Why Early-Stage Technical Risk Reduction is Crucial for Medical Device Startups

Interview with Diality CEO Osman Khawar

Making the leap from physician to entrepreneur was a huge risk for Diality CEO Osman Khawar, but one he doesn't regret taking. As a board-certified nephrologist with over a decade of experience in this field, Osman saw the opportunity to provide value-based care to dialysis patients and decentralize dialysis delivery in the US. 

Diality was birthed with the primary purpose of offering freedom and choice in the dialysis space. The company is working on a mobile hemodialysis machine that brings immense versatility to the table, allowing patients to receive treatment in different settings of their choice, including clinics and homes. 

Because of its continuous monitoring feature, cloud connectivity, and electronic medical records (EMR) system compatibility, Diality's system will enable nephrologists to make data-driven decisions and create personalized experiences for each patient regardless of their treatment setting. 

The patient-inspired hemodialysis system will also facilitate shorter training times for healthcare professionals and care partners through its easy-to-navigate interface and automated treatment setup. 

In early 2022, Diality closed a $24 million Series B investment round, bringing their total funding amount to over $54 million. The Series B2 funding round will be used to support the device's 510(k) clearance, home clinical trial studies, and commercialization. 

As Diality closes in on its much-anticipated market entry, Osman's team continues to focus on developing a versatile, market-ready product capable of delivering a wide range of dialysis prescriptions. 

In this Medsider episode, Osman talks about the importance of early-stage technical risk reduction and building collaborative relationships with regulatory agencies and value-based care providers. He also discusses how getting the right team members and investors on board is paramount to building a sustainable and successful medtech startup. 

Key Learnings from Osman's Experiences 

  • One of the most common shortcomings of medtech companies is the lack of early-stage technical risk reduction. Reducing uncertainties during the initial phases of development can save you a ton of trouble down the road and give investors the confidence they need to support your venture. 
  • The effort needed to build collaborative relationships with the right stakeholders is sometimes underappreciated. For example, one of the best ways to ensure a smooth regulatory clearance process and efficient clinical adoption of your product is to prioritize building alignment with the right people and organizations. 
  • The team members and investors you bring on board can make or break your company's success, especially in its earlier stages. A great way to build a mission-driven, patient-centric group of people is to connect them with real-life patients and consumers. 
Guest
Osman Khawar
CEO of Diality

After obtaining an MD from the University of Glasgow and an MPH from Johns Hopkins, Osman went on to become a board-certified nephrologist with a passion for serving dialysis patients. He is currently the CEO of Diality, a medtech company in the midst of creating a hemodialysis system that's versatile, mobile, intuitive, and cost-effective. 

Start Technical Risk Reduction as Early on as Possible 

Osman believes that a lack of early-stage technical risk reduction is one of the most common mistakes companies make in the medical device space. He emphasized the importance of undertaking technical risk reduction as early as possible.

By delaying this process, you risk having a product that doesn't meet your requirements. In most cases, projects only get more complex, intricate, and expensive over time. And it will be much harder for significant adjustments and shifts to be made during the later stages of development. 

Osman explained that any innovation or invention, no matter how brilliant, inherently comes with its own set of risks. And the best way to minimize the impact of these risks is to go through a series of prototypes and carry out consistent product iteration and improvement at each stage of the process. 

Feasibility prototyping enables you to collect early evidence that can prove or disprove your technology's validity and sets the stage for grounded, realistic targets during your development process. Such prototypes can typically be designed with minimum resources and time and can significantly reduce development risks in the future. 

"You answer a lot of fundamental questions about technology that you can't get with design and analysis. And the first indication of where they will hit your desired performance targets is really from there," Osman said as he expounded on the benefits of feasibility prototyping. 

Reducing such uncertainties also gives you the upper edge in convincing investors to come along on your journey. 

Another core part of early-stage product optimization is finding the right balance between features and functionality. An over-the-top product with too many features can lead to more technical risks. 

According to Osman, domain expertise is crucial in achieving this delicate balance, as it helps you pinpoint what the market requires and optimize the development process to meet those needs. 

Build Collaborative Relationships to Facilitate Regulatory Clearance and Clinical Adoption 

One of the best ways to increase your odds of successful regulatory clearance is to build collaborative relationships with the relevant agency. 

Gaining full-fledged access to what other medtech companies have done in the past can be challenging, and at times, the most current requirements may not be reflected in available guidelines. 

Thus, Osman's advice is to create a space for two-way interaction and feedback, which can provide insight into what's front and center in the FDA's mind. Keeping the dialogue open and communicative will massively de-risk your regulatory submission. 

"I would just encourage as much collaboration as possible. That sort of environment is responded to well on both sides of the table, and I think it really keeps everyone focused on what we're trying to do, which is improve the quality of care in the United States." Osman elaborated. 

But the benefits of collaborative relationships aren't only confined to seeking regulatory clearance. Osman explained that aligning with care providers can help you understand what's essential in clinical settings and develop products that fit different healthcare models. 

According to Osman, value-based care is becoming increasingly prominent in dialysis care. Understanding how Diality's hemodialysis system fits into that model came through his personal experience in nephrology and conversations with other care providers in the space. 

"Eventually, you want to start talking to real people who are going to buy your device and pilot it. And I think the earlier you have those conversations and relationships, the better." Osman said. 

Your Team Members and Investors will Shape Your Company's Direction 

Being thoughtful of who you take on board is critical at every stage. Investors, partners, and team members can significantly influence the direction of your product development process. 

Osman explained that having the wrong people involved can lead to a clunky, impractical product with excessive features and high technical risks. 

"Sometimes that happens because the wrong partner is chosen, you've got the wrong investor, and you've got the wrong team around you. Your product iteration needs to be understood by your investors. And if you don't tell that story well, you get yourself in a bind." 

Osman also advised entrepreneurs to build a supportive investor base by encouraging their potential stakeholders to be thoughtful of the investment and commitment they're making. He explained that that alignment is important going into any funding rounds. 

Apart from getting the right investors on board, building a solid core team is also crucial for success. And since his company has taken on a patient-centric approach, Osman ensures his team is informed and engaged with the company's mission by connecting team members to real-life patients. 

"And so for employees, pre-COVID in particular, we used to go to dialysis units and take them there, so they can understand and meet with patients. We bring patients into the office at all our team meetings just to discuss it. It used to be really key to our culture. I think it's important that your team is mission-driven and enthusiastic about what you're doing. The only way you can do that is to connect them to the problem in the market." 

Osman also added that a great way to lead a team is to identify its core competencies and ensure the company stays in the lane it excels in.

Osman plans to rope in external help for specific areas his team may not be experienced in—for instance, enlisting the help of a contract research organization (CRO) to aid with designing and executing clinical trials. This allows his team to effectively focus on their true expertise, which is product development. 

"I think it's important that you define your core competency and what you're good at as a company. And you continue to leverage that. You may add on other pieces to it, but you can't lose sight of what you're good at." Osman elaborated. 

Download a copy of the interview transcript right here.
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Making the leap from physician to entrepreneur was a huge risk for Diality CEO Osman Khawar, but one he doesn't regret taking. As a board-certified nephrologist with over a decade of experience in this field, Osman saw the opportunity to provide value-based care to dialysis patients and decentralize dialysis delivery in the US. 

Diality was birthed with the primary purpose of offering freedom and choice in the dialysis space. The company is working on a mobile hemodialysis machine that brings immense versatility to the table, allowing patients to receive treatment in different settings of their choice, including clinics and homes. 

Because of its continuous monitoring feature, cloud connectivity, and electronic medical records (EMR) system compatibility, Diality's system will enable nephrologists to make data-driven decisions and create personalized experiences for each patient regardless of their treatment setting. 

The patient-inspired hemodialysis system will also facilitate shorter training times for healthcare professionals and care partners through its easy-to-navigate interface and automated treatment setup. 

In early 2022, Diality closed a $24 million Series B investment round, bringing their total funding amount to over $54 million. The Series B2 funding round will be used to support the device's 510(k) clearance, home clinical trial studies, and commercialization. 

As Diality closes in on its much-anticipated market entry, Osman's team continues to focus on developing a versatile, market-ready product capable of delivering a wide range of dialysis prescriptions. 

In this Medsider episode, Osman talks about the importance of early-stage technical risk reduction and building collaborative relationships with regulatory agencies and value-based care providers. He also discusses how getting the right team members and investors on board is paramount to building a sustainable and successful medtech startup. 

Key Learnings from Osman's Experiences 

  • One of the most common shortcomings of medtech companies is the lack of early-stage technical risk reduction. Reducing uncertainties during the initial phases of development can save you a ton of trouble down the road and give investors the confidence they need to support your venture. 
  • The effort needed to build collaborative relationships with the right stakeholders is sometimes underappreciated. For example, one of the best ways to ensure a smooth regulatory clearance process and efficient clinical adoption of your product is to prioritize building alignment with the right people and organizations. 
  • The team members and investors you bring on board can make or break your company's success, especially in its earlier stages. A great way to build a mission-driven, patient-centric group of people is to connect them with real-life patients and consumers. 
Guest
Osman Khawar
CEO of Diality

After obtaining an MD from the University of Glasgow and an MPH from Johns Hopkins, Osman went on to become a board-certified nephrologist with a passion for serving dialysis patients. He is currently the CEO of Diality, a medtech company in the midst of creating a hemodialysis system that's versatile, mobile, intuitive, and cost-effective. 

Start Technical Risk Reduction as Early on as Possible 

Osman believes that a lack of early-stage technical risk reduction is one of the most common mistakes companies make in the medical device space. He emphasized the importance of undertaking technical risk reduction as early as possible.

By delaying this process, you risk having a product that doesn't meet your requirements. In most cases, projects only get more complex, intricate, and expensive over time. And it will be much harder for significant adjustments and shifts to be made during the later stages of development. 

Osman explained that any innovation or invention, no matter how brilliant, inherently comes with its own set of risks. And the best way to minimize the impact of these risks is to go through a series of prototypes and carry out consistent product iteration and improvement at each stage of the process. 

Feasibility prototyping enables you to collect early evidence that can prove or disprove your technology's validity and sets the stage for grounded, realistic targets during your development process. Such prototypes can typically be designed with minimum resources and time and can significantly reduce development risks in the future. 

"You answer a lot of fundamental questions about technology that you can't get with design and analysis. And the first indication of where they will hit your desired performance targets is really from there," Osman said as he expounded on the benefits of feasibility prototyping. 

Reducing such uncertainties also gives you the upper edge in convincing investors to come along on your journey. 

Another core part of early-stage product optimization is finding the right balance between features and functionality. An over-the-top product with too many features can lead to more technical risks. 

According to Osman, domain expertise is crucial in achieving this delicate balance, as it helps you pinpoint what the market requires and optimize the development process to meet those needs. 

Build Collaborative Relationships to Facilitate Regulatory Clearance and Clinical Adoption 

One of the best ways to increase your odds of successful regulatory clearance is to build collaborative relationships with the relevant agency. 

Gaining full-fledged access to what other medtech companies have done in the past can be challenging, and at times, the most current requirements may not be reflected in available guidelines. 

Thus, Osman's advice is to create a space for two-way interaction and feedback, which can provide insight into what's front and center in the FDA's mind. Keeping the dialogue open and communicative will massively de-risk your regulatory submission. 

"I would just encourage as much collaboration as possible. That sort of environment is responded to well on both sides of the table, and I think it really keeps everyone focused on what we're trying to do, which is improve the quality of care in the United States." Osman elaborated. 

But the benefits of collaborative relationships aren't only confined to seeking regulatory clearance. Osman explained that aligning with care providers can help you understand what's essential in clinical settings and develop products that fit different healthcare models. 

According to Osman, value-based care is becoming increasingly prominent in dialysis care. Understanding how Diality's hemodialysis system fits into that model came through his personal experience in nephrology and conversations with other care providers in the space. 

"Eventually, you want to start talking to real people who are going to buy your device and pilot it. And I think the earlier you have those conversations and relationships, the better." Osman said. 

Your Team Members and Investors will Shape Your Company's Direction 

Being thoughtful of who you take on board is critical at every stage. Investors, partners, and team members can significantly influence the direction of your product development process. 

Osman explained that having the wrong people involved can lead to a clunky, impractical product with excessive features and high technical risks. 

"Sometimes that happens because the wrong partner is chosen, you've got the wrong investor, and you've got the wrong team around you. Your product iteration needs to be understood by your investors. And if you don't tell that story well, you get yourself in a bind." 

Osman also advised entrepreneurs to build a supportive investor base by encouraging their potential stakeholders to be thoughtful of the investment and commitment they're making. He explained that that alignment is important going into any funding rounds. 

Apart from getting the right investors on board, building a solid core team is also crucial for success. And since his company has taken on a patient-centric approach, Osman ensures his team is informed and engaged with the company's mission by connecting team members to real-life patients. 

"And so for employees, pre-COVID in particular, we used to go to dialysis units and take them there, so they can understand and meet with patients. We bring patients into the office at all our team meetings just to discuss it. It used to be really key to our culture. I think it's important that your team is mission-driven and enthusiastic about what you're doing. The only way you can do that is to connect them to the problem in the market." 

Osman also added that a great way to lead a team is to identify its core competencies and ensure the company stays in the lane it excels in.

Osman plans to rope in external help for specific areas his team may not be experienced in—for instance, enlisting the help of a contract research organization (CRO) to aid with designing and executing clinical trials. This allows his team to effectively focus on their true expertise, which is product development. 

"I think it's important that you define your core competency and what you're good at as a company. And you continue to leverage that. You may add on other pieces to it, but you can't lose sight of what you're good at." Osman elaborated. 

Download a copy of the interview transcript right here.
Share:
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