MedTech Moneyball
When I founded Waterston Capital, I knew I wanted to do something different, something better, something that would make a difference. I had been working in healthcare for quite a few years and when I discovered that life-altering technologies were collecting dust on shelves at universities and research labs across the country for want of someone—anyone—to take them from innovation to actualization I was, at first, angry. Then I was inspired. I could do this. We could get these overlooked technologies on the market and into the hands of the people who needed them most.
I started doing my homework and the more I learned, the more I realized I didn’t completely agree with the direction much of MedTech innovation was going. Traditional Venture Capital firms were looking solely at the big dogs—the inventions that would radically transform healthcare but that would also take years, even decades, to bring to market. Many of the early-stage products I was seeing weren’t as revolutionary or as sexy as, say, a cure for cancer but they had the potential to be truly life changing for the patients who needed them. And, because we could bring these evolutionary products to market quickly, we could reward our shareholders consistently over a period of time rather than just with one big payday years down the road.
The more I thought about it, the more I saw a marked comparison to the movie Moneyball, the 2011 film starring Brad Pitt as Billy Beane, then General Manager of the Oakland A’s. Based on the book Moneyball: The Art of Winning an Unfair Game by Michael Lewis, the story follows Beane’s attempt to build a competitive ball club on a budget substantially lower than those of richer clubs in the league. He realized he’d never be able to recruit the kind of exceptional, 5-tool players teams like the Yankees could afford, so he used statistical data to analyze undervalued players whose more modest skills, when combined, would maximize the A’s on-base percentage (OBP).
What, I thought, if we looked at technologies the way Billy Beane looked at players—undervalued, early-stage inventions that other VC firms typically overlook and that can deliver steady, repeatable growth and value for our shareholders. It’s a concept we now refer to as “MedTech Moneyball” and I believe it has the power to completely reinvent the wheel for the way medical technology is approached.
Now, don’t get me wrong. At Waterston, we’re also very excited to nurture those revolutionary technologies I mentioned two paragraphs ago. But they will never be the only technologies we champion. Right now, in our pipeline, we have a huge innovation poised to help patients with right heart failure. But we also have simple technologies like a gait trainer that helps reduce crossing gait in people suffering from movement disorders in the lower extremities. Smaller technologies like this one may not make front page news, but for the people—both patients and clinicians—whose lives they change for the better, they’re the inventions of the century.
As of this writing, we’re on the verge of selling our first two technologies. We have the partnership of exceptional inventors, innovators and universities, and the support of far-sighted investors who are as excited as we are about the way we’re changing the MedTech industry. Waterston may still be in its infancy, but I know to the core of my being that in five years we’ll be known as the company that outsmarted the bigger firms by focusing on small steady improvements that drive steady, repeatable growth and by always putting people first.