Medsider: Learn from Medtech and Healthtech Founders and CEOs - How to Validate Your Idea Rigorously: Interview with Flow Medical CEO Jennifer Fried

Episode Date: February 18, 2025

In this episode of Medsider Radio, we sat down with Jennifer Fried, co-founder and CEO of Flow Medical. Her startup is developing an advanced catheter designed to treat pulmonary embolisms.Jennifer started her career as a healthcare venture capitalist and consultant at Bain & Company. Before co-founding Flow Medical, Jennifer was the CEO and co-founder of ExplORer Surgical, a surgical software platform spun out of research at The University of Chicago. Under her leadership, ExplORer grew from an idea to a global product, earning accolades, like being named one of the Top 50 Healthcare Technology CEOs, and partnerships with major medical device companies. Jennifer successfully exited the business in 2021, when it was acquired by GHX.In this interview, Jennifer shares insights on navigating M&As, raising capital, and tips for validating ideas. She explains why engaging early with potential acquirers is key, how challenging your assumptions can save years of effort, and the importance of tailoring your pitch and building lasting investor relationships.Before we dive into the discussion, I wanted to mention a few things:First, if you’re into learning from medical device and health technology founders and CEOs, and want to know when new interviews are live, head over to Medsider.com and sign up for our free newsletter.Second, if you want to peek behind the curtain of the world's most successful startups, you should consider a Medsider premium membership. You’ll learn the strategies and tactics that founders and CEOs use to build and grow companies like Silk Road Medical, AliveCor, Shockwave Medical, and hundreds more!We recently introduced some fantastic additions exclusively for Medsider premium members, including playbooks, which are curated collections of our top Medsider interviews on key topics like capital fundraising and risk mitigation, and 3 packages that will help you make use of our database of 750+ life science investors more efficiently for your fundraise and help you discover your next medical device or health technology investor!In addition to the entire back catalog of Medsider interviews over the past decade, premium members also get a copy of every volume of Medsider Mentors at no additional cost, including the latest Medsider Mentors Volume VII. If you’re interested, go to medsider.com/subscribe to learn more.Lastly, if you'd rather read than listen, here's a link to the full interview with Jennifer Fried.

But the reality is you then have to go and validate it because oftentimes the problem isn't going to be as big or as universal or as meaningful as it is for you. And it's very hard to attribute yourself from that bias. And I think it is so critical to them say, okay, how do I find a dozen, two dozen, three dozen other subject matter experts and get them to. talking about the problems that they face in the same area and ask the questions in a way that aren't reading, but really just to find out, hey, what are your problems doing this procedure? Welcome to MedSider, where you can learn from the brightest founders and CEOs in medical devices and health technology. Join tens of thousands of ambitious doers as we unpack the insights, tactics, and secrets behind the most successful life science startups in the world.

Now, here's your host, Scott Nelson. Hey, everyone, it's Scott. In this episode of Medsider, I sat down with Jennifer Freed, CEO of Flow Medical. Jennifer started her career as a healthcare venture capitalist and consultant at Bain & Company. Before co-founding Flow, Jennifer was the CEO and co-founder of Explorer Surgical, a surgical software platform spun out of research at the University of Chicago. Under her leadership, Explorer grew from an idea to a global product, earning accolades like being named one of the top 50 healthcare technology CEOs,

as well with partnerships with major medical device companies. Jennifer successfully exited the business in 2021 when it was acquired by GHX. Here for you the key things that we discussed in this conversation. First, for future M&As, engage early, plan intentionally, and nurture relationships. A proactive approach will help you gain an understanding of the market, as well as get to know your potential acquirers and their interests. Having these conversations early, when there's no M&A deal on the table, is much easier, and when there is, you'll know the ropes by then.

Second, be intentional about challenging your assumptions, conduct unbiased customer discovery, and lean on data in patterns rather than personal biases. This upfront effort helps you ensure the problem is real, meaningful, and worth solving. It will also save you from the unnecessary time and resource investment. Third, build meaningful, lasting relationships by personalizing your approach, understanding your audience, and staying persistent. Leverage your network to create warm connections, tailor your pitch to your audience, and use rejection as an opportunity to foster future relationships. Raising capital requires preparation, adaptability, and consistent follow-up to keep potential investors engaged over time. All right, before we dive into this episode, I'm pumped to share that volume 7 of Medsider Mentors is now live. This latest edition highlights key takeaways from recent Medsider interviews with incredible entrepreneurs like Bill Hunter, CEO of Canary Medical,

Brian Lord, CEO of Pristine Surgical, Don Crawford, co-founder of Safion and current CEO of Corvista Health, and other proven MedTech founders and CEOs. Look, we get it, keeping up with every MedSider interview, isn't easy. That's why we created Medsider Mentors. These e-book volumes distill the best practices and insider secrets from top founders and CEOs, all in a downloadable easy-to-digest format. To check the latest volume out, head over to medsiderrady.com forward slash mentors. Premium members get free access to all past and future volumes, plus a treasure trove of other resources. If you're not a premium member yet, you should definitely consider signing up. We recently revamped Medsider

with swanky new features, especially for our premium members. In addition to every volume of Medsider mentors, you'll get full access to our entire interview library dating back to 2010. You'll also get Medsider Playbooks, curated guides, path with actionable insights and topics like fundraising, regulatory challenges, reimbursement strategies, and more. And if you're fundraising, don't miss our exclusive investor database featuring over 750 life science VCs, family offices, and angels. We've even created three custom packages to help you with your next fundraise. Learn more about Medsider mentors and our premium memberships by visiting medsiderradio.com

forward slash mentors. All right, without further ado, let's dive in in the interview. All right, Jennifer, welcome back for a round two on Medsider Radio. Appreciate you coming on. Thanks for having me, Scott. Yeah, looking forward to to maybe lightly touching on the exit, which probably seems like a lifetime ago, right? But maybe more of a close, close on what you're doing now with Slow Medical. But for those that didn't listen to the first Medsider interview and maybe are unfamiliar with your background, give us like a short two to three minutes, elevator-style overview of your journey leading up to co-founding flow. Sure thing. I've spent almost my whole career in early stage med tech at this

lane. I started off enter college for a few years at the company of the consultants. And then I went to go work as a healthcare VC. I was at a staff fund at SIS Woodlands, living in Chicago, but needing to palo out. So no prior conversation about racking up the frequent fire miles this year. Certainly nothing new. for me at this point. And I was investing in later stage, medical devices, as well as health care software. I last the fund in 2016 to build us in building my first company, Explorer Surgical, which is a surgery software platform, Sunnet out of New York City of Chicago,

with my last co-founder, Dr. Alex Langerman, who's a head and neck surgeon. And Billson ran that for five years. It was an amazing ride on the crazy ups and downs of the startup, but we exited that business to D-Jax, which is primarily owned by Werberd Pankets at the end of 2021. So it just over five years full-time building that business. So I've been working out for time for three years. I stayed on for a little less than a year as general, the archer. I fell into the 99% of entrepreneurs who have a very hard time being the GM within a bigger business,

but it was the right fall for Explorer. My plan was to take a few years off. I had my daughter right after I sold Explorer, which is live when they say it feels like a long time. I think about a selling company when I was eight months pregnant, and I'm now looking at the three-year-old that is racing around my office. It was like a really long time. My intention was to take some time off, and I ended up getting back into it sooner than expected that couldn't be happier to do it. I've been with the flow team now. I joined as an advisor about a year

a half ago and joined full time as co-founder and CEO last fall. That's a great review. I can tell you maybe told that story once or twice. For those listening that didn't get a chance, as I mentioned, to listen to Jennifer's first episode here on MedSide, or highly occurs that one. We obviously went deep on her first company,

which she just referenced, explore surgical, but excited to dig into flow. So with that said, give us a sense for kind of your, what you're working on, the pulmonary embolism catheter and really how the, maybe how the idea either came about or what attracted you specifically to join as a divisor first and then to run the company now as the CEO. Yeah, at Flow were developing a next generation pulmonary ambulism thromalysis catheter. So there's been a lot of talk in the video lately about large fourth phrenbexomy

capitals, which is a very important part of the space, but where we haven't seen as much innovation is thrombolysis. My partner is Dr. Paul and Dr. Ahmed are interventionalists. University of Chicago. I am also adjunct faculty there. So this is, you know, ground-wide day all over and building another U of C startup coming out in the hospital. JPE's interventional cardiologist adds as an intermensional radiologist. And for those of you that spent more time in the OR than in the interventional space, these two specialties don't always get along. So nice to be. So they actually work very well together clinically. They run a comprehensive BTE program, at UChicago and had been working together clinically for the last seven years.

At the end of 2020, in 2020, we saw just this huge spike in PEs. It was just this massive increase in pulmonary ambulance and patients. And we talked to the eventualists. They also tell you that those PEs behaved differently in COVID patients. And the two of them were sitting together at the PNARA at University of Chicago Hospital. after getting their COVID shots, so we know the exact date. They were being monitored to make sure they didn't have any reactions to it. They were sitting there looking at each other saying,

hey, we were doing all of these arthritis worth thrombectomy procedures, and that works really well for some of our patients, but we really think Lytics work better for most of them. And I really wish I had a better P.E. thrombolysis catheter. and we have the picture. They literally drew out on a piece of paper. Here's exactly what we would like to have. So here's what we think is missing in this space.

Here's where we think the existing tool is all short. Here's a repeat-to-state opportunity. So the two of them sat together, braced toward its day in December 2020. And unlike most people, they then followed through. And so they spent the next three years working with the Pulski Center, which is the Business School Center for Entrepreneurship.

going through programs at the NIH. They got these on SBIR grants. They actually got funding from a strategic, and they used all of this to build early prototypes. They started collaborating with an engineering firm, figuring out this device was going to be. So when I met them in early 2020, I was so impressed.

They were to take these two positions who were very busy clinically, and they not only had this really great idea, but they figured out how to act on it. even while they were working, how we got it as many hours every week. So they had taken something and really got enough playground. I had gotten the call about flow right after I sold Explorer. One of my former angel investors and current Asian investor in this company, too,

his name is Steve Gould. He is a vascular surgeon by training and had always been a supporter of mine. I had known him since I was just getting Exploristard. So he called me right after I sold Explorer and said, Jen, I have your next one for you. And I remember getting this phone call. And I think I was 38 weeks pregnant. I'm like, Steve, this is not the time to have this conversation. I love you.

You're wonderful. But I need you to go away right now, right? I had just kept this deal done. I'm about to have a kid. This is too much. He said, okay. But then when he called me back a year and a half later, I was now in a position to listen.

I wanted to meet anybody that he thought was good for me to meet with. But my dad had also gotten diagnosed with a rare form of blood cancer that predisposes him to venousarambolism. So naturally, I had male on curiosity about disease, blind to understand more, and definitely I wanted to meet the two of them. So I met them and immediately liked them, was excited about what they were doing. And they're taking this contrarian plate to the market. So you've seen all of this growth of large rhambectomy, which is really exciting. And a lot of companies jumping on that the end wagon and company out with their old hemectomy catheter and improvements upon the status quo, but you really haven't seen a whole lot

in pee from bolysis. So the trade to that to sense in time with Domestic. I wasn't working at the time. So I joined as an advisor and sent six months really turning over every zone in this market. I called Devincentive Interventionalist, international cardiologists, IR, as to what they were doing,

what tools they were using, why they used certain things over others, what they saw as the base problems in the States. I held my friends who were obese-dies. I called my friends who were at the big cardiovascular companies to ask them of these friends that they were seeing in the States. And ultimately, I kept looking for somebody to give me a reason to say no.

Because having gone for this journey, I know how part it is and didn't want to sit myself for this long, painful journey. And I looked up at the end of the six months and just said, wow, I think this is the most compelling opportunity that today I've ever seen in my career. And I would be insane to not do it. So look to my house in and said, all right, here we go. And joined a little over a year ago. And it has been so much fun.

I am thrilled that I made the decision really excited about what we're doing. Yeah, that's a fun story. And one thing, and we may have a chance to double click into it later on in the discussion. But you just mentioned this kind of this rigorous sort of in-depth kind of process that you follow to basically try to get to a point where you're looking for the reason why not to pursue this idea. because startups are so hard. That's always, to me, like, a sign of a really, like, either an entrepreneur that's been there and done that or, like, really, a really good one.

Brian Fahey with Adana Medical mentioned something similar when I had him on the program a couple months ago. He was like, I always, if I'm looking for ideas, like, that's one of the things I try to like. If I'm really bullish on the concept, like I try to look for a reason why not to do it because these things are so hard. They're so capital intensive.

They're so time intensive, et cetera. I love the fact that you brought that up at the outset of this interview here. So give us an idea. Well, you're about a year. year in, right? So you're saying you're as CEO, but the company's been around for what, three, three plus years. So give us a sentence for kind of where flow is at in terms of stage, development, clinical plans ahead, etc. Yeah, we are just out of design freeze right now. We were,

I wasn't, but my two partners were fighting about a handle. And now I think we've figured out the solution to that. We are getting ready to move into DV. We've ordered all of our material goals and we're kicking all of that off and order. vinyl fixtures, which is very exciting. And we hope to be submitting our IDE in late 2025, did you our first in human study. 2024 for us is really a lot of engineering, a lot of R&D. I think we did teen animal studies. I have now seen CPR at a pig more times than I would like to, but all in the sake of really good science. And And hopefully, hopefully, fingers crossed.

Before the end of 2025, we will have enrolled our first human patient. So we're excited to see the products now start to translate into being used on humans. We're honored and excited for what's next. Yeah. And we're reporting this in late 24. So it sounds like this year's been, as you said, a big year of R&D, of preclinical and RD work. and next year, hopefully will be a big year of getting into into patients.

All right, let's look at you as soon as the next 20 or 30 minutes to get into kind of some, some key cross-functional topics or discussions. But for everyone listening, flowmedical.com is the website. So just as it sounds, flowmedical.com is a website. And we could get the dot com. It's pretty expensive, yeah. Maybe at some point down the road, yeah. There's somebody out there who's listening has flowpatical.com.

Let me know what ransom you want me to pay you. So you can get that. You know, we did something similar with Fastwave. We had the dot co early on. And then once we released our series A, we went ahead and pull the trigger on the dot com. On the dot com. But it wasn't that,

it wasn't that expensive, right? Because some of these domains are like insane. But I figure Flow medical, that's a cool name. So oftentimes cool names, the dot coms are like hard to come by. I know. It's added to my sedule list.

That's very long. All right. With that said, let's circle back around to Explores action to GHX. and then maybe compare that to flow getting what sounds like early stage investment from a strategic. When you think, when you get the question from other MedTech founders or CEOs, they're like, I don't know, how should I be engaging with strategic? Should I be in stealth mode?

Don't talk to them at all. Should I talk to them a lot? What is your general advice for, or maybe general approach, whether it's in a form of like investing, getting one on the cap table around or via exit if the timing is there? I think you should be engaging with strategics and potential acquires very early. In my case at Lowe, I did it before I even joined. And I knew that we needed to raise venture money in order to get us to market, right? I don't have enough money to pay for the $20 million or whatever I think it's going to take in order to get us to market myself.

And that is the reality of raising outside money. When investors put money into your business, you need to get the money out of your business. business and you have to be thinking about how you're going to create that exit. And for some companies, the strategy is in remains we're going to IPO and this is going to be a Cefatinealown business. In MedTech, most of the time you're going to be thinking about MNA. And so even if you think that you plan is to IPO, I always encourage entrepreneurs to have this conversation with potential players really. So for me, even before I joined Flea, I called the people

who I thought would be the town choirs of this and said, hey, and it's just a friendly person or a friend of a friend, how does conversation with me, Jennifer? Because when I call you the next time, I'm going to, I think I'm going to be at slow, and it's

going to be a different conversation. So before I join, let me ask you the fever of, tell me what you really think about the PES days. What do you see happening? What do you think this following breath is going to be? What are going to be? the thing is a cousin collection point.

What do you think about the use of catheter directed thrombolysis versus large word from vctomy? I was asking all of those questions and planting those seeds even before I joined the company. And I think that's really important to do. And there is an entrepreneur named Margaret Azari who wrote this book called Exit Right, and I recommend it to all of my MBA students. And he lays out a process. in this thought of conducting an annual review with your board.

So it's not something where it's all of a sudden, oh my gosh, we have this opportunity to sell to think about it. But really, this should be part of your annual planning as a company. And I think it is such a thoughtful way to think about it, is just once a year sit down and say, who do I think my top private or seven inquirers are?

And have I talked to them this year? Do I know what they're doing in this space? Do I know who the right people are? Do they know who I am? have we built a relationship together. And that is more of the approach that I'm taking with this company. And as that, I need to be talking to top three players every single month. But I want to know what the key people are.

I want to make sure that they know who I am. And so if and when the time is right, there is a relationship that's already been built there. And it's also you're not just seeing a point in time, but you can start to form a trend line because you're planting these different seeds and showing that progression over time of Hey, here's Rayne. And now I'm coming back and saying, here's our device. Take a look at it. Isn't it beautiful?

Check out the colors that I got all the fun thing. And next year, I hope to be able to say, here's our first patient. This is what we've done. And then here the outcomes from our first in human. Here's what's happening in our pivotal. So you're building that relationship over time. That's good dots. Because I'm sure you probably know a handful of entrepreneurs.

And art, to be fair, like usually the pretty smart folks too, but they're very big on like staying in stealth note and like telling no one about what they're doing. And it's, I just don't. I'm a little bit biased and maybe to my fault in the exact opposite direction, right? I'm like, I'm a very public entrepreneur. But yeah, all of the, all of the insights that you just listed in your answer, like totally leaning in. I think that's the way to run a startup in today's sort of environment. Let's transition to take this concept of ideas because you touched on it earlier when you're describing the journey of flow and how the two, the two physicians that you're copassion.

co-ended the company with literally had a sketched out the idea on napkin. But what's different is they actually acted on it. Right. And that most people don't. Right. Most people don't. It's so hard. Yeah, totally. And obviously, you're an entrepreneur yourself. You invest as well. And previously we're at a VC firm. And so when you think about going from idea to actually like, like making something happen, what are a few things that you look for? You, you outland what the process you followed when you got more serious about possibly joining flow. full time. But maybe frame that up was like where you see most entrepreneurs go wrong when they're when they're sketching on napkin ideas and either deciding to chase something or deciding not to.

Yeah, I think very few people do true customer discovery to the rigor that I think somebody should when you're betting your most important asset, which is your own time on this particular idea. and I see this a lot with physicians, but I see it with non-physician founders too. Especially as a physician, when you're said to Sunday matter expert, and you treat so many of these patients, it's easy to say,

I have this problem, therefore everybody must have this problem, right? So I don't like the way of this device works, or I think we need to have this, whatever your idea is. But the reality is, you then have to go and validate it because oftentimes the problem isn't going to be as big or as universal or as meaningful as it is for you. And it's very hard of attribute yourself from that bias. And I think it is so critical to them say, okay, how do I find a dozen, two dozen, three dozen other subject matter experts and get them talking.

about the problems that they face in the same area and ask the questions in a way that aren't reading, but really just to find out, hey, what are your problems doing this procedure? And so for me, it wasn't calling doctors and saying, let me tell you about this idea. And I did at the end because they all said, oh, damn, what are you doing now? The hell is what you're working on. But I started all of them by saying, how many PE cases do you see a year? and how many of those are eligible for intervention and how many of those do you decide to intervene on?

And tell me about that decision, right? So I'm not talking the device solution to all. I'm just saying, how do you choose to do a procedure or not? And then what devices are you choosing to use? And what are the biggest challenges that you think there are in the P.E. Lampi with care broadly, right? What are your big issues? And now you really get people talking.

And then only after talking to dozens of people, can you then say, oh, here are the patterns and everybody's saying X, Y, Z, right? And it's hard work to do. It takes, it's time intensive. It requires making the abs of people that may or may not be in your network. So you got to call people and say, hey, you got that, you have that cousin that's married to an I.R. Right. Do you think she would talk to me on her drive home for 10 minutes and back to some random person? So you have to do the work. And you have to have the same set of questions that you're asking in the same order every lay and make sure that they're not leading. And I think a lot of people skip past that step and go into let me engineer products and let me build its product.

And they find out, oh, it's engineering this product and nobody wants it or nobody thinks that this is a problem the way that I do. And you can save yourself a lot of time and headaches by just doing that work from the get-go. Yeah, I just want to really emphasize that because it can be hard. I mean, it's easy to fall in love with an idea for all of us. Yeah, but the reality of doing a startup in MedTech is like these businesses are so capital intensive, right? You're going to have to raise in almost every scenario, tens of millions, maybe hundreds, depending on what you're working on. But you call this out earlier is the most important maybe asset even beyond money is time, right? Because these things are like five to 10 year journeys.

You're not overnight flips. It's not an equal to 24 months and you're done. Yeah. Even with Explorer, I mean, that seemed relatively fast, but it was five years, right? And that's pretty, that is pretty fast. I mean, in comparison to the most, but a five-year exit is fast. If you're listening to this, you've got an idea. Don't put away, but make the big takeaway here is make sure you do that rigorous upfront work in order to, in order to feel really bullish before Hergo Allen.

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