Medsider: Learn from Medtech and Healthtech Founders and CEOs - How to Prevent Your Device From Getting Knocked Off: Interview with PN Medical CEO Mark Carbone
Episode Date: February 9, 2023In this episode of Medsider Radio, we sat down with Mark Carbone, CEO of PN Medical.Mark is the CEO of PN Medical, makers of medical devices that help improve pulmonary performance of patient...s, vocal artists, and professional athletes. Mark used his technology background and entrepreneurial experience to turn PN Medical into a frontrunner in the pulmonary space.In this interview, Mark shares crucial lessons on how business leaders should build teams, bring a device to market, and protect the company’s brand.Before we jump into the conversation, I wanted to mention a few things:If you’re into learning from proven medtech and healthtech leaders, and want to know when new content and interviews go live, head over to Medsider.com and sign up for our free newsletter. You’ll get access to gated articles, and lots of other interesting healthcare content.Second, if you want even more inside info from proven experts, think about a Medsider premium membership. We talk to experienced life science leaders about the nuts and bolts of running a business and bringing products to market.This is your place for valuable knowledge on specific topics like seed funding, prototyping, insurance reimbursement, and positioning a medtech startup for an exit.In addition to the entire back catalog of Medsider interviews over the past decade, premium members get a copy of every volume of Medsider Mentors at no additional cost. If you’re interested, go to medsider.com/subscribe to learn more.Lastly, here's a link to the full interview with Mark if you'd rather read the summary instead.
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It's harder than you think.
So unless your uncle gave you a million dollars to get started or 10 million or somebody else did, it's a lot harder than you think.
And you're going to want to give up a lot.
And it's going to affect your family.
It's going to affect your marriage.
It's going to affect your kids.
It's going to affect your health.
You're going to get fat.
You're going to gain, you're going to go on binges where you just don't exercise and you work 16, 17 hours a day sometimes.
So it's a lot harder.
than you think. This is not easy. Here's, it's funny I was watching. I love TikTok now because I just
get those one minutes from these really great people like Peterson and others. I get these little
anecdotes and oh boy, the things that they say about I'm missing it right now, but it'll come
back to me. But it's really, it's really that it is harder than you think. And you do want to
give up, but you keep, you got to, you just got to keep pressing through.
Welcome to MedSider Radio, where you can learn from proven med tech and healthcare thought leaders through uncut and unedited interviews.
Now, here's your host, Scott Nelson.
Hey, everyone, it's Scott.
In this episode of Medsider, I sat down with Mark Carbone, who is the CEO of P&MEDICAL, makers of medical devices that help improve pulmonary performance of patients, vocal artists, and professional athletes.
Mark used his technology background and entrepreneurial experience to turn P&MEDA in a front run.
in the pulmonary space.
Here are the key learnings that we discussed in this conversation.
First, finding champions is crucial.
People who can truly move the needle for your business.
Look for individuals who not only have domain expertise,
but are driven to leave legacy.
Second, protect your products at all costs.
You need to partner with the right IP council,
allocate enough legal budget, and secure as many trademarks
and patents as possible.
Third, identify distributors that not only can execute,
but are trustworthy as well.
Ensure they have an actual sales force on the ground
that can deliver real results for your brand.
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So that's why we decided to create MedSider mentors.
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from the world's best medical device
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In addition, as a premium member,
you'll get to join live interviews with these incredible medtech and health tech entrepreneurs.
Learn more by visiting MedsiderRadio.com forward slash mentors. Again, that's Medsiderradio.com
forward slash mentors. Mark, welcome to Medsider. Appreciate you coming on.
Hey, thank you very much. All right. Really looking forward to the conversation. It's going to be a
little bit of a different twist. And as we kind of discussed in the pre-interview here, you know,
I'm having a lot of fun bringing on, you know, founders and CEOs of kind of traditional
medical device companies that are now commercializing, you know, direct to consumer. And so I think
this will be a fun conversation. So with that said, I provided a little bit about, you know, a short
bio of yourself kind of at the outset of this episode. But let's start there. If you can provide
kind of an elevator pitch for your professional background leading up to your, your CEO role at,
at P and Medical, that would be really helpful. We can start there. Sure. I think it all started off
as I am someone who has made so many mistakes along the way. It's amazing that I'm as successful as I am now.
So looking back, it's like you can make mistakes. It's okay. Just get up and keep going.
So I was an entrepreneur since about 13, you know, cutting grass, buying and selling cars, painting houses.
So started early, come from an entrepreneurial family. College went to pre, did prelaw, got my MBA.
I now use about 2% of my MBA.
So if I had it to do over again, I would not do it.
And then my first substantial venture was a software company.
I started in 2000.
I sold that in 2007.
I invented an enterprise solution.
It was like, you know, competed with Oracle, PeopleSoft and Microsoft dynamics,
but at a much smaller level.
But what I did after that, of course, that was the great recession that were now
entering another one, similar.
Hopefully not. I made a big move, but years after that, actually, and I took a break from
entrepreneurship for 18 months. And then I worked for one of the most successful presidents in
corporate America, Todd Jones of Publix. It's a regional grocery chain, but one of the most
successful Fortune 100s in America, actually. And he taught me so much. And it was great to take that,
to take that little break. I also had a marketing agency for years.
And then fast forward a little bit to 2015.
That's when I took over P& Medical.
It was a really small niche mom and pop company.
And I've since taken it from half a million to now this year in 2023,
we should be around 20 million.
So it's gone, it's been a great, it's been a great venture.
And a lot has been learned over those years.
Yeah, that's great, great background.
I love kind of your, your eclectic sort of resume, you know,
which I'm sure, you know, all of.
those various experiences are kind of yielding a lot of fruit in terms of what you're doing at P&M Medical.
So can you give us a sense kind of like a like, let's not, without going like too far into the
weeds, give us a sense for like what, what your devices are and kind of what pain points they
solve?
Sure.
Well, first off, the field I'm in is cardiopulmonary medical devices.
And the quickest way to describe this is, you know, you can think of it two different groups.
So I'll just show you the first.
This is like our flagship device.
This is the packaging.
And just quick on packaging.
We've learned a lot of lessons over the years.
Make it small, easy to package so you can fit as many in a box when you're shipping.
You know, message from the original founder.
And when you open it up, message from me.
And then my personal email address.
And believe me, I get emailed every single day.
Oh, that's great.
That's pretty rough.
And then so this is the flagship product.
So this one, like I said, there are two types of people that we serve.
This first type, this is the medical device.
This is for people suffering from respiratory illness.
So COPD, asthma, chronic heart failure, things like that.
And now COVID, so this is big.
We're really big in COVID recovery, actually.
It's pretty exciting.
And the second type, so this is more for your audience, for your listeners.
This one's for high achievers and pro athletes, Olympians.
It's a lot stronger.
It's for people who are fit, who are just alphas.
And what they're doing is they're trying to improve their human performance physically and mentally.
So this is this is it.
It's called breather fit.
And it's very similar.
It's just a lot stronger.
And then how you use it.
What it does is it it's training and building up all the respiratory muscles, everything that has to do with breathing.
So and even the larynx.
So it affects speech, swallow all the way down to the lungs.
Real simple, real quick demo.
You adjust the dials, inhale and exhale.
different pressure settings.
And you start low.
Of course, you go up and there's an app that goes with it.
You follow the app.
It coaches you.
It's like a virtual coach.
And I'll just do a couple breaths.
And you do two sets in the morning, two sets at night, typically.
And it's just five minutes morning, five minutes at night.
And the results are pretty outstanding.
I mean, go to our website.
There's a lot of statistics from the pro athlete side, you know, special forces.
So for Army Rangers, they can increase.
their runtime. It's the rucksack time when they're carrying that big pack on the back by
39 seconds they can improve their two mile run. Speakers, professional speakers, it actually
helps with anxiety too. So as soon as you start using it, you start calming down.
Do you have a lot of, a lot of, and we'll circle back around. I think for everyone listening,
you know, Mark and I having this conversation on Zoom so I can see the devices. But if you're just
listening to this, head on over to PN Medical, P.E.
in like so Paul Nelson medical PNmedical dot com and you can get a sense for what these devices
look like and how they work.
But a quick question on the on the on the breather fit device,
more the consumer kind of like,
you know,
device that's meant for for you know health and wellness and athletic performance.
Do you get a lot of people that comment on sleep enhancement that use it at night as well?
Wow, good question.
Actually, we've done sleep studies with it.
Oh, really?
That's what's great about it.
We're, we do the most knowledge.
novel research in our industry, actually, all the way from NATO fighter pilots and astronauts,
all the way down to COPD and chronic heart failure. So sleep apnea, I've got it. So what it is
is I'm a user because I've got some of these issues. I've actually, I'm a three-time COVID survivor,
so I have long COVID, so I suffer from some of the symptoms of long COVID too. So sleep is big.
And what it does, it's key. People don't realize this. The new big number is your HRV, your
variable heart rate. So that is a predictor of longevity and your lung capacity. After 30,
our lungs actually start, we start losing capacity. And you can reverse that. Our device actually
helps reverse that. So HRV is a key number that athletes and everybody across the world has to
monitor. So HRV goes up overnight. Like I use aura. We partner with all the wearables. We've done
studies with a number of the wearables. I like the aura because you just put it on and forget it. And it does
really good sleep track. Oh, you got one too. Yeah, we got one. Yeah, so big time for sleep for snoring
as well, because what it's doing is it's strengthening those muscles around the laryngeal area.
So it is really good for sleep. Yeah, that's super interesting. So I guess just to sum it up,
you've got you got two, basically two devices, one that's meant for more like consumer health
and wellness and athletic performance and recovery and the other one's a little bit more
positioned as a kind of a more medical device with the, with the latter one, the more the one
that's positioned as kind of for, you know, clinical use or medical purposes.
Do you commercialize that as well directly to consumers or do you kind of work through more
traditional clinician channels?
Well, it started a distributor channel.
We did all distribution at first way back before I started when I took over.
And there was some hospital nursing home, assisted living, and then outpatient rehab.
So we're in all those spaces.
And now over the last four years is when we've started commercializing.
And we have brought it online.
So it's class one.
We have a class two version two over the counter.
So both of those actually can sell on Amazon and the other, on the other consumer channels.
So it's worked in both areas.
Yes.
Okay.
Okay.
Got it.
And then you touched on this briefly.
Give us a set before we get into some of these, you know, kind of the key lessons
learned, you know, that you've learned throughout your career.
as it pertains to kind of growing P& Medical.
But give us a sense kind of for where the company's at in terms of, you know,
regulatory commercialization, et cetera.
You mentioned you get class one and class two devices, right?
And then you've been actively commercializing both for quite some time.
Sure.
Yeah.
And people need to know it's it is not hard to get class one approved or registered.
And it is such a bonus because that's it always,
when you're ever trying to go into a new hospital or any medical space, it comes up.
Somebody's going to ask it in one of the meetings when you're trying to close a deal.
Is it FDA registered?
So class one is not hard to get if some of your audience have never approached that.
It's not scary.
Class two is very hard.
Yep.
You have to get 510Ks.
It's a long process.
You have to find good consultants.
I found my consultants that we hired years ago that we've been keeping.
and they're at a really good rate.
We found them through,
we started looking through LinkedIn,
but actually Upwork is where I found a couple really good ones.
Yeah.
And we've kept them for years.
Yeah.
That's a channel.
Yeah,
I mean,
just on that note,
that's a,
I mean,
that network or that marketplace has been,
has been around for quite some time.
But there's a lot of really talented people on Upwork,
right?
I mean,
I think if you may be familiar with it and think it's just,
you know,
it's just kind of a gimmicky kind of fiber type of marketplace,
but it's not. I mean, there's a lot of like really, really good skilled professionals that,
you know, that freelance and they're available. We have hired in the eight years I've been here,
my first hire was my chief scientist who's still with me off of Upwork. And I landed her in Austria.
She's in Austria. We just, I just, I found her and she's been with me ever since and she's a secret
weapon, actually. And half of our team comes from Upwork. Wow. So I use Indeed friends. You know,
you do friends and family, Indeed, and then Upwork. So that's how we've always, and HR is my biggest
issue. It's my biggest, it's the biggest investment. It's the most important thing you can do as a
CEO, I think, is team. And it's almost my, it's pretty much half of my job is just trying to
find great people. Right. Or just really good at what they do. And they're smarter than me and the
things that they're really good at. Yeah, one of the, on this, on this topic, you know, one of the
things that I'm, I'm a big fan of, especially for early stage companies or early stage projects.
I mean, it could be within an existing kind of larger company.
But if you're trying to find, you know, talent for a certain function, the nice thing about using or kind of leveraging sort of the gig economy, right, whether it's through Upwork or any other marketplace, is that it allows you to kind of get your feet wet, right?
Get to know each other, you know, experiment a little bit on a project.
And, you know, without going all in on a full time hire as an example, right, that could end up maybe not a good fit, you know, for both parties.
And so I really kind of love leveraging sort of fractional work like that because, I mean, it really does, it really does allow you to kind of experiment and, you know, determine whether or not it's a, it's a good fit for both, you know, both the company as well as the as well as the freelancer. So interesting that you brought that up. But on that note, Mark, you've got kind of an interesting formula, right? When you're taking on, you know, a new, you know, in terms of product development. And you've got, you've referenced, I think, and kind of leading up to this conversation, a formula for how do you.
you balance both research and product development. Can you kind of frame that up and maybe
put yourselves in the shoes of another med tech or health tech entrepreneur that's listening to this
conversation and talk to us a little bit more about that equation and how you look at it?
Yeah, that's true. When I took over the company, again, it was really small, but at least it had
some revenue. It had a little bit of profit. So I was, you know, maybe I had a little edge.
other people have money. I had an edge that I bought a very small company that had a good reputation.
So there was a little bit of runway for me to spend a few thousand a month. So that balance with
product development and research matters because as I was going to sell, they're like,
well, where's your research? I would always get hit with, oh, where's your research? And the previous
owner actually did do some research but never published it. So I started getting that old research
published. And then what we did, how I did the research is that I don't know if I was a good salesman,
but I would go and pitch institutions and say, you know, we've got something great. I'll give you
the product for free. You know, the actual product cost of our product's not a lot. It's not like a
$1,000 device I'm having to give away for free. We do have a connected device too, but I would give away
product in time and help. And we actually got some studies. So I have, most of our studies,
we have only had to fund what we do. We do not have to pay for the IRB. Because, you know,
an IRB, and we've done them with Mayo Clinic, we've done with the biggest hospitals in the
world. The starting price is usually a half a million dollars just to talk. And I've, and how it's
worked is, I mean, I can't give full detail, but it's been a great relationship where I don't have to
put so much up front into that. So the balance is, gosh, you've got to get tiny little wins
and you really leverage and publish and push and promote those tiny little 10 patient studies
or 20 patient studies. And then once you work your way up to doing an IRB, well, then you get there
and you get to that spot. Yeah. Yeah. It's interesting that you bring this up because I was
rereading an interview that I had with Jim Biggins, who run, he's the CEO of a, of a,
and CEO of access vascular, right? And that's not a consumer product per se. But he mentioned something
that as they kind of approached research, right, clinical research, they, you know, the natural kind of,
you know, path forward is to do like, you know, a big, large RCT, right? But those are, as you mentioned,
you know, super, super expensive, right? And a huge, a huge commitment. And instead, they, you know,
they did smaller, you know, single center types of studies, right, that allowed for quick,
turns when it comes to IRB approval and, you know, sites that were a little bit more enthused
and excited about doing the study. So, you know, you typically can get through those a lot,
a lot quicker. And, you know, they're a little bit more bought into publishing the data,
et cetera. So there's a lot of advantages in like, you know, starting small, right? And doing,
you know, kind of picking off these smaller, you, you hit the key. This is what I did is I always
found a really excited champion. Somebody who had a little budget in their department, but they were,
they just, they're just into tech. They're into new stuff.
and they want to move up the ladder at their organization,
and they'll do anything to get a study and get published.
So fine, they're everywhere.
People are really bored in their jobs,
and they want to do something new.
They want to leave a legacy, right?
So I always approach it that this is legacy building,
and it ends up being a win-win across the border.
We end up becoming great friends.
So all the studies we've done,
I know have friends everywhere from these studies.
And we just had each other on the back
and just feels good that we actually moved healthcare forward.
Yeah, yeah, no doubt.
I'm, I advise another direct-to-consumer med tech company.
They've developed a class two device, but it's OTC doing exceptionally well.
And, you know, they've seen the same thing, right?
The more they commercialize, they actually get inbound requests from really actually
top-tier institutions, right, that are excited.
And, you know, they're people that are, you know, working on some small project inside,
you know, a large organization.
And this is kind of, this is their thing, right?
You know, this is what gets them excited.
And, you know, they're oftentimes willing to do, you know, small research projects that really don't cost the company much, right, at all, you know, other than maybe, you know, the provision of the actual devices to use as part of the study.
So. Well, one other thing, though, when people are doing this, this is really important because I've had this happen.
You need to leave quickly if they're wasting.
I don't want to say they're wasting your time, but you may got a person that's super ambitious, but they
do not have the power to influence all the other decision makers.
And you need to walk away and not,
because sometimes I've stuck around for a year meeting with people.
And you got to know that just move on.
There's somebody else that really wants to work with you and just find that person.
That's good.
That's good stuff.
Let's transition a little bit to your experiences when it comes to the regulatory function, right?
And that, which can be kind of dynamic, right,
especially if you're commercializing through Amazon.
So talk to us a little bit about your,
how you've kind of balanced, you know,
working with various, you know,
agencies like FDA and also Amazon,
you know, with, with, you know, more devices that do kind of fall under that
that med tech umbrella.
Sure.
It goes back to whoever is your champion on your side,
your FDA consultant or if you can afford it,
that you have somebody in-house.
They just have to have a track record that they know these people.
or you actually, another powerful way to go is through law firms.
So one of our law firms is hauling in night, which is one of the biggest in America.
And their division that deals with this, well, they just can walk, they're in D.C.
So they can just walk across the street over to the FDA.
It's not like they do that, but they'll just go out for coffee with someone.
So you really have to get somebody who knows somebody there for not so much for approvals,
but for coaching so that when you do go through the approval process, you don't get all the
denials. It's another three months. It's another six months where you have to answer 46 more
questions that you did not answer or they want clarity on. It's the more you do your homework
up front and you don't try to make too many claims, it usually pushes you through faster.
And it feels like the FDA was getting, they have been trying to be a little faster about it.
Like they're being more forgiving on software. I've noticed that's,
getting easier. And then the new thing we're dealing with now that we're growing globally is ISO,
which FDA was four years ago supposed to switch to ISO, and I don't know what the status is right now.
But we're now having to get, we're getting ISO certified as well because the EU, you know,
they require that of us. So it's there's, it's really, I don't know how to say it. It's, it's a lot of
homework up front. You really need people on your team who have done it five or six or 10 or 20
times. And you must, you just got to really interview them pretty hard that they truly have done it and
they have to prove they have. Yeah, that domain expertise is so important. And ideally, it's,
it's not only domain expertise in a certain function, like regulatory, obviously, but ideally it's
domain expertise in that sort of therapeutic arena too, right? And even better if they understand
kind of the nature in which your your business model kind of operates in, right? Like if it's an
OTC, they've got experience, you know, with regulated OTC devices. So yeah, I echo the same sentiment.
I want to circle back around here in a little bit and talk about your experiences commercializing
across Amazon, right? But before we go there, let's chat a little bit about partnering with
investors, right? Because you have a fair amount of experience there. So with fundraising. So if you had to
kind of sum up your advice or your counsel, right, for other med tech, health tech entrepreneurs that are,
you know, raising, let's not think about like Series C or Series D rounds, but like early stage
capital, right? Friends and family, Angels, maybe Series A, you know, what kind of like one or two
pieces of advice would you kind of offer up that have been, you know, either, that you've either done
really well or maybe, maybe failed and kind of have learned from over the years? Yeah, that's a great
question. We've done two rounds. So we did Angel and then the second was was a real estate mogul.
And I'll go into that one. That one. So I'll just tell you, you don't get an investor who knows nothing about medicine.
So and but he had a lot of money. But I'll tell you. So part one, when I first started, you know, I came to the table with a connected device. So we 3D printed it. I was at Advent Health in their innovation lab.
They did all the 3D printing.
We made really cool connected devices.
And I raised some money on that.
I raised the first bit of money because it was shiny.
It was the shiny cool product that could predict an exacerbation 14 days before the patient knew they were having it.
So it was pretty cool.
I mean, I've still got it.
We're probably going to go live with it in 2024.
But a lot of lessons learned with that device.
So anyway, with investors, first thing, I actually thought I was going to land a really big investor.
and we had done our meetings, gone back and forth, gone on to dinner.
And one of the last questions he asked at a session, he said, what's your 3% rule?
Or what are you going to do at the 3% time?
And I said, what's that?
And he actually pretty much ended it five minutes later because I didn't know what that meant.
So he told me afterwards, though, after he said, no, he said, what are you going to do when you hit 2% to 3% of market share?
and you have to have an answer because if you really are making these predictions, oh, we're going to be worth this.
We're going to be 100 million.
Well, that means you're probably going to be at the 5, 10 percent market share rate.
So when I hit three or when I actually hit 5 percent market share a few years ago, well, it was a disaster.
I had to hire law firms.
We had to go into lawsuits because what happened is it opened the door.
The world saw us.
And it was COVID because we are, what's happened is we are a solution for COVID.
So 20 knockoffs, five counterfeits later, and multiple lawsuits.
Amazon was kind.
They even did an international lawsuit on our behalf, which has been amazing because
there's no way we could have afforded such an expensive lawsuit.
So what you have to prepare for is what is your plan when you actually have that
much market share?
You're either going to be bought.
What they typically do is the big guys destroy you first.
and then buy you. So they lower their prices to hurt you, and then they come back when you're
down, and then they buy you at half of what they were first going to offer. So it's really
tricky. But then with investors, so the first investor was actually a group of guys that's now
a real fund. It's Florida funders out of Tampa, Florida. And they did the angel round. They're still
there. They're amazing guys. They're such a nice team. The second was a real estate mogul.
and I'm now almost done buying him out.
So it was not a good, it wasn't healthy.
You do not take money just because they're giving it.
It could be the end of your company because these guys are really smart, so smart.
And they're looking at you with your great ideas and they can eventually just take it from you.
So don't take any money that comes.
What I learned the hard way is just get out and sell.
And your next hire after yourself is salespeople.
I mean, that's huge.
It's good out there and pre-sell.
If you don't have a product yet, and I was good at that.
When I had the software company, I needed to spend a million dollars to get the software
where it needed to be.
I pre-sold $2 million worth of software a year before I made it, before it was out.
I don't know how I just put really good presentations together, and I pre-sold.
I gave them all really deep discounts, and they funded me until the product was out.
So that's another way is you really got to try to self-fund.
I know investor money sounds great, but looking back, the investor really has to have the same.
They have to be equally yoked.
You guys have to have a similar belief plan.
And if there is an exit strategy, it can't be like a two-year.
It has to be a little bit longer.
They have to give you some room.
So that's my.
Yeah.
Those are really good thoughts.
And I'm glad you brought up that phrase that you just used equally, equally yoke.
Because, you know, if you're, you know, if you've got something compelling, right, a device or product that you're excited about and you know, you know, you need to raise capital, right?
It's going to be, you know, you're not a, you know, multi-million millionaire or, you know, have a significant net worth.
And, you know, you want to raise outside, outside capital.
And you're hearing no, noes all the time, right?
Rejection after rejection.
it's so, it's so, I guess, compelling, right, that when you get your first yes, just to take the money,
but you got to be careful, you know, if it's an investor that does not have, that's not committed,
right, for more than, you know, more than two or three years and doesn't, you know,
sort of fundamentally sort of align with what you're trying to do with your device and offers really
no, no other sort of like domain expertise. It can be, it can be challenging, you know,
not that it's impossible, but, man, it's, you know, think twice. Think twice. Think twice.
probably, you know, if you're, if you're in that scenario and tempted to take money from an investor
that you're not necessarily sure you should. So great, great feedback. The other thing that I
thought you brought up was interesting was this, this concept of this 3% rule, you know,
and I think that's really interesting because you're right. I mean, if you're making
significant inroads and taking market share, like the target on your back just gets bigger and
bigger across the board, right? So not only from competitors that you're taking share from,
but also from regulatory bodies too, right? They're going to, you know, start looking at what you're
doing and claims you're making and how you're going about your commercial process with a lot,
with a lot more granularity, you know? So I think you brought that up and being able to kind of think
through, okay, if we get to this next inflection point and we're starting to, you know,
to drive significant top line revenue, well, that comes with some other, there's some other things
at play too, right? And you got to be prepared.
Hey there, it's Scott. And thanks for listening in so far. The rest of this conversation is only
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