of various local organizations and resources that support MedTech entrepreneurs and startups

Learn more about Scott Johnson:

• Connect with Scott on LinkedIn: https://www.linkedin.com/in/scott-johnson-mba-b4ab9b27
• Read Scott’s bio on DeviceAlliance’s: https://www.devicealliance.org/scott-johnson-bio
• Check out Scott’s podcast: https://www.devicealliance.org/medtech_radio_podcast
• Visit M4D’s website: https://m4dllc.com/about-us

About Business Problem Solvers:

Welcome to Business Problem Solvers Podcast, where legal insight meets entrepreneurial innovation. Are you a startup founder navigating the complex legal landscape of entrepreneurship? Are you seeking practical advice, actionable strategies, and expert guidance to propel your business forward? Look no further. In each episode of Business Problem Solvers, seasoned attorney Eric Allspaugh takes a deep dive into the intersection of law and business, bringing you insightful interviews with a diverse range of industry experts, thought leaders, and successful entrepreneurs.

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Read the entire transcript of this episode:

Voiceover: Welcome to Business Problem Solvers podcast, where legal insight meets entrepreneurial innovation. Are you a startup founder navigating the complex legal landscape of entrepreneurship? Are you seeking practical advice, actionable strategies, and expert guidance to propel your business forward? Look no further.

Eric Alspaugh is a seasoned attorney. Based in the vibrant startup hub of California, and he’s thrilled to be your host on this exciting journey. In this podcast, we’ll dive deep into the intersection of law and business, bringing you insightful interviews with a diverse range of industry experts, thought leaders, and successful entrepreneurs.

From intellectual property and contract law to corporate governance and regulatory compliance, we’ll cover the essential legal topics that every startup needs to know. Our guests will share their [00:01:00] wisdom, experience, and practical tips to help you navigate legal challenges, seize opportunities, and build a thriving business in today’s dynamic marketplace.

So whether you’re a seasoned entrepreneur, A budding startup founder or simply curious about the intersection of law and business. Join Eric on Business Problem Solvers podcast as we explore the legal insights and entrepreneurial inspiration that will fuel your journey to success.

Meet Scott Johnson: Medical Device Industry Insights

Eric Alspaugh: Hey Scott, welcome to the Business Problem Solvers podcast.
And for my listeners, it’s an honor for me to welcome Mr. Scott Johnson, a friend and colleague in the medical device community here in Orange County. I’ve had the pleasure of working with him directly on numerous projects, but significantly over the last seven years at Device Alliance, where Scott has had the role of president.

He’s been head of committees [00:02:00] and is now with the board and helping us direct our strategic Alliances here in Orange County and elsewhere. Welcome, Scott.

Scott Johnson: Eric. Pleasure to be on, my friend. How’s it going?

Eric Alspaugh: We’re doing great. It’s it’s really going to be a pleasure to have this time with you because we’ve had so much fun.
And in fact, we had a blast this last week at the very large Octane medical device investment event here in Orange County. And so I wanted to pick your brain on all things medical device industry, where you see things heading, and ultimately I want my listeners to get some tidbits and useful information from you to encourage them to get into the garage and inventing and more specifically out of the garage.

And looking for investment here in Orange County.

Scott Johnson: Gosh, thanks. That’s a, yeah, it’s quite a softball [00:03:00] pitch to take a swing at. But I think for the sake of having a productive conversation, I’ll stick to a little bit more in my area of, a so called expertise.
Orange County’s MedTech Ecosystem

Scott Johnson: There are many people out there that have stats on the national scene, the state scene, but.
Maybe just to focus on Orange County a little bit, because I’ve just. Been very lucky and honored to have worked with kind of so many people and interact with them through the device science community that know quite a bit about the entire ecosystem here as a whole. So just high level snapshot just remembering a few of the stats.

That I had looked up and did some research on for an article I wrote for the Orange County Business Journal right now, I believe, or Orange County, the medical device specific economic output, I believe it’s about 46 to 47 billion, roughly about 145, [00:04:00] 000 jobs that are directly there, not including suppliers and service providers, but directly in those medical devices.
And as far as the big players in the space, obviously diagnostics. obviously cardio ophthalmology, but as far as the trends in Orange County go, that number, they expect it to be at least a 60 billion within the next five years. So last time I checked from some of the California life science associations forecasts and some of the others for the state the med tech will probably be the second, if not the largest industry focused here in Orange County, which Is continues to just be so fascinating to me because as much as we have everything that we do, right?

There’s still a couple of just challenges, which I’ve thought about and talk to people much more than myself on that. We still continue to want to solve as a community. [00:05:00] I think we’re getting there because maybe the wool is being pulled off the eyes of a lot of people that have just been enamored with other things in the region for so long.
But I think. Maybe your listeners would probably agree with this, but I just think post COVID, there’s been a little bit more of a fresher conversation on the state of MedTech and where we’re at now, whether we can get that into a cohesive tactical plan to execute, I guess remains a big question.

The 1 thing you and I did discuss, and I thought might be a very interesting starting point with respect to your your podcast and how you engage the community. About 2018, I started to do a little bit of a personal survey and I’ll take a step back and just share with you. I was working at Octane on the Launchpad Accelerator with then the Director of Investment Relations, J.
C. Ruffalo. I was working with my good friend, Mark Belotti, and some of the medtech. [00:06:00] Basically we’ll call them panel that would review these med tech companies coming through and looking for these series a funding. I started hearing some themes on these entrepreneurs that have been around the nation versus the themes that I heard about the entrepreneurs that were here in orange County.

And I thought I have my own med tech podcast. I was talking to entrepreneurs, I’d meet them at device lines, and I just started picking their brain saying, You have gotten to a certain state, and I would say, looking back at the 114 MedTech entrepreneurs I spoke with, most of them are about a series B.

I want to say right around there. And this ranges from many people. I’m sure the community knows Bill Cologne. Dave Ferreira, Juliana Elstad even speaking with Stan Rowe, Ramin over at CathWorks. We had actually put together a MedTech mastermind consortium of about 18 of these leaders in the community based on me conducting the survey.
And I basically asked the MedTech entrepreneurs, what is it that Orange County specifically is missing that if [00:07:00] you could wave the magic wand and put this element into the ecosystem, it would have helped you out so much.

Challenges and Opportunities in MedTech

Scott Johnson: Significantly and overall high level, the number one answer as far as majority of them would say access to capital.
Now that’s not necessarily, a strange revelation there, but I think more specifically access to capital inside of Orange County, meaning the investors are not here. And you can certainly talk to a lot of people, like 80, I’ve laid the last stat that I’ve read. But I think it’s like close to 83 or 80.

4 percent now of investment into MedTech comes from outside of Orange County. So the intellectual capital’s here, the structures are here, but as far as the people that recognize it are willing to get off the bench and throw money into the game, the capital comes in, but then that ROI kind of leaves once, that company, does their big buyout.
And then also to the second biggest one, once again, not a shocker here, just the cost of doing business. [00:08:00]

Eric Alspaugh: Countless

Scott Johnson: conversations with commercial real estate guys, and we don’t need to certainly go down this path. Obviously, we understand what it’s like to do certain things in Orange County, and it’s just not a cheap place to live.
Just with those 2 stats there, that survey that we wrapped up in 2012, we tried to do some serious work with a lot of different organizations to see if there was a model. That device alliance, or maybe a larger community can emulate similar to what they did, whether it’s medtech galley or boston.

And what I mean by the model is a nonprofit working side by side with a chamber of commerce to support these. Infrastructures for the fledgling startups, so that when they got to a certain round or when they got to a certain visibility, the resources were there to support it because from what I’m hearing and what I’ve seen here from like ecosystems, like UCI or other places where MedTech companies come to, they start up, but then when they need those critical next step [00:09:00] infrastructures, animal testing prototype houses, et cetera, et cetera, they’re leaving Orange County to go get that.

Get those services and we would talk about the intrinsic benefit about having these resources here to foster that environment, and it just continued to remain a challenge. And here we are 3 years later, certainly the access to capital and then this has been a pretty decent year, coming off of the, some of the trends in the JP Morgan conference earlier this year, and even looking at some of the.

Kind of homegrown heroes that have got access to capital. As a matter of fact, I just read a pretty comprehensive list from LSI, Scott Pentel’s group, where they’d actually showcased all the companies that got accessed and got funding. And a good chunk of those were from Orange County, which is good to see.

So I’m curious on your side of things with. With all of these challenges and especially some of the stuff that you handle legally, are you seeing similar trends as far as on your side of that? And what I mean by that, are [00:10:00] you seeing a little bit easier access to funding? Are you getting, are you seeing the clients out there?

Are they still having a little bit of struggle out there? Or do you find that capital’s flowing a little bit more and you’re having more conversations with entrepreneurs that are coming up?

Eric Alspaugh: Fair question. Perfect. I have seen. Ebbs and flows and raising capital is always a challenge.
It’s always very difficult. People don’t understand that. And I would say. I actually saw an easy opportunity for investment into startups about three years ago post co in the middle of COVID, but the amount of Money that was being printed. People with real money recognized that economically their money was going to just devalue.

And so they were putting money into equities and I’m no financial [00:11:00] expert, but I saw people throwing money into smaller startups and for a couple of years I saw a lot of companies raise some money, which in prior years would have And so I, I enjoyed that time and I worked with companies that were able to raise capital and even a couple of them had some exits.

So that was good. Right now. It seems like it’s the same as the previous 15 years on average, in that there’s deals that are happening. There’s great technology. But you brought it up access to capital is always a challenge. And even here in orange County, and I don’t want to name names on who I’m disappointed with and who I thought could have brought resources or leverage their resources better.

I think that I think from my position, my best [00:12:00] use of resources would be just to educate people about. Where to go and how to look rather than try to make investment capital available organically right here in my backyard. It
Scott Johnson: was interesting post COVID. I will not say any names, but I had at least five to six meetings with various funds, various companies that moved into Orange County, into the vacant space seeing that opportunity and wanting to transplant an office here.

And, quite frankly, slap the device Alliance logo on their office and say, Hey, we know MedTech. As a way to compete now with a little bit more of a competitive market where all of a sudden you have a MedTech entrepreneur that’s able to actually have smart money, actually have a [00:13:00] strategic partner that knows his zero selections.

They know the physicians, they know how to get to first in man. They know how to grease those wheels and get things moving. So that was, I was hopeful of that. And I’m, I am definitely now a little bit more in my role here. My, my current role here is the VP of sales and marketing with them for D.

I’m definitely seeing that a little bit more, but it is still. It is still interesting to me because there’s, they just want the access to that. It’s all the it’s almighty dollar, but then even when the almighty dollars there and you look for those. Infrastructure places to go. They do have to leave orange County.

Is that going to change? I’m really hoping it will in the next 10 to 15 years. You would think a 60 billion output would build an infrastructure like that here in orange County, but who knows me with the cost of real estate here maybe it’s just never a feasible option. And this is just one of those lateral rungs that we just never put here, but we MedTech community in orange County,
Eric Alspaugh: that’s [00:14:00] very insightful. I should mention some of the positive one, one positive thing is that I really have seen an improvement in UCI over the last 10 years with their technology transfer office, the resources that they have, the openness to reaching out to industry. Including groups like Octane.

So that has been a very positive thing that I’ve seen, but I’m interested in hearing real quick about what you’re doing with M you mentioned M4D. Can you tell us real quick about what they do and what your role is? And I don’t know how that impacts the community in a bigger way.

Scott Johnson: Yeah, sure.

The Role of M4D in Neurovascular Innovation

Scott Johnson: It’s a M4D as I mentioned before, I’m the VP of sales and marketing there, so they’re a premier medical device manufacturer, they’re specializing in designing, developing, prototyping, testing, validating, and full scale manufacturing of novel [00:15:00] endovascular technologies.

So my job is to drive the strategic sales and marketing plans achieve corporate revenues and develop and execute the business development strategy, and also essentially, Grow the revenue to significant amount because one of the unsung industries here inside of MedTech is the neurovascular industry.

And a very quick and a dull story about two years ago device lines did its first what’s new in neuro event. We had some great KOLs there. I had some really good partners going to work with him to bring these speakers this panel there and it’s quite funny and all of a sudden we’re looking at 100, 125 people, but the quality of the people that were in attendance to hear these KOLs speak, Dr.

Satoshi, who many people on their own know, Wally Roginski, Joel Harris, it was just shocking that we had so many of the industry leaders. I remember looking at Mark Dickinson. He’s [00:16:00] president of J and J CERA Novus, just sitting in the front row, just listening, and he came up to me after the event, he said, Hey, Scott, thanks.

We don’t do any neuro events in Orange County. And I was like wait a second between, BALT, MicroVention, Medtronic, all these headquarters, nobody talks about it. And that’s just one microcosm of a lot of the things that happened here. In Orange County within med tech is just it’s such a big impact, but it doesn’t really get talked about maybe because my own bias and then fast forward now working with a contract manufacturer that deals exclusively with this.

It is just. It is just an exciting and it’s a new territory for me to look at how the globe and KOLs and SMEs work with the neuro industry here in Orange County is something else and to actually be with a firm that continually, exceeds the expectations of the physicians and the doctors and the entrepreneurs that come into our office.

There’s a lot of exciting growth here. Even our company is going to be [00:17:00] launching a manufacturing plant in Vietnam. Right now, I think I’ve got some people over in Barcelona working with some KOLs there and, we’re having global connections and just growing this company out. I’m like, really excited for the future.

So it’s like a little success story inside of Orange County. But once again, We undervalue the impact that we have on the whole global market of MedTech here in Orange County. So yeah, that’s my exciting daytime job. In addition to working with you, obviously, on device lines, I also sit as the corporate partnership committee member over at Chalk Hospital with my good friend, Kayla Camano, who is there.

She’s recently moved on, but Yeah helping to make an impact over there with advancing some of the hospital care and bringing some awareness to some of the afflictions and help that they’re giving children of Orange County.

Eric Alspaugh: Wow. That’s always great. And I know I’ve seen you working with the American Heart Association and Chambers of Commerce and reaching out.

On behalf of Device Alliance and all sorts of groups trying to make connections. Real quick, what about without giving away anything [00:18:00] proprietary, what kind of companies are you seeing come into M4D in terms of their finance? Are they venture backed? Are they round A, B, C? Is there a trend or a sweet spot that you guys have been seeing?

Yeah, it’s high

Scott Johnson: level. There is, there’s a nice spread. So I’ll do the spectrum of there is the initial R and D prototype development and you are dealing with the physicians and doctors who have been on the front lines. Of, endovascular, novascular, just the, they’ve been in the trenches for years and all of a sudden they’ve seen an unmet clinical need and they’ve got an idea and they’ve got a novel concept.

They’ve got some IP, but at the end of the day, they just, they don’t know how to design it and they don’t know how to develop it and they don’t build for manufacturing. [00:19:00] And I know it just seems very cliche to say, but it’s, something that I’ve learned and I’ve got a great colleague who’s just taught me so much about all this.

They don’t understand, just because you have this 1 concept and yes, you can make a prototype, but can you actually scale this? And so to, we do a lot of work on the R& D side and that’s, Really where my R and D team, they shine going up to, your questions far as the clients we get, we also are getting midsize and large scales companies that are looking to manufacture.
And now with our ability to do manufacturing in Vietnam, that’s obviously a very viable option, certainly because of the economies of scale there. And they may need particular stents, catheters, the various technologies made. So those conversations I’ll go there as well. But. I would say the sweet spot and the majority of it is the R and D, because then we work with the clients so closely all the way to that development, because we have an in house quality team that helps them get clearance from the FDA and also, with [00:20:00] MDR from the European markets.

And so getting those clearances just recently, we did a FDA clearance with single pass with Bill Cologne. And so having that all in house, then the client kind of works and engages with the team one on one. So they’re a part of the process and the growth and they see it there. So then they almost become like a strategic business partner with us.
manufacturing process, but we’ve been there from day one with that. So I’d say that’s probably the sweet spot as far as our client diversification.

Eric Alspaugh: Okay, great. What other questions did I have for you? Oh, my, my favorite topic for my listeners is to hear stories about startup entrepreneurs and some of the pitfalls that they have.

Legal Pitfalls for Startups

Eric Alspaugh: And if you had any. Funny stories or that could give us insight on what people do at startups that they shouldn’t do. And in particular, legal catastrophes. And one of the things [00:21:00] that we have previously talked about was whether it’s nondisclosure agreements or the chain of title in creating Ownership or documenting inventorship and ownership and patents.
Have you run across any of those or do you have any other stories that are in the same vein?

Scott Johnson: Okay. Yeah. Okay. I got a, I got one. I absolutely want to pick your brain on because I’ve heard this now on at least seven different occasions within the past two years. And it is being engaged with lawyers and when their client leaves.
They will tell me they should not have even filed a patent. And, I’ve asked two or three of these lawyers. I said, yeah, how long have you been in the game? They’ve been in the game for 15, 20 years. And when I asked them, I said, how often is it that you see that a client filed a patent that they didn’t need to unnecessarily did, or just didn’t Had no business doing.

And they [00:22:00] said all the time, I said give me a number to wrap my head around and I’ve had answers range from 30 to 60 percent of the time they should have never even filed the patent to begin with. So I guess maybe, flip it back to you. Has that been your case? And two, it is the answer is simple as they failed to get a consultant to help them on that to even, Hey, should I be spending these tens of thousands of dollars to do this because they don’t understand the whole game that they’re engaged in and they don’t understand the total available market.

And they’re not just thinking through what they’re, what problem are they solving? And how are they going to get there? Are they just in a state of like panic Oh my gosh, no one else has that. And they just. Act quickly. And next thing they’ve blown hundreds of thousands of dollars. And I didn’t need to do that.

Lawyer’s yeah, it’s a little bit of back and forth with that one. So what’s your insights on that one? What have you seen out there?

Eric Alspaugh: So from my [00:23:00] perspective generally no, generally I work with early stage inventors and again, they do, they have a great idea and they saw that movie and they think Kevin Costner did it.
If I build it, they will come right. And that’s the 95 percent of people because they love their idea and they actually do have a wonderful idea. They do not consider All of the other things, because we hear the stories of the guy who came up with the pet rock or the Chia pet or whatever. And you’re like, Oh, I could have done that.

Or I had that idea. They leave out so many other things. And what you alluded to was an understanding of the market. The medical device space is unique in that there’s insurance [00:24:00] reimbursement. There’s it’s highly regulated compared to other industries. And so I actually end up oftentimes with inventors that are in a hurry and they need to file their patents.
You have to have patents in. In our industry for healthcare med tech in order to check the box to even raise capital. There’s no one out there that’s saying we’ve got a trade secret. Even the folks with apps and software and things like that, they’re generally tying their secret sauce to some sort of a hardware application and looking for patent claims because it’s difficult to obtain capital.
And if you don’t have a patent application, it’s even more difficult. But the problem that you are bringing up is with I would say premier law [00:25:00] firms that are working with constant streams of people that have access to capital and are maybe the funnel is maybe not efficiently sending ideas their way, meaning they’re like a venture capital fund gets solicited with 600 to 1000 different ideas a year.

And they, their perspective is that these inventions are good, but they haven’t thought through the next three steps to make it through manufacturing, the scaling up of manufacturing, the regulatory, The insurance or the reimbursement, the distribution, the insurance, those types of issues how to make an exit, who are there any large partners available in the, in their space, or are they going [00:26:00] to grow it organically?
In house.

Scott Johnson: Yeah.

Eric Alspaugh: And those are like the

Scott Johnson: first world entrepreneur problems, right? You’ve got too much money to play IP with. Yeah, that’s a fair statement. Usually quite the opposite of the struggling first time entrepreneurs, but so let me then ask you a question on this one because the trends now toward, I guess you could call it just the.

The telemedicine aspect of it, right? Whether it’s generative AI they’re improving the efficiencies and it’s all about this. The biometrics technologies, the wearables even like the other day I read a, an article, with BCI, and that’s going to be like, my gosh, I saw some like astronomical numbers on that whole market.

So everything’s opening up to this personalized medicine aspect of it. So when you add in and I’ll, I can use maybe, neurovascular, but just think about any of your patents now that we’re getting more into this. [00:27:00] VR reality based tech transfer stuff on IP. What are you seeing out there?

What’s your message to the med tech community as far as how they should be thinking about that? Because I think people are addressing that as an afterthought. We’ll just add this technology. And because then every time you say data investors get extra excited, right? So we’ll just plug it again there at the very end and get to make it a buzzword, but.

Is there an IP strategy that you, a mistake that you are seeing startup entrepreneurs make? In their thought process from the get go, or do you feel that’s just something that kind of evolves with the IP as it goes along? Or do they need to take much more considerations up front about how that device will evolve over 10 years with respect to this data transfer?

Eric Alspaugh: Yeah. So the inventors and entrepreneurs that I’m dealing with regularly, they actually, they have the ideas. They are generally [00:28:00] engineers with technical expertise. typically have a regular day job and they have these ideas of, I’d like to one day develop this on my own. And so I see a lot of issues in documentation and when inventors leave one company and go to another company, it’s critical to document employment agreements, independent contractor agreements.
nondisclosures to understand those and to be careful when working on your side hustle to document things outside of work hours, to not use a work phone or anything associated with your nine to five. If you have any inkling to develop a product separately. And that was related to this is. [00:29:00] The big lawsuit that Massimo and Apple have had, that we talk about the patent litigation and it’s, Patent litigation at the ITC and very interesting patent litigation, but it really stemmed from personal personnel and HR with people leaving a particular company.

And a large group being acquired in a systematic way that raised the red flags and drew the attention that some unfair business activities might be happening. And so in that particular case, it stemmed from a personnel issue and not. Maybe it was IP related. I haven’t delved into the exact nuances of, and details of the case, but definitely having non disclosure agreements, having [00:30:00] processes in place to document that.

Hey, I’m leaving. It’s a clean separation. I’m coming on board. Hey, I’m not bringing anything in that I should not have and we’re good to go. Just diligence and it’s difficult. I think people have an internal, a gut sense of what’s fair and what’s not, but they don’t know how to ask, embarrassed to ask and if they do ask, does that send the wrong signal rather than, Hey, I’m glad you asked that question.

I want to be transparent and handle that issue now, and we can make it work because you have disclosed it. So there are solutions and people shouldn’t be afraid. And I, that’s an issue that I see with a lot of garage inventors.

Scott Johnson: Yeah, I remember the interesting thing with that Massimo one that I didn’t quite consider at the time was.
My gosh, I think it was like an email that went back, [00:31:00] who knows how many years, but then the employee leaving, which is already a kind of California HR nightmare. But then buried in that what exactly is claimed the scientists can and can’t do. Yeah, to that point it gets, it definitely gets messy.

But the one thing, when you and I were talking a little bit at octane is. Looking at where the big trends are as far as we did a snapshot of what Orange County is like and looking the bigger trends in med tech, the generative AI, the telemedicine, the personalized. Medicine. We’ve spoken for years at events on this consumerization and the world’s tend to stay separate. But now, with a little bit of this virtual reality health care and kind of A. I. Getting into it. I am curious.

The Future of AI and Big Data in MedTech

Scott Johnson: Have you seen [00:32:00] anything that has surprised you on The AI side of things with respect to technology and med tech that maybe people have not seen or considered.

And I’ll give you an example. One of the companies that I had, when I decided with could basically detect cancer cells using AI gosh, I want to say eight years ahead of the current technology based on these predetermined algorithms. And even though that they had these studies and these are pretty Concrete white papers.

They still were, probably years away from making any met claims. You could basically, you can do it’s called pre screening, it would be like the safe word for it, but. Still the legalese around that technology being used, they say is still, it’s almost in development now where there’s just a lot of eyes on the big companies to make moves first versus the small guy to even get into that.

Have you seen anything that’s been interesting to share with the medtech community as far as how that’s been playing out with respect to what your [00:33:00] claims should be and how much people should be precautious or brave, with the eyes integrating into medtech.

Eric Alspaugh: Wow, you flipped the script. This is a super interesting and evolving space.
And what I could tell you is I worked on patents going back about 10 years where MDs and data scientists were getting and collecting large data sets of 20, 000 patients over long periods of time. Epidemiology studies with lots of data, very detailed, And using, it wasn’t artificial general intelligence.

It was just algorithms and smart algorithms that could detect mathematically things that you and I just were not capable. We can track three dimensions, four dimensions, but once we’re asked to reason in five or six dimensions, we [00:34:00] lose it. We just can’t do that. Mathematics can. And going back 10 years I worked with a company that was able to use big data sets and come up with an 12 lead EKG monitoring system that could detect all sorts of cardiovascular issues in 90 seconds of resting rather than requiring a patient to get up on a treadmill and do a stress test.

And it had particular applications for diabetics or people who had lost limbs or who were severely obese and couldn’t get up and get moving. How could we do these tests? I’ve seen the data. I’ve seen those things working their way through FDA. I, and adjacent, I’ve seen similar big data used for detecting blood [00:35:00] infections.

In advance of any traditional systems, like we’re talking 48 hours, 72 hours in advance, being able to detect somebody who might be susceptible to a sepsis. And so FDA doesn’t have a pathway yet clearly defined. For people to feel comfortable with disclosing big data or sharing their algorithms and things like that.

So we’re in a gray zone right now where these devices are being limited in their clinical applications. They’re being used as. in house diagnostic. There’s a different MDDR was the FDA guidance term in house diagnostics rather than diagnostics that could be sold outside or with FDA regulation.

What’s my point? [00:36:00] I hope that, I know that FDA is looking at this because of generative AI exploding and there are massive applications. I think that Very technical people recognize it as just sophisticated math, and there’s going to be some interplay with the marketing folks and the technical folks and the regulatory folks to take advantage of this generative AI or these algorithms, because they’re super powerful and there are now.

Smart algorithms that could probably help people or engineers identify trends. and help them get their data sets solidified in such a manner that it’s reproducible for FDA purposes. That’s the big hurdle is FDA is going to be like, you’ve got some [00:37:00] proprietary algorithm. If you ask, The same question, a different way, we get a different answer.
So I see some issues there. What about you? Have you seen any trends?

Scott Johnson: No, you know what? It’s been conversational at a very high level for me and some of the events I’ve gone to personally in my day to day, I’m not seeing that. If anything, I read in the news. It’s probably, lately it seems to be a lot of movement on the robotics front, which is a, which is another interesting one, but I guess that’s a whole nother conversation in and of itself.

But, yeah I think I, I wanted to make sure that I was.

Collaborative Efforts in Orange County

Scott Johnson: Staying within the lane that I felt a little bit more comfortable with this conversation, keeping it here to Orange County, because I think, day to day and being involved in device science and supporting the other organizations here, when I, the problems that.

I’m focused on, although is awesome and we’ve certainly all heard, David [00:38:00] Chang, give presentations here in the local community. It’s I think about Orange County about what’s the next 5 to 6 years going to look like and how can we. Break down the divisions, I think that happened within this county between, my gosh, even if it’s between various med tech organizations, or how we can get out of our own way, because to me.

I’ve seen when you look at other models around the U. S. And you think to yourself, like we should be able to do that. And it’s, everyone gets excited. They’ll talk about the ideas. But then at the very end of the day, this just is like any other business. You say what’s the tactics?

What are we going to do? And then it’s just to yeah, you’re not trying to move rocks there, Scott, you’re trying to move earth and I’m not in the earth moving business. And so you say okay. So everyone recognizes the market. They recognize it’s a serviceable market. They recognize the money’s coming in.

They recognize all of this is going to be growing, but there’s that first mover and who’s it going to be. And I feel like there’s [00:39:00] just been a little, it’s been stuck in that gear for a while. I do sense a change and I do sense organizations are getting a little a bit. And maybe not frustrated, but they’re getting a little more of a sense of urgency.

Okay, we can act on this because the world is getting smaller and smaller. And I think Orange County’s impact on the global med tech industry is just getting bigger and bigger. At the end of the day, businesses need to do what businesses need to do. This is the game we’ve signed up for, and, we need to make a few risky choices, but in order to create sustainability.

And actually make Orange County a beacon of MedTech, you know, that’s where my head is at between the various organizations, that I’ve been trying to do, but some people might say, maybe a fool’s errand, but I think we’ll all be laughing looking back at this ecosystem in 5 years saying, wow, we don’t really recognize this place because there’s going to be so much growth here.

And if we can be a small part of that growth and that callous for change, then, hey, so be it, so that’s where my goal is at the end of the day.

Eric Alspaugh: I love it.

Resources and Networking for Entrepreneurs

Eric Alspaugh: So what kind of resources would [00:40:00] you share with viewers or listeners today who are coming on board? You see all sorts of networking events and all sorts of resources.
Who would you give a shout out to or some resources that you could give to these hopeful Entrepreneurs.

Scott Johnson: Oh, gosh. Yeah. Obviously, without, everyone knows my involvement, I think, with device Alliance, but, having been involved with and I’m just going through the top here, an organization that just partnered with us for the 1st time in a long time, a mix medical innovation exchange.

I went to 1 of their events, very engaging. They have a very unique dynamic and a different type of engaging conversation for start mid tech leaders. Obviously, octane have just having wrapped up their medical innovation form. We had just signed a strategic partnership with, so Cal bio and we’ve actually, we’re looking to support them more on future collaborations.
Obviously the orange [00:41:00] County regulatory affairs committee, Okra, these are different groups. I think what I would love to see a little bit more of, and what I’m getting tapped on the shoulder on is a little bit more of a cohesive relationship and an event. To get a little bit more of the local investment community, and I believe that the local chambers, whether it’s Irvine chambers or other city organizations to get involved with what the tech is doing, I just see them being able to create a little bit more value add for some of the challenges we have, because.

Truth be told, we, Eric, you were part of this 5 years ago. We did a med tech. I believe the word was like the mega mixer, right? We had 6 organizations. We had UCI bill applied innovation. We had all the organizations that I named off and we got 5 or 600 people together for those events.

Amazing feedback, tons of, energy, tons of Hey, what’s going on next. But, at the end of the day, [00:42:00] I had a nonprofit vehicle and people were volunteering their time and what it needed was a full time paid staff and, to build this thing up. Shame on me, for kind of, Plotting such an aggressive course, but the thing is, the energy is there.

And I look at organizations like LSI, like what Scott Pantel’s done, and the KOLs and SMEs that he brings here. And it’s that’s, that, that’s the way that like, I see the do it. And there’s plenty to go around here and support this. And there’s plenty for Orange County. So if there’s entrepreneurs out there looking to get involved in groups, or they need specific resources Please, by all means, if anybody wants to reach out to me directly on LinkedIn, I get quite a few requests all the time.

And so I, shame on me. I would have made a great recruiter in another life, but I’m happy to point out resources or people that they’re looking to connect to here in the ecosystem, because quite frankly, it’s just what device science does best, we connect people. To resources that are needed.

And that’s obviously a very simple way to go. And what’s nice is, if somebody doesn’t know someone, [00:43:00] then the next person will know someone who knows someone, who can basically find that. And that’s one of the things that I always liked about device alliances. It was a very tight knit community and we moved things out of the way for people to get connected.
And we didn’t do it. We didn’t do it at a high cost. We had very easy barriers to entry. And I think especially for those entrepreneurs that are looking for the resources and some exceptional teammates to help build their team and the access to capital. We had a good network of connections there.

And so we’re going to continue to grow that. And you and I obviously both working on the next generation of the leadership team. And, me with my own med tech podcast, we’re constantly looking to just amplify those voices that are looking to help. And At the end of the day for any of those entrepreneurs that are listening to the show all I would simply say is reach out and ask.
Awesome. I’m happy to do what I can do, and happy to point you out to at least someone who can help you if I’m able to do so myself.

Eric Alspaugh: That’s awesome. Hey where, what’s the best way if somebody wants to get in touch with you? Is it LinkedIn or

Scott Johnson: [00:44:00] Import? Yeah.

Eric Alspaugh: Okay. Yeah.

Scott Johnson: Yeah. Oh, ple. Please do LinkedIn.
Yeah. I try to keep all my worlds separate, so yeah, my nonprofits. A lot of people have just reached out to me directly on LinkedIn. Yeah that’s Scott Johnson MBA, and you can put in device lines in the search and hopefully my name will get brought up, but always happy to connect and always happy to a lot of people will reach out to me just to get some industry insights and to see what I might know within the Orange County ecosystem.
And happy to be of service any way I can.

Eric Alspaugh: Awesome, Scott, you’re the best. And I’m going to, I’m going to hit you up for a follow up in six months to see how our predictions are unfolding.

Scott Johnson: Yeah. And I’ll tell you what on that note, I’ll quick story. Last year we did a partnered event with We are at Ed and we did a panel and I’m starting to, we’re engaging with some of the people who have been over there.
Juliana. Ted’s been a fantastic partner and a collaborator as far as that. And what is interesting is I’m, there is [00:45:00] not national, there’s global interest in what Orange County is doing and I have the conversation so much. And I’ve had the full spectrum of it. And it’s interesting because you tend to get the people who have, they’ve just been there and they’ve done that.
And they’re not skeptical. They’re just telling me, Hey Scott, I’ve been at this quite a long time. I don’t see the tide changing. This kind of just is what it is. But I’m seeing a little bit more of a shift in the conversation. And that’s been very hopeful. And I think it just needs, it’s like the one snowflake that creates that avalanche, right?

And so a lot of these groups that are coming and talking to device science and saying Hey, what more can we do? What can we actually do to get this going? Cause I think everyone else feels that same. Feeling of antsiness. Hey, we’ve been doing this for a long time. We’re so much stronger together and we can do things in our own backyard.
Why are people coming into our backyard and doing it better than us? When we’re the ones that know how to do it best and we’re right here. So that conversation we are always open to and you obviously, about the couple of [00:46:00] additional strategics who we can’t name any names right now, who we’re looking to expand our footprint in because at the end of the day, Eric, people like yourself.

The team we had, whether it’s Tyler, Kevin, Lisa, like our executive team, the brand device science has it’s I’m always, I am always impressed that we work pretty hard to keep that a really good brand. And it’s. And it has a good reference here in Orange County, and what can we do with that to up our game and take this to the next level?
So I’m always open to those conversations as well. So if anyone has any ideas, by all means, please feel free to reach out to me as well. We are always looking to collaborate.

Eric Alspaugh: Awesome.

Conclusion and Upcoming Episodes

Eric Alspaugh: Thank you, Scott, for visiting the business Problem Solvers podcast. And I’m looking forward to our next event.

Scott Johnson: Fantastic. Eric, hey, you’ve been a great friend. You’ve been a great partner. Thank you for all of your service. Thank you for all your volunteer work and excited to see where where the ship takes us next. Let’s keep it going.

Eric Alspaugh: Awesome. Thank you. Thank you.

Voiceover: [00:47:00] Stay tuned for our upcoming episodes where we’ll cover topics ranging from business formation and fundraising to contracts and compliance.
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