BoneChat #127 - Eliminating "Tray Friction" in Orthopedic Logistics | Greg Prosser (Hansel Medical)

Okay, welcome to BoneChat 127. Today we have Greg Crosser, founder, CEO at Hansel Medical, that enables people to track instrument inventory assets. And from my experience, companies and distributors don't know where a large percentage of their assets are. So Hansel's elegant solution really supports my thesis that I've been writing about, that everything's driven by cost reduction and more throughput in orthopedics now. So it's the perfect solution at the perfect time. So I'm gonna hand the mic over to you, Greg, and if you, if you have slides, throw 'em up.

Yeah.

Or yeah, sure. Yeah, I, um, hi everybody. I'm in Dallas, Texas. Uh, yeah, Greg Prosser. I think a little bit, um, I can share a little bit just about me. Um, first off, I'm pretty informal, so if any— this is not like a presentation. If anybody wants to have a dialogue around what we're doing or wants to hop in at any time, please do so. What I'm probably going to— I mean, I've been pretty damn busy with the business. So candidly, I'm going to share just a sales deck that'll help kind of guide some conversational things for me. I didn't prepare anything too specific for this, but I figure, you know, this is an audience like, this is quasi like a sales/presentation of Hansel. So the sales deck will do. Yeah, a little bit about me, my background, like Tiger said. I didn't originally come from orthopedics. Uh, if you had asked me 15 years ago, uh, what I'd be doing, I, I wouldn't have even known this existed, that I'd be a startup founder in the software space in orthopedics. Um, it was outside of my world. I grew up in a small town in Missouri. Uh, my dad was a dentist, my mom was his lead hygienist, and they had paper charts like growing up. So like definitely had no, um, no conception of like technology, businesses, et cetera. We had a computer. That my dad, you know, bought. And we were always kind of at least on the latest with that regard. But I was never like a techie growing up. I studied mechanical engineering at the University of Missouri. So I do have an engineering background. Worked at Honeywell in Kansas City as a mechanical engineer. And then I had an opportunity to come down to Texas to join an early stage oil and gas startup. And that's what brought me down here. So after 2 years of working on nuclear weapon components at Honeywell, in Kansas City. Cut my teeth in startup space in oil and gas industry, and that was a connected devices platform doing data acquisition and security monitoring in the oil field, which actually not only did that get me hook, line, and sinker into this way of working, but it just opened my eyes to this opportunity of like software and hardware being used in business. I did 2 years of medical device sales in the durable medical space selling bone growth stimulators in the post-op spinal fusion space. Mostly we did do long bone. So I ran everything in my book of business in a distributor here in North Texas, you know, from calling the patients, calling on accounts, delivering my patients, doing the billing and reconciliation. So literally got to kind of be an entrepreneur in a sense. And then, then after that, I was, I invested in and joined another early-stage startup doing asset tracking in healthcare. And so if you look at my LinkedIn, you'll see a company called Digital Medical Tech. I was a stakeholder and a product lead there. Within the first month of working for that company, we were doing Bluetooth-based tracking, but that company was focused on Bluetooth tracking of things and devices in hospitals. And, um, yeah, within the first month or two of working there, there was a Stryker distributorship in the Pacific Northwest that was, um, uh, in the Portland, Oregon area. And, uh, my sister lives in that area, so that was very serendipitous. So I stayed with them, her, my brother-in-law and her, you know, for 10 weeks off and on in that first fall, uh, just sleeping on their spare bed. And every day I'd work at the Stryker distributorship. And so that was a 2-year boot camp. That really, um, I'm standing on the shoulders of what we initially did and what I initially learned and the relationships I built, um, to carry that forward, um, with the vision that I have for Hansel.

So, um, COVID, uh, a little background noise, but anyway, yeah, I'm gonna mute everybody here.

Um, yeah, sorry. Um, that company didn't survive COVID. The silver lining is, is, um, So I lost my investment. That company didn't survive COVID, but I had a pretty gut instinct that this was something worth pursuing and frankly, a harder problem to solve in an underserved space. So held some software product management roles, found my co-founder in that timeframe, and took the leap in 2023. For the first 15 months, I self-funded the company and lived off my savings and then got the company into Techstars, which is a startup accelerator in the startup space. That gave us some capital, which allowed me to stay full-time on the business. And then last year we raised our pre-seed round, uh, which really was mostly the catalyst, uh, for me getting my co-founder full-time. So my co-founder is, uh, Jason Kerner.

Um, people in this— what was the seed? How much was the seed, Greg?

Yeah, uh, seed round was— we raised a little over half a million. So, uh, target was $500K. Uh, we oversubscribed the round, uh, which I'm grateful for. And a lot of that broke down into, you know, Yeah, from a founder perspective, um, it was a balance. And that was, that was something to learn along the journey too, of like, what do I need to raise and what's going to go towards, and how do I value the company, all these things, uh, because that affects dilution, right? And so, um, we pretty much landed on target of $500K, uh, maximum of $600K based on how much you wanted to dilute in the first round. Jason and I are both very technical, so everything we've built within the company has been pretty much us. The only thing that we've outsourced is the electrical engineering of our own printed circuit boards. That was just something that was a little bit out of my wheelhouse and wasn't worth the lift to learn. We probably both— Jason and I are decently technical and savvy guys. We probably could have learned it. It just would have— it's just easier to get somebody else to do it. Now we have, with the first round of funding, we have an outsourced hardware development firm that basically gives us input guidance on things like that. They write our custom firmware, but, you know, Jason and I set the business requirements and physical requirements of the device. And yeah, so Jason's in the United Kingdom. He was a chief architect at— we both worked at Intellicentrics. I know people know that credentialing space, so don't hold it against us. We were trying to do good things there. So anyways. Candidly, that's something I think Hansel's going to get into at some point. That's something I want to get into. If we're already tracking trays and we got all these locations on the platform, I think we can disrupt that space and finally offer a solution for these medical device reps and stop getting basically screwed over with overly high service rates for technology that isn't advancing. And I think just in 4 years they've doubled their annual subscription costs and it's not like it's any more or better. Than it was. So, um, we have a lot of things on our strategy and roadmap. Um, so anyways, Jason's the chief architect. Um, he's a wizard. Um, I have a, I've been very blessed, uh, to find a great, uh, co-founding partner, um, uh, to go along this journey. He get, he has a, a wife and two kids in the UK, so he couldn't take the leap and take the same level of risk that I took initially. Uh, but he, we've built this trust over 4 years. Um, and just kept delivering for each other across the pond, per se. And yeah, now he's been with me full-time for 7 months and it's amazing how fast we've progressed in the platform. You know, we're pretty much, we are commercial ready. The only thing holding us back is I literally, I mean, if you look here, I got boxes all over my office. This is a Tabletop Dental autoclave. So I did, I built the first Um, I designed the 3D modeling and built the first, uh, versions of our tags. I did the environmental testing in this tabletop dental autoclave to make sure they would survive. Um, all that. So I have, uh, units here for like the first, uh, 3,000 tags for trays that we're going to be able to support. Um, and I build them all, so I configure them. I got 1,500 printed circuit boards and batteries ready to go. That I need to get, uh, configured, and I'll take them to weld them up in Fort Worth. So I do all that, and we're actually hiring, uh, I'm gonna say I got the email sent out, we're gonna hire an intern this summer. So that's going to help me out a lot, frankly. So it won't be just Jason and I in there, Frank, and it kind of dropped in my lap. Um, so anyways, uh, a little bit about the business. Um, and I feel like I'm pitching here. I'll get into a deck, we can talk more about it, but if you're enjoy— if it's good, just, you know, I guess thumbs up or, or whatever. Okay.

Um, good.

Yeah.

So, um, yeah, I have, uh, you know, so I have this mix match of like mechanical engineering, uh, medical device sales and startups. And that was just basically a perfect marriage to like position, uh, myself to be the founder of this company. And then Jason's been building software, um, for healthcare, um, for over 20 years, basically. He's an architect. You know, he's written— we have an iOS, Android, and a web platform. So what we're doing on a bigger scale— actually, this is probably a good time to share the screen. Let me figure this out here. Desktop 2. All right, let me know if this has come in.

We see it.

Okay. So yeah, we like to use, you know, change the way you operate a little bit. Double entendre on operation rooms and changing actually the physical operations of organizations. So, you know, what we're building— let me get up here, sorry. So as we know, like today, you know, the reps are in constant, constantly in communications with text, emails, WhatsApp chats, like but all these different tools and methods, phone calls, which none of this stuff is structured data anyways, but there's just countless hours being spent on like case coordination of inventory and hardware. So, you know, we know scheduling is fragmented across, you know, you got ReadySetSurgicals, EPIC, which is your EHR, you know, Cerner or Oracle, any kind of facility-based scheduling solution and/or, you know, homegrown, potentially iCal, Google Cal, which is what some of our customers are still using on many things. You know, building a platform with automatic tracking allows us to allow or enable our customers to be, you know, proactive in the way that they're doing things. There's obviously, I think this is a very fire drill industry, as you all know. I don't think, luckily I'm speaking to a pretty well-versed crowd in the orthopedic space. But, you know, surgery schedules are changing all the time. So knowing where this stuff is and being able to plan for it accordingly so that you keep the doctor happy so that you can keep growing on revenue, etc. That's kind of the value that we're wanting to bring. Information, information being siloed, you know, different tools for different groups if they're even an organization or a distributorship that has, you know, an operational, um, group, I guess, or division team. Uh, I've met many, uh, orthopedic distributorships that kind of are just pure sales orgs. And even, and there's much of this, uh, this role as a medical device sales rep that is very operationally driven. Um, I think there's an opportunity for Hansl, uh, to help our customers kind of mature in the way that they run their business too, not only from the software and hardware that we provide, but from kind of the practices and structures that we've seen with more mature or more successful— I won't say successful, that's a, that's a wrong word, but just more mature or sophisticated organizations. Again, some of the ones that we're talking to, it's literally just a, you know, 1 to 3 principals and then you got a sales team and like they may not have anybody operationally within their organization. And I've talked to others that have like operational teams with truck or with vans and drivers that are delivering stuff and building, you know, inventory. So we've actually built a ton of tools in Hansel to kind of support all that. And then we have a data warehouse. So you pretty much have like a Power BI instance in Hansel. Jason stood up a data warehouse so we can pull, you know, insights and metrics on all the data that's in Hansel. So getting into a little bit of how we do it, our technology is Bluetooth-based custom trackers. So think of us like, you know, I won't say we're going as big as Apple, but I'm going to use them as the example. Think about us like Apple. We're a fully integrated ecosystem, and that's where it's going to work best. We have our own, again, Android and iOS applications. The Bluetooth devices are provisioned to work specifically within our tech stack. Our first version that we're going commercial with of the Bluetooth tags for the trace. And we have non-Bluetooth tags, or sorry, non-trace tags. We just use off-the-shelf card tags that we'll put in implant totes that are provisioned specifically to work within our tech stack. So by using Bluetooth, we kind of hit this sweet spot of, you know, you have this trade-off with real-time location services, they're called RTLS, you know, tracking things basically, IoT type stuff. You're going to make trade-offs on capabilities on whatever you choose. And the best thing to do is to choose the technology and architecture to fit the problem. Don't select, don't make a solution and try and go looking for a problem to fix, which is basically what we started from anyways. So Bluetooth allows us to have passive automatic tracking that gets away from your RFIDs and your QR codes or barcodes. Uh, you know, that's going to require manual intervention to scan things. Crap data in is going to give you crap data out. Um, so knowing the nature of this business, it can just, uh, you know, cause issues. If you can't trust the system because people aren't scanning things in, then it all breaks down anyways. And that's not to say we're going to be 100% perfect. We We're probably gonna— we're gonna try and be in that 95+ percentile of accuracy. We're already getting great coverage, but with what we're doing from a mobile platform, um, and Bluetooth approach is, again, think about it like your Find My, right? The whole reason AirTags are being able to be sold by Apple is because they got so many iPhones in the field that you can pretty much track people's keys and purses and their personal items, uh, effectively. And now they even got partnerships with 50 airlines, so you can track your stuff through luggage, right? Through, uh, through the airport when they're managing your luggage. So we're really building that network effect. It's kind of mentioned here in this third point. It's basically crowdsourcing location data, right? So we have actually really reliable tracking even in a controlled implementation and ecosystem, meaning like we only have, we have 4 design partners we've been working with for 9 to 12+ months. Training, I have 4 orthopedic distributors across Texas, Missouri, and Ohio covering foot and ankle, hip and knee, child pediatrics, or sorry, pediatrics and upper extremities. So we have a breadth of manufacturers and a breadth of disciplines which has really allowed us to work with them in a sandbox-like environment on a limited scope implementation for us to just gather data, get feedback from all these different organizations with different organizational structures and different needs. So that we can synthesize that down to build Hansel effectively for adding value to them. So we're really taking that Apple approach to build, you know, like that Find My network, but it needs to work on both Android and iOS because we need as much coverage as possible. Right.

So, Greg, let me, let me stop you there. So, yeah, what, what Greg hasn't said is his number one customer is distributors. Number two is device companies. And number three would be hospitals. So the, the, um, he's— the primary focus right now is distributorship. So walk us through what actually happens. So, you know, uh, you know, ortho distributor in Indianapolis, okay, they have a lot of stuff all over the Midwest, they don't know where it is. So walk us through what happens.

Yeah, um, so if they want to move forward with Hansel, which we obviously hope so, um, if they have you know, our pricing is per device per month. So we got to have that conversation with them on what they can afford and how that— that's kind of the, I'll say, you know, that's the experimentation that we're going to be doing this year. You know, I think we're priced— I'm priced it fairly for what we think our customers can afford and what we can do. But what we need from them is, you know, they'd have onboarding data that they would provide us. So they need to give us you know, the users that they need to be invited. Our pricing model is based on a per asset model. So if they have 2,000, 3,000, whatever, it's a price per month per asset. And that allows Hansel to own the inventory, uh, you know, basically replace it if there's any issues too. Um, but then we can kind of crowdsource, um, the users with on the platform, um, to access information to the data. So it's really a SaaS solution with a very lightweight hardware. That's how the business models run. So we would onboard their customer with a Hansel instance. We'd get their users, we'd get all their equipment onboarded as well. And we have templates that we send them and playbook, a little playbook that we're, you know, refining and running from an onboarding standpoint. And then we need to add locations in a given geography. So if we are already working with other groups in that area, like call it Texas, which is where I'm at, The beauty is, is once we add facilities, hospitals and warehouses— or sorry, hospitals and surgery centers on Hansel, those are considered common locations on the platform. And this is where you really get a platform-like solution. So when we stack other customers, be it distributors and/or manufacturers operating in those same spaces, those are common locations on the platform. We don't have to continue to, you know, we don't have to onboard every customer in their own siloed instance, right? Everybody gets to benefit from what's already built. And actually, every customer that's added to the platform only compounds the value to every other customer.

So I've no idea. Network effect.

Yeah, network effect. Right. And like, you know, people want something that's cost effective and they want real-time data. Well, guess what? You got to make trade-offs on what you're willing to sacrifice or what you're willing to get out of that. So, you know, if Stryker wanted Hansel solely within Stryker, That's not my ideal situation for the company long term because it doesn't build to this vision of like crowdsourcing everything, right? And it would only be within that instance. So we can, yeah, use a Zimmer, you know, Zimmer just to make random references like Zimmer and DePuy reps can be walking through the hospital and updating Stryker and Zimmer equipment and they won't see that they're updating it, right? All that stuff's architected in the platform to keep it proprietary of whose inventory, but we're crowdsourcing it so that like, or even, you know, facility users, that's what we plan to go. So a way that we want to expand our network effect sooner is we have like a free tier user, base level user that could be in the SPD or the OR and they could have Hansel running on their phone and they could be updating data for our customers.

So do they have to have their phone with the lap— with the app live when they walk through the hospital, or can it be like passive in the background?

It's passive in the background. Yeah, we do a lot of creative stuff.

Uh, that's incredible.

Yeah, so it's hands-free. Um, and when you come in range and out of range of beacons, we pull certain things. Um, yeah, we record autoclave cycle. That's another thing to notate. Um, so we can count the number of autoclave cycles that a that a tray has gone through, we can timestamp that. Obviously, you do need users to be in proximity of the tags in order to gather that data, but that's just all a part of— we want our customers to buy into the long-term vision that's going to give everybody the value that they're looking for. So, you know, again, as we grow, I've thought about this many times as the founder, it's like, it's kind of crazy. Like, we've already built a pretty reliable solution even with kind of more siloed instances now just because we're not big yet. You know, we're not, we're not broad in our coverage. It's still reliable. But as we get bigger and as we build out this network effect and hopefully people buy into our vision, our issues get— our problems go away or get easier, I guess, because we're, we're crowdsourcing that user base. So yeah, we'll get there. We get there from an onboarding standpoint. We get their data. But then the core components of the app or the, you know, the solution is the Hansel tags. You got the mobile apps and then you got a management platform. And then our rollout steps will be, yeah, once we have the inventory onboarded, then we will assign the same whatever number of Hansel tags they want to move forward with, whether that's a limited scope or certain assets, or sometimes some groups are talking about, you know, tagging one core tray in a set of like 3 to 5 that might travel together., I'm willing to, I'm not here to oversell a customer on stuff they are, they want to trial it out. Um, but obviously the, the biggest power, um, that you're going to get out of Hansel is knowing that where every tray is, right? Uh, not just a collective, because if you're only tagging one core thing and you got 4 other things floating with it, and one of those things goes, it only just takes one time, one of those things goes missing, it's like it wasn't that much extra just to track the thing, um, potentially.

So can you, can you show us what, uh, what, what you see on the app? You know, there we go. Uh, you're still ahead.

No, let's just dive in. So, um, so this is the web app, and I can— let me pull up, uh, I'll share my—

so you can— while he's doing that, guys, you can do this on, on your smartphone or a desktop, either way.

Yeah, yeah, you just need a web browser. It's just like a web app, so it's not, it's not a native macOS or Windows application that you would have. I can, I'll dive into the mobile app here a little bit.

We have a, we have a question coming in from— yeah, go ahead and ask your question, Pat. Can you, uh, you're talking as permitted, Pot. Go for it. Oh, oh, well, keep going, Greg. We'll try to get him on.

Yeah, no worries. Um, so we land a customer into this dashboard. This is an admin experience. So, um, yeah, we kind of give them this gray bar, and then you can jump down in here into sub-workspaces, and that's like where we can chop up, uh, We can chop up territories into workspaces. So some organizations want a siloed set of assets that are consigned to a given territory, region, or whatever. We can do that. They can be owned at the whole organizational level or the account level and then just manage between territories. We have an asset list view page. So this, again, this is a demo account that we've built here on Hansel to kind of demo things. Maybe I'll stop the share. I can anonymize some stuff and show you our local groups map view because it's pretty slick. I just don't want to give away information that I haven't got the okay from while we're on the call. But this is an example here. So I have these tags that we set up. Let me see if we can go down here. Maybe it's settings. Actually, let me go to the, uh, let me go to the admin space. Let's go to account. Uh, yeah, so I've set these territories up on the places that I visit. So I went to Chicago, um, you know, Monday through Wednesday for work. Uh, we got the DFW or Dallas territory in Hansel. And then when I went to LogiMed, you know, we set up Southern California as a territory. So when assets go in and out of territories and we polygon these on a map, we can indicate to the customer when things are visiting or away. So in this instance, if I have assets here, I can see I have 13 tags that are from some other workspace that are now in my geography. And so we can surface that to the customer. So you think about loaner sets that get transferred between territories and owned by certain groups. This is how we get— or loaner sets that get sent out from the manufacturer to distributors. This is how we can surface that stuff in real time on the platform to make it aware of like, hey, you have this stuff in your field. And we also have alerts set up in the system. So we have a, we have a lost mode. We have like a sending and receiving mode for territories you would select. So lost mode is like I have a tray or set of trays or multiple trays or, you know, implants, whatever that are there missing. And this is the beautiful part of like the crowdsourcing later on as we build out the network effect. You know, I could set up an asset or assets on audit mode or sorry, lost mode. We have an audit mode too. I can talk about that. But lost mode. And then when any Hansel user inside your organization or outside pings that thing, we can then send you a notification of like, hey, we found it, right? So if you think about all these misplaced and lost assets over time that organizations are writing off or putting in a bucket for later, we can help surface that stuff. So you just minimize or drastically shortcut the time. That things go missing. So when we surface this on the asset view, you can then click it into it, see like what's actually, what's, what do I not, what does my, what is not in my workspace that's in my territory? And maybe you need to ship that out. With sending and receiving alerts, you could say like, okay, I'm shipping a certain set of trays out to support this other group. Their surgery's happening on next Monday. So I need it back by next Thursday at the latest, right? And you can set, pick a time and date. And if those assets show up in your territory, again, we have that geofenced on the, on the map, right, or polygon on the map there as a territory, as a bounding territory. If a user registers those tags as they come back into your territory, we'll just wipe that off because it maybe it met the condition. If it didn't meet the condition, then we can send a notification to both parties saying, hey, you need to ship these trays back. So we have a live map view. Let me— we got locations here, so you can favorite locations. We have physicians and preference cards, so you can add physicians. You can go into a physician. You can set preference. Let me find one maybe that has something set up, hopefully. Yeah, so we have location-based preference cards and where we have— so we actually have a preference card hierarchy. So if you have a procedure type and a physician and those two just get married, you can select, you know, we can have preference cards set on that. Additionally, you may have that physician that does the same procedure at two different facilities that are two different preference cards because of whatever. And I've heard that happen. We had that requested a couple times from organizations that we worked with. So we've layered this in now where we have this hierarchy of like physician, procedure, location. If those three match and there's a preference card of that, then we'll pull that preference card. And you can do this stuff on the, on the mobile app on the fly. So you schedule a case and you're just going through and you can select, um, so the procedure, the physician, um, and, uh, the location. And if that, if that selection doesn't have a preference card, you can see we don't have items, right? It says down here, like orange icon, no items. Now you can schedule that case without items if you want to. There's nothing to stop you there. We're going to surface like, hey, you don't have anything that you're assigned to it. When you come into this next flow, you're able to select from templates based on that procedure type, right? So procedures will have templates. If we come back over here, go into procedures, let me just see if we have templates. There we go. So you have these templates. So this is that standard and that alternate, right? So you can actually have two different tiers and you can have a default tier, right? You can set something as a standard thing, like the default is the one we use the most. And then we have this concept called variants., and that can be some nuance. So we're kind of like, we're providing the customer this almost like file structure organization of their procedures. And when you do this at the manufacturer level and you could roll this out to your distributors, um, that's the ideal scenario. Then you're talking about the reporting of all this stuff. So not only are you streamlining on the mobile app for the reps in the field to schedule things, but then like your reporting structure can be as broad, such as, you know, again, this is demo data, so give us some grace here. You're just your primary total knee arthroplasty thing, or you could get granular and saying like how many of these things of standard, you know, standard equipment setups or this whatever variants get subtreed under there. You can get as granular as you want in the reporting or as high level. So Yeah, so if we come in here and you can select, then we just pull that in. And now since I don't have a preference card for that physician, the rep can then just hit save preference card. I'm not going to do it for the sake of demo purposes to kind of maintain this, but you could hit save preference card and then that will automatically get stored in the platform against that physician and procedure. So then next time, so you're kind of doing this on the fly, and then next time you don't have to do that. When I select those 3, or at least those 2 settings, the physician and the procedure type, we're just going to pull this stuff in as like that's that that physician needs the standard list of items for this procedure.

So then— Oh, cool.

Yeah. We also have— yeah, any questions, I guess? Let me pause there.

It's a lot of information, but it is. So you— while you're talking, there's— it's been validated both from a distributor point of view. Mark Maloney said there's a lot of— there's more oversight that needs to happen between the distributor and the medical device supplier. And then Colleen used to run a company as a medical device company, and she spent a lot of money tracking or trying to find assets. So everybody needs this. There's no question about it. So jump in, Kyle.

Yes, a couple of questions for you. So you haven't shown us the tag. I assume that you can give us an idea of the footprint. I'm curious about that. I'm curious if you have any capacity to do any sort of thermal measurement so that it creates a method for you to have a count of how many times it's been through the autoclave. And then a couple things to share. So I was on a project with J&J a couple years ago, and, and tracking inventory was kind of the thing. And it turns out across J&J, across all the different divisions and all the different teams, they had like 30 different projects that were all working on how do we keep track of our assets. And at one point I was in a meeting and It's a bunch of VPs and high-level executives were laughing about the fact that they have $1.5 billion of inventory in the field and nobody knows where it is. I didn't think that was particularly funny, but I was working with a lot of logistics people and I'm the engineer. So anyway, the other thing that I'm curious about is you mentioned that this is ideal with distributors, and I don't doubt that that's the case. I'm working with a company right now that is insane with the amount of loaners that they use compared to consignment. I would imagine that for non-distributor assets, the consignment or the loaner space might be the, like, an interesting inroad or trial opportunity for you. And then, yeah, I had a few other thoughts, but I'll stop there.

Yeah, so, you know, from a go-to-market standpoint, that's why we're targeting distributors because they're smaller businesses, they operate in regional geographies. And from an early-stage company perspective, that's— it's faster to have conversations with regional teams and folks that are responsible for managing inventory of the manufacturers that they represent. So we've, we've designed, like, our customer profiles are distributors, manufacturers, and later hospitals and surgery centers. But the go-to-market's always been distributors because they're smaller businesses that we can work with on a bite size. And frankly, we're early, right? So like We're an early-stage company. It's just Jason and I. I told you on the beginning of the call, like, we're just hiring our first intern. So, um, that doesn't mean we're not on the cusp of being like ready for scale. Uh, we're actually already talking to manufacturers, um, but manufacturers have always been on the roadmap. And as we cover, um, you know, gain customer and tractions and footprints across distributors, then their manufacturers are going to become like aware of Hansel, right? It's, uh, it's obvious. And so The way we've architected Hansel is that, you know, a distributor can manage their territories within their, you know, geography that they've defined by the manufacturer in that relationship. But that just— that architectural structure applies the same to the manufacturers because the manufacturers are going to have agencies across regional markets. And that's the same concept that a distributor would have with territories and teams, a manufacturer will have with agencies across, uh, organizations. So, but we've, we've done some really creative things in the software where, you know, we also have set it up so that, you know, we know many distributors could represent a handful of products and manufacturers, and they need to track all that stuff within their footprint. And we've done that in a way where, like, those people and those teams would have access to that, that, those assets and data within their environment, like within their, sorry, their geography, their footprint. So like they see all the stuff they're tracking for all the manufacturers that they represent for. But if a manufacturer's on the platform too, they only see the visibility and insight to what their assets are in the field across the agencies that represent their products. Todd?

Cool. Yeah. Hey, show the device while Todd's asking his question.

Yeah, so it's about, I don't know, 3 AirTags thick. It's got a little notch here.

How do you mount that to a tray?

We use high-temperature Peak zip ties.

Yeah.

So—

Always Peak.

Either that or duct tape.

Yeah, definitely not duct tape. And honestly, that's what another thing I talk to customers about is because I know facilities are pushing back on adhesive. So if you want to talk about QR codes and RFIDs, Not only are there gaps there operationally and architecturally from a standpoint, but like if you're getting to get pushback on adhesives on the tray, our tag is welded shut. It's not reusable and it's made of a polymer that's approved for medical devices. So, you know, we've designed, you know, I do all the build process for the tags now, so I've done, you know, we built the tooling, uh, we got all the— we have custom, uh, software for us to like configure things, um, at a quick pace. So everything that, you know, we've done as founders that don't scale, everything's pretty much in place for us to like lift and shift this to a third-party group, which is what we're going to do this year. And then we can have somebody set up with the process, um, and a QA check, and we can crank these, crank these things out at whatever scale and whatever speed, frankly, we need. It just comes down to us, you know, dropping in and helping our customers get the implementation going. So, Kyle, I think you mentioned— oh, go ahead, go ahead, Todd.

Yeah, a couple quick questions. So I spent— I went to the dark side, sales, for 3 years in trauma for Smith Nephew. And this was, you know, back early, like, 2009, we had spreadsheets that were run by one person to track everything, and it was so chaotic because trauma— we weren't big enough to, to put everything in every hospital like Synthys is or Stryker. So we had to move it around and stuff was lost.

So does—

first question, how well does this work 4 stories down in a parking garage or SPD in a hospital that's built more like a bunker?

Yeah, absolutely. I mean, that's the benefit of using Bluetooth, frankly. So there's a company that I think probably, uh, maybe some of y'all know. I'll just— it's called Smaide, if you haven't heard of it. They're a French company. They do cellular tracking for, uh, trays. They were spun out of our French manufacturer, but they took more of a fleet management approach. Even on their documentation on their website, they mentioned that their trackers 94% of the time will update once a day. And that's, you know, less than once a day. Now, granted, Hansel tags aren't updating unless people are nearby them. So we have to build that out or people have to be in the facility. But again, if our customers buying into the long-term vision, then in our minds, like, that problem gets less over time. And frankly, the cost and the problem— another challenge with SMATE is their hardware is too big to fit in some of these trays. You got millions of trays in the field. Their hardware costs more because it has more expensive devices and a bigger battery and all this stuff in it, right? So when customers are asking for some of this, yeah, can it track itself? Like, you know, maybe one of the— for sure one of the challenges to Hansel that a customer might say is like, well, if, you know, if somebody's not on Hansel and it moves away, I don't see it. Yeah, that's the whole point of us building the network effect. Again, you got these trade-offs, but our device also costs a fraction of what our hardware costs a fraction of what Smaid does. To answer your question about the offline, that's the beautiful part about being Bluetooth, committed to Bluetooth in our, in our architecture and our technology. We have offline scanning, so we actually are able to empower the customer to run a scan of their assets nearby in a facility. We can store that offline when they don't have an internet connection or they have poor internet connection, and that's all done locally on the mobile app, on the native app. And that's the whole point of using a native app. Smaid has a web app, so they don't even have apps in the App Store, and there's limitations to like capabilities, frankly, with that. So you get a better user experience, all this stuff. It is another platform to support, like meaning if you have a web app that is mobile web, right? It's a responsive app that changes views based on a mobile screen versus a web screen. Those are still applications, but they're web apps. But when you build a native app being on iOS or on Android, you have more capabilities of accessing the hardware, accessing things that you need to enhance the experience and the reliability of the solution for the customer. So using Bluetooth, again, kind of round it out with a little bow on it, it's like it allows us to do this stuff offline. And then when service or signal is reestablished, then guess what? We have that data to send off to the platform, right? If it was scanned X number of times. Kyle, did I answer— or sorry, Todd, did I answer your question?

Yeah. So what about like a blended model? So you have my little company, we sell sets into a hospital. Those, those stay there, they own them. Would you put a tracking device or have someone like in SPD be able to track that? But then we also have cases that pop up that are, that are a loaner case, right? And so that would be the distributor or the rep or or even just the company sending it to the hospital. So would you be able to track even the stuff in SPD without a rep going there or a distributor?

Yeah, well, that's the vision of getting the hospitals on it too, or having medical device sales professionals asking some SPD or OR folks that they're closer to, maybe they could download and/or create, again, a lightweight basic user on Hansolz. Like, hey, do you like, Greg, I know you work here at the hospital. You know, we got these trackers on our device, like they know each other, right? And it's like, hey, do you mind just like, can you mind signing up on this base user so we can just like, it can ping your phone. It's not going to record anything. Actually, frankly, it only records the location of that user when they're near assets. So the system like doesn't track your location. Are you cool with that? That's kind of our go-to market. You turn the phones into gateways way faster. Now the long-term vision for Hansel that we have from an end-to-end platform of facilities and OEMs working together to drive utilization of these expensive assets, you know, we want to have coverage across both ends, but you're not going to install gateways. We want to install gateways. We already have— I've got gateways in my office here that we're toying with and we're going to put them in our distributors that we're working with. But we want to have like— you could even get to a point where you have workflow management in the SPD and the OR based on our tags and our platform. And that's where we're going. But the reason, you know, again, leveraging native apps and the mobile devices, everybody has a damn smartphone on them nowadays, right?

Yeah.

So you're using the smartphones here. I'm gonna— we need to get to Colleen's question here.

Yeah.

No, you're on mute. You're on mute.

Great presentation, Greg. I want to preface my question with, this is the first thing I've seen that I believe the field will overcome field personnel objections to, you know, using a system. And I think it's all focused on the Bluetooth networking, right? Without that feature, it would be another one of those. I mean, because I've tried. Over my many years of ConsenSys, I tried, I don't know how many solutions, you know, in-house solutions, third-party solutions. This is the, this is really cool. So my question is, have you had any experience with onboarding distributors and their reaction to using the platform?

Yeah. So we, like I mentioned earlier, we have 4 distributors across— oh, I need to share this, sorry. Um, we have 4 distributors across, uh, Texas, um, Missouri, and Ohio that we've been working with for 9+ months. And I got another pipeline of about 50 to 60 distributors that have either— I've either talked to, we've connected on LinkedIn, like some form of warm, warm touchpoint. And then, so we're working this year to like operationalize and commercialize Hansel. Like these are just steps as we go on our founder journey of like, how do we get paid for this, right? What customers, um, are willing to pay. Like, you know, what, what do they, you know, what's the right fit there? And then next year is more about like growth, right? We're going to get third-party manufacturing, commercialization, uh, and then the next year like is about implementations and growth. Uh, so to answer your question, our goal is somewhere between like 3 and 7 distributors. If I'm being realistic, we'll probably get around 3 to 5, uh, this year that's getting paid customers in any capacity. We're already talking to manufacturers like I mentioned earlier, which is crazy because I could only hope that we had been talking to people at that level this soon. But, you know, I made a post on LinkedIn recently. I was like, you know, we're commercial ready, which we are. The only bottleneck's Greg, basically. Like, I build the beacon right now.

So like— Need an intern.

I need an intern first and then I'm going to need a full hire soon.

So let me turn it around here and I think we understand the business and it's got incredible potential. It solves a real problem. What— let me ask the panel here, what would you guys do if you were Greg to, to grow this business faster? I, I'll throw out one idea. Have you, have you looked at the freemium model where you give it free to a distributor for like 12 months and just totally get them hooked on it and then They'll pay any monthly subscription, any per-set subscription after that, because they're totally hooked.

I have not considered that, just frankly because we have a hardware component, right? So that's a lot of money. That's a lot. We have to outfit that.

And then we're also— What's the cost? What's the minimum cost you could just—

So for our early adopters right now, we're at $5 a month per asset tracked. So any active, any active tag. Report. And again, I've— so when customers push back on the pricing, it's like, I've already tried to price it in a place that's, I think, fair enough, um, where— and again, we built, uh, reporting and, uh, alerting and scheduling and preference cards, like all this stuff on top of tracking. Like, we're not just the tracking guys. So, um, you know, it's $5 a tray.

That is really cheap. I remember, uh, QMed Innovations was selling a thing that's the size of a pack of playing cards. And I think that was, man, I can't remember. I think it was $200, $300 a month per tray. It was a lot. And it had a long-term battery in it.

Yeah, but even, and some of these trays are $50,000 worth of parts in one. Exactly. Right level tray. Like even $200 is a silly nothing to complain about knowing where it's at. Wow. $5 seems no-brainer.

Well, and that's, that's again, that's, that's, But as a startup, that's your whole kind of strategy, and that's what we want is, again, I want to price it fairly. I think price can go up. It may later. But I want it to be in a place where they can make the decision because ultimately we just want the adoption and the use of Hansel, right? And if we can build a healthy business at that price point early on, then we're going to do it. And if it's a deal, And that's the whole thing too. So you have in the startup like world, you have, you know, design partners, which are your kind of free beta customers. And then those become early adopters, which maybe I'm not, um, maybe none of this is new to some folks on the, on the call, but then you have early adopters, which get discounted pricing for taking a chance on an early technology and company. And that's part of Hansel's like way of getting adoption and proving itself in the marketplace. And then later you get later adopters, right? People that are more risk averse, they need something to be more proven. And then maybe pricing has gone up since then. So those early adopters get the discount for believing in us early. And I'm a guy, um, you know, I want to take care of those people that believed in us early too. So, um, you know, I, I plan to treat our early adopters, especially our design partners that are converting to early adopters— those people have worked with us in a free capacity and given us their time and energy to help build and craft Hansel over the last year and a half. Um, but our early adopters, I plan to, you know, Poland.

They get a discount in exchange for that. You get feedback, you get early feedback.

Yeah, well, we also get adoption, we get commercialization, right? So, um, yeah, any—

what would you guys do, uh, Kyle?

So how small is too small for you from an engagement perspective? Like, if you're putting tags on 25 trays to get started with a new potential customer, is that even worth your time? Are you trying to go bigger than that?

Yeah, I think bigger than that's better. Like, you know, we've already, I can show them, you know, our live, I can show them our design partners and live distributors on the platform. Like it's proven that it works, right? And frankly, from an onboarding lift for us, like getting all of their hospitals and getting all their assets and going through that gambit in order to tag things. I mean, we could onboard 25 things, but also if it's just 25 things and you're not touching those all the time, then you're not checking Hansel enough for maybe it to be meaningful enough of a solution or of an implementation for you to like get the value out of, right? So like really when you start covering most of your assets, that's when I think the value is. You know, I don't have a number that I've selected for a minimum implementation. I'm thinking somewhere in the hundreds of trays. It just depends on the size of the organization too. Like how big is your footprint and how much total trays do you have and what does that look like? Right? So it's just going to be on a customer-by-customer basis, but definitely at scale. Um, yeah, we just like—

that seems like the large MSAs would be like, you know, New York, Chicago, LA, you know, Houston.

Well, there's a reason I asked a question about that though, is that would be specific, probably tied into like a limited alpha launch, right? And if you Pursue that as potentially a way in, a relationship-building enterprise. The alpha launches are followed by beta launches where you go commercialization at scale. And it's something that might be an easy way in because you're only having to onboard a couple of locations with Design Surgeons. Gets, you know, the company and its affiliates and its distributors associated with your software, a proof of concept in there. For walls is why I mentioned that quantity. But I understand the challenges of the onboarding of it and limitations of it.

That would take you— I mean, if they just wanted to onboard a few locations in Hansel and they wanted to tag 25 trades and they wanted to send somebody to drive from point A to point B and around or whatever and see how it tracked, you can do that in a week, right? Like, that's like— you wouldn't even need a long-term assessment to like, to run against Hansel for that. Now again, once you start progressing up and scaling up your implementation, there's just more value to be had in tracking more things, frankly.

Got it. Mark asked a question about any IT resistance from hospitals. They hate, they hate new systems.

Yeah, so they're not, they're not using Hansel right now. So that's not a problem. And that's actually, frankly, part of the go-to-market too, because their sales cycles are way too long. For us to try and survive, uh, to get them. So what's going to happen is we're going to get adoption at the distributor level and the manufacturer level, then we're going to use that, um, that weight or that clout within the medical device side to start selling into hospitals. And then we also will have revenue at that time where it'll give us some runway and some patients to then work with these health systems, or our customers can help champion us into it, right? And think about a world too where SPD folks have, you know, that base level user I'm talking about, and they've already been on Hansel. The word starts to get out We may have hospitals approaching us. I've already spoken to a group out of Indiana called Parkview Health. They have the Muro Center for Innovation that they do. So they're going to, you know, whatever that relationship looks like, I told them we're a little early on the conversation, but they have a hub and spoke model of ambulatory surgery centers in a main facility. And I plan on working with them in a design partner capacity for our facility side solutions. So no pushback from IT. That was strategic in the sense of sales cycles are long and I've been through that with the last startup. But we will get there. As far as pushback on our tags, little to none. And we also have a regulatory review. We just ran sterility testing with Steris, so I have a report that provides or that proves that our tags are clean after sterilization from Steris, which is like a notable brand name in the, in the industry, right? So we're empowering ourselves to talk to our customers, which is then also those materials are available to them to to then share to the facilities of like, don't touch these tags, they're ours. Then they're good, they're good to be in the tray. So the regulatory review covers like how we don't meet our, meet classifications as a medical device, how we don't impact the IFUs, all this stuff within the FDA guidelines and sections and whatever that is signed by industry consultant. So like that's all lined out, right?

Cool.

Yeah.

Yeah, Mark.

What's your limitation? For growth? And what kind of patent protection do you have on the device?

Yeah, right now, I mean, my best friend actually in Dallas is a patent attorney, which is very fortuitous for myself. So yeah, he, he's a licensed patent attorney. So no, it's not patent protected. We have trade secrets on how we build it, how we do it. There's stuff within the software. Frankly, I don't need to— I could have gotten a patent, but when talking to my buddy, like, I'm not going to spend money to get a patent that isn't defensible. So this isn't defensible yet. I have ideas with the hardware in a way that we could have a patent on it. There's some such thing as a commercial moat, right? So if we're the first to market and we're doing it better than anybody else, or we have a better maybe just personal brand, people like us, right?

Even more so. The network effect is your moat. Once, once you have, you know, hundreds of distributors. Yeah, a few, a few. Yeah. Then, then it's— that's your moat. It's like Facebook. Uh, anybody could copy Facebook and start a Facebook tomorrow, but you got no chance, right? Because it's a network effect.

Yeah, well, that, that's the commercial mode I'm talking about, in the sense of like, we're the first ones doing it this way. We have 2, 2 and a half years of learning. We got, you know, our skills and experience as a founder, founding team, uh, that position us to be the guys to build this thing. I think we've proven that to our investors and to our design partners and to the market. Um, so we'll patent things as it makes sense, but I wasn't going to spend money to get a patent that wasn't Smart, smart move.

And then Mark's second question was, what's, what's preventing you just scaling faster?

Is it? Yeah, I think we're just at this, we're really approaching this inflection point. It's the third party, it's the third party hardware manufacturing. So having that lined up, lined out, and then it's a combination of revenue or funding. So as a founder, I just have to see where that lands over the next, you know, 6 to 12 months of can I self organically fund growth internally from revenue, or do I need to get some outside capital to help boost it?

So you need, you need outside capital. So what do you, what do you think your next raise is? Uh, when have you mapped that out? Yeah, no, what time and how many million dollars do you think you need next?

Yeah, it'll be somewhere between 1 and 2 is my thought. And it'll be end of this year, early next. Um, again, depending on where revenue's tracking. So, and again, being a highly technical team, like we don't need a big team. I'm basically going to hire product, customer success, and implementation people that can be like Greg 2.0s that can then drop in to help us, you know, do implementations with customers.

Got it. Yeah, I think you just need more users. You need to accelerate monthly users and forget about sales. Forget about sales dollars.

Well, we have— I've adopted a phrase called tax and trace, right? So as a person who's ran a cap— runs a capital efficient business, I'm very mindful of my own money personally and finances, and I carry that how I run the business. I'm adopting this mindset again.

We've—

I think we talked about, you know, we talked about the $5 per month pricing being very reasonable.

Cool.

We want as many people to sign up as soon as possible so we can get that adoption, right? That's the whole point. So.

Yeah, this is great. Uh, well, you got, uh, Cope's gonna bring us home with the last question.

Well, I'm sorry, I had a call from a client I had to take, so I'm gonna listen to this tomorrow if Tiger gets it posted. If I miss something, Greg, sorry. You had 4 distributors using you right now, I think is what you said.

Yeah.

Um, did you tell us, and I apologize if I missed it, what they say about it now? Cause they've been using it for how many months?

What's the longest?

Yeah. So over, uh, we've, we tagged our first bit of assets over a year ago with one of them here in Texas. So 9 to 12 months plus on all of them on a limited scope of tagging 100 things and all of them are converting to paid customers. So that I hope will tell you like in working with us, they, they love what we build. We, I, you know, I think we show up every 2 weeks and we're, we impress them on something new that we built in the platform.

Yeah, Mike, that's— by the way, that's the absolute best indicator that you're ready, is they're buying it, right?

And they're—

yeah, my question would— was then, what do they tell you they use it for? What do they like about it? What do they not have to do anymore that they used to have to do? Because, I mean, Tiger and I have talked about this. I'm shocked by the amount of companies that seem— like Maloney was talking about— seem to go, yeah, we have a bunch of, uh, you know, tanks out in the field. We don't really care where they are. You're like, do you have millions of dollars of inventory out in the field? And then they go, yeah, well, it's under Maloney's care, so if he doesn't take— keep track of it, we just charge him. That's what Zimmer does. That's what the Pew does. That's what they all do. But that's— I want to know, I was curious what those distributors say they like about it. They clearly like it, but they tell you that they stop using it. And that's what I was— I want to hear what they were saying because I actually think that's your most compelling sales pitch is whatever they say.

Oh yeah, I have— I mean, I have a video production company that I plan to talk to about doing a testimonial, like interviews with our local group, because they've been— they're a really sophisticated, mature group. Like, again, they have an operations team, they got drivers, they got vans, right? Um, not to sound— not to dodge the question, They love everything we're building. I'm not kidding. Because we like, because we, we do like all this. So we build Hansel to be, we're not, you're not fitting you into a box. I use the word flexibility. So we're building Hansel in a way where the customer can work flexibly or progress their way up in the way or maturity of how they use Hansel. But we're also not this like Salesforce platform where you need customization and custom development to build the thing. Right. So we have this wide range of flexibility of how you use Hansel. But we're not also fitting you in a box. I mean, man, any, so we, the way I approach product development, product management in software capacity is like engage with your customers. So last year we were meeting with them weekly when implementations were early. Q4, we just, we were in kind of in build mode. We put our heads down and it's Q4 for the industry. So it was like, cool, y'all go sell, close the year out. And we're going to focus on building shit here. And then when we, when we all come up for breath, This year now we're meeting every 2 weeks. So we still meet with our design partners every 2 weeks to talk about how we're putting in process workflows. We got the data warehouse, we got reporting, we got utilization metrics, we got physicians, we got procedures, we got territories, we got all this stuff. And then marrying that in from the mobile app, we got alerts into the web app.

And so, okay.

Yeah.

Yeah.

You're killing it. I, I, we're, we're pulling for you big time. Uh, last question. Why Hansel? And then we got to wrap it up because I'm, uh, we've gone over the hour. Okay. Where did the name Hansel come from?

So on my last startup, we were testing things in the map. Data points or assets would show behind me. We would call them breadcrumbs, and that always stuck with me. And so I wanted the platform to be a two-syllable name that was very easy to pronounce, very easy to recall. Hansel, like the breadcrumbs, came up. And then I found out 4 months later, and if you guys get my updates, you'll see this, but the definition of the noun of a Hansel is a gift given for good luck at the beginning of the year or to mark an acquisition or start of an enterprise, which I was like, holy shit. So did not plan that. So we have Gretel, the AI agent. So we're going to kind of round out the branding. So we have Hansel the platform, Gretel AI. She narrates our educational videos and instructional videos. So that's why it's Hansel. So people can say, check Hansel. What does Hansel say? Blah, blah, blah.

Right.

Perfect.

Well, thanks, Greg. This has been great. And some of the members want to connect with you afterwards. So you may see some emails. Keep up the good work. We're pulling for you.

We appreciate you guys. Thank you so much for the time.

Thanks, Tiger.