TMC Innovation Institute harnesses the amazing power of the Texas Medical Center to encourage the development of life-saving medical devices and technology. What better place to advance new medical technologies than in the Houston innovation ecosystem? Hear from the people who are part of the effort.
Amber: Hi, this is HXTV and I’m Amber Ambrose. Thank you. We’re the show that champions Houston innovators and entrepreneurs and it’s brought to you by PKF Texas, the CPAs and advisors to Houston innovators for over 15 years. Today, we’re at the TMC Innovation Institute with Dr. Erik Halvorsen, the Director here. This is kind of part 2 of an interview and we’re going to be doing something a little bit different. So, Erik, I’m going to let you take it away and introduce your guests.
Erik: Sure, so we have two of our TMCx alumni companies. TMCx is the accelerator program that we run here and now they are both recent graduates of our program and for some unknown reason that they’re going to enlighten us to, they have decided to stick around and be part of our ecosystem. I thought we would start with Alex and let him introduce himself. But it’s a good segue to the previous segment that we had with the Biodesign fellows because Alex and his company Alleviant actually emerged from the Biodesign program. So, Alex, tell us a little bit about your experience in that program, and then, what is Alleviant, and where are they today?
Alex: I can still consider joining the Biodesign fellowship probably the second-best decision in my life, with the first being to ask my fiancé to marry me recently.
Erik: Totally good plug. She’ll see this now.
Amber: Good answer, Alex.
Alex: And so, in my viewpoint, the Biodesign fellowship is an unfair advantage if you really care about starting a new company, helping patients, and hoping to have a successful company off in the future. Alleviant Medical; we are a medical device company stationed here in Houston. We developed a transcatheter device that cuts a small hole in the heart of patients with heart failure to improve their symptoms and help keep them out of the hospital. So far, we have raised a seed financing and we have some really good annual data. We’re making a lot of good progress, thanks a lot in part to the ecosystem.
Amber: Did you say you cut a hole in their heart?
Alex: We do.
Amber: I just wanted to clarify.
Alex: We have a small expandable blade that we cut about an 8-millimeter hole in the heart. The problem these patients have is because they have heart failure, the heart is just not working very well anymore, they have a buildup of pressure in their left atrium, the upper left chamber. What we realize is that to reduce their symptoms and help keep them out of the hospital, if we just cut a small hole in the heart that then offloads that pressure, and so they don’t get their symptoms, it helps keep them out of the hospital.
Amber: Have a better quality of life.
Alex: Have a much better quality of life.
Amber: That’s exciting.
Erik: And you guys graduated from the accelerator program about a year ago.
Erik: Talk about what’s happened post-graduation in terms of some of the other resources you’ve taken advantage of here at the TMC Innovation Institute.
Alex: I think one of the most critical moments in the history of our company was the months right after leaving the fellowship. As you mentioned, during the fellowship you get paid to do it, but once the fellowship is over, that paycheck stops. We essentially were a four-person company hunkered together in a single little desk that we essentially weren’t having to pay rent for, and we were able to still crank out the device, get it approved, and eventually be able to get to animals and produce the data that allows us to raid our seed financing several months later.
It’s like one of these moments where you don’t really—we always believed that we would be able to raise the money, we always believed we were going to become successful. We didn’t necessarily have a lot of flags suggesting it, but we believed in our team, we believed what we were doing, and fortunately we were able to produce the data and we were able to get some investors excited into the deal, most notably, the TMC Venture Fund.
Erik: Sarma, you guys with Luminare, you guys are a local, homegrown, Houston company. Talk a little bit about, first of all, I mean, I think the story of how you came up with this company and why you chose to pursue it—you’re a medical doctor specializing in infectious diseases, well, specializes is a strong word. You’ve been known to practice it at times. Talk a little bit about what compelled you to start Luminare and what is Luminare?
Sarma: We actually started the company in my garage. Marcus is the co-founder of Luminare; he’s imported from Sweden. I did my training at the Baylor College of Medicine in Houston, in Internal Medicine, and I was working in the hospital as a regular doctor seeing patients. My patients were dying of sepsis, which is the body’s response to an infection. It’s the number one cause of death in the hospital. One in three people who die in a hospital die of sepsis. This is endemic. In the US we have 1,000 people dying of this every day. I joined the hospital’s committee to be like, hey, you know, how can we make this better? I was on a few committees in the hospital trying to improve processes. At the same time, I was the medical director of another hospital. I was the Director of Utilization Reviews, so I got to see what happened to every patient in the hospital. I was on the ethics board, so I got to see when things were not going well, or when the hospital needed to intervene, and so on.
I sat on enough of these committees to sort of see this underlying problem of insufficient technology. We just didn’t have the right type of software to identify sick patients fast enough. In my naivete, I decided I’ll just build it myself. My wife said, no, so then I started recruiting software engineers. That’s when I ran into Marcus in Sweden, and two weeks after—so, I met at his wedding. So, he’s married to my wife’s best friend, and I was like, who is she getting married to? And since I’m such a cool person, I said, “You know, I’ll go to Sweden, I’ll check this guy out. If he’s the wrong type, I’ll just tell you a few days before the wedding, so you can call it off.” So—true story, so I go there and I’m having a coffee with Marcus in this small café in Uppsala, and I’m talking about my ideas and recruiting a software developer, and the guy goes, “Oh, this is easy, I can do this.” And, I mean what do you mean?
And so, he starts talking about version one of the software, version two of the software. So, he gets married three days later, and at the wedding he wants to talk about the software. I said, “Hey man, I’ve not done this a whole long time, but I can tell you that this is a big no-no. Talking about business at your wedding.” So, I get on a plane the next day, I come back to Houston and he’s in Sweden. He calls me and says, “Hey, I’ve been thinking about your idea. We should do something.” Two weeks later, he moved into my guest room in Houston with his wife. We moved the cars out of the garage, we threw up a wall, went to Home Depot, bought an air conditioning unit, bought a bunch of furniture, computers, hammered out a prototype in like 30 days, and Luminare was born.
Marcus: I had been looking for the next thing to do and when I heard him talk about this, I was like, yes, that is the obvious next thing. We can do this. And I think that’s how we operate. The problem remains out there and it has a bunch of lives and a bunch of consequences and a bunch of money tied to it. That’s why we’re sticking to attacking this problem.
Erik: Talk a little bit about, I don’t want to prompt you too much—
Sarma: I know what your question is going to be. I know Erik well enough to know what he is going to ask me.
Erik: You gave the, “I’m a doctor, and I see it, and I sit on committees,” answer, but I know a little bit more about this in that you’ve had a personal connection to sepsis. Talk a little bit about that because I think it’s really important, not just for folks to hear that story, but I think successful entrepreneurs in any field have to be very passionate about what they’re trying to do and what they’re trying to build, and you definitely have that.
Sarma: Thank you. That’s the first compliment Erik has paid me, just so you know. Usually, he’s just mean to me.
Amber: We have it on video, so it’s evidence.
Sarma: I’m so happy. I’ll try my best not to cry when I say this, and I’m getting better at recounting this story. We started Luminare, we were a software company, we made software for the hospital. Three months into this process, my friend’s daughter ends up in the ICU at a local hospital and he’s texting me saying, “Hey, she’s in the ICU and she’s 22 years old and she’s on a ventilator.” I figured, hey, she’s getting good care, nothing for me to do, right? On hospital day three, I start getting worried. My radar is going off, there’s something not right. So, at three in the morning I get up, get dressed, go to the hospital to see her. Just as I get off the elevator, they call, Code Blue on the overhead, which means someone’s heart stopped.
I go to the ICU, my friend is standing outside and he’s crying, and I go into the room and my intern and resident are doing chest compressions on his daughter. They get tired, and I had to start doing chest compressions, and then 45 minutes later, I had to go tell my friend that his daughter died of sepsis because we didn’t intervene fast enough. If you looked at the medical record, everything was done perfectly according to the standards of that day. That was 2014, so way back, right? But to me, it just meant we didn’t have the right type of technology in place yet. I came home and I took it as a personal failure.
That’s when I mortgaged my house and said, you know what, we’re going to take this big—we want to go to take this to every single patient who needs this across the US. We went from being a software company to a company that helps hospitals achieve better outcomes for their patients. We go and sort of, if they have great software already, that’s perfect, we’ll help you build the protocol. If you don’t have the software, we’ll give you the software, we’ll build you the protocol, we’ll train your nurses, we’ll talk to your doctors. We want to create an ecosystem where the focus is on getting better patient outcomes because that’s when everyone wins. That’s really our vision, that’s who we are now.
Erik: Thanks for sharing. That story is really powerful and not certainly one that everyone experiences, luckily, but it underscores, like you said, how big of a problem sepsis is. It may be something that’s not commonly known. The thing that I love about both of you guys, and really, a lot of the companies that we work with is you’re passionately trying to solve a big problem. If you’re successful at doing that, you’re talking about impacting thousands, or hundreds of thousands, maybe even millions of lives with the products that you’re working on. That’s really amazing and underscores the number of sacrifices that you guys have made along the way, including, I know you recently gave up practicing entirely.
Sarma: I’m transitioning out of my clinical practice. I don’t want my colleagues to be doing all the night calls, so while we recruit my replacement, I still have a minimal presence in the hospital, but for all intents and purposes, I’m leaving clinical medicine to do this full time.
Erik: Even though I’ve been sending you signals all along the way that maybe you’re not a great CEO. I’m kidding.
Sarma: Thank you for that vote of confidence.
Erik: I had to offset the compliment from before.
Sarma: I feel humbled. Now I’m the humblest person in the room.
Erik: Talk about—either of you guys can answer this. So, you went through the program, maybe talk about what were some of the highlights for going through the accelerator program, and then, now as you’re still in this environment in this coworking space, what are some of the benefits that you guys see as a company for being here?
Marcus: We approached it thinking that—we’d just started getting traction before we came. I wanted to join to see that we didn’t have any blind spots, to see that we have most things figured out, and basically partake in the classes. I think what we got was a lot of community and lot of local know how, and a lot of attention. Very, very big, very positive attention. TMCx is a stamp of approval. It’s a tough thing to get into and it’s an intense process, and all of that together has become a game changer for us.
Alex: I would say one of the highlights is, what we do is a very challenging thing. It’s very rewarding but it’s very challenging. It’s a really amazing experience to be surrounded by other people who are also this, what I like to call, the church of entrepreneurship, where everyone’s singing in the same choir about the importance of innovation and everyone is like, you don’t feel so crazy going like months without salary because you really believe in this one thing. When you can have people next to you that are going through the same thing you are, it is really motivating, it really helps you keep day to day.
Sarma: For me, I’m pleasantly surprised to learn we had everything figured out before we came here. I was like, great, fantastic. For me, we started having some traction in the hospital, and after we joined TMCx, the unknown is basically the thing that takes startups out. It’s what you don’t know that kills you. Please close your ears, Erik. Erik has started five, six companies now, and his team is fantastic, I’m a big fan. They are the real reason I’m still here, not Erik.
Amber: This interview is over.
Sarma: So, but to have that sort of team approach where I can just go walk into someone’s office and say, “Hey, can you spend an hour with me talking about our go-to-market strategy? Can you help me understand how I can communicate with customers better? Can you help me understand how I can communicate with investors better?” A lot of people, TMCx has become sort of a mark of quality of a medical device company. It’s like an ISO mark now. So, if you’re a TMCx company, you sort of meet a certain standard, and a lot of very large organizations, companies that have 50-60 billion in market cap started reaching out to us and saying, “Hey, we saw that you’re in the sepsis space. Would you be willing to sit down and talk to us about these questions?” We’re in these meetings where people have flown in from Europe and they sit in the board room with us and they take notes for six hours. That’s exhausting.
The coolest thing that’s happened is I got a phone call from NASA saying, “Hey, we’re doing human space flight missions to Mars. We need to start thinking about better computing systems in healthcare. We need to start thinking about autonomous medicine. So, would you be willing to come and talk to us about that?” Getting—last week, or two weeks ago, getting to talk to the Army Research Institute about this and NASA and all of this stuff is happening because of this great innovation community that Erik and his team have built. Can I say one more thing?
Erik: No. Go ahead.
Sarma: What people don’t understand in healthcare, or what I didn’t understand, is a lot of innovation takes place on the industrial side. There’s a lot of stuff that’s innovative that’s built already that’s there that’s not actually helping patients because it just sits there on the shelf. It would be in a university or somewhere else. The ability to commercialize technology and the ability to bring it to market and actually help that patient who is our mom, our dad, our brothers, sisters, our kids, our grandparents, right? So, the ability to do that quickly is what I believe TMCx really produces.
Erik: I think that’s great. I think that’s a highlight, too. Going back to the Biodesign piece of this, where that is a ground up build of not just, what are the unmet medical needs, but how is the physician going to use it? Or, are they going to use it? How does it fit in to existing clinical workflow? Because of our tight ties to the hospital and the physicians that are there and the IT and IS people, it gives, obviously from a Biodesign standpoint, but for the companies that are here, it’s not good enough to build a better widget if nobody is going to buy it or use it. Understanding that in this environment is a way to do that. Thank you, guys. Any last words or recommendations to the healthcare companies that are out there that maybe are considering either being in the coworking or being part of the TMC Innovation Institute in some way?
Alex: One thing that I’ll say to join what you all said about the seal that the TMC Institute provides. I did my first company here in the Texas Medical Center back in 2011, is when my first company was originally founded. Before this building was built, before any of these people were talking about innovation, and it is so night and day about what the environment is like, especially being able to get access to investors, which is one of the most critical things that an early stage company needs. Before, you essentially had to know who these people were, because investors often don’t just take cold calls from people. Now the TMC is very good at being able to open doors and having that initial interaction with you that was really critical for us and I think is one of the most difficult things for an early startup that’s just now starting out.
Erik: I think that’s a great—on this ecosystem, and HX is doing amazing stuff with the fund of funds and also activating other sources of capital which is really exciting. Three years ago, when I got here there were zero investment groups co-located with us. We now have five that are here under our roof and there’s two to three more coming next year, and that doesn’t include the TMC Venture Fund. The funding landscape has changed, in healthcare and I think in other sectors, pretty dramatically in a short period of time, so that’s great.
Marcus: I would say it’s definitely a no-brainer to go here. To come here with a humble attitude and to invest in it, and not just see it as a stretch of time that will give you some attention, but I can see in our cohort that the companies who actually invested in being here, in networking and actually listening to the classes and participating, they got a big return on investment, which you told us in the beginning, but it’s definitely so. So, if you’re in the healthcare space, definitely come and see it as a four-month investment.
Erik: It’s like life. You get out of it what you put into it. Same with the programs.
Sarma: I was going to say something mean to you, but I changed my mind; as a parting comment. So, my parting comment is going to be for companies that are out there. Again, please close your ears because this is going to make you look good. I think being at TMCx, I wish I could have done this when we were a much younger, earlier company, because it would have saved us at least two years of our time. If we knew what we knew going through the cohort, like when we first started the company, we would be doing this interview in my private jet.
Amber: Well, I’ll make sure we’ll do this same interview on his private jet since he is here at TMCx. No promises, but hopefully that will happen. Well, thank you all for joining us today on HXTV to discuss all things TMC Innovation Institute. And especially to you, Dr. Erik Halvorshirt, I mean, Halvorsen. Not Halvorshirt, just a slip there. We really appreciate your time and attention and just the thoughtful questions, as well. Thanks again.
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