Jorg Lorscheider has been involved with product development and manufacturing for over 25 years both as an employee and business owner. His career highlights include considerable experience running a startup and managing a very complex professional service business.
Jorg thrives on consulting with companies to apply his knowledge and creativity to help them improve. Currently, that involves developing a detailed understanding of manufacturing as a core competency and looking for opportunities to leverage best in class external resources to improve the bottom line. He has a large network of contacts and relationships in the medical device product development and manufacturing spaces and is open to helping the ecosystem through facilitating connections.
Q1. Given your expertise in the product development space as it relates to medical devices, what is the most common challenge that early-stage companies face and how can they overcome this?
I see a number of challenges that early-stage companies face, which include overlooking the past. In the medical world, there are many issues that have been repeatedly solved by different companies, only for another company to fail trying to solve the same issue. I find that most early-stage companies are completely unaware of the history of related companies that have tried and failed to overcome a similar challenge. I almost think that this should be part of the investor presentation. There are a myriad of issues that this research could reveal including IP issues, pitfalls to avoid, team weaknesses etc. – and this would save investors some due diligence time as well.
Q2. Consulting with numerous companies in a manufacturing capacity, what is the most important thing for a startup to consider when scaling the production of their device/diagnostic?
Funding: The first and most obvious is money. When you are scaling, you need to be experienced in asking for the proper amount of funds to do the job correctly. Most of the time, Venture Capitalists (VC’s) and startups dramatically underestimate the amount of money required to actually take a product all the way to production – especially a medical product with its regulatory burden.
Experience: One of the reasons for the underestimation of funding is the lack of experience. Since they do not have the experience, they underestimate the effort, which creates insufficient budgets and thus leads to underfunding. There are many experts and expert organizations that have designed and scaled products for manufacturing several times and have the knowhow to do it within a timeframe and set budget. Most startup companies don’t want to hear the truth (or don’t trust the vendor’s motives) about how long it will take and how much money it will cost. This leads them to find alternatives that will not work such as thinking, “We can do this ourselves for less money.” This is patently false, if the industry had a way to do things faster and for less money, it would be doing it all the time.
Q3: Keeping up-to-date on the latest medical and life science industry news and as a person who directly interfaces with companies in this space, have you observed a trend as it relates to startups who are securing funding and moving their business forward?
Partners: The companies that progress look to find partners that can attract investment. This is a big problem since most founding partners have dreams of running the company and making huge amounts of money. It is not in their nature to look for partners early on and to give away equity and control. I find that founders who can put aside their egos and attract a credible management team have a much better chance at attracting proper investors and succeeding long term. This is anathema to most academics and engineers who have founded companies. While founders are very talented, they do not have an investable reputation and this is important to secure funding now and in the future.