Paul Hartung is a serial entrepreneur, board member and strategy advisor. Here, he discusses how he helps build companies such as Leuko, Clairways, Verisense, and others in the MedTech space.
Highlights:
Sal Daher Introduces Paul Hartung
Leuko Labs
"... Something dark goes through, that's a red blood cell. Something light goes through, that's a white blood cell. Then they count that, and then it can come up with immunocompromised, or low leukocyte count, or normal leukocyte count..."
Upcoming Milestones for Leuko
Clairways
"... That's an area of great interest for me is academic founders in the life sciences, taking their technology from the lab into the clinic, or into the market. It requires understanding the technology, and it also requires understanding the market..."
Verisense
Xander
"... Well, he's basically creating a software that interprets the voice of the person who's speaking to the wearer of the glasses, and creates a caption, which projected on the lens. You can caption what people are saying to you..."
Paul's Backstory
How Paul Got Into Life Sciences
3Com
"... The whole premise of the technology was that you could take people who were suspect of the disease, and rather than immediately going in for really expensive brain imaging tests, which actually involve exposure to radiation and you can only do them very infrequently, this is something that could be done in a general practitioner's office, doesn't even have to be done in a hospital...:
Sonivance
Advice to the Audience
ANGEL INVEST BOSTON IS SPONSORED BY:
Transcript of The Frontiers of Medtech
Guest: Paul Hartung
Sal Daher: I'm really proud to say that the Angel Invest Boston podcast is sponsored by Purdue University Entrepreneurship and Peter Fasse, patent attorney at Fish & Richardson. Purdue is exceptional in its support of its faculty, faculty of its top five engineering school, in helping them get their technology from the lab out to the market, out to industry, out to the clinic.
Peter Fasse is also a great support to entrepreneurs. He is a patent attorney, specializing in microfluidics, and has been tremendously helpful to some of the startups which I'm involved, including a startup that came out of Purdue, Savran Technologies. I'm proud to have these two sponsors for my podcast.
Sal Daher Introduces Paul Hartung
Welcome to Angel Invest Boston, conversations of Boston's most interesting angels. I'm Sal Daher, an angel investor in Boston who is just fascinated about how to build technology companies. Today, we're very lucky to have with us, Paul Hartung. Welcome, Paul.
Paul Hartung: Thank you, Sal. I'm looking forward to this. It's exciting.
Sal Daher: Oh, this is great. You know, I've been meaning to have Paul Hartung on the podcast for a long time, because Paul trained as a mechanical engineer, studied at MIT, so we have that in common. He has gone off and worked in the various directions of life science. He's been involved in building some really important companies. We're going to talk about some of these startups that he's been involved with in the life science space. Then we're going to talk about how he went from being a mechanical engineer, to becoming an executive and entrepreneur in the life sciences.
He's also a musician, by the way. You can find Paul Hartung music out there if you want to. It's pretty nice, nice sound. Oh, I understand you also grew up in Weston, Massachusetts.
Paul Hartung: I did.
Sal Daher: I lived there for 20-something years. Didn't grow up there. Grew up in Belmont. Paul, let's talk here about startups that are foremost on your mind. Not to say these are the best startups you're involved with. I know, it's like asking what is the fairest of your children, that kind of thing, but the one that's maybe giving you the most trouble. What's uppermost in your mind?
Paul Hartung: Well, there are actually three that I'm working on right now that-- I can't say they're giving me trouble. [laughs]
Sal Daher: No, no, no, no. Giving you interest, that you draw interest tremendously, yes.
Leuko Labs
Paul Hartung: Yes, yes. One is Leuko, and sometimes called Leuko Labs.
Sal Daher: I'm an investor in Leuko Labs.
Paul Hartung: Yes, an MIT spinout. It's a finger test for cancer patients who are undergoing chemotherapy to monitor their white blood cell count.
Sal Daher: Thus, Leuko. Thus, the name leukocytes. Yes. Counting the leukocytes, the white blood cell counts, yes.
Paul Hartung: Basically, if the white blood cell count gets very low, people can get very sick, and end up being hospitalized for a number of weeks.
Sal Daher: Chemotherapy does that. It can cause the white blood cell count to go down, and people become susceptible to all kinds of infections. I understand there's also some Alzheimer's treatments that have that same effect.
Paul Hartung: Well, I think there's a potential with this kind of platform to move into immunotherapies.
Sal Daher: Immunotherapies, yes. Okay. Actually, listeners, the founder of Leuko has been on the podcast, Carlos Castro-Gonzales. We did a full podcast on this, but we're getting a perspective here from Paul, who's a board member. This is several years after Carlos has been on the podcast, so is kind of an update. I know the device has shrunk tremendously.
[laughter]
Sal Daher: It used to be [laughs] bigger than a breadbox.
Paul Hartung: Well, it turns out, if any of you are in the Cambridge area, you can visit the new MIT Museum, and it's on display.
Sal Daher: The breadbox-size one?
Paul Hartung: No. This is a smaller one, but it's still a prototype. Couldn't give away the latest.
Sal Daher: Right, right. No, no. If we gave away our prototype, what would we have to work on? Yes.
Paul Hartung: Have nothing to send to the clinical trials. [laughs]
"... Something dark goes through, that's a red blood cell. Something light goes through, that's a white blood cell. Then they count that, and then it can come up with immunocompromised, or low leukocyte count, or normal leukocyte count..."
Sal Daher: Nothing! But the MIT Museum was really happy about it. [laughs] At least when I spoke with Carlos, what they were doing is basically shining a bright light on the capillaries right above people's fingernails. The capillaries are small enough that blood circulates one cell at a time, so it's really easy to see the white blood cells versus the red blood cells.
Something dark goes through, that's a red blood cell. Something light goes through, that's a white blood cell. Then they count that, and then it can come up with immunocompromised, or low leukocyte count, or normal leukocyte count. Is that still what they're trying to do?
Paul Hartung: I think you've got it right, yes. I think the big difference for patients is rather than monitoring their temperature, which will go up if their white blood cell count goes down, but if their temperature spikes, it's really too far along.
Sal Daher: Yes, it's an early indicator. You don't want to get to the point where the temperature spikes.
Paul Hartung: Right. Right. Also, they don't have to draw blood. You don't have to take a blood sample. You're just looking through the skin. It's like putting your finger in a hole in a device.
Sal Daher: It's like a pulse oximeter, but instead of telling what your oxygen saturation and your red blood cells is, the algorithm looks at the count, and then it says you have low leukocyte count or you don't have low leukocyte count. Is it still binary?
Paul Hartung: There will be a threshold, yes.
Sal Daher: A threshold?
Paul Hartung: Yes. Your doctor will be informed and you will be instructed on whether you need to come in for a checkup or whatever it may be.
Sal Daher: Right, because the current state of monitoring having a low white cell count when you're undergoing chemotherapy is to draw blood and to do white blood cell count. Patients do that every two weeks, and that is cumbersome.
Paul Hartung: A lot can happen in between in those two weeks.
Sal Daher: A lot can happen between two weeks, yes.
Paul Hartung: You can have a crisis.
Sal Daher: It's kind of like filling a jar with balls. You're going to fill a jar with balls instead of large balls. If they're smaller balls, you're going to fill more of the space in the jar. Meaning if you can test this every day, you're going to be able to really have a fine-grained idea of when you can be on chemotherapy and when you can't. You will avoid the downside of being on chemotherapy when your white blood cell count is low. When you're clear, you'll know right away so you can continue taking the chemotherapy to kill the cancer.
Paul Hartung: The timing is great for a company like this. Look at how telemedicine is changing and how care is being pushed to the home. This is something that can be sent home with a patient. There's a critical period. They don't have to do this forever, but over about a three to four-week period, particular patients that are at risk will benefit from being monitored and will reduce significantly the chance of a significant medical event.
Sal Daher: I remember the interview with Carlos. He mentioned that the order of magnitude of the number of people whose lives might be spared in a year is something in the neighborhood of order of magnitude of thousands. It could be 1,000, could be 4,000. These are people who would have gotten an infection because their white blood cell count was low and would have died from that, and this won't happen. Then you also have people who will be able to have your chemotherapy longer, perhaps even more aggressively, and you will know exactly that you're above the threshold. It's really exciting.
I like the fact that the founding team came out of the Martha Gray lab at MIT. They have this idea of bringing all the different components together to solve a problem. There's a hardware problem. There's a machine vision problem. There's a medical aspect to it. The team incorporates all of those things, and I'm very impressed.
Paul Hartung: Yes, Martha has an international program called IDEA², MIT's IDEA² program. Since I've gotten involved in Leuko, she's roped me into that program.
Sal Daher: Oh, that's right.
[laughter]
Sal Daher: No good deed goes unpunished. You go to the board of Leuko, you get roped into IDEA².
Paul Hartung: It's pretty cool. We're helping companies that are originating around the world.
Sal Daher: Well, yes, Leuko is a company like that to a certain extent because Carlos is from Spain. I know one of his co-founders, Ian Butterworth, is British.
Paul Hartung: And two other Spanish founders.
Sal Daher: Two other Spanish founders, yes.
Paul Hartung: We have two offices. One in Boston, actually. Photonic Center at BU.
Sal Daher: At BU, yes. I've been there.
Paul Hartung: Even though it's an MIT startup, it's a beautiful building.
Sal Daher: Yes, it's in the Photonic Center at BU. That's Boston for you. The compounds, they whine, they cross [laughs].
Paul Hartung: And an office in Madrid as well.
Sal Daher: An office in Madrid, yes.
Paul Hartung: The company has been successful in raising money. We did a Series A recently, and investors have been very pleased with the progress they've made over time.
Sal Daher: They also got significant non-dilutive funding from, I think, it's NIH. They look at this- just this could save a lot of lives and make medicine easier and less costly and more effective. What are the big milestones that are coming for Leuko?
Upcoming Milestones for Leuko
Paul Hartung: Well, like any good medical technology, it's all about clinical trials and we've had some very successful trials to date. We're not finished yet. We're still in the midst of trials to qualify the product for commercialization. Again, it's inspired by the results in the past and moving forward in the next phase.
Sal Daher: I know that at least when I talked to Carlos, they had small trials in Madrid, hospital in Madrid, and I think they were looking to be doing larger trials because the initial indication was very promising.
Paul Hartung: Well, they've done a lot of other things right towards commercialization. They actually did a usability trial because they realized that this is going to be a device in the home. To get compliance from users, it has to be pretty seamless and painless, seamless, easy to use.
Sal Daher: That goes without saying. Very good. Is there anything else that you want to say on Leuko? I could stay on Leuko forever. I'm very interested.
Paul Hartung: Well, I think it's -- Leuko in some ways is a model of how startups are getting off the ground these days. They've done a number of things right. I actually met them through an accelerator program, which was one of the validation points.
Sal Daher: Which accelerator was that?
Paul Hartung: This was MassBios’ what was called the Mass Connect program.
Sal Daher: Oh, the MassConnect.
Paul Hartung: Yes, it's been rebranded recently and changed somewhat, but really good brand. MassConnect helped a lot of startups over about a 10-year period. They also got a fellowship from Phillips. They won a number of startup competitions. They actually were number one in Mass Challenge.
Sal Daher: Oh, wow.
Paul Hartung: They won a big west coast competition that involved a significant investment as well to get them started at the seed level. Then they've been organized, very milestone driven. As you mentioned before, they've done a good job of combining grant funding, non-dilutive funding, and equity financing. They've been working on potential areas of partnership. Lot of things in the pot.
Sal Daher: Non-dilutive funding is wonderful, but the danger is, that it comes with strings. I'm an investor in a company. It's doing really well. They've received quite a bit of non-dilutive funding as well, but at one point they just decided we're not going to go any further because the non-dilutive funding came with mandates that they had to follow.
They had to basically incorporate some internet of things, functionalities into their product [laughs]. It was taking them off the path because they were doing something that was massively helpful to research scientists. Just the very limited functionality they had, IoT was not necessary and they were going to have to hire an IoT person and all this stuff and so forth. At that point they said, "Now from here on, we're not going to follow this path because eventually, yes, there's going to be an IoT component to our platform, but right now, we're basically helping people."
The alternative is a spreadsheet [chuckles]. We got this connected platform that reads QR codes and incorporates those things in a-- It doesn't have to be so fancy with internet of things connectivity. Yet, eventually it will be. That's the danger of non-diluted funding is it can take you in directions that may not be immediately helpful to a startup. I think Carlos has been very astute, and his team have been very astute in choosing where to do this and successful in getting VC funding.
Any other thoughts that you have on Leuko? You want to go on to another startup?
Paul Hartung: We can move on.
Sal Daher: Sure.
Clairways
Paul Hartung: Another startup that I've been involved in recently is Clairways, which is a spinout from Dartmouth. Even though I'm an MIT guy, I don't do exclusively MIT startups [laughs].
Sal Daher: You go and hang out with the Dartmouth animals with their cold weather habits, and their drinking, and their football mania.
Paul Hartung: Hey, I'm a downhill skier, so it's not all bad up there - -
Sal Daher: Oh, that's really common. You have things in common with the Dartmouth animals. No, it's just like there was a time, the golden age of MIT when MIT didn't even have a football team. Remember it had a Tiddlywinks team. Tiddlywinks, but not a football team. Those are the days of purity.
Paul Hartung: [laughs] I was just in an MIT building yesterday. I'm mentoring the venture mentoring service. They've converted the old MIT Museum to a set of facilities. There's this D-lab.
Sal Daher: A design lab?
Paul Hartung: Yes. They've got a solar car project that-
Sal Daher: Cool.
Paul Hartung: -actually won a cross-country race last year. It's very cool stuff.
Sal Daher: You mentioned the design. I'm glad to hear that MIT is working on that, because I've interviewed two founders who came from the design area at Harvard, with different startups. These are two unbelievably impressive founders. I hadn't realized that these creative types, these like long hair, creative design types could be such effective founders and remarkable. This is so cool.
Chrissy Glover, she has a connected device, which is a robotic glove, that helps people whose hands are impaired by stroke to rehabilitate, movements for rehabilitation, connected online and all that stuff. The other one is Souvik Paul who is developing a reusable retractable catheter. The big thing there is that it tremendously lowers the cost of this catheter that's retractable, so it doesn't cause infection. It reduces infection by 35%.
For people who are intermittent users of catheters, infection rate is like 50% a year. If you can reduce that, that's a lot of time -- These poor people in wheelchairs and so forth. That guy is unbelievable. He pitched the ball last night. Everybody was like, "Oh." He also comes from the design side. He's also been on the podcast recently. These two phenomenal founders coming from the design area, I'm glad MIT is focusing in on that area as well.
Paul Hartung: Yes. Clairways, being a Dartmouth startup, is working on something a little different.
[laughter]
Sal Daher: Okay.
Paul Hartung: What they have is a device. It's a wearable. You can think of it as a small patch that is worn by people who have chronic cough conditions. Right now, it's being used to develop better medications for cough. During these trials of medications for chronic cough conditions, today, the patients have to carry around, essentially, a big tape recorder that records their cough. The tape runs out after a day or two.
Sal Daher: [laughs] This sounds like bag software.
Paul Hartung: Then someone has to sit down and literally listen to the tape and count coughs.
Sal Daher: Oh, man. This is such a '60s vibe.
Paul Hartung: These clever cofounders with a little bit of AI background and sound processing background said, "Why couldn't we just monitor the sound and count when the coughs come in real-time, to not bother creating a tape”
Sal Daher: Listen to all the whitespace. [laughs]
Paul Hartung: That's exactly what they do. They've created something that can be worn not for just days, but potentially in the future for weeks through the duration of a trial.
Sal Daher: My sound engineer, Raul, has software that detects silence and the spikes of sound and so forth, and it helps you find that in the soundtrack. It's funny I was telling you Alex Westner, who's at MIT's Media Lab, I was interviewing him his startup. He's doing eyeglasses that have caption. Do you know Alex?
Paul Hartung: I'm actually a mentor of his.
Sal Daher: Oh, God, so we can talk about --
[laughter]
Sal Daher: Man, whoa, you are everywhere. Wow. Okay, well, great. Please, Clairways. Please continue. We'll get to Alex eventually.
Paul Hartung: Clairways has done a good job of raising a seed round. They closed around with Innospark Ventures-
Sal Daher: Yes.
Paul Hartung: -and form their first board of directors. I'm actually on their board of advisors. Like with Leuko, the trust was developed through mentorship first. Then they asked me to come on board as an advisor. It's very difficult to go out and hire strategic help.
Sal Daher: You will invariably hire the wrong person. It's really difficult for startups because being an executive in a large company doesn't necessarily prepare you for what you need to do in a startup. It's a different environment. No knock on people in large companies. What they're doing is they've got departments to do all kinds of things, and they're doing a very narrow- they have a very narrow skillset.
People in startups tend to have very broad skill sets because you're doing all kinds of things, and you're doing it with very little money. You don't have to be cutting-edge. You have to be cutting edge in one aspect, in one dimension of what you're doing, but everything else, you're off the shelf. That kind of stuff is large corporate is highly specialized. Everything that they do is world-class, and best practices, and all that stuff. Sometimes it's difficult.
I think a mentorship relationship that grows into something more like an advisorship, or board membership, or even an executive position, I think it extremely wise in the situation with startups.
Paul Hartung: I can't say too much more about Clairways at this point. They're still in an early stage but already getting some corporate interest in collaborating and collecting very promising data.
Sal Daher: Yes. That's the thing. Are these academic founders?
"... That's an area of great interest for me is academic founders in the life sciences, taking their technology from the lab into the clinic, or into the market. It requires understanding the technology, and it also requires understanding the market..."
Paul Hartung: They are.
Sal Daher: That's an area of great interest for me is academic founders in the life sciences, taking their technology from the lab into the clinic, or into the market. It requires understanding the technology, and it also requires understanding the market. Understanding the market is really difficult because it's like they're frequently addressing non-consumption. People don't know they need it yet. Yes.
Paul Hartung: I have two basic questions that I ask. One is, does it work? Then the second is, who cares?
Sal Daher: Who cares? Yes, exactly.
Paul Hartung: Something that I've become an advocate for is the I-Corps program. You familiar with that?
Sal Daher: I'm very familiar with the I-Corps program. Yes, I am, I am, but-- Please, continue.
Paul Hartung: Yes. MIT happens to be a hub. This guy named Roman Lubinsky, who has been a real champion of it, founded it. It's gotten to the point where the NSF gives SBIR grants to- I think you have a 40% better chance if you've gone through this program.
The principle of the program is to establish product-market fit by, before you put too much time into product development and too much investment, you actually go out and interview, call about 100 potential stakeholders across a landscape, and you find out whether you're really addressing an unmet need, a pain point. In some cases, people going through that exercise find maybe their platform idea is okay, but there's something more compelling to pivot into as far as a market fit.
Sal Daher: Exactly. I'm an investor in QSM Diagnostics. They went through I-Corps. A professor at Northeastern, Ed Goluch, he went through that, and that, I think, helped him tremendously to figure out where to use the quorum sensing molecule technology that he is one of the world's experts in that particular area and how to apply that to create a fast diagnostic for the presence of bacteria.
Eventually, it became obvious that it had to be in the veterinary space. It will just take too much effort to develop in the human space. Eventually, it's going to be in humans. Right now, your cat or your dog, you can find out if their ear infection is bacterial or fungal in two minutes. You can't do that with a kid, but you can do it with a dog --
[laughter]
Paul Hartung: I'm taking note of this. I'm a dog owner. [laughs]
Sal Daher: You're a dog owner. No, no, no, no. There is a- I'm blanking on the name. It's either pseudomonas aeruginosa or a fungal infection. Pseudomonas aeruginosa, an antibiotic is required. A fungal infection, an antifungal agent. They can tell in two minutes which is which with a swab of a little bit of that ear goop. I can't resist this. There's also, their milestones include having a detector for feline and canine urinary tract infections. There's like 90% commonality with humans on the microorganisms that cause UTIs in humans and cats and dogs. [chuckles]
I can just well imagine human beings going to the vet with a bootleg urine sample to the vet. “This is for my Fido, to test to see what the reason for the UTI is because you can get a two-minute reading instead of waiting a day for them to do a culture which is the standard care. The I-Corps yes, I like the I-Corps, but I think--
Paul Hartung: It's a tool.
Sal Daher: It is a tool.
Paul Hartung: It's a process, and they have a methodology that they use. I think their principle of reaching out to potential business stakeholders early on with exploratory discussions, not just going out and trying to sell your idea, pitch it for investment --
Sal Daher: Right. What I saw of it, it sounds too much like actually developing a product instead of asking strategic partners, where could this technology help you? Where could it solve a problem? It doesn't seem to me, at least from what I've seen, some of the exercise that they have and all that stuff, it seemed to be very product oriented. I think it's early with the technology.
I think the most valuable thing is just to go out to a lot of strategic partners and display your technology and tell them what it can do and then let them think. It's because they know the problems. They know where it can be. In the life sciences, you have patent protection, so you can expose your technology to a lot of people. One of these are going to come up with a killer idea.
I've seen it happen. The founder had no clue that this was the use case, that was useful. It's like he thought the use case was something else. The corporate said, “This is a problem for us. This is what we're working on. Forget that. Yes, it's nice. We have an area that's but if you could do this, that could really make a difference.”
Paul Hartung: Timing is a factor.
Sal Daher: Absolutely.
Paul Hartung: You run into a particular problem at a particular time.
Sal Daher: In the interest of keeping time, what was the third startup that you wanted to talk to? Then let's talk about Alex Westner's startup.
Verisense
Paul Hartung: Okay. This is super early company called Verisense.
Sal Daher: Verisense?
Paul Hartung: Yes. It's a spin out from Shimmer.
Paul Hartung: Verisense is spinning out of Shimmer. In very simple terms, you can think of it as a global depository for wearables data that can be used by many different entities.
Sal Daher: Pardon me, but what is Shimmer?
Paul Hartung: Shimmer is a wearables company. Yes.
Sal Daher: It's like Fitbit. They're a global depository for--
Paul Hartung: This is for the data. Yes.
Sal Daher: For the data.
Paul Hartung: Quality-controlled database.
Sal Daher: Presumably deidentified, anonymized?
Paul Hartung: Correct.
Sal Daher: Okay.
Paul Hartung: That's about all I can say right now.
Sal Daher: Very intriguing. Very intriguing.
Paul Hartung: I just joined their advisory board. They've got a great advisory board.
Sal Daher: Cool. Let's talk about Alex Westner's company.
Xander
Paul Hartung: I'm a mentor under MIT's Venture Mentoring Service. They're strict about not saying too much. Alex has been pretty good about getting information out there.
Paul Hartung: It sounds like you are familiar with that company.
Sal Daher: Yes. I interviewed him a few weeks ago.
Paul Hartung: Okay.
Sal Daher: When your podcast launches, his podcast will have launched.
Paul Hartung: Let me talk a little bit about MIT's VMS, the Venture Mentoring Service. We're a service for anybody who's an MIT affiliate, student, alum, professors. I think other people who work in various capacities in the institute are eligible for it. Mentors are all seasoned entrepreneurs, business people. Ourselves, we volunteer our time, but we're there to support the entrepreneur at whatever stage they are. We actually have some very seasoned entrepreneurs who have sold companies, come back to us because they've got some new venture--
Sal Daher: It's a different area, a new discipline, and they need help. I cannot say enough about the VMS. Whenever I miss Demo Day, I'm like, “Oh, rats.” I own apartment buildings. All of a sudden, I'm abstracted from real life because it's a burst pipe or something, or some problem. Missing the VMS Demo Day is always a tragedy. There's so much interesting stuff being done there.
Paul Hartung: Alex must have described his glasses technology.
"... Well, he's basically creating a software that interprets the voice of the person who's speaking to the wearer of the glasses, and creates a caption, which projected on the lens. You can caption what people are saying to you..."
Sal Daher: Oh, I love it. I love the fact that he is not reinventing the wheel. He has a supplier for the glasses that has a standard-- Well, he's basically creating a software that interprets the voice of the person who's speaking to the wearer of the glasses, and creates a caption, which projected on the lens. You can caption what people are saying to you.
Paul Hartung: Yes. Just for the listeners, a prime customer for this initially is people with profound hearing loss. You can imagine someone with profound hearing loss, essentially having a heads-up display of what someone is saying to them.
Sal Daher: It's great because you can turn your head and it'll pick up who's talking. It gives you a sense of being present, and being in the conversation. They're funky-looking glasses. The image that Alex sent for the webpage, you can look it up on the web page, is Alex wearing the glasses. It's halfway between the goggle and glasses, but they're wearable, and they have sufficient battery life. I like the fact that all the processing is done on the device itself so it's not talking to the cloud somewhere and so forth like Siri. Oh, Siri. We mentioned before, I liked the fact that Alex comes from a design background.
Paul Hartung: He also has some business background, though.
Sal Daher: Exactly.
Paul Hartung: I think he's not purely an academic founder.
Sal Daher: Oh, no, no, not at all. He's at Fidelity's, they have a lab for new technologies and so forth, Fidelity Investments, and he's a working sound person. As I said, he worked on the software to pick up silent spots, or noisy spots in a soundtrack that's commonly used by sound engineers. He understands the software side of things. He understands the sound processing side. I think he has a lot of skills to bring in, and also understands the creation of a usable product. He spent a lot of effort into that. Had a really fascinating conversation with Alex.
Paul Hartung: Did you want to hear how I got into this whole business of helping the startup?
Sal Daher: Yes. That's how I like to organize the podcast. We talk about the startups first and then I do a little promo for the podcast. Then we get into the entrepreneur’s journey, or the angel’s journey, or the professional journey of the guest. The promo for the podcast is basically an injunction to the listeners who have enjoyed the conversation, which this conversation is created to help people like me to learn more about how to build companies, talking to people like you who have a lot, a lot of experience in building interesting companies. You learn stuff.
You learn stuff that's completely unexpected. Somebody says something, and it's like a light goes off. In my life, I've had so many times where my life has been substantially altered by an off-chance comment by someone. Paul, I was born in Brazil. I became a naturalized citizen in the US in 1988. I went to school at MIT as a foreign student. Then I went to work for a big bank, for Citibank overseas.
I happened to be at head office, and I was interviewing for a position here in New York with the head office. It just happened that the elevator opened up, and a guy coming out of the elevator and I was going into was somebody that I knew over the phone from my work in Buenos Aires, Citibank in Buenos Aires. He said, “You're looking for a position in New York. Ask them to get you a green card. It's really easy for Citibank to get you a green card because of this, and this and that.”
I would not have occurred to me to ask for a green card. I was not going to ask for a green card. I was going to get a job. He was a foreign, someone who was a naturalized-- He had gone through the process and all that. This is like a chance encounter. Completely changed my life because having a green card, which means a permanent residence in the US makes your life so much easier, instead of having to have temporary gigs here, and then L-1 visa, and then going overseas, again and coming back. Just a chance encounter just changed my life.
Those kinds of things, this is what I like to have here. Somebody mentioned something that could be really life changing for a founder, or for an angel. This is why the podcast exists. Please follow us on the app that you use to listen to podcasts. Also, do us a favor of rating us and leaving a written review. By the way, written reviews have a lot more impact on the algorithm. We get shown to more people if someone bothers to write a written review. If you happen to like a particular episode, when you listen to that episode, immediately go and do that because if it's during that launch week, that episode gets amplified because of one review. It's remarkable. That's the pitch for Angel Invest Boston. Anyway, Paul, you studied mechanical engineering at MIT. You were worrying about how your undergraduate research project was nickel alloy tools and how they wear out, and things like that. How did you get from that to being in the life science? Wait a second. Which class are you in at MIT?
Paul's Backstory
Paul Hartung: Undergrad class of 1980.
Sal Daher: 1980. I'm undergrad class of-- I graduated in 1976, so four years. When you were at MIT, was it yet required that you took one term of Biology?
Paul Hartung: No.
Sal Daher: You see, still in 1980. I'm doing all the life science investing that I do with high school biology. Now, MIT is 30%, 40% of everything they do is related to the life science.
Paul Hartung: There was also only one entrepreneurship course.
Sal Daher: Yes, that's right.
Paul Hartung: A graduate-level course and lectures.
Sal Daher: That was Ken Morse's course? Is that what you're saying?
Paul Hartung: I don't think it was Ken Morse at the time.
Sal Daher: Oh, wait a second. I remember a guy, Darryl Wycoff, in civil engineering was also talking about entrepreneurship. Maybe in the departments, there were entrepreneurial people talking about it. It wasn't formally ensconced in the Sloan School. Anyway, how did you go from the wear and tear of nickel alloy tools to the life sciences?
Paul Hartung: It's interesting. I'm an engineer who got to love manufacturing. Actually, I was lucky enough when I was at MIT to work for a friend of mine's father who had taken over what you consider an antique factory in Jamaica Plain for making surveying instruments that go back to the 1800s, that were used to survey the Brooklyn Bridge in New York. These things were like a piece of art. The whole factory was driven by leather belts on these big pulley systems across the ceiling.
Sal Daher: [laughs] Wow. You got to see that, huh, or it doesn't exist anymore?
Paul Hartung: I had learned this obsolete art of drafting with a drafting board, with a pencil and eraser, and all that. Doing technical drawings in high school, he needed me to do some drawings so he brought me in. I got curious about these machines out back. It instilled a love of manufacturing. I actually learned to operate every single machine. I went and found where the castings were made for these parts in some remote town in Massachusetts, and essentially made these instruments the way they were made decades ago and fulfilled a small government contract that he managed to land.
It's the kind of technology that doesn't grow old. For me, it installed this love of manufacturing. I ended up doing both my undergraduate and graduate theses under the Laboratory for Manufacturing and Productivity which also crossed over into material science because I ended up getting involved in theories around tool wear but it had to do with chemical reaction between tool materials. Actually, my research is still taught at MIT under the manufacturing curriculum because I came up with unique theories. I won this Young Scientist of the Year award, this big international organization called CIRP-
Sal Daher: Wow. That's impressive.
Paul Hartung: -along with my professor who was under 30. It was the award was for people under 30, so the two of us shared the award based on our publication. Anyway. [chuckles]
Sal Daher: That's the thing about MIT. It's always a humbling experience hanging out with MIT characters because they've always done things like you wouldn't believe, but at the same time, it's very heartening because they're unbelievably cooperative and willing to help. I didn't experience a lot of sharp elbows at MIT. Even the pre-meds didn't have sharp elbows. It's an ethos of, "Wow, gee-whizz. Look at this cool thing we can do. Let's see what else we can make this thing do." They're like kids horsing around.
There's not a competitive environment, although people drive themselves to unbelievable extremes in terms of work. It's not a rat race thing. It's a joyful dedication or a joyful engagement. Complete engagement with what they're doing. They're just like in another world of like a trance. Not just the software people who could be coding for hours. It's the tinkerers and it's so cool. Or the hacks and when they have a little spare time, they get into a hack. Great, anyway, where does the life science component come in?
How Paul Got Into Life Sciences
Paul Hartung: Yes, it's going to come in quickly now. My first job was for GE and it was more generally around advanced manufacturing.
Sal Daher: For those who don't know, GE is General Electric, [laughs] they used to make everything from refrigerators to turbines and so forth. You may not see GE anymore. I'm having some work done. My light panel here is a GE Light panel. They used to be really General Electric and do everything, but then they got really specialized. I think they still make diesel locomotives and things like that but highly specialized aircraft engines and so forth. GE in those days, were probably making refrigerators still.
Paul Hartung: Yes. I was working in the aircraft engine department, which is where more advanced techniques were needed and one of those advanced techniques was using lasers. Now, lasers are pretty ubiquitous now at all different power levels. These were the earlier days of what were considered high-power lasers that were powerful enough to cut through metal and weld things. My career path, I also have to give a shout-out to my dad. He was an entrepreneur himself and an inventor of some machine-controlled machinery.
A lot of what gets made today, 3D manufacturing techniques are based on work that he did way back when.
Sal Daher: Wow. John Hirschtick has been on the podcast, who's created the desktop a CAM/CAD program the first one, and then took it to the web and so forth.
Paul Hartung: Cool. Anyway, that got a little bug of entrepreneurship and so after a couple of years with GE, when I was watching my coworkers retiring, and I was in my early 20s. I figured I--
Sal Daher: That's a weird experience.
Paul Hartung: I figured I might as well do something different. I was getting a pullback to MIT. They wanted me to do a PhD, and I actually got accepted in the PhD program, but stayed for a few weeks and decided I had gotten a taste of working in industry. I really didn't want to become an academic, I didn't stick with it. I ended up jumping to a startup that was doing cool stuff with lasers, little play on words. It was called Laser Fare, in French, laissez faire. [laughs]
Sal Daher: Oh gosh.
Paul Hartung: Exploring all different uses for lasers, including using them in the manufactured medical devices. I even published and presented in a medical device journal, MDDI on, they were used in manufacturing pacemakers, for instance, welding the covers together.
Sal Daher: Wow.
Summit Technology (LASIK)
Paul Hartung: Again, after some time there, I got a call from a guy who had been working for me, and he said he had just joined a really cool startup using lasers to treat vision disorders, LASIK.
Sal Daher: Okay, so that's the bridge.
Paul Hartung: Yes, it was the laser connection.
Sal Daher: Materials that you got at the GE.
Paul Hartung: High-power laser.
Sal Daher: Laser into MIT.
Paul Hartung: Then lasers for the eye.
Sal Daher: Then LASIK in the eye. LASIK was a laser that removed small amounts of--
Paul Hartung: It's from your cornea, the outer surface of your eyes, is the cornea.
Sal Daher: Yes. It terraces, right?
Paul Hartung: It actually sculpts it.
Sal Daher: Sculpts it, yes.
Paul Hartung: It was an excimer laser that happened to be a laser that ran off of a toxic gas that you had to be very careful in the handling and management of. It would do what was called cold ablation. It would remove tissue without burning the tissue very efficiently. The tissue would evaporate off the surface. Now lots of people get their eyes treated. What impressed me, I wasn't an early person that's in the startup. I joined the start-up as a worker. I was like a co-founder. For me, it was an opportunity. I was interested in learning general management the hard way.
I learned Engineering and Engineering Management, Project Management. That was a blockbuster. That company went public and stock went to $300 a share. It was eventually acquired by Alcon which, at the time was owned by Nestle. Now officially it's owned by Novartis, but I'm not sure how active they are with that particular technology right now. Still, lots of people are getting treated. That taught me about the whole regulatory process, medical device manufacturing. At the time that I joined, people were getting treated in Europe.
They'd get early approval under CE mark in Europe but hadn't gotten approval in the United States yet. I helped get through that whole process to make sure that we had good manufacturing and quality controls and all that stuff in place. Then I got distracted again.
3Com
I got pulled into the internet of things. I got called by a headhunter to take a job with a company called 3Com. 3Com, actually was another MIT spinout. I didn't know that at the time.
Sal Daher: Bob Metcalfe. I've run into him.
Paul Hartung: The interesting thing about 3Com is, so a lot of things that we consider day-to-day technology today, like the concept of having a computer in your kitchen or a smartphone or, a wireless connection, or a modem or all these pieces of connectivity technology 3Com developed and acquired. It was a real lesson in M&A actually, mergers and acquisitions. We were buying a company every month, and, assimilating teams in. For me, as a mechanical engineer, it gave me a really good dose of software, and electrical hardware development.
Winphoria Networks (acquired by Motorola)
That led me toward another startup. I joined a company called Winphoria Networks as VP of operations and that company was acquired by Motorola. The killer app and this was a little bit of a pivot for the company because we were working on more core technology for wireless service providers, came up with a push-to-talk application, which was a button on the side of the phone, like a walkie-talkie function. This is before texting really took off in this country. The idea of a quick call, you didn't have to dial and wait for a ring.
You'd beep someone in, was compelling. I think about today in the digital health revolution, and my learnings from that period was outside of healthcare. Something I've learned in my career is that skills translate.
Sal Daher: Yes, they do.
Paul Hartung: For instance, early on, even going back to General Electric days, my early days, I was working in fairly highly regulated industries. It turns out, working at a medical startup, it's a highly regulated industry, meaning you have to have policies and procedures and quality standards, and their design reviews and things like that. At a time in my career, I was a process geek, and those processes could apply to any product. Lo and behold, I got interested in getting back into healthcare, and I had a taste of it.
Cognoptix (formerly Neuroptix)
I had an opportunity to put everything together after Winphoria was acquired by Motorola. I went to a seminar actually on raising venture capital. That was the ABCs of venture capital being sponsored by a law firm. One of the speakers interested me, a guy named Alan Green. I don't know if you've ever met, but he's a JD, MD, PhD who had done a lot of startup stuff. He also specializes in regulatory advising and law. He had hooked up with a couple of scientific co-founders out of Mass General Hospital and Brigham Women's who had made the discovery that amyloid, which is one of the characteristics of Alzheimer's disease, actually grows in the eye, in the lens of the eye.
Sal Daher: In addition to growing in the brain, yes.
Paul Hartung: In addition to growing in the brain. They needed someone with some business sense who could turn it into a real company and move it forward, so that's what I did. I became the third guy on the team.
Sal Daher: That was Cognoptix.
Paul Hartung: Yes. It was originally named Neuroptix and then Cognoptix. There's a lot of material out there on the internet. We were really high-flying in around 2015. I took the company through product development to where we realized that the technology needed to have both the device, there was an optical technology called the fluorescence lifetime imaging. We had to have a compound that we formulated into an ointment that would be applied the night before you went in for the procedure that would seep into the eye and bind to the amyloid protein aggregates.
That was the marker.
Sal Daher: The idea is to rule out Alzheimer's. If there's no amyloid deposits or amyloid plaque right in the eye, then it's not Alzheimer's, or whatever.
"... The whole premise of the technology was that you could take people who were suspect of the disease, and rather than immediately going in for really expensive brain imaging tests, which actually involve exposure to radiation and you can only do them very infrequently, this is something that could be done in a general practitioner's office, doesn't even have to be done in a hospital...:
Paul Hartung: Right. Everybody's read about the amyloid treatments, many not working well, or what have you. Turns out that Alzheimer's is defined by, if someone dies of Alzheimer's disease and they section their brain, they look for two characteristics. One is this buildup of plaque, which is amyloid, and then tangles, which is called the tau protein. You really have to have both to be diagnosed at autopsy of having the disease. From a scientific pathway standpoint, they think that amyloid can induce the tauopathy.
That the amyloid starts first and then in some people they get more aggressive tangles. The bottom line is you don't have Alzheimer's disease if you don't have this plaque, if you don't have amyloid. It may not be enough to just clear the amyloid. You're not going to make someone better for sure.
Sal Daher: You can at least tell that someone doesn't have Alzheimer's from looking at the lens of their eye and seeing that they don't have amyloid deposits.
Paul Hartung: Right. The whole premise of the technology was that you could take people who were suspect of the disease, and rather than immediately going in for really expensive brain imaging tests, which actually involve exposure to radiation and you can only do them very infrequently, this is something that could be done in a general practitioner's office, doesn't even have to be done in a hospital. That is a very simple eye scan, and yes, it could be used as a rule-out. It was a wonderful development project.
The issue is the landscape out there, I think, is challenging because when you have a good diagnostic or monitoring technology, the first question that gets asked is, "Okay, what's the treatment for it?" That's where the struggle has been. [laughs]
Sal Daher: There's value to being told there's lots of conditions that can create Alzheimer's like symptoms. Being told that you don't have Alzheimer's has value.
Sonivance
Paul Hartung: Then I founded another company called Sonivance. This was a precursor to the deregulated hearing aid industry.
Sal Daher: Oh, yes. That's a big blockbuster saturation.
Paul Hartung: Saturation, yes. We saw this great opportunity for people who complain about hearing loss. Well, they complain more specifically about not being able to hear in noisy places.
Paul Hartung: I found a scientific founder who was looking to move his technology forward and developed some sound curation technology that could run on your mobile phone. One use case would be to just have the phone on the table and have earbuds connected to the phone or a wireless connection to the earbuds. What we realized is that, for one, it becomes a cultural thing. There's a stigma associated with wearing hearing aids. People have to make a conscious decision of whether or not they want to be seen in public wearing hearing aids.
Who do you see in a restaurant talking with a group of people that's still wearing their earbuds? Could be seen as being rude, right?
Sal Daher: Yes, exactly.
Paul Hartung: There's a problem there and we watched the test case of the West Coast company that was very well funded HearOne that crashed and burned in their product launch after about nine months just because of that. Only 25,000 people bought their product and they did a mega launch. It's one of these things where the idea was good, but society wasn't ready for it. Now, what's happened today with the deregulation of hearing aids, it really opens up the opportunity for people who have lower-level hearing loss.
They're unwilling to go to an audiologist or a specialist but they can go to their pharmacy and get something over the counter that solves their problem.
Sal Daher: Oh, like the over-the-counter reading glasses.
Paul Hartung: Right.
Sal Daher: It's like the over-the-counter hearing trumpet or whatever.
Paul Hartung: That’s a great thing.
Sal Daher: Cool, whereas --
Paul Hartung: I closed it down after a year. Really, I got a great team together working on a volunteer basis on the business plan but when we assessed the market and where things were at, we decided not even got raised money for it. That was a lesson in learning to say no.
Sal Daher: Yes, I know. It's understandable.
Paul Hartung: Yes.
Sal Daher: The signal wasn’t strong enough you don’t pursue it. That's really valuable. Great. Paul, as we think about wrapping up our conversation here, are there any thoughts about things that we haven't touched on or things that you want to get across to this audience of founders, of angel investors, of people who work in startups?
Advice to the Audience
Paul Hartung: Yes. I think for one you have to have a passion for it.
Sal Daher: Of course.
Paul Hartung: The startup journey is a rocky road.
Sal Daher: You don't do it for the money.
Paul Hartung: It's not for the faint of heart. I also think it's really good to get some foundational work experience in more established companies somewhere along the way.
Sal Daher: Yes, consonant with Jeff Behren’s advice, Jeff said the same thing during his interview.
Paul Hartung: There's lots of free help out there for you.
Sal Daher: Amazing. Boston is really blessed with that.
Paul Hartung: The mentorship ecosystem is very strong, these are not people who are trying to take advantage of you, you have to have your radar up on top.
Sal Daher: I have seen that happen. [chuckles]
Paul Hartung: Yes, you do have to have your radar on top.
Sal Daher: By and large it’s like most of the time that people are extremely helpful for they'll do things at you leaves you like, "Wow, I'm really, really impressed, I'm embarrassed that they've been so generous in helping."
Paul Hartung: There are ways to learn to do pitches and develop business plans, lots of programs, I just did a video course for Harvard Catalyst which is a post-grad program but they're lots out there. I think practicing through business plan contests where there might be a little bit of money involved but for one it's a practice, two it's validation because if you can go in and say I was a finalist in whatever it maybe, you differentiate yourself.
Sal Daher: As an angel investor I've said this before on the podcast and I think it bears repeating. I've listened to founders in the beginning of the race, and I've listened to the founders presenting the same company, basically the same pitch at the end of the race. They're so much better at the end of the race. People get better. Their message is honed down. They're refined. They've interacted -- if they know what they're doing. They've interacted with potential investors and they fine-tune the message so that it makes sense.
Paul Hartung: I think, take advantage of incubators as well. I think if you're a graduate student for instance, you don't need to rush out of your institute, make sure that you really got your business plans together and, you've got the basic science done. That it's something that, is worth licensing out of the institute and turning into a business, into a viable business. Then find some seasoned people to join your team and you're going to need to share equity with those people.
Sal Daher: Makes a lot of sense. The seasoned people, what they can do for you. They know the map of Terra Cognita. You are sailing in Terra Incognita, but they can keep you from running aground on places where the reefs are. They're specialists coming into the harbor. They know the harbor.
Paul Hartung: I think, we could do a whole session on, financing models these days, but, the landscape has really changed. It used to be that VCs wanted to be the first money-in.
Sal Daher: Paul, let's think about doing that okay? An entire episode just on funding models. Are you up to that?
Paul Hartung: I'd be glad to do that.
Sal Daher: Let's think about that. Let's set up a different time to just go into that funding because that is so crucial because it is so hard to fund life science companies, particularly doing biotech winter. I think it's worth having that conversation just dedicated to that.
Paul Hartung: Sounds good.
Sal Daher: Tremendous. I'm so glad that we connected and you agreed to finally be on the podcast. I've been trying to get you off for years. Some people are like, "I can't believe you haven't been on the podcast. This is going to be in the seventh season." I ran the Michael Mark the other day and I was telling Michael because Michael is the first podcast that I recorded. I said, "Michael, it's about time that you come in. You were the first podcast of the first season. we're starting a seventh season. It's about time you came in for an update.
Have you learned anything in these six years that you want to share with the audience?" "No. No. I just forgotten stuff. I just forgotten stuff." Michael Mark, look up that podcast. Great. It's a great interview. I was a terrible interviewer, but his answers were great. I was so terrible. Anyway. Awesome. Paul Hartung, founder, entrepreneur, advisor, board member.
Paul Hartung: Mentor.
Sal Daher: Mentor, mechanical engineer, turned into a life science founder. I'm very grateful to you that you made the time to do this and that you have made a promise to come back to talk about funding models and funding life science companies. We look forward to that second episode, but for now, thank you very much.
Paul Hartung: Thank you so much. I appreciate you taking the time to listen to me.
Sal Daher: No, this is really valuable. Thanks a lot, Paul.
Paul Hartung: Bye-bye.
Sal Daher: This is Angel Invest Boston. Thanks for listening. I'm Sal Daher.
I am glad you were able to join us. Our engineer is Raul Rosa. Our theme was composed by John McKusick. Our graphic design is by Katharine Woodman-Maynard. Our host is coached by Grace Daher.