#19-Anatomy of a startup - 1st conversation with the Micro C Founder, Dr. Greg Kolovich (30 mins)

Brought to you by Tiger Buford.

Hello, orthopedic ambassadors. Welcome to Inside Orthopedics. My name is Tiger. I'm an orthopedic industry insider and retained recruiter for early-stage orthopedic companies. Thanks for listening. This is episode number 19, titled A First Conversation with the Founder of MicroC, Dr. Greg Kolevich. This one is for those who wanna look inside an early startup. Greg is a fellowship-trained hand surgeon in Georgia and co-founder of MicroC, a handheld C-arm that is just faster, clearer, and safer than the C-arm in your operating room today. Miriam is his Chief Marketing Officer for the MicroC business. This is a candid conversation between Greg Kolovich, Miriam Sharpe, and myself. We are in 3 separate locations after Academy in March of 2019. We have never met. You will see from the awkwardness at the beginning of the conversation that this is a first time. Enjoy, don't forget to subscribe, and thank Tiger Buford when you have a key addition to your team. Be safe out there.

So let's just jump right in. Let's just go live here. So first of all, I guess tell, you know, tell me who you are and kind of how you ended up in Savannah.

So my name is Greg Kolovich. I'm an orthopedic surgeon in Savannah working with Optum Orthopedics. I'm from Cleveland, Ohio. I went to med school at Ohio State after my undergrad at Georgia Tech and did my residency training— my residency at Ohio State, my hand and micro fellowship at Harvard at Mass General. So my wife is from Atlanta, and she always wanted to move back south. What's interesting about the group at Optum is 3 of the guys had gone through the same residency program as me. So when they were looking for a hand surgeon, they knew who just to call. And they called me directly and recruited me down. Obviously my wife was ecstatic about moving back to Georgia. And that's how I ended up in Savannah.

Makes sense.

When I first moved to Savannah, I didn't know what to make of Savannah when I first moved. And now I love it. I wouldn't ever live anywhere else. I really have adapted to living on the water and boating and golfing and, you know, the cool Low country lifestyle, it's very, um, a great place to raise a family. And I live right on Skidaway Island and I've got 3 kids, so, wow, it's a great place to raise kids.

And you guys just had your giant St. Patrick's Day parade, I guess.

We did. I missed it, fortunately.

We were in Vegas.

We just got back from the—

Oh, from the county.

I usually leave town for that. Oh yeah, I got back, um, Saturday night, so.

All right, terrific. So let's just, let's kind of jump right in. So I'm an engineer. I think you're an engineer too. I love to hear about where ideas come from. So what's the— where was the aha moment for the Micro-C?

Well, the aha moment was very— I mean, I can remember like it was yesterday. I was doing a case. The guy in, I think it was Nantucket, he cut his hand off with a chop saw.

Wow.

In a suicide attempt. So then he, you know, he had a lot of mental issues. He ran off into the woods. His wife found him. They flew him up to Mass General and I put his hand on as a fellow. And I remember, I remember having trouble like, you know, plating a wrist or plating the hand and holding the C-arm. And I kept thinking, God, it would be great if I could just untether this thing. You know, you're trying to lug this 400-pound C-arm around and you're holding a hand unsteady and you're trying to put screws into the metacarpal and screws into the wrist. And you're doing it by yourself at night. So I remember, I remember it was like 3 or 4 in the morning and I thought, God, you know, if I could untether the emitter with the sensor, that would be something. You know, if I could get closer. Basically, it was about degrees of freedom. If I can have infinite degrees of freedom and bring the X-rays to the target as opposed to bringing the target to the X-ray, then that was the aha moment. So I went, you know, after immediately like the wheels started turning in my head, I was actually on a ferry to Martha's Vineyard and I wrote down a sort of a circuit and a prototype on a napkin. It was like an hour ferry ride.

It was.

It was about a half-hour ferry ride. But I remember I was outside as the sun was going down. I was writing this thing on a napkin. And then I was an electrical engineer, so I called my buddy down in Georgia Tech and I asked him if it was possible. I started doing research on it, and then we started really cranking out some cool ideas. And then it was funny when we came up for the cable, the tracking. The original plan was to have a static sensor flat on the table and then a movable emitter.

Okay.

And I thought, why couldn't we just get a really big, you know, flat panel CMOS detector, like a 24 by 24, and just have the whole table be a giant detector? And my CEO, Evan Ruff, he's like, Greg, those panels are $180,000. Well, So, um, my— you're like, well, that's out because we can never sell a mini CRAM for the panel cost. We can never sell a thing that costs $185,000 just, just for one part. I mean, the thing would be incredibly expensive.

Right.

So out of sheer monetary necessity, we thought of a design to make it cheaper, and that is use a 6x6 panel Which is about $6,000. You know, don't— you have to quote me on these numbers, but, uh, Sure. The, uh, the panel was, was exponentially cheaper. And instead of having one panel, much like a panorama, we could move the panel in space and stitch the pictures together so you could cover the entire table with one smaller panel. So that's how we came up with the tracking, which is actually like, now that we're You know, 2 and a half years into it, that's the part that all the big companies want, the tracking, because we could build that into OR tables now. So what was an idea to make it affordable became probably one of the most desirable intellectual properties that we've created, was our tracking.

Sure.

So we've developed a way to track a sensor in a table Through drapes and through the interference of the anesthesia machine. So, and we developed a very specific technique and we laid claims to that and have IP all surrounded about that. And then we've also developed, you know, when you're moving in infinite degrees of space, you have to collimate your conical X-ray beam so that it's focused on the target. You can't be shooting X-rays into oblivion. So we needed a very specific way how to focus the beam. So we developed this dynamic collimator, which shapes the beam in particular shapes and always directs it at the sensor. So the sensor and the emitter talk in space and they move in space. So they're always perpendicular.

Right.

And the collimator shapes the beam so that it's always, you know, maximally focused on the sensor. So those are the 2 real big parts. So once we figured out how to do that, then the ideas just came. You know, we patented all that, then we came up with all this other stuff, like, you know, like stuff I really can't even get into because, um, it's the future generation of, uh, of our company. And when we started spinning off these ideas, we're like, well, Micro-C is our baby. Micro-C is, is what people want. Micro-C is probably what people are gonna wanna buy or sell or acquire, but we have all these other ideas for IP. We're creating a new company called Oxos Medical, which will be our C corporation, and then Micro-C will have its own part of it.

Got it.

So we had to do that. We had to do that to protect our ideas so that for future iterations, you know, we still have a corporation going. So we've morphed from this 2-person company to a, Company with— we have 15 full employees, 21 contractors. We've got a lot of traction. We've raised millions of dollars, um, from about over 60 doctors. And, uh, we have not gone DC yet, which I think is— I think is a very good thing. But people like you who say things like, ah, you're solving a problem, when you see it and, you know, your experience with orthopedics, imagine what Hand surgeons are saying about it when they see it in action for the first time, when they take that first x-ray.

It has to sell itself. Yeah, yeah.

They not only sell themselves, but they're like, how do I be a part of it? And then, you know, they become investors as well. So we've been very, very blessed with a lot of traction. We've got some really good ideas for the future in terms of embedding our technology into operating tables and creating new OR of the future that is without a C-arm and without a C-arm tech. And doing a lot of AI platforms to start interpreting radiology images automatically without radiology input, and to do a lot of templating and annotations on the X-ray to make X-rays more efficient and certainly cheaper, more automated.

Right, right.

So the secret sauce is the software that connects the sensor with the emitter and And it keeps them parallel to each other?

Well, the secret sauce is, um, I mean, you can read our patent. It has to do with our tracking.

Okay.

It is, it's a hardware track. I mean, it shoots its LiDAR, which is sort of how, uh, you know, it's sort of how, um, self-driving cars work.

Right, right. So it's laser.

It has these— Right. It's actually high— it's actually infrared.

Infrared, right.

And we've been able to create a system that can penetrate the drapes, 'cause you got a drape over it, so it's not a direct line of sight. We've actually tested it with 17 drapes, and it still tracks through the drapes. We've also had to create a system that wasn't— So if you start thinking about, well, how are you going to track 2 things in space? Well, there's a lot of ways you can do that. You can do that with Bluetooth, you can do that with Wi-Fi, you can do a direct cable access, you could do ultrasound, you could do infrared. So there's all these ideas. You just throw a bunch of ideas up on a whiteboard. Well, then unfortunately we don't— you have to cut 90% of those ideas out because you don't have direct line of sight.

Right.

We don't have— we have to drape over our table. So we couldn't do like— because of that sheer fact, we had to cut out many of the ideas. And then because we're in basically a silo that has very important machine, our anesthesia machine, plus all the other interference going on with the OR. We couldn't use Wi-Fi or Bluetooth. It wasn't fast enough or reliable. So we needed something that could certainly track through without a direct line of sight, but it had to be faster and more reliable than Bluetooth or Wi-Fi because we couldn't Do that with all the interference in the room. So we were lucky enough to— well, we were smart enough. I don't want to say lucky because this actually took a lot of thinking on our part to come up with a system that could handle both those obstacles. One, you got to be able to do it in a very pressure-cooked situation such as the OR with a lot of interference. Number 2, you got to do it blindly without any direct line of sight. So we were able to do both.

So will 5G help solve the problem in the future with With Bluetooth and Wi-Fi?

Oh, see, I'm not smart enough to answer that. That's probably a question that Evan and our software engineers could answer. But I think, you know, that's a question I can't answer. But certainly it makes things faster with less resistance, less interference. You know, I think they're starting to get— they're starting to make things that we only dreamed about when I was in school, when I was in engineering school, so.

Right, right. Well, so I've seen pictures. It's like the size of an iron. I mean, it's tiny. Yes, it's totally portable and you can get close to the space really easy. So what's the power source? Is it just— AC or DC in the operating room? Both sides tethered?

Yeah, it's 110 volts AC. So we're—

everything's custom.

We have a customized power supply, custom X-ray tube. We believe we can make everything smaller. There's a couple companies that have smaller parts, like our— we believe we can build a smaller power supply and a smaller X-ray tube.

Wow.

And that can go up to 120 kV so that we can power through a hip and a spine.

Wow.

So that's our next goal, to make it even more powerful and smaller. We think we can probably knock off another pound. I mean, you know, you start thinking about this and you, after a year or so, you get to know every manufacturer in the world. You know, and, uh, you know, when those guys come up with something, they're the first to know about it. So we're probably getting, um, we're light years ahead in terms of contracting with people out there that can make us really small and help us miniaturize our emitter. We are even working with manufacturers to make— we really even want to talk about making a faster, even better flat panel detector. That's a very expensive part of it. It's a very expensive piece. Those flat panel detectors take a long time to make. There's zero tolerance for error, but they take months and months to make.

Wow.

And those are super expensive. Yeah, the process is really, really intricate. It's not like they just pound those things out day by day. They take a long time to make. And they can't have any defects. And if there's any defect in the lattice, then they have to throw them out. So there's very— those are very, very complicated pieces to make. And we've learned a lot about digital radiography Our hope is to sort of— not that I ever want to get in the process of making flat panel detectors, but we want to find contractors that can sort of, you know, make things specifically for us in terms of what we want to do. And it should be very powerful when you can do those things.

Yeah, once you get the volume, you can dictate to the suppliers. Your turn a little better. Yeah. Right. Well, so where is the Micro-C right now? What's the— where's the design and the regulatory approach? Good question.

So we froze the design February 18th. When you freeze your design, then it goes for IEC testing. So we have 5 Prototypes that are being tested, they do, they do a lot of things. They drop test them, they, you know, they shock them with 1,000 volts, uh, they test them underwater. I mean—

Yeah, water test, the shower test. I remember that. Yeah.

They do, they do a lot of crazy things that you're thinking, well, why would this ever happen in the OR? Now, at first I was like, well, this is just absurd, but now that we're In the thick of it, I'm very glad that we're doing it because number one, it ensures me that our device is truly indestructible, at least within the confines of an OR.

Yeah.

And I know if it can pass IEC testing, it can pass the OR. Number two, it makes you really think about safety in an extreme way and how important it is for others. So I'm actually glad that we're doing it. Plus it puts up a ton of hurdles for people to knock it off.

Right.

You know, you always, you always want to make your technology difficult to replicate. And the safety features that we've added, the lockout, all the— I mean, essentially, you know, we had to build in a safety feature so that if it gets shocked with 1,000 volts, it shuts off so it doesn't cook our motherboard, but then turns back on.

Wow.

So, I mean, that— those are, those are, those are embedded into our motherboard. I mean, we had to build those things, and it was a learning process. No one ever tells you that when you're designing your motherboard from day one, be sure that it's capable for a 1,000-foot transient shock. No one ever tells you that. You learn that as you go in IEC testing. So like I said, if I had to do it all over again, I would probably start at the end and then go back to the beginning, if you know what I mean. Yeah, like look at what the—

Start with the test in mind. Yeah, right, right.

But we're here and we made very good progress. It's been 2 years. No one thought that we would get to this point in 2 years. Including myself. So I'm—

It's really fast. I mean, really fast solving problems when you've got multiple engineering disciplines, mechanical, electrical, software. Amazing.

Yeah, and I think— so we've submitted for IEC testing. We should have FDA coming up. I mean, soon. We're thinking Q3. For this year?

Yep.

Excellent.

And the software, there's embedded software, or is there— can you talk to the device from somewhere else? Can you upgrade software from somewhere else?

Yeah, in modern technology, that's all that has to be part of it. I mean, you have to be able to do—

Upgrades, right.

Process upgrades from afar. Because there's no way we could send a distributor to each one and upgrade it. So it's simply a matter of, like, sort of like your iPhone. We built it into the software where it upgrades on its own.

Oh, brilliant. That's brilliant.

Wow.

What was the biggest challenge in the last 2 years? What was, you know, all startups hit walls and have really tough problems to solve. But what was your big problem?

Um, well, I remember back— was it 2016? I was actually on a flight to Dublin, uh, we were going to Ireland, and Evan was in Atlanta, and we were having— we're having a lot of trouble with, uh, power supply and the heating and cooling of the X-ray tube.

Mm-hmm.

And we didn't think we could get it done. We thought it was actually sort of impossible to have a 60 kV tube at that size with that tolerance for what we need to do. So we didn't— and then get the power supply into it. And we were on our 3rd or 4th iteration. We had talked to X-ray suppliers from all over the world, and I was— we were pretty frustrated, but we I flew out to England and Evan and I had set up this meeting with this guy out of the UK. He was actually in London time. And it was probably at 3 or 4 in the morning for me. I don't remember what time it was for Evan. And I think England was like at the same time zone, but we had this huge conference call for about an hour or 2.

Hi, y'all.

And we sort of figured it out.

Wow.

And that was really early, 'cause at that point we were like, well, if we can't figure this part out, You're dead. Yeah. And at that point, it was all my money into it, and it was like my close— like my, you know, like my father-in-law's money. It was like, these were like— these were like— this was like family money, you know? So like, I was like, it was basically me taking all the risk at that point. So that was a big hurdle. Um, you know, we've been blessed with raising money. I think, I think Adam and I have a certain Capacity to level with investors. I think people have found us to be credible and trustworthy. So we haven't had trouble raising money, which has been a really good thing. We haven't— we've never run out of money. And as my good friend Josh Hicks says, Josh sold his company Plated to Albertsons for $300 million. So he's a very trustworthy guy. He knows what he's talking about. And he said, Greg, you can only run out of money once.

I like that. You can only run out of money once if you're a startup. Yeah.

If you do it again, it won't happen again. So I remember thinking about stuff like that, and the first year was tough. I remember there had been a lot of sleepless nights, especially when we were on the drawing board and just having delays and stuff. Getting the prototype made. And it wasn't— they weren't major delays, but like to me they were, you know, because I was—

Yeah, well, you're burning cash every month. It's painful.

You're burning cash and you're, you know, you think it's— you got the perfect idea and you go down that path and it's not that it wasn't perfect, it just is not— it wasn't practical or it wasn't like Affordable, you know what I mean?

So— Yeah.

You're always kind of making these adjustments on the way, but like, I think the one thing that we've been very good at, Evan and I are polar opposites. So like, you know, when he's hot, I keep him cool. When I'm hot, he keeps me cool. So we have just very different ways of dealing with stuff. So I think, He's always been very good at delegating responsibility to our engineers and keeping them on track and making sure that they're working at capacity. So he's been really good at managing that. I've been really good at managing our investors' expectations and then sort of pushing the vision of the product to the end user, which is me. So we had very different talents with very different responsibilities, but I think that took a lot of pressure off him. in the day-to-day, 'cause I mainly deal with the fundraising and the investing and on the trade shows and pitching it and that sort of thing. And then he is able to do the day-to-day as a CEO and get the project done and meet deadlines. And we've never, we've ever, we have a saying, like we've learned from Theranos and all these other companies that No, we're just doing stuff that, you know, promising things they couldn't deliver. We've been very careful not to do that. We've only— we know what we can deliver and we know when we can deliver it. So we don't make obscene promises.

Interesting.

I think that's important. I mean, I think that's important. I think you can promise someone the world, but that doesn't mean you can deliver it. And I think for us, like, our projects have been very realistic with timelines that have been met.

Terrific.

Like the other day, we went to ALS and we just built that prototype hand table, the tracking hand table, and we got it done, you know, a week before we were flying out to Las Vegas. So that's not an easy task. I mean, but we knew the timeline in front of us and we met it. So I think that's important for startups to do that, because investors watch that. They're like—

It's really important, yeah. It's really important, Greg. I see a lot of startups make the mistake of having brilliant ideas for products, but they don't know how to execute. And I think the execution piece is actually more valuable than the original idea. That's a special team that can hit milestones over and over again and get over hurdles that they don't even know about yet. That's good stuff. So where are you, how do you think you're gonna sell this? 4th quarter or 2020? Have you thought about—

We're looking to launch formally at the academy, the HAN Academy in Las Vegas in September.

Okay, wow.

That's when it's formally going to be distributed. So we've got a manufacturer. The nice thing is we don't have to pound out huge amounts of volume early. We certainly want the project to be launched so that, you know, we know that everything's working appropriately and that our investors— that our customers are getting what Expect. We certainly want to value their feedback. But the nice thing about it, once you get FDA— once we get FDA, we can then unfreeze design and make some iterations within the confines of our clearance to make it more ergonomic, to make it smaller, to basically take some feedback from our users and change it. So this is going to be a constantly changing thing. I mean, you wouldn't dare buy an iPhone 1 now, now that you have the iPhone 8 or the X, right?

Right, right. No, it's typical. Yeah, Gen 1 is never the product that you sell all over the world. It turns into Gen 2 and Gen 3, and it just gets better all the time.

The thing I can tell you is our Gen 1, our current device right now, is awesome. I've used it in the operating room. It's great. It does everything I need to do. So I'm very excited about that. And I know it's reliable because the FDA mandates That it's super reliable and it's super, you know, I mean, it's borderline indestructible. They've done drop testing on this that I don't think you could break it in the OR unless you throw it off a building. I mean, I've seen some of the tolerances this thing is passing, and I don't even think it's physically possible to break it right now in the OR. But anyway, these are good problems to have. And then you really start— it becomes fun because you're like, okay, we have talks with manufacturers of plastics and shock absorbers. And we're using this— the outer shell is made of a plastic that is from one of our engineers that I knew 12 years ago. He was a textile engineer. He made that introduction for us. So it's really fun to To take input from people in all different fields. It's not just electrical engineering or mechanical engineering thing, or even a software thing. It's a textile engineering, it's a polymer thing. It's a— in some ways it's a nuclear thing. I mean, there's all sorts of fields that come into this, and I'm just— it's been a lot of fun to hear different points of view.

Well, this is terrific. I want to be respectful of your time. We'll certainly look for this in the future. So how would a hand surgeon kind of get more information about MicroC before the FDA clearance? What's the best place to go?

Well, I would love to tell people on the website, but that's just too slow. I mean, if you want to know about the MicroC, you just email me.

I appreciate your time. Thanks, Muram. I love your products also, and we're close by, so I actually may stop by your office one day and see it in person. And let me know— Yeah, please do. I mean, you guys think of how I can help you, I'll be happy to help you in any way. Love the disruptive space where you're solving a problem nobody else has solved. I've never done surgery, but I've been in cadaver labs all over the world in surgeries. All over the world, and I cannot believe the size of the C-arm that gets wheeled around for hand or foot operations. Blows my mind.

Yeah, absolutely.

Makes no sense. All right, thanks, Greg. Thanks, Miriam.