Where Academia Meets Bio-Innovation: An Interview with Professor Youseph Yazdi

It was a jovial scene at the home of Casey McGylnn, veteran lawyer and legal counsel to life sciences and technology startups. He was the energetic host of a networking event for the Johns Hopkins University Center for Bioengineering Innovation and Design (CBID). There were local angel investors, professors, students, and an impeccable plate of hors d’oeuvres. It was the perfect place to scope out the relationship between academia and venture funding, especially in the field of biodesign, and to ask questions like: What do investors look for in medical device start-ups? What value do they provide to entities like CBID, a biodesign research center and provider of a cutting-edge master’s program in biodesign? How do students in such programs secure funding to bring their solutions to the market? And as the night wore on, I was able to find answers to many of these questions.

San Francisco-based venture capital associate Ashish Aman told me that “what venture firms like about programs like CBID is that they are product oriented.” He finds that the relationship between venture capital and these kinds of programs is practical, since both focus on developing tangible solutions to problems. Conversely, Donna Jang, an experienced angel investor and attendee at the event, finds interacting with programs like CBID to be very helpful in generally “seeing what’s going on in science.” She also values the “ideas that people [from these programs] bring us.” However, she finds that graduates from these programs often need with business management and urges graduates to ensure their team has the proper expertise to run their company prior to taking it to investors.

At the event, Youseph Yazdi, faculty in Biomedical Engineering at Johns Hopkins and Executive Director of CBID, made a case for the value of programs like CBID, arguing that they accelerate our ability to use bioengineering to address unmet clinical needs. Yazdi spoke of a time when doctors and engineers did not work across the aisle. He remembers being told that one could either be on one side of the street, academia, or the other, industry.  The refrain being that “you can’t be in the middle of the street, you’ll get run over.” Times have certainly changed since then, and Yazdi now runs an organization that brings together clinicians, engineers, health workers, and business leaders to solve current health challenges.

 

To gain more insight into where academia meets bio-innovation, I spoke to Professor Yazdi:

faculty_yazdi_y_01141.jpg

How have you seen interdisciplinary innovation become more common in the university setting? How does this change happen?

Well, I'd say that the change that you're describing is a form of cultural change. And cultures change in a variety of ways. Culture is embedded in the minds of many, many people and to change things takes a long time. Think of it as a large mass. F = ma applies to culture change. There has to be a lot of force or pressure to make something happen. And that determines how fast things change. When you have a very large, established, successful institution like Stanford or Johns Hopkins University, that's a huge mass. The more successful it is the more resistance to change because people say, "why should I change?"

In a corporation that's very successful, the CEO can say, from now on, we're going to do things this way and everyone had better get in line. There will be some resistance, but culture will change quickly. In an academic institution, that's not the case. The president can't just give an order. So, the cultural change must happen more like in a society than in a company. Those sorts of cultural changes usually happen by example. Somebody is successful, and then people say, "Hey, I want to do that!" A clinician will start a company, or they get involved in the company and it'll be very successful. And then their colleagues will say "I want to do that." 

The opposite is also true. If a faculty member or clinician tries something like this and gets in a terrible legal headache, that could set back the cultural change a lot. So what institutions need to do is to ensure that people who do take these risks are encouraged and get support. Not mollycoddled and handheld, but [given] a little bit of support. They should also ensure that there are rules in place to avoid conflicts of interest. Basically, setting up some bumpers so that this culture change happens in a somewhat protected environment.

So, the best thing are examples. Good examples will accelerate things, bad examples will scuttle change. That's really the bottom line.

What things, policy-wise, should the university do so faculty feel freer to and more comfortable in taking these risks?

First of all, a caveat on what you said about free or comfortable. By definition, no risk should be completely free or comfortable. It creates a moral hazard when say you can take risks without any downside. 

The essence of entrepreneurship is that there is this downside. But it shouldn't be so severe. It has to be commensurate with the situation. There have to be some protections in place. Specific things include small amounts of funding to allow more faculty to try out this idea. I think successful institutions have programs like the Coulter Translational Partnership. Pockets of funding that are not a lot of funding, but just enough so that more faculty are encouraged to try something else. That's one thing. There should be policies in place that [provide] reasonable protection from conflict of interest problems emerging as opposed to policies that just stifle creativity and err on the side of too much caution. But it all really starts from the top. University leadership has to see this as something valuable and set these policies and have these small pockets of money available for people to experiment. And some matchmaking. The Coulter program is great because it encourages doctors and engineers to work together. It kind of forces this matchmaking. Programs like that I think are proven to be very impactful in changing the culture.

 

The innovation that you're describing requires communication between researchers, engineers, doctors, healthcare workers, financiers. As the director of CBID, what are some of the challenges that you've faced when facilitating these collaborative relationships? What has been most rewarding?

 The challenge is that in a successful institution people have a lot of things they could be doing that are really awesome. There's a high opportunity cost associated with working on a translational project. So the value has to exceed the opportunity cost. That's a big challenge. It has to be something that's likely to succeed and has a high potential for impact. And of course, the university, like I said before, can make that threshold of activation a little lower by giving some support and resources to nurture things and get them going. But I would say that's been the biggest thing. We're dealing with faculty here at Johns Hopkins who have a lot of great things that they're already working on. To get them to say, I'm going to set aside that opportunity and focus on this other opportunity in translational medical innovation. That has to be worthy of that. 

Now the second half of your question is, what's the most rewarding? I would say when you see a person who's really smart, really good at what they do and who heretofore has been focused on research and using all of his or her skills and talents to advance the frontiers of science and technology. And you were able to convince them to take a step back and focus some of their energy on solving real world problems. And they come up with solutions that actually help people. That's incredibly rewarding. I'm not saying people should abandon the former and do the latter.  They're both important. Still, I think a balanced life should balance between long term and short-term impact on society. You can't spend your whole career thinking about the long-term and never giving a thought the question of how am I impacting society in the short term. Has anything of my body of science and research saved any lives, or made people's lives better? That's a question that every scientist, every faculty member needs to ask themselves.

 

When was the decision made for CBID to have a dual focus on innovation for the developing world and for the industrialized world? What factors were involved in this decision?

That was about one or two years into the creation of the program. Originally, our goals, like Stanford Biodesign, were mainly focused on US innovation. Innovation for advanced healthcare systems. But when I was J&J, I really wanted to get the company involved in frugal innovation, low-cost innovation, innovation for emerging markets. It's not an easy case to make in a big corporation. My leadership wasn't really that interested in it. I remember going to my boss with a book I read in business school, "Fortune at the Bottom of the Pyramid." My boss’ reply was that “there's only misfortune at the bottom of the pyramid”.

Another colleague of mine, who runs our masters program, and I discussed this a lot. We asked, how can we incorporate global health innovation into our program? And then we thought that, in medtech, most growth is in emerging markets. That's one factor. Another factor is that existing healthcare systems in the advanced countries, the US in particular, are too expensive. Therefore, we have to responsibly think about how we introduce the mindset of low-cost innovation when innovating for the advanced healthcare systems. That's why we decided to integrate [low-cost innovation] into our program. Meaning, every student's going to work on a global health innovation project and a US innovation project. So, they get to see both aspects of innovation. Then, when they go on to work in a company like Medtronic or J&J they go in with that mindset that it's possible to design a product that has 80 percent of the functionality of the leading-edge product at 20 percent of the cost. That would enable a much larger impact on the world, rather than trying to eek out that last measure of performance while increasing cost to the point where you exclude people’s access to healthcare.

 

What is the role of venture capital and sustaining the innovative capacity of programs like CBID and ensuring that the products developed within these programs get to market?

Well venture capitalists, not the money, but the people rather, play a big role in our process. I'll give you an example. When the teams are trying to choose which problem to focus on, we'll bring in the perspectives of venture capital investors and have them take a look at the list and say, you know, I don't know what you're going to come up with in that area, but that's a hot area. That's an important area. If you come up with something useful in that area, I think there'll be investors who would be very interested. Sometimes they say the opposite. Sometimes they say, I don't care what you come up with in that area, investors are not going to be interested. So, you can do that even in the early stages when you're trying to choose which problem to go after. And later on when the team starts to develop their solution, they can come back to the same investors and get their perspective again on the different solution options. Which of these options do you think would be most interesting to you as an investor?

And then of course, you can go back to them a third time. Once you have the raw materials for a startup. Then you have a potential early stage investor. I would say people often only do that third one and they don't talk to investors until they get to that stage. But I think that's a mistake. So, we try to bring in investors, not their money, but their perspective, early on. Smart VC's often also put money into programs like ours just to provide a small amount of money so that there's a better chance of something good to come out of it at a low cost. For example, we have teams that the teams are very promising, but they need, let's say $50,000 to $100,000 to keep them going for six months so they can do some critical killer experiments and then an investment decision could be made. But if they never get that chance [to do those experiments], it might never get to that point. So I think putting a little bit of seed money in a program like ours so that we can allocate a small amount of funds to the most promising projects so they can get to a point where a better decision could be made about them is a good use of funds.

 

During your time at CBID, what trends have you seen in investment in the biosciences and in medical devices in particular?

The trend for VCs, you know, is just a little bit of a herd mentality. They become very enamored with certain things for a while. A lot of money, for example, went to tissue engineering for a while. Right now, it's a lot of emphasis on apps and healthcare tools that can leverage mobile technologies, especially for global health because you can go to the most remote areas and people have smart phones. One of the things that I think is incredibly powerful, and I'm very excited about, the trend is tools that can empower lay people to take more responsibility for their own health, that empower people to do a better job of tracking, let's say, medicine compliance in their family. Or compliance with care regimens like diabetes care in their own family. I say the whole family, because oftentimes it might be an elderly relative or elderly parent that the family has responsibility for. An app or some tool like that can help the family take better care of them as opposed to relying on nursing homes and outside care. Tools and apps can make that job, for the family, more effective and easier. We've had several projects like that and those generate a lot of excitement. Tools that empower people at a lower skill level to do the job of someone at a higher skill level. Those are tools that I think are incredibly powerful. Now, in the extreme, you're talking about something like robotics. But in my mind, robotic surgery is an inelegant solution. Over the top. If you're able to get somebody who has the manual dexterity of an average human being, they are going to exceed that of a robot any day. And if you could give them the tools and the guidance to do a complex procedure or to take care of their loved one in case of emergency give them knowledge and maybe some guidance, you could get a lot done at a much lower cost.

 

Essentially unlocking the potential of everyone to positively affect the health of themselves and everybody around them.

Yes.  In fact, to give you an example of that, we're doing a design challenge with students in Baltimore and students in Gaza. Each team will be half students here and half students there. The focus will be on the design of tools so that the general population can take better care of each other's health, in situations where the formal healthcare system is unavailable.

If somebody in your household is having a baby, would you know what to do? Would you be able to take care of them? Is there a tool kit that we can give you so that you, a lay person, are able to help? If somebody in the household has an accident, could you give them a tool that would allow them to take better care of the injury? If someone is shot, for example, when you come across somebody who's been shot or in a bad traffic accident could we give people a kit that they could keep in their cars so that they can do a better job they come across somebody in that situation. That sort of healthcare resilience for populations is, I think, a very powerful trend.

 

Would you say that there's just a group of VCs who are more open to investing in medical device innovation? Or do you find that you have to do some more groundwork to get VCs to see the benefits of putting down a greater investment in medical devices?

Usually, if it's an expert.  I mean you have to have some level of expertise and experience in this area to be successful. Like anything else. If you're used to investing in energy related companies or transportation communication, maybe a fourth of those insights and are applicable in medtech. Medtech is a very different beast. It's a weird industry, a complex industry. The payer and the provider and the patient and the physician. Those are very different players.

The person paying for the product is not the person who will be using it. So, it gets really complicated and you need to understand a much broader picture.  It's not the same as investing in transportation for example. I think medtech] is incredibly more complicated and more important and more expensive. I would say. It's not for the casual investor.  You need expertise and experience to be successful. And for people who are experienced, you don't need to convince them of the importance of this.

 

What sort of organizational structure and leadership is critical in ensuring the success of a company coming out of a program like CBID? How does CBID prepare its students, when they have a device or a product ready, to organize a startup and make the most out of the product's potential?

That preparation starts from day one. It starts from teaching them about our paradigm for medical device innovation, health care innovation. Our paradigm is one that teaches that you have to understand all of the different perspectives are essential to address in order to have a successful solution. When you start that from day one, that mindset then the student knows that they are not here just to think about the clinical problem. They also have to think about how it's going to be paid for and what are the regulatory hurdles that must be addressed. They think about the competitive landscape, the technical, the team, the organizational, and funding aspects. But that's too much to take in at one time. So we take an iterative approach where we do a little bit of working all of those and then do a little bit more in all of them and do a little bit more and all of them at each stage. And at each stage we ask does this still makes sense from all these perspectives? That means that by the end of the year, for example, year one of the program, the students not only understand the clinical problem and the specific innovation targets we're going after. They also have a foundational understanding of the regulation and reimbursement issue and the business model they're going to be using to make the effort financially sustainable. They also have prototypes and proof of concept. They also have the basis for the team, including a clinical advisory board. Maybe industrial advisors or commercial advisors in that first year. And those are people who are volunteering a few hours. A lot of times it's all on a volunteer basis. But then if they want to launch a company, they already have the skeleton of a start-up and then they can build on it. So that's the method that we use.

 

At the CBID expo you mentioned that the design of CBID, was inspired by the Stanford Biodesign program. Would you be able to speak to that a bit more? 

So we started in 2009, about half a decade later than the Stanford Program. We very much respect and admire the success of Paul Yock and the Stanford Biodesign program. And we followed in Yock’s steps for the first few years with the 3-I model. Identify, invent and implement. Later we moved to a more iterative model which incorporated ideas from biodesign, R&D at J&J, lean startup, and a few other places, to create our own twist to that. But yes, we use the textbook all the time, the [Stanford] Biodesign textbooks. So, in many ways we're indebted to the Stanford Program for helping us get our program up and running.

 

You spent a great deal of time at Johnson and Johnson. What perspective did your time at Johnson and Johnson give you on the funding of research in the life sciences and just generally what perspective did it give you coming into your current role? 

A couple of things. One is a general insight into what it takes to do product development, advanced R&D, and commercialization marketing at a professional level. That's useful because that's kind of that perspective is not common in academia. Also, perspective on talent. What does it take to be successful in a company? How to prepare yourself. Students need to hear from somebody who used to hire people, so they consider perspectives from across the interview table and get practice. Talent development, innovation, and management side of academia is lacking. There's a lot that academia can learn from industry in trying to do more translational and talent development work.

Also, there's just a mindset in industry of we're here to use our talents to help make the world a better place through providing products that people want to buy because those products are helpful. Providing real value. A good company like J&J, for example, when they sell a product, they do something called integrity selling. You sell a product, you're not really selling, you're really informing your customer of opportunity that is a mutual benefit. The customer gets more value from the product than the money they are paying. So it's a win-win. You're reducing waste, suffering, or lost productivity through your product. It's a matter of value. Are you bringing real value to your customers? And that's the core of everything we teach here about the business side of what we're doing. And that is, is your innovation providing real value to the world. Not just a trick where you able to explain some, you know, some anomaly in the repayment system or something to make some money or exploit some anomaly in the difference between different stakeholders, ride that wave and make some money on it. Are you providing real value to the overall system, to the world, to the patients and customers?

 

I’m amazed by the work that you did at CBID during the time of the Ebola epidemic. What role can programs like CBID play in kind of accelerating innovation and getting solutions where they're needed most?

I think we have a responsibility like any member of society when there's a crisis, it's all hands on deck. Everyone should do whatever they can to help. If you're a farmer, you should help. If you're a truck driver, you should figure out a way to help. If you're a medical device design program, you have to figure out a way to pitch in and help. And we did that in the Ebola crisis, in the Zika crisis, and in this latest wave of refugees at unprecedented levels in the world. We've done these design challenges where we bring people together, use good practices in design, and try to come up with solutions that can have an impact.

 

What kind of change would you like to see within the CBID program in the next 10 years? How do you see the program’s relationship with Silicon Valley or with venture capitalists evolving?

Well, we're now in our 10th year we have a fairly mature program. We've operated as a very nimble startup program in the sense that we iterated quickly and try to find out what works and what doesn't. The models we have now for interaction with industry are going well. We just like to see more of those. We would like to see more a VC involvement early on, so they can further help shape our direction, but also provide advice on, like I said earlier, what is promising and [what is] not.

Fundamentally, we have the vision of being more global on the ground in different countries. Having a program with home based in India and China. Those are areas that we're considering as long term strategic objectives.

And one of the things that we really care about helping other programs at other universities get started and grow. I know that sounds a bit counterintuitive if you think of it from a competitive perspective, but the attitude was really set by Professor Yock at Stanford that, that if you're leading program, part of your leadership obligation is to help others. And he's helped us considerably. And we feel like we have an obligation to help others as well. My competition, that of our center, is not Stanford Biodesign or biodesign at UC Berkeley. My competition is the 90 percent of academia that doesn't do what we do – the 90 percent of academia that is not focused on societal impact, not designing real world solutions. I would like to see that role of academia expand. Any successful program should think of that as part of their mission.

 

 (This interview has been edited and condensed for clarity)