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Telemedicine. Three technology startups. The product is one, but different fates



I continue my series of articles devoted to the problems of telemedicine - a topic that has significantly increased its relevance today.

In a previous article, I prepared the filling of the simplest electronic stethoscope, described the principle of its operation and the logic that guided the developer. The case of an electronic stethoscope was not chosen by chance - this is one of the most popular areas in which startups try their hand. During the preparation of the material, I counted almost a dozen attempts to “invent” the stethoscope anew.

In the early 2010s, there was a remarkable prospect for the explosive growth of Telemedicine. The elemental base of electronic components has reached a qualitatively new level. Broadband data channels became available. The development and standardization of highly reliable protocols for telemedicine has begun. Venture investors, on the eve of the “spurt”, turned their eyes to technology startups in the field of healthcare, which began to grow like mushrooms after rain. However, the revolution did not happen that time.
Too lazy to read the article, but have your own opinion about what are the main reasons for the failure of technology startups in the field of medicine? Please take the survey at the end of the article. Your opinion is important to us!

Why?


There were many reasons. Some lie on the surface, others are less obvious. In order to understand this issue, it is necessary to analyze the experience of others.

In the process of preparing my own startup in this area, I spent a lot of time trying to find the secret to success. Below I will try to share part of the collected material and talk about the “life cycle” of the three projects that are most characteristic of the “first wave”. I specially selected projects whose fate was completely different in order to more easily understand which steps are successful and what should be avoided.

Today we are preparing three cases of different levels of success


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  • 3M Littmann. , .

CliniCloud


Last summer, I spent a lot of time in order to find out the reasons for the failure of this promising, at first glance, startup. I bring to your attention the information collected bit by bit. The main source was a blog hosted on a site that is now inaccessible. Legend has it that the startup was founded in 2012 by two partners with a medical education. At least one of them was Chinese.

In the same year, the first prototype of a stethoscope was presented to the world at a conference organized by Microsoft. Somewhat later, it was supplemented by a non-contact thermometer capable of measuring body temperature at a distance of 5 cm, with a stated accuracy of ± 0.2 C. However, despite the fact that they started in Australia, relations with Western investors did not develop too well. We managed to get seed investments from the venture division of the Chinese insurance and banking conglomerate Ping An and a number of business angels, including musicians (D.A. Wallach, Kosaku Yada-Sonar Group).

There was enough money to make a complete design of the device, right up to the packaging. The efforts were not in vain, and in mid-2015, the team finally managed to raise the first round in the amount of $ 5 million, again from Tencent Chinese investment fund.
By this time, everything was ready to launch a turbulent production activity and it started without delay. In October 2015, the first batch of stethoscope boards was assembled at a factory in Shanghai.


After a couple of months, the process of certification, assembly, inspection and packaging of finished devices began.


Speaking of packaging. I really liked her design. A great case made of quality material. The box made an indelible impression on me. Hard cardboard, excellent printing, even a magnetic latch was present! They did not regret the image of money, which was not at all in the Chinese style, but when you aim at the American market you have to crush the "mean knight". The stethoscope itself also looks very stylish. Cast body made of anodized aluminum alloy, carefully selected colors of the membrane. The thermometer obviously let us down - it looks “a bit oily” in appearance. As shown by the operation, both the accuracy of measurements and reliability are not up to par with him.

I described the filling of this stethoscope in detail in a previous article. It is immediately clear that the Chinese developed it, with an eye on mass production. Minimalism in everything! They did not even bother with the transmission of sound via Bluetooth, and microUSB was used as a connector on the side of the stethoscope.

This allowed to reduce the selling price of the kit to a very democratic level for such startups - 149 USD. Moreover, it included free delivery to Australia, the UK, the United States or Canada.


2016 was a very hot year for the team. Product certification was completed, albeit in a minimal amount. It was possible to organize sales through popular online platforms - Best Buy, Amazon, FSAStore. Some of the goods were even laid out on the shelves of chain stores of a large retailer B8ta.

The main startup team was based in Melbourne, and America was hoped to conquer with the help of the experience and energy of mentor Michael Raeder.

By the beginning of 2017, it became clear that the direct sales strategy to the end user did not give the desired results and work in this direction was strengthened. The stake was placed on young parents, to attract whom they tried to use bloggers and opinion leaders in social networks.


“The face of the project” was the mother of two children, Caroline Harper, who specializes in fashion and lifestyle. To popularize their products among medical workers, a distinguished doctor was included in the staff.

Back in 2015, its own YouTube channel was opened, but the team reacted to this format of attracting customers quite formally. Until the end of 2016, only 7 videos were released.

During the search for investments and technical support, old contacts were raised with the top manager of Microsoft, who showed interest in the project at the very initial stage. In the end, the software industry giant was attracted by promises of introducing automatic data analysis using Artificial Intelligence. A grant, modest in size, was received for work in this area.

Despite all efforts, direct sales continued to stagnate, which forced marketers to focus on B2B. The hunt began for large players - providers of medical services that provide remote consultations to doctors and medical workers. Initially, the results were encouraging. Long negotiations began with Babylon Health , a large company in this area. In addition, it was possible to establish active contacts with the community of independent medical workers and round-the-clock care of Doctor On Demand and, which appeared in 2016, the private home care agency Astra Health Care, Inc.. In July 2017, moving towards potential partners, CliniCloud announced that it was preparing to release new devices - a balance, a pulse oximeter and a blood pressure monitor, which were to be combined into a single system with existing devices.

Problems


After several months of communication with corporate clients, it became clear that full cooperation with large businesses in the field of medical services is hindered by two main factors:

First, doctors needed full certification to work with patients, and secondly, to work effectively with electronic devices, it is necessary to integrate traditional, for medical professionals, data storage and processing systems, including paper and film media. To fully exchange data with medical applications, the developers promised to prepare an API and SDK by the end of 2017.

Already in November 2017, CliniCloud announced its intention to launch its own web portal for storing, viewing and controlling personal data obtained with a stethoscope. It was planned to access it not only using a mobile application, but also a computer.

First of all, the portal was supposed to be focused on doctors who could use it to safely collect patient data and stream the sound of a stethoscope.

the end


On November 20, 2017, the last video on YouTube channel was unexpectedly published. It was clearly provocative in nature - it talked about the wide possibilities of artificial intelligence in relation to a coffee machine, household scales, diet, and other things that have nothing to do with the project. And not a single word about a stethoscope and medicine in general!
This was the beginning of the end. The development dynamics of the project did not inspire investors too much, and the remaining money was already not enough to implement ambitious plans. Even small grants handed out at various startup support events began to expire. The startup’s age was approaching a critical five years, after which he had to either enter the stage of sustainable growth or die.


Finance is no longer enough even to pay cash rewards to employees. The team began to crumble rapidly. Marketers had to be reduced, a large group of students who occasionally took part in individual advertising campaigns for the most part for hype and free coffee breaks , quietly resolved by itself. Bloggers returned to the advertising of food additives ...

Only the backbone of a team of several people, bound by obligations towards investors, continued to imitate the activity. They supported sales through their own site of previously manufactured devices, but real activity switched to completely different tasks related to artificial intelligence and in a completely different project.
The result - in the second half of 2019, a startup put up for sale the remaining one and a half hundred sets with a significant discount, completely stopped supporting sold devices and deleted the contents of the site. The company, apparently, was in a state of bankruptcy.

Ecuore


The development strategy of this startup is reminiscent of the first case. It would seem that they are doing everything right, but at the same time things are not going as if on Monday their mother gave birth to all of them . With the declared staff of 16 people, for the entire time of its existence, only about 6,500 devices were sold. The result - life in the company is still warming, but it is very far from dynamic development.

Go to the details


The company began its long journey with a startup launched in the same 2012. Having gone through the Spanish business accelerator, she created a device that was very revolutionary for the European market at that time.


This is a wireless device with a WiFi interface, on which it, in online mode, was able to transmit data. The choice of interface affected both the size of the device and the type of power - batteries that are charged from standard USB charging. The design of the device turned out to be very peculiar and not too convenient in medical practice. Among the features we can distinguish the use of built-in digital filters for primary signal processing. You won’t surprise anyone today, but at that time it looked progressive.

Certification challenges


As far as I understand, the first round of investment did not strike the imagination with its size. It was barely enough to create a limited batch of devices, but it was clearly not enough for a full-fledged certification process.

On the site you can find traces of complaints about the excessive complexity and high cost of this process.


I also have serious suspicions that the low quality of the sound signal also played a role. Otherwise, it would be possible to get positive feedback from doctors, which would help raise the second round of investment, already for certification.

For one reason or another, this did not happen. To save the situation and organize sales, the team was forced to change the positioning of the stethoscope to veterinary, since the path to the market for medical devices for people, in this situation, was closed.
The result is the appearance of the device under the brand name eKuore Vet.

The problem, however, was that it turned out to be very expensive for this market and was not in high demand. Nevertheless, the first sales instilled timid hopes in investors and they were enough to raise the next round of investments, which was enough to obtain a number of more advanced certificates, including ISO 13485. During this process, the electronic filling of the device was also improved.

The result was the appearance in 2016 of a new product that looks like two drops of water similar to its predecessor, but received a more solid name eKuore Pro.

However, by that time, serious competitors had already settled in this price niche. The main one is 3M Littmann. Electronic stethoscopes from this company cannot be called cheap, but they provide excellent sound quality. In addition, they have another huge competitive advantage - execution in the constructive format familiar to the doctor. However, we will talk about them a little lower.

Price matters


Ekuore fell into the typical trap of underfunding and the need to fulfill obligations to investors following past rounds. Investors demanded that the declared indicators be met, without which they refused to continue supporting the project. In an attempt to get out of chronic loss-making, product prices had to be lifted. As a result, the selling price of a stethoscope in Europe, in the simplest configuration of the eKuore Pro basic Kit, amounted to € 482.79, which is literally 20 to 30 dollars cheaper than the flagship device of the market leader - 3MLittmann with Bluetooth function.


For wealthy customers, it was decided to make an exclusive kit, which is additionally equipped with a cheap Chinese tablet and quick-change heads with a magnetic lock. However, it does cost crazy money.

Fight for survival


For the survival of the company, it was necessary to apply anti-crisis measures:
An attempt was made to connect a South African startup specializing in cloud data processing and machine radiation as a partner to the project. They tried to attract him to create software for the extraction and analysis of heart murmurs. But something went wrong and full-fledged software did not appear. My attempts to enter the site of the South African partners led to extremely strange browser errors:


I had to urgently create a simplified version of the software on my own. So there was a visualization function that tracks the dynamics of noise changes during patient auscultation over time. It allows one to recognize the appearance of new noises that are uncharacteristic of the patient’s normal state, but is not capable of making assumptions about their nature.
A search was made for partners among manufacturers of medicines and medical equipment. As a result, a couple of German firms showed interest in the project, but it seems that full cooperation did not work.

An attempt to break into the French market also did not produce impressive results.
Formally, the company has dealers in several countries of the world, on different continents, but apparently, they do not show much activity. For example, on the website of the Russian company Intermedika, listed as a dealer, no mention of eKuore and its products could be found

A boy with a finger in a hurry to help!



The culmination of anti-crisis measures designed to save the situation was the creation of a fundamentally new, extra-budgetary model of the eKuore ONE stethoscope .

With its help, the doctor was invited to independently "finalize" his stethoscope model by cutting the auditory tube for installation in the gap of the body of this wonderful device.


It seems that this device did not have its own power source, but received it from the gadget's USB port. Via the same USB, data is also transferred to the tablet. For obvious reasons, I could not look inside this wonderful device, but judging by the dimensions of the case, two variants of circuitry are possible.

Most likely, a digital microphone and a cheap ARM microcontroller are located inside. All signal processing functions, including pre-filtering, are taken out to the application.

The second option is an analog MEMS microphone + codec with a USB interface.

How the circuitry of the device might look in this case is shown below, however, this option is much more expensive at cost and was hardly used.


The device is positioned as a kind of “parasite” on the body of a market leader.

The native application remains the same, with a minimum of functions. However, a certain API is offered complete with a stethoscope, which allows you to create a file format compatible with the program from 3MLittmann Bluetooth 3200. She is invited to use it to analyze them.
Despite the long-released announcement, the product itself on sale has not yet been discovered.

What is wrong with him?


  • The user will have to perform mechanical actions on his own, namely, cut the tube of an existing stethoscope and insert this product into the incision. Different stethoscopes have tubes that are slightly different both in diameter and in elasticity, and this complicates the task.
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  • This device requires a gadget with a USB port and OTG support. Not every smartphone has such a port. In particular, such a device will not work with gadgets from Apple.

Latest news from the fields


The main material for this article was collected more than six months ago and, even then, I had good reason to doubt that this device would save the project and be able to attract serious investors to the startup that could decide on the next batch of cash injections. It seems I was right - looking at the company’s website a week ago, I did not find any mention of this device, but I found many interesting innovations.


In the basic device, finally the WiFi interface was replaced with a much more suitable product - Bluetooth Low Energy. Moreover, in the depths of the site I managed to find an old friend, but in a new guise. eKuore ONE lost its wired interface, but got a "middle name". Now it is proudly called eKuore ONE Wireless . This will clearly benefit him, although I’m not sure what will ensure a bright future. Judging by the small dimensions of the device, there may be a problem with the battery. When transmitting high-quality audio streaming, even BLE transceivers become very voracious. Small-sized batteries or batteries that can fit in such a tiny box will be discharged to indecently quickly.

When finances sing romances


The 8 years of the startup’s struggle for life have essentially weakened the creators. It was not possible to get money from venture funds for a clearly protracted project, and the founding fathers were forced to take a desperate step - to resort to an attempt to involve private investors in raising money.


The lower bar for entering investor status is lowered to 200 €. This closely resembles a crowdfunding company. According to information published on the site, € 367,377 out of € 500,000 has already been raised .

The plan for further actions is as straightforward as it is daring: To raise 500,000 euros, to receive another 1,000,000 bank guarantees for the business development program. Take a loan for full certification and production of a new, sufficiently large batch of devices, which will help to significantly reduce the final cost of the device and finally carry out full certification.

With sales growth, the company's capitalization should increase. Bringing it to 8 million euros, the founders hope to finally sell the company and by 2024 pay off investors five times more expensive shares!

Coronavirus to help


Not attracting attention to the topic of coronavirus today has become a bad form. Of course, our startups did not miss their chance either, and they did it in a creative manner - with the help of a comic strip.


Market Leader 3M Littmann


Startup from the last century


It's time to tell the story of a recognized market leader in the production and sales of electronic stethoscopes. It began in the early distant 1960s. It was then that Dr. David Littmann, a professor at Harvard Medical School, developed the very first model of what we call a stethoscope today. Littmann was a cardiologist, so he realized the importance of the quality of the device for auscultation. In 1961, the doctor described his vision of an “ideal stethoscope.” He presented it as a device with two bells: open, for listening to low-pitched sounds, as well as closed, with a rigid plastic diaphragm for filtering low-tones. Another important improvement was the use of a single tube emanating from the bell of a stethoscope and bifurcating at the proximal part. The stethoscope was made shorter and lighterfor ease of use. In addition, Littmann invented to connect the ear parts with a springy metal arc, creating constant pressure necessary to maintain the apparatus in the ears.

So there was a modern stoichiometric double-sided stethoscope. Today's 3M Littmann Classic II SE is very similar to this early model. Littmann founded a company called Cardiosonics , which was based in Cambridge, Massachusetts. To begin with, the company released two types of stethoscope - a stethoscope for doctors and a stethoscope for nurses.

Known to everyone today, 3M Corporation recognized the excellent acoustic quality of Dr. Littmann's stethoscopes and acquired his company in 1967. Dr. Littmann continued to work on 3M after the sale of the company, but already in the role of consultant. The combination of 3M funding and Dr. Littmann’s mastery determined the future of stethoscopes for many years to come.

However, progress did not stand still and in the late 1970s, a new stethoscope model was introduced - 3M Littmann Cardiology . It was distinguished by a double lumen, a soft ear tip and a deeper bell to enhance low-frequency sounds.

3M could not stint on significant investments in research and development of new models. So in 1987, the following revolutionary model of the 3M Littmann Master Cardiology stethoscope appeared. The patented 3M Littmann diaphragm was patented. The stethoscopes possessing it do not have a second bowl in the form of a traditional bell and are one-sided. This allowed the user to listen with a one-sided head to both high-frequency and low-frequency sounds, changing the level of pressure on the head of the stethoscope.

First electronic stethoscope


The next step in the development of 3M Littmann stethoscopes was the achievement in the field of electronic sound amplification.

3M Littmann Electronic E2000 was introduced back in 1999, and 3M Littmann Electronic E4100 already in 2001. Both electronic models are equipped with amplification and noise reduction systems, and are designed for extended auscultation.

The 3M Littmann electronic models are specifically designed to detect hard to hear sounds of the heart and lungs. The E2000 delivers 14x sound amplification, while the E4100 already has 18x gain.

The Littmann 3100 and Littmann 3200 models are currently mass-produced.that have the ability to 24-fold increase in sound, as well as the ability to suppress up to 85% of extraneous noise.

Littmann electronic stethoscopes dominate the market today and are the quality standard that other manufacturers are guided by.

Secrets of Success


Why, unlike a large number of similar devices from different manufacturers, are 3M Littmann products most popular? I give below a number of reasons that I can note:

  • By the time of the release of its first electronic stethoscope, Littmann already had an excellent reputation as a manufacturer of traditional products and an extensive client base among medical professionals
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  • The company has developed a relatively simple program for displaying and analyzing auscultation data. She supported the option of simplified remote data exchange between colleagues over a secure channel and worked under the control of the widespread Windows OS. The data storage protocol was made open, which allowed a third-party developer to create their own specialized software. This has played an important role in increasing the popularity of the product.

It's time to take stock


And why did the startup articles described at the beginning fail, as well as their numerous clones, of which I counted a total of about a dozen, failed? We will examine their errors in more detail, and at the same time we will try to talk about the general problems of telemedicine in the next article. In the meantime, I bring to your attention a survey whose results will help us do this.

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