Nick Delmonico's professional journey is diverse, spanning the worlds of both healthcare and finance. His roles at ECG Management Consultants, PwC, and J.P. Morgan provided Nick with a multifaceted perspective on the economics of healthcare. He has a Bachelor of Science in Accounting from the University of Delaware and went on to do an MBA at the Fox School of Business at Temple University. But it’s not only this impressive professional and academic background that led him to found Strados Labs.
Nick was only four years old when diagnosed with severe asthma. Growing up, he spent a lot of time in the ER and the ICU and experienced the constant fear and uncertainty of not knowing when his symptoms might escalate to the point of needing hospital care. Although it was traumatizing as a child, Nick rose above and made it his mission to find a better way to manage respiratory conditions like his.
Nick founded Strados Labs in 2016 and the core team came together at a health hackathon hosted by Independence Blue Cross and Thomas Jefferson University. He says, “I knew healthcare was a messy business, and there was a need to have better, earlier interventions to reduce hospitalizations.”
Strados has set out to develop a solution that could help people with chronic respiratory diseases receive better care. As an asthma patient himself, Nick recalls, “I remember being asked by a doctor, ‘When did your symptoms start? When did you start having difficulty breathing?’ And I didn't really know how to answer those questions.”
The initial goal at Strados was simple yet to the point: create a tool that would enable clinicians to understand and track patient respiratory health in real-time, reducing the anxiety and uncertainty of managing their condition by detecting whenever the patient coughs or wheezes. Nick explains, “We enable care for patients with pulmonary conditions outside of the four walls of the hospital so that we can get ahead of events before they get really bad–before ER visits and before hospitalizations.”
Their device, the RESP™ Biosensor, is a small, lightweight, wireless wearable that remotely captures sounds from the patient's lung, like a high-tech stethoscope that you wear all the time. “It’s an acoustic wearable that you place on your chest that listens to your lung sounds and measures your breathing patterns. Lung sound data is transferred to the cloud, where our proprietary algorithms detect when those events are occurring and how much worse they are getting, and then notifies the care team so they can take action,” Nick explains.
The real-time monitoring gives clinicians a better picture of their patients' health outside the hospital, and the data allows providers to better follow their patients’ pulmonary status and receive early insight into exacerbations, enabling timely interventions.
Strados gained its first FDA clearance for the device back in 2020, recognizing the safety of its product as a prescription device. Currently, the company is in an exciting phase: focusing on manufacturing, building a distribution network, and preparing for commercialization. Today, the RESP™ Biosensor is used in six languages across 65 (and soon to be over 150) trial sites.
Key Learnings From Nick’s Experience
- In addressing complex problems, especially in healthcare, it's crucial to first gain a deep understanding of the issue. Actively engage with various stakeholders, such as patients, doctors, and administrators, to gather a wide range of insights.
- Explore uncharted paths that align with your business's unique needs and market position. For example, by understanding the research requirements of pharmaceutical companies, Strados not only validated its own technology through others’ research but also gathered invaluable data and got paid for it along the way.
- Starting with non-dilutive funding methods such as grants and competitions is a smart strategy for medtech beginners. This approach allows you to maintain ownership and focus on product building versus the distractions that often come with fundraising.
Nick Delmonico, co-founder and CEO of Strados Labs, boasts a dynamic background with an MBA from the Fox School of Business at Temple University and a Bachelor's in Accounting from the University of Delaware. His career includes roles at ECG Management Consultants, PwC, and J.P. Morgan, where he honed his skills in healthcare strategy, commercialization and operations, business planning, and project management.
Understand the Problem Before Trying to Solve It
While pursuing his MBA, Nick began to contemplate the inefficiencies in the healthcare system, particularly, drawing from his own experience, the treatment and management of respiratory conditions like asthma. He identified a significant gap: the lack of effective methods to objectively monitor respiratory symptoms. This issue is part of a broader problem within the care continuum, which is often complex and inefficient.
Nick recognized the need for a transition from the prevalent fee-for-service model, where hospitals are compensated based on the quantity of procedures, to a more patient-centric fee-for-value model, emphasizing quality of care and outcomes. This change is particularly crucial for pulmonary patients. Their frequent emergency room visits due to symptom flare-ups not only strain hospital resources but also undermine patient well-being.
His countless visits to hospitals, grappling with his own asthma, might just tally up to those fabled ten thousand hours, making Nick an expert by circumstance. However, it didn’t stop him from getting to the root of the issue. “I interviewed stakeholders, patients; I interviewed doctors, nurses, technologists, people who worked for payer organizations within the healthcare ecosystem, and administrators,” he recalls, asking them critical questions about the issue and the potential solutions. “Starting with the problem and not the solution was really crucial for us,” Nick says.
After identifying the market gap, it was time to strategize. Nick outlines their thought process, "We needed to determine the most effective regulatory path to take, claims we should make about our product, its capabilities, and how these factors contribute to our next commercial milestone, what we wanted to prove about our product, and how to start marketing these new aspects.” All this had to be done in a capital-efficient way, as money is limited in every startup’s early stages.
Making substantial claims, like saying you can predict an asthma exacerbation, requires extensive clinical evidence to satisfy regulatory standards. Yet, Nick didn't just dive head-first into setting up clinical studies. Rather, he believed that determining the right starting point is an art in itself. The feedback indicated that medical specialists were skeptical about trusting a wearable to capture lung sounds properly. So, he started by focusing on demonstrating that their device indeed could match the quality and fidelity of traditional stethoscopes in capturing the same acoustics.
That is how Strados was able to gain clinician confidence and determine the best regulatory approach, opening up new avenues for the company in the process.
Creative Strategies for Validation and Funding
There are well-trodden routes and then there are routes that align with your company's specific needs, prospects, and market stance. Finding these alternative paths is a bit of a journey, but it can yield truly fruitful results. Think of it as creating a road for yourself that’s authentic and custom-made rather than forcing your company onto a one-size-fits-all track. Identifying or rather, creating this authentic strategy requires stepping out of your comfort zone, experimenting with new approaches, constantly adapting to changing environments, and staying in touch with your ecosystem – including potential customers, patients, medical providers, or other businesses. In Nick's case, it was pharmaceutical companies that had mutualistic prospects with Strados.
Three years ago, in 2020, Strados Labs caught the attention of a pharmaceutical company interested in using their technology for acoustic biomarker measurement. The team then received a Small Business Innovation Research Grant from that company, allowing them to explore their technology's applicability in research settings. Nick's approach was pretty hands-on: he conducted interviews with approximately 65 pharmaceutical executives.
He shares, "We continuously heard the same thing, which was either ‘This is exactly what we need right now for these very particular types of studies that we run’, or ‘It's certainly where we want to go’." In short, these companies were in need of a monitoring tool to assess the efficacy of their drugs.
Confirming a strong demand for their technology in various studies, especially during COVID-19, Nick decided to sell both the hardware and the software to pharmaceutical companies for research purposes.
For Strados, this direction presented a fantastic opportunity, though it wasn't part of the original plan. As Nick emphasizes, new ideas need to be clearly communicated to internal stakeholders, like the board, who are often wary of unexpected changes, sometimes rightfully so.
Nick underlines that this wasn’t a pivot, "It's more of a stop on the path to where we want to go." This direction has not only helped to validate their product but has also helped accumulate a wealth of data, including over 100,000 validated lung events and 14 million recorded breaths.
Nick proudly states, "Others are now publishing that cough monitoring is more effective than patient-reported symptoms." This collaborative approach has fortified Strados’ market position, enhancing the potential for commercial success as they plan to enter hospital systems.
Nick says, "It's one more step in the direction of de-risking the technology and building a better solution for the long run." By engaging with and understanding the needs of their potential customers, Nick was able to use this remarkable lever for Strados’s growth. Tapping into this collaborative model, Strados was able to showcase the clinical efficacy of their product without the financial burden of sponsoring trials.
Non-Dilutive Funding as the Initial Fuel
When it comes to raising funds, Nick acknowledges the hardships, especially in the medtech industry, “It's surprising how difficult raising capital for medical devices is. It's got a very high barrier to entry for a reason. It's capital-intensive. It's risky. And there's a lot of things that can go wrong.”
He advises starting with non-dilutive grants for three main reasons. Firstly, they potentially increase the technology's value at the outset, reducing dilution of ownership. Secondly, it addresses the challenge of raising capital when you only have an idea on paper. And thirdly, it helps you build credibility. You can use the grants to demonstrate your progress further and attract other investors.
Strados, for example, applied for various grants from a wide variety of organizations. Nick shares, “I was able to leverage the grants we secured with VCs saying, 'Hey, we just raised $150,000 in grants from this respective entity. I'm going to raise another $300,000, so we have a total of $450,000 to work with to meet the next milestone.'”
However, the process of applying for a grant is not a walk in the park. If you’re not experienced, the amount of paperwork and bureaucracy can be intimidating. In fact, Strados works with an agency to help write and submit grant applications. These agencies bring a different external perspective, offering strategic advice and insights that can be pivotal. The companies get paid if they can secure the grant, which is how most of these collaborative partners are compensated.
Another avenue of securing capital during the initial phases is participating in entrepreneurial competitions as they also offer non-dilutive funding for winners. Strados did enjoy its fair share of awards from various organizations in the healthcare, medtech, and startup communities, the most recent one being the ATA Telehealth Innovators Challenge.
Participating in competitions is also great for practicing and refining your pitch, especially if you’re a first-time entrepreneur. Nick explains, "Figuring out how to articulate a two-minute pitch or a three-minute pitch or a 60-second elevator pitch can be very challenging. The more of those competitions that you do, the more you're going to be forced to do that." He goes on to say, “It helps you improve and refine your pitch. It helps potentially with funding. And also that kinetic energy that happens with entrepreneurs and starting companies. You need to feel like your message is resonating, your story is resonating, and that you're really building something.”
However, Nick advises caution, noting, "It's always important to not get overwhelmed. So try not to overdo it. You don't want to get overwhelmed because you'll burn out either individually or as an organization. And if you do too many things at once, you don't do anything well."
Nick Delmonico's professional journey is diverse, spanning the worlds of both healthcare and finance. His roles at ECG Management Consultants, PwC, and J.P. Morgan provided Nick with a multifaceted perspective on the economics of healthcare. He has a Bachelor of Science in Accounting from the University of Delaware and went on to do an MBA at the Fox School of Business at Temple University. But it’s not only this impressive professional and academic background that led him to found Strados Labs.
Nick was only four years old when diagnosed with severe asthma. Growing up, he spent a lot of time in the ER and the ICU and experienced the constant fear and uncertainty of not knowing when his symptoms might escalate to the point of needing hospital care. Although it was traumatizing as a child, Nick rose above and made it his mission to find a better way to manage respiratory conditions like his.
Nick founded Strados Labs in 2016 and the core team came together at a health hackathon hosted by Independence Blue Cross and Thomas Jefferson University. He says, “I knew healthcare was a messy business, and there was a need to have better, earlier interventions to reduce hospitalizations.”
Strados has set out to develop a solution that could help people with chronic respiratory diseases receive better care. As an asthma patient himself, Nick recalls, “I remember being asked by a doctor, ‘When did your symptoms start? When did you start having difficulty breathing?’ And I didn't really know how to answer those questions.”
The initial goal at Strados was simple yet to the point: create a tool that would enable clinicians to understand and track patient respiratory health in real-time, reducing the anxiety and uncertainty of managing their condition by detecting whenever the patient coughs or wheezes. Nick explains, “We enable care for patients with pulmonary conditions outside of the four walls of the hospital so that we can get ahead of events before they get really bad–before ER visits and before hospitalizations.”
Their device, the RESP™ Biosensor, is a small, lightweight, wireless wearable that remotely captures sounds from the patient's lung, like a high-tech stethoscope that you wear all the time. “It’s an acoustic wearable that you place on your chest that listens to your lung sounds and measures your breathing patterns. Lung sound data is transferred to the cloud, where our proprietary algorithms detect when those events are occurring and how much worse they are getting, and then notifies the care team so they can take action,” Nick explains.
The real-time monitoring gives clinicians a better picture of their patients' health outside the hospital, and the data allows providers to better follow their patients’ pulmonary status and receive early insight into exacerbations, enabling timely interventions.
Strados gained its first FDA clearance for the device back in 2020, recognizing the safety of its product as a prescription device. Currently, the company is in an exciting phase: focusing on manufacturing, building a distribution network, and preparing for commercialization. Today, the RESP™ Biosensor is used in six languages across 65 (and soon to be over 150) trial sites.
Key Learnings From Nick’s Experience
- In addressing complex problems, especially in healthcare, it's crucial to first gain a deep understanding of the issue. Actively engage with various stakeholders, such as patients, doctors, and administrators, to gather a wide range of insights.
- Explore uncharted paths that align with your business's unique needs and market position. For example, by understanding the research requirements of pharmaceutical companies, Strados not only validated its own technology through others’ research but also gathered invaluable data and got paid for it along the way.
- Starting with non-dilutive funding methods such as grants and competitions is a smart strategy for medtech beginners. This approach allows you to maintain ownership and focus on product building versus the distractions that often come with fundraising.
Nick Delmonico, co-founder and CEO of Strados Labs, boasts a dynamic background with an MBA from the Fox School of Business at Temple University and a Bachelor's in Accounting from the University of Delaware. His career includes roles at ECG Management Consultants, PwC, and J.P. Morgan, where he honed his skills in healthcare strategy, commercialization and operations, business planning, and project management.
Understand the Problem Before Trying to Solve It
While pursuing his MBA, Nick began to contemplate the inefficiencies in the healthcare system, particularly, drawing from his own experience, the treatment and management of respiratory conditions like asthma. He identified a significant gap: the lack of effective methods to objectively monitor respiratory symptoms. This issue is part of a broader problem within the care continuum, which is often complex and inefficient.
Nick recognized the need for a transition from the prevalent fee-for-service model, where hospitals are compensated based on the quantity of procedures, to a more patient-centric fee-for-value model, emphasizing quality of care and outcomes. This change is particularly crucial for pulmonary patients. Their frequent emergency room visits due to symptom flare-ups not only strain hospital resources but also undermine patient well-being.
His countless visits to hospitals, grappling with his own asthma, might just tally up to those fabled ten thousand hours, making Nick an expert by circumstance. However, it didn’t stop him from getting to the root of the issue. “I interviewed stakeholders, patients; I interviewed doctors, nurses, technologists, people who worked for payer organizations within the healthcare ecosystem, and administrators,” he recalls, asking them critical questions about the issue and the potential solutions. “Starting with the problem and not the solution was really crucial for us,” Nick says.
After identifying the market gap, it was time to strategize. Nick outlines their thought process, "We needed to determine the most effective regulatory path to take, claims we should make about our product, its capabilities, and how these factors contribute to our next commercial milestone, what we wanted to prove about our product, and how to start marketing these new aspects.” All this had to be done in a capital-efficient way, as money is limited in every startup’s early stages.
Making substantial claims, like saying you can predict an asthma exacerbation, requires extensive clinical evidence to satisfy regulatory standards. Yet, Nick didn't just dive head-first into setting up clinical studies. Rather, he believed that determining the right starting point is an art in itself. The feedback indicated that medical specialists were skeptical about trusting a wearable to capture lung sounds properly. So, he started by focusing on demonstrating that their device indeed could match the quality and fidelity of traditional stethoscopes in capturing the same acoustics.
That is how Strados was able to gain clinician confidence and determine the best regulatory approach, opening up new avenues for the company in the process.
Creative Strategies for Validation and Funding
There are well-trodden routes and then there are routes that align with your company's specific needs, prospects, and market stance. Finding these alternative paths is a bit of a journey, but it can yield truly fruitful results. Think of it as creating a road for yourself that’s authentic and custom-made rather than forcing your company onto a one-size-fits-all track. Identifying or rather, creating this authentic strategy requires stepping out of your comfort zone, experimenting with new approaches, constantly adapting to changing environments, and staying in touch with your ecosystem – including potential customers, patients, medical providers, or other businesses. In Nick's case, it was pharmaceutical companies that had mutualistic prospects with Strados.
Three years ago, in 2020, Strados Labs caught the attention of a pharmaceutical company interested in using their technology for acoustic biomarker measurement. The team then received a Small Business Innovation Research Grant from that company, allowing them to explore their technology's applicability in research settings. Nick's approach was pretty hands-on: he conducted interviews with approximately 65 pharmaceutical executives.
He shares, "We continuously heard the same thing, which was either ‘This is exactly what we need right now for these very particular types of studies that we run’, or ‘It's certainly where we want to go’." In short, these companies were in need of a monitoring tool to assess the efficacy of their drugs.
Confirming a strong demand for their technology in various studies, especially during COVID-19, Nick decided to sell both the hardware and the software to pharmaceutical companies for research purposes.
For Strados, this direction presented a fantastic opportunity, though it wasn't part of the original plan. As Nick emphasizes, new ideas need to be clearly communicated to internal stakeholders, like the board, who are often wary of unexpected changes, sometimes rightfully so.
Nick underlines that this wasn’t a pivot, "It's more of a stop on the path to where we want to go." This direction has not only helped to validate their product but has also helped accumulate a wealth of data, including over 100,000 validated lung events and 14 million recorded breaths.
Nick proudly states, "Others are now publishing that cough monitoring is more effective than patient-reported symptoms." This collaborative approach has fortified Strados’ market position, enhancing the potential for commercial success as they plan to enter hospital systems.
Nick says, "It's one more step in the direction of de-risking the technology and building a better solution for the long run." By engaging with and understanding the needs of their potential customers, Nick was able to use this remarkable lever for Strados’s growth. Tapping into this collaborative model, Strados was able to showcase the clinical efficacy of their product without the financial burden of sponsoring trials.
Non-Dilutive Funding as the Initial Fuel
When it comes to raising funds, Nick acknowledges the hardships, especially in the medtech industry, “It's surprising how difficult raising capital for medical devices is. It's got a very high barrier to entry for a reason. It's capital-intensive. It's risky. And there's a lot of things that can go wrong.”
He advises starting with non-dilutive grants for three main reasons. Firstly, they potentially increase the technology's value at the outset, reducing dilution of ownership. Secondly, it addresses the challenge of raising capital when you only have an idea on paper. And thirdly, it helps you build credibility. You can use the grants to demonstrate your progress further and attract other investors.
Strados, for example, applied for various grants from a wide variety of organizations. Nick shares, “I was able to leverage the grants we secured with VCs saying, 'Hey, we just raised $150,000 in grants from this respective entity. I'm going to raise another $300,000, so we have a total of $450,000 to work with to meet the next milestone.'”
However, the process of applying for a grant is not a walk in the park. If you’re not experienced, the amount of paperwork and bureaucracy can be intimidating. In fact, Strados works with an agency to help write and submit grant applications. These agencies bring a different external perspective, offering strategic advice and insights that can be pivotal. The companies get paid if they can secure the grant, which is how most of these collaborative partners are compensated.
Another avenue of securing capital during the initial phases is participating in entrepreneurial competitions as they also offer non-dilutive funding for winners. Strados did enjoy its fair share of awards from various organizations in the healthcare, medtech, and startup communities, the most recent one being the ATA Telehealth Innovators Challenge.
Participating in competitions is also great for practicing and refining your pitch, especially if you’re a first-time entrepreneur. Nick explains, "Figuring out how to articulate a two-minute pitch or a three-minute pitch or a 60-second elevator pitch can be very challenging. The more of those competitions that you do, the more you're going to be forced to do that." He goes on to say, “It helps you improve and refine your pitch. It helps potentially with funding. And also that kinetic energy that happens with entrepreneurs and starting companies. You need to feel like your message is resonating, your story is resonating, and that you're really building something.”
However, Nick advises caution, noting, "It's always important to not get overwhelmed. So try not to overdo it. You don't want to get overwhelmed because you'll burn out either individually or as an organization. And if you do too many things at once, you don't do anything well."
