Revolutionizing High-tech Diabetes Management with Sean Saint

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Welcome back to the Tacos and Tech Podcast. I am your host, Neal Bloom and I've got a co host today, a real special one. I've got Justin Ju from Techcoast Angels, angel investor. Hey Justin, thanks for joining the pod today.

Hey Neil, thanks for having me, man.

Yeah, I'm excited. We've gone back as TCA members a few years but first time having you on the pod and it's a special one because we're going to introduce and co interview a portfolio company of yours. We've got Sean Saint on from Companion Medical. But I want to give a little context of your background and how maybe you want to give a little bit of your, you know, how you met them and kind of your background in the medical Device industry.

Yeah, absolutely. And thanks for having me. I'm super enthused to talk about a subject that's near and dear to my heart and that's diabetes management. So a little bit about me. I got my start in the medical device industry working for a large med device company back in the day and they were focused on high tech solutions for diabetes management. And what I mean by that is CGM or continuous glucose monitoring, insulin pumps, and software management for both patients and providers. And these tools and devices are really considered the gold standard of diabetes care. But unfortunately the majority of diabetics even today are not on these high tech solutions. And so I saw that there was a very obvious gap between these no tech solutions such as pens and syringes and these very high tech ones that I was working with. So anyway, fast forward it was here I got to work with patients and healthcare providers to really gain a deeper appreciation and understanding for the nuances and the frustrations that come along with diabetes management. Because you see, diabetes is a disease that can be well managed and those individuals can live long and healthy lives with proper education and the right tools in their hands. But without those tools and without that education, it can be really frustrating and demoralizing disease to live with day in and day out. You really can't take a vacation from diabetes when you're insulin dependent. So move forward some years. I began to work in the asset management space with my father, mostly in public equities and real estate and private equity deals. And it was during that time I was taking some classes at the University of Booth Chicago Business School. And it was a classmate of mine, also named Sean. So shout out to Sean, who was in Tech Coast Angels, Los Angeles, and he introduced me to TCA and he thought I should check out the San Diego chapter. So I did. Now, when you join an angel group, one of the first things they tell you is, or at least they told me is that for the first six to nine months, do not write a check, don't invest in any of these pitches because they're all going to sound like the best idea since sliced bread or the wheel, right? And the reality is, seven to eight out of 10 of these companies, as your listeners know, go belly up. And so this is around early 2014 when I joined TCA. And of course, within a couple of months of joining, along comes Sean Saint and his pitch of companion medical. So there I was, sitting in a room with 30 to 40 seasoned angel investors. And after the pitch we had an internal discussion and exactly none of Them were interested in exploring this deal further. And in Sean's defense, even though this was one of his early, I would say, less polished presentations, still good. Diabetes is a very nuanced disease that takes an intimate understanding sometimes to really comprehend how a new solution can fit into the marketplace. And so while I could see the potential in the market fit for Companion Medical, I was extremely reticent to invest based on the advice I had been given, the little interest among other members, and me just being a brand new angel investor. But it was only after meeting with Sean several times for coffee and sitting down with him and really getting to understand his perspective and that just seeing that he really got it, he understood what diabetics struggle with, that gave me the confidence to make my very first angel investment. And turns out it was the right bet on the right horse and certainly the right jockey, as it turns out. So Sean did a wonderful job. So I'm super excited, Neil, to join you and talk to Sean today and just understand the journey he took after taking, you know, my small investment and investments from others in those early days when his company, I think, was just in seed or pre seed stages. The valuation, just under $2 million at that time to the great success story that it is today. So really happy to be here.

Thanks, Justin. Even just your story of how you met him, how you invested locally, how the company maintains obviously local presence, that is kind of what we're all about here to kind of show that cycle the recyclable capital piece of staying here and we'll continue to grow other San Diego companies too. So great background.

Yeah, you're right, man. Because if I met him on Zoom and he was on the East Coast, I probably, you know, wouldn't have gotten that firsthand feel. Just that early stage of me being new and just seeing, being able to look into his eyes. So that, that really meant a lot to me. So you're spot on there.

Well, we've been dancing around and let's, let's bring them on. Let's. Let's hear from Sean himself. Sean Saint, founder of Companion Medical. Sean, welcome to the podcast.

Thank you, Neal. Thanks, Justin. Really excited to be here today.

Yeah, we're excited to have you. Congrats on the recent acquisition of Companion. Obviously your head's down, working for a long time and to look up and see a new name on the side of the building is a big change. But I think you and I go back probably around the same time. You met Justin. Were you in Evo Nexus or were you a Cool company by Santa Venture Group.

A cool company. I think that's what it was. Yeah. Not even Nexus, though, although I found that to be a very, very impressive group. But, yeah, we were a cool company, I think in 14, if I remember right.

Okay, sounds right. Same time with us with Portfolium. I think that's where we met up. You have a deep history, obviously, in diabetes tech2 and other medical devices. We're going to spend a little time talking about your background, the San Diego diabetes tech ecosystem, because you've played a part of a number of those companies. But why don't we dive back even a little further? Where did you grow up and where'd you go to school and what'd you study?

Wow. I grew up all over the place. I kind of like to say I have no home, but I was born on the East Coast, Northern California. My formative years were in Alaska, oddly, but back to California after that. And I went to school at Cal Poly San Luis Obispo for mechanical engineering.

Got it. Go Mustangs. I almost accepted there as well, too, as a mechanical engineer as well. So how'd you make your way down to San Diego and how'd you get into the device scene?

Well, after I graduated, I went to work, oddly, for Medtronic, who ultimately ended up acquiring Companion. That was in the vascular space at the time, up in Santa Rosa. And so I worked there for about five years, give or take, and moved down to San Diego for a tiny little company at the time called Dexcom. And most of us here on this podcast are going to know that name. They're not tiny anymore, but they were at the time. I think I was about. There's about 30 people there when I got there. But, yeah, that brought me down. I followed some people that I knew from Medtronic, Eve been down here ever since.

Yeah, that's great to hear. Do you want to tell us just a little bit, what did the San Diego Med device scene look like when you first got here, Sean?

That's a great question. I mean, certainly smaller. Absolutely. The diabetes space was smaller, to be very honest with you. I mean, I was so head down at Med, excuse me, at Dexcom, just getting stuff done. I didn't. I really had no exposure to it. Having gotten that exposure a little later, I have seen it grow just astronomically, even starting, you know, in2010 or 13. And so at the time, yeah, it must have been just nascent. Although San Diego always had a very good leg up, starting even back from the. When was hybrid tech Right. I don't know. We were always bound to grow up eventually.

Real quick question for you. In your background, I saw that you worked at United Defense. Was that up in Santa Clara? Did you work on like manned systems up there?

I did actually. So you were there too at some point?

Yeah, I was there when they were BAE Systems. So a little bit later.

Okay. Yeah, no, I was there FMC and then United Defense and then the sale to Carlisle Group. I was there during that. So that would have been in the mid to late 90s. But yeah, really epic place to work. But at the same time it kind of led me to medical devices because here I am designing military vehicles and that's a lot of fun, especially for a mechanical engineer. But I thought, I haven't committed to a career yet, I'll try medical devices. And I went up to Medtronic av. It was an AVE at the time prior to the acquisition by Medtronic up in Santa Rosa. And I just loved it. The idea that I could do this engineering and be helping people at the same time was, it was, it was perfect. My whole family is healthcare providers, doctors, PAs, you know, the whole bit. And I always joke that, you know, the only reason I'm allowed at Thanksgiving is that I went into medical devices.

Yeah. When you have pride in what you work on, it's obviously it kind of changes the way that you apply yourself obviously.

Right.

You feel like you're having an impact and changing the world. So can totally understand and relate to that. So take us through some of the products you got to work on between Medtronic, Dexcom and Tandem and more.

Yeah, I've been just super lucky in my career. I mean at Medtronic, Vascular and ave before that I was doing cardiovascular stents, catheters, that sort of thing. Got a chance to do some really neat stuff and self expanding stents a little bit and drug coded stents, which was just all the rage at that time. But I moved away from that to come down here for, you know, something that didn't exist. Right. Continuous glucose monitors with Dexcom and we didn't know, we thought it was kind of an interesting idea, but I don't think anybody could look from then to now and really understand what, what CGM has become. And of course it makes a lot of sense looking backwards, but you know, as with anything innovative, it's not obvious when you're looking at it from the other direction. So that was an amazing experience to get the first really real time CGM from concept to, to market in about Two years, Unbelievable fun. From that I moved on to a small startup in the aesthetic surgery space, then to tandem diabetes. And again, that one I'll say was more obvious in that insulin pumps were a thing, but we just wanted to make a better, smaller insulin pump, right? And we called it the iPhone of insulin pumps. And I think we did that. So that was also just a ton of fun. But oddly, I think even through those two, two jobs, I probably didn't fully understand diabetes and I didn't understand, you know, the people who have diabetes. As Justin gave me a lot of credit for maybe understanding that. I don't think that came until a little bit later, specifically what happened there. You know, I'm working at Tandem trying to figure out how to get more people to use this excellent insulin pump we've developed. And that's the right question for tandem. But at that time I got diagnosed with type 1 diabetes myself. And you know, that doesn't happen almost, but, but it happened to me and I think, not surprisingly it changed my perspective a little bit. And I thought to myself that insulin pumps are great, they're fantastic, but as long as huge majority of people don't use them, then what we've done as an industry is we've kind of left those people out in the cold, right? It's not their job to develop better technology, it's our job to develop better technology. And you know, if they're not willing to use the pump, that it's our job to develop something that they will use. And so I thought about it and I'm not by a long shot the first guy to think about smart insulin pens. But when we looked at what had been done in the industry prior, we weren't really impressed. We couldn't find much. What we did find was not what I would have done. So we took the plunge. Penn Medical was born.

That's great. And just to be clear for our audience, type 1 diabetes is not contagious because a lot of times it is type ones that work at these diabetes companies. They certainly were some of my co workers. But that's just bizarre that you got diagnosed as an adult while working at one of these diabetes medical device companies. Sean, just sort of a three part question as you kind of took us through your career. When did you kind of have that aha moment for a novel or just a new insulin delivery idea? And what were you really able to work on while you were working full time at these other companies? And sort of lastly, when did you kind of really rip off the band Aid, so to speak, and decide to go all in on companion medical.

That's a great question. I don't know if there was an aha moment for me exactly, except to say that it was just this growing frustration of, okay, people are still not using it, still not using it. And you do this market research, right? And it's like, okay, well, I don't want to wear it. How do you make an insulin pump that nobody wears right, when you can't? So it was just this growing belief that we had to do something different. And as I said, I mean, it becomes relatively obvious the direction you have to go. There's only so many ways to give insulin. But you're right, I couldn't do anything. I mean, I was working my butt off at my previous job, and as you should be. And it just. There's not a lot you can do nights and weekends. So it eventually was the end of 2013, I believe, that we just had to rip the band aid off and go all in on that idea. It was a scary time.

So, Sean, take us through a little bit of the entrepreneur's mindset. You're working full time for a semi, not huge company, but I guess I don't know the total size of the company you were at, right, as you were starting companion, but what's it like to think of this new idea, have a day job and start sketching out. Here's what I want to build. Not just the technology, but the company you want to build as well, too. Like, how did you wrap your head around. Around all of those pieces at that same time?

Scariest thing ever. I mean, maybe it's not popular to say it, I think. I think there's maybe even a, you know, this narrative of the entrepreneur as this fearless person that'll take on the world. And I don't know, that wasn't me. I was scared to death. But what it came down to for me was as I started to get a little more clarity on what I thought the product really needed to be, I started to look for it and research it. And I'll be very honest, my original idea was I'm just going to get a job with a smart pen company because that's where I want to work, and that's the product I can believe in. And I just couldn't find it. Right? So then I thought, okay, well, somebody must be doing this. I'll just. I'll keep looking and I'll keep looking. I'll find who's doing it. And frankly, I just couldn't and eventually it just came down to, you know, staring me in the face. I have to make this leap of faith, and I can either leap and do it or just sort of forget about it and stop working on it. And it can't. It was like it was dumb to me. Right. Let me get this straight. I can't find anybody doing it, so I'm not going to do it. And so it was almost, for me, it was almost being pushed into it. Right. It was like I couldn't find anybody to work with, so I had to do it. And when I say me, me and my co founding team, of course, but I mean other companies. So, yeah, for me, I finally kind of felt like my back was into a corner, but I'm glad it was.

This was your first company that you.

Started, right, as employee number one? Well, I guess Allura was employee number one as well. But I had a founding team around me on that one. That was the first time I was CEO and so.

So first time doing that. It sounds like you said you have, you know, doctors in the family, but do you have entrepreneurs? Like, have you been around other people starting growing up?

Well, you know what? Yeah, I have, but I didn't actually appreciate that until after I did this. It was almost like there was certain people within the family. I didn't even know what it was they did, and I'm pretty embarrassed by that now. But yeah, we do have a family full of entrepreneurs, actually.

Yeah. It's funny, typically those people that you don't know what they do because they do everything right as that entrepreneur. So take us through. When did you actually go all in on this and how was the. The funding piece for medical device? You know, when and when did you actually start applying for funding and how you got to know TCA?

So, you know, we incorporated very into 2013 and then the next four months were kind of a mad dash of fundraising and I didn't have any idea how to do that. Right. I mean, you get all this advice from different people on the best ways to fundraise and you hear things like, you know, when you ask for money, you get advice. When you ask for advice, you get money. That's true. But then you also hear if you don't ask, you don't get. And that's probably also true. So I was talking to everybody I could, and if there's. The mantra I took on was never stop talking. Talk to everybody all the time, anytime about companion medical. And I did that. And I went out to lunch with friends and didn't even intend to get investments. And I got them probably $250,000 or something, or maybe $200,000 of what we raised in the early stages of companion were from people that I didn't. I wasn't really pitching. I was just talking to friends. They said, well, that's a great idea. I'll put money in. But it was in April of 2014, I believe, that we closed the first round of funding. And it was small. It was like $495,000. I mean, it's a lot of money, but in the great scheme of things, it's a small round. And that was when we were really able to start meaningful operations in the company. But I'll tell you, from then on, it's fundraising full time, right? For seven years almost. For me, that was the real shock. You always think that you're going to close a round of funding and you're done. You can forget about it for, let's say, a couple of years. And I never found that to be the case at all. I was always, I'll say fundraising, but that might mean pitching, that might mean talking to analysts, that might mean going to the healthcare conferences with the bankers. Who knows? But one way or another, you're fundraising.

Yeah, man. We must have been crossing paths a lot. That's exactly when we were fundraising as well, too. Started in April and closed in July of 2014. So we must have been pitching TC at the same time. Justin, do you remember his pitch? Do you remember? I mean, you obviously talked about how you were going to wait, but obviously you didn't. Do you remember him coming in and pitching in that process?

I do. I also remember your pitch. A Portfolium. It was funny. My mentor at the time at TCA was really big on Portfolium and I was really big on Companion Medical. And we each made an investment in the company that we believed in, and both of them turned out to be great successes. But it was funny. We would always say, all right, who's going to exit first? Who's going to exit biggest? But, yeah, I do remember Sean's pitch. It was good. It was, I would say, in his early stages of pitching. And so there was some refinement to be done. And I remember, I think it was the following year, Sean, where we entered the Quick Pitch Competition that TCA puts on annually. And I was already an investor, so I became his, I guess, coach, so to speak. And we went from a fairly rough pitch to one that won the Best Pitch award at that Quick Pitch Competition. So Sean was just like a sponge. I mean, he was an eager learner. He took little bits of advice that I could give in the coaching and turned it into an extremely polished pitch that he obviously was able to take on the road and raise millions of dollars. So kudos to him for really, really taking an amazing idea and being able to polish it up and present it in the way he was able to to much larger investors in TCA down the road.

I appreciate that, Justin. It's funny, I remember parts of that pitch. I talked a little bit about the concept of pitching. It's almost like being a shark. Like, your eyes roll over and then you wake up a minute later. What happened? Because it's. For me, I'm not a natural public speaker. It's. It's scary to be up there. Yeah. Not natural for me at all. But over the years, I tried to work very, very hard at it. I tried to practice a lot. And like any other skill in life, you can get better at it. And my only frustration is that, you know, you start to raise money and you go to the sort of the biggest names you can possibly find, because that's how you do it. And you give your worst pitches first to some of the bigger names, and you don't always do that well. So I very much appreciated Justin's, first of all, his hesitance to invest, but then ultimately, you know, making the leap of faith and doing that. And I think that actually that's part of the magic of TCA is that in Justin's case, you know, and this is, there's always an expert in what somebody's pitching in the room. And in Justin's case, he was the diabetes expert. And I always thought that that spoke so loudly that he invested and the other people didn't, because I do think that's the hardest thing. Right. Is communicating an innovative idea. The fact that it's innovative fundamentally means not everybody believes you yet. And convincing people of that is, I think, the hardest thing to do, at least from my perspective.

Yeah. And I just wish at that time I had more clout being just the young new angel investor on the block to convince the other guys in the room to write a check as well. But hopefully if another diabetes deal comes down the pipe, I'll have a little bit more to say about it to my fellow investors after kind of quick pitch 2015ish. How did the company proceed from there? Were there any pivots that you guys made and sort of talk about the struggles in the early days?

There sure. Actually, one quick word on Quick Pitch, even that. Right. I remember sitting in the audience the year before, Quick Pitch, watching, just saying, wow, I could never do that. Look at these people, these entrepreneurs. They're amazing. Then just 12 months later, I was on that stage giving a pitch, thinking, how did I get here? So, you know, life takes a funny turn occasionally. So on the company itself, there was never what I would consider a real pivot. And that was so lucky for us. And it's. I don't. I don't think it was skill or anything else. I think it was just luck. We had a particular vision at the beginning, and, well, of course it evolved. It just never really pivoted. The business model didn't change, the product didn't change meaningfully. That was a gift. We were able to just focus on one thing and never have to take a huge step back and go a different direction. But that's not the same thing as not having challenges, of course. Geez. It was every challenge under the sun. You know, technically, we were trying to do some very hard things. Our product has a Bluetooth radio in it, and it lasts an entire year with no recharging. That's a very hard thing to do with a product that's no bigger than a product that doesn't have a battery in it. A lot of work associated with that. Another one is fundraising. Fundraising is always a struggle. At least it was for us. We were trying to do something that not a lot of people were doing. Some of the larger pharmaceutical companies started to publicize that they were working on it as well. Our belief was that we would be able to do it faster, hopefully better. That's a hard thing to convince an investor of. Right? Because I think to an investor, and this is understandable, resources are everything. They provide resources. And when you look at somebody like a big pharmaceutical company, you see nothing but resources, and that's fantastic, and you need that, but you also need to be quick and nimble. And, you know, that's something that a small startup can provide. And certainly I think that's what our secret sauce was at Companion Medical is that we just moved so much faster than anybody else in the industry did. But again, that's a very hard thing to convince people of, that you're going to be the one who moves faster. You know, like I said, we were always working on that as well. And then little things. We never expected to be first, frankly. We expected to be a fast follower. Somebody must have been out there doing this. And in fact, they were. But we ended up getting them to market. But what that meant was we also had to create, for example, the reimbursement pathway. Was it going to be a medical benefit? Was it going to be a pharmaceutical benefit? We had to figure that out and then make that true. Right. There's. There was no way to look up what the reimbursement of a smart pen is, because smart pens didn't exist. So we had to create that world. That was a real challenge. And then of course, the actual convincing a larger company that what you're doing is important and ultimately getting through the entire acquisition process is obviously, you know, that that takes some work. But Medtronic was a phenomenal partner for us on that one. We really appreciated the way they handled that.

Yeah. And to Sean's credit and his team as an angel investor, they really did stay resolutely focused on their initial path and what they saw as the end goal. I've made a couple dozen investments since the time I met companion till today. A lot of these early companies do a major pivot. Unless you're like a cancer drug, they're still working on cancer. But Sean stayed really resolutely focused. And that was something that as I got his updates, I was very pleased to see. But Sean, can you just kind of take us through how long from that time we're talking like what, 2015ish did it take you to actually get into the market? And what were some of the major, I guess, inflection points and milestones that you reached along the way that were challenging and that you really celebrated with your team?

Yeah, great question. So if you go back to January 2015, I remember I had a conversation with the gentleman who turned out to be our regulatory guy. And we decided that from that point we could probably get the product 510 cleared in 18 months. We were wrong. It took us 19 months. So we were pretty happy about that. So we got 510 clearance and product July 2016. But the reality is we hadn't built a commercial organization yet. We had a lot of hiring to do. We had manufacturing validations to do. We had commercial operations, customer service, sales. We had to build all this. And we sold our first in pen. December 1, 2017, I believe the date was. So that was obviously just an enormous, enormous milestone for us and a big celebration as was the 510k. Frankly, that was a first of the company for sales. Fielded our first real salesforce, I think it was in March of 2018. And then we added another class of reps. About every six months after that. After that it was slow and steady growth the whole time. I mean, obviously you always celebrate a fundraising, certain milestones, certain number of pens per quarter, that sort of thing. But wow. Off the, off the top of my head, I'm not coming up with one pivotal thing that we really celebrated after that with. Of course, with the exception of the acquisition and frankly, the acquisition, we really didn't because it happened during COVID I don't know how many companies sold during COVID but wow, that is not the experience I expected, I'll tell you that right now.

Yeah, really a Cinderella story there is amazing how that happened. But maybe also take us through what was going on around you. What was the diabetes med dev industry doing around you during that time while you're getting your 510k and just hitting market? Were you seeing other people, you know, that you needed to try to catch up to or what did it look like, the landscape at that time?

Great question. So the mainline industry, right, was focused on automated insulin delivery or closed loop infusion pumps. And I think those are fantastic. And they've been getting better and better and better every year since 2013. When I stopped working on them, that was the thing that everybody was convinced was going to take over the world. And I think they're right to say that it's a fantastic technology. They're right to say more people are going to flow over to it. But I personally thought it was wrong to say that it's going to take over the world. And so that was the battle we were fighting. We were fighting the battle that there is a need for something better than what people are doing, but not quite. An automated insulin fusion pump. To us that was obvious because not everybody wants to wear a pump, but still we had to go convince the world of that. The healthcare providers, we didn't have to convince the patients, which is interesting when you talk to users, everybody got it. And that was really satisfying for us all through that time. But then on the smartpen side, there were a few other companies that were trying to go down similar roads to us. The big pharma companies proved to be true. Several other startup companies, you know, they're all doing good work, every one of them. In fact, it was just some very big news in the industry. One of the other companies in the space just a. A few days ago in fact. But we ended up being there first and to this day we're the only product on the market in the United States. But that wasn't clear at the time. Right. There was all this news and everybody's coming and I think there was a particular analyst who published something that There was like 15 smart pen companies. So it was, it was a scary time for us. But at the same time we knew that we were a little bit out in front and we had that edge. So it's important to not lose it. Don't give it away.

Yeah. And if I could just interject, that's one thing I really liked about your. What you were going after is diabetes is one disease where those living with it do a ton of research. They're on forums, they're researching and they're trying to figure out what the best way is to manage their diabetes. And if they're clamoring for something, they will get their doctor to prescribe it for them. So I really liked that it was a no brainer from a patient standpoint and that there would be just tremendous pull through from the prescriber point of view that the patients would be asking the doctors for it just as much as the doctors that were backers of this product would prescribing it to their patients.

That's exactly right. It's a challenge in the diabetes space in order to reach everybody because, you know, to reach a patient directly with diabetes, insulin dependent diabetes, it's not exactly rare anymore. But it's rare enough that you're not going to do direct to consumer advertising, Right. Like TV ads or what have you. They're just not targeted enough to get to the ROI that you need. So we do social and this and the other thing to reach the consumer directly, which is fantastic. And you're exactly right, Justin. They go and they ask for it and their healthcare provider is always happy to provide it. But we also follow the traditional path of helping the healthcare provider understand what we have and basically turning them into the inadvertent sales rep for us. They're the ones that have that direction, user contact. So we hope that over time the healthcare provider believes in what we do and what we do for the, what we call the four P's, patient provider, payer and pharmacist. And they start to prescribe that without our own intervention. And we're definitely seeing that. A word on the four P's. You know, everybody likes to talk about stakeholders in their industry. You know, for us, them, you have to get it right for each one of those because any one of those people, patient provider, payer or pharmacist can stop the delivery of whatever it is you're developing. But if you get it right for all four, you're going to have some level of success. And I hope that we've done that. We can do better, we continue to try and do better. But I think we did a pretty good job out of the gate.

I'd say so. I mean, sounds like you had a product in market just what, three years ago or so, and here you are now. Take us through the running up to the acquisition. Were you actively looking or were you getting hit up a lot by bigger companies or what did that start to look like in the beginning?

Well, I don't know if you call it looking. So this always for me fell into the category of never stop talking that I mentioned earlier. I talked to investors, I talked to analysts, I talked to companies strategics at all times. And my thought was, am I trying necessarily, no. But at some point one of these people will be interested and I sure as heck want them. They're never going to be interested if they don't know what we're doing. And a lot of people made a lot of assumptions about what it was we were up to. And a lot of it was wrong. And it's understandable because you don't understand the product. It was on my shoulders to go tell people what it was we were doing. So I made sure to do that. So over the years, we fielded a lot of inbound interest on a company. Well, is that inbound organic? Is it me? I don't know. I mean, a lot of those conversations were meetings I asked for. A lot were meetings that were asked for from me anyway. There was a lot. And it just, none of it ever really made sense to us until the deal with Medtronic came along. That was Medtronic and us. We had known each other for a long time. They were very familiar with us. We kept them up to date on what we were doing. Their own strategy evolved slightly and it just became the right time. We were able to achieve a certain level of market acceptance that they found compelling. And In March of 2020, just a few days after lockdown happened, we had our first real meaningful meeting. And that's when the process started. And it was all done virtually, which was unexpected. You know, it's one thing to sell a company virtually, it's another thing to celebrate virtually. And that part that didn't work nearly as well. The selling bit worked fine, the celebration not at all.

Well, there's still. You can bring the band back together, the alumni group, hopefully maybe before the end of this year. Something you mentioned at Medtronic and Dexcom there were a lot of passionate type ones who were the ones building the technology too. Was that the same internally at Companion as well?

Yeah, absolutely. And one of the things that I found really gratifying about that is that we had several people join the company and have really frank conversations with me and say, hey, I use a pump and I like to work here and I want to help people with diabetes, but I'm not going to use the product because I use a pump. And my answer was always the same, great, no problem, use whatever you want. That's the whole point, right? We're trying to provide more choice. I'm not trying to take your choice away. And inevitably, one by one, every one of those people, you know, took a pump break or wanted to see what it was like or whatever it is. And in almost every case I can think of, they stayed on the product. One of the people said to me, it was like, I thought that was kind of funny. It was like losing a limb in a good way. And it's hard to explain that until you've worn an insulin pump, you know, 24 hours a day, seven days a week, and you realize it's gone, it's not there anymore. And holy smokes, it's this feeling of freedom. But for me, the reason is just that it makes me think about it less. I can use the pen when I want, I can put it down when I don't. I don't have to wear it, I don't have to, you know, make sure it's full of insulin or battery or that it's not occluded or all these things. But again, those things are just for me and plenty of people that's the right solution for. But it has been gratifying to see essentially the whole company that, you know, those of us with T1 or T2 in some cases flower to the product. That's when we really knew we had done something important.

Yeah, very cool. Sean, some things I've been meaning to ask you since, since you have exited that I've been curious about is just, you know, how much did you get to actually dictate deal structure and the terms for the acquisition to the extent that you can share and just sort of, what kind of help did you get outside of, you know, just beyond a lawy to actually help negotiate with that 8,000 pound gorilla that is Medtronic?

Yeah. So I guess the first thing I'll say is, yeah, of course we had help. I think one of the cardinal rules, I guess, of being an entrepreneur is being unafraid to dive in on anything, but being well aware that you're not the expert on anything and there are experts out there. And I did have a fairly extensive legal team on our side. I did have the bankers on our side and they were all invaluable. But I'll also say that Medtronic was fantastic. I remember the day we got the definitive agreement and reading through it and sort of saying to myself, this is respectful. There's nothing we have to talk about here. There's always little things. I mean, I think there's, I can't remember, there's like 95 meaningful terms in a document like that. So obviously there was negotiation, but I do want to be respectful of them. It was just, it was sort of a signable document when it came across the bow, which was nice. We were really thankful for that. So did I dictate anything? No, I mean, you know, you win some, you lose some. But again, in this particular case, there just wasn't that much to do.

And was there much back and forth in terms of negotiation between your team and Medtronic's team, or did it kind of just naturally progress to the number that you settled on?

From my perspective? Well, we're talking about value. You know, that goes pretty quickly. At least it did in this case. It was, it wasn't a lot of back and forth, but I don't think anybody was in it to, you know, wring the last dollar out or what have you. You know, you make a respectful offer, you counter it, you know, let's be good with that. So that went really very well. There was an awful lot of back and forth in the actual documentation, but I think that's natural. You're talking about hundreds of pages of legalese and, you know, tax treatment and this, that and the other thing. And you know, the lawyers really want to make sure they get that right. So I never really perceived it as negotiation, I just perceived it as collaborative work to get it right.

Sure, that's a great way to put it. And so what's it like now going from a relatively small office of being a startup to now being quote unquote, inside of Medtronic under their umbrella? What's it like now day to day for you and kind of just, are you fully integrated at this point? Are they allowing you to some autonomy and operate as a separate team? What does that structure sort of look like nowadays?

So oddly, we're still in the same office that we were in prior to the acquisition, but things are very different. September 10th, the deal closed. And we have to keep in mind Companion Medical was a commercial entity. So pretty quickly we have to make sure that we are integrated with their marketing teams, their commercial operations team, so we know how much we're selling. Get the sales teams to work together so we have a cohesive message. Bring in the operations professionals from Medtronic to make sure that we're building the device in a way that they can support. It's just there's a million functions that need to be integrated quickly. So we still to some extent operate separately. At least portions of the company do. But a lot of it is very well integrated, and I actually think that's a strength. Again, I'll compliment Medtronic on their integration ability here. They threw a big team at this and a smart team, and we were able to really do a great integration very, very quickly. The beauty of Medtronic is they have so many resources and so much pull and so much muscle in every area. And that's why it's great to be integrated. If we were operating completely separately, we wouldn't have access to any of that. But as a fully integrated piece of the puzzle. So now we're just a product line within. Right. They have their pumps, they have CGMs, they have smart pens, and we get access to that cohesive, well, 8,000 pound gorilla, as you were talking about, which I think is a benefit.

And the team gets to stay in San Diego, which is great for everyone as well too, I would imagine, right?

Yes. I don't believe off the top of my head, I don't think anybody has moved.

That's awesome.

And of course, Covid helps with that. Right? I mean, we're all wondering about how this new world works. Is remote work a thing? Nobody really knows. Obviously, we know it'll increase. We don't know to what level. But what I can say is what I'm seeing both with Medtronic and others is that there's certainly a much greater tolerance for remote work. So we're seeing that.

That's great.

Love to hear that. Something we love to track at Freshbrook Tech is our own tech mafias. You know, it's kind of harkens back to the PayPal mafia days and all the companies that have come from that. But, you know, you are part of this Dexcom and Tandem mafia now. You know, early employee at Dexcom, starts a new company and sells it. That's noteworthy. And you've obviously watched others, I would imagine, leave and start or join. And I imagine you pulled some Talent as well too. Can you take us through, just looking back and even to now, like, is San Diego a diabetes tech hub or where else could that be?

Absolutely, it is. There's just I think a few places in the world that have anything like the kind of diabetes skill sets we have. I mean, obviously around Northridge. I mean, Medtronic of course, is a huge company and has a tremendous set of skills. That's one, possibly Irvine, Boston, you know, there's a few others. But San Diego is amazing, right? I mean, between Dexcom, Tandem, Glycense, Biolink, Lilly, Becton, Dickinson, I'm probably missing a ton. I know Metronome Health is near here, Capillary Biomedical is near here. There's just an awful lot of diabetes technology and they've all spun out of a few of those companies. Right. Oddly, from my perspective, Tandem didn't really spin out of Dexcom at all. It was, it was sort of organically grown completely separately. But you know, over the years they've now started sharing employees back and forth quite a bit. And, you know, everybody's done a tour in one of those two companies.

That's interesting. We definitely know of a number of other startups too, like the Biolink guys come to mind and others, you know, playing in this space for either smart sensors or stuff like that. So you're right. Great to highlight the talent here and obviously mission driven or impact driven, you want to stay in that space. And there's a number of other companies you can go to, you know, for a whole career. So great to see and thanks for contributing a part of that. Guys, we're coming to the big question here at the end that everyone wants to know. You both have been in San Diego a long time, so your expertise is important here. What is your favorite taco spot? I'm going to give it to Sean first.

Well, I always say that if you want good Mexican food, you could go to Mexico. So for me it's cross the border in Tecate, turn left, go about, I don't know, I want to say about a mile and it's just past the road. I don't even know the name of it. Great little roadside. It's not even a stand, it's a little building. Best autobah tacos I've ever had. Just past the return to the border crossing. I wish I remembered the name. Are you going to make me pick something in the United States?

No, you're good. And everyone's got that place that they just know how to get there. But don't Know the name of it. So, yeah, you're right on. Justin, how about you? You got a favorite?

Yeah, hard. Hard to beat south of the border into Mexico. But for those, I guess that are a little less adventurous than Sean. I'm a new resident to the Bird Rock area and I found a couple of favorites. The first being Don Bravo. That's just sort of my go to anytime. Real solid right on La Jolla Boulevard. And then the second one is if you want anything seafood related, you got to go to Oscars. It's just. It's killer. They throw some bacon in there with some scallops and just all of their seafood tacos are next level.

Absolutely. Their ceviche, the Oscar ceviche, next level.

Oh, yeah. Killer.

Looks like I have some homework to do.

Yep. Check the fresh, the tacos and tech tacos database which will be updated with your both of your answers. And yeah, there are. There are some fan favorites I would say from previous guests. Well, Sean, Justin, great to have you both on. Sean, thanks so much for sharing your story. But even more, thanks for building such an impactful company. We know you will continue to do very similar things in building this and whatever you do next as well too, so thank you for that.

Thank you so much, Neil. I really appreciate you having me today. It's been a ton of fun.

Yeah, Neil, it's a real pleasure. And Sean, thanks for being an incredible founder. It's been a wild ride and I was happy to join you along for it as much as I could.

Thanks so much, Justin. And on a side note, we should talk.

Absolutely. Let's go grab some tacos.

All right.

Awesome. I love hearing that. Include me too. And we will talk to you guys soon. Thanks so much for being on.

Thanks, Neil.

Bye.

Thanks for joining us on the Tacos and tech podcast with Neil Bloom. Thanks again to Cox Business for helping make this possible by expanding the reach of the San Diego tech ecosystem. Big shout out to School of Rap for our rad intro musician. And thanks as well to Nest Podcast Network where we are recording live inside their studio at Nest Co Working in Bankers Hill. You can find Neil Bloom on Twitter eelbloom as well as Fresh brewed tech and Tacos and Tech Pod on Twitter too.

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