Medsider: Learn from Medtech and Healthtech Founders and CEOs - Thinking Global and Executing Local: Interview with Aether Biomedical CEO Dhruv Agrawal

Episode Date: November 26, 2024

In this episode of Medsider Radio, we sat down with Dhruv Agrawal, CEO of Aether Biomedical. Aether's ZEUS bionic arm is a highly durable, multi-articulating prosthetic designed to handle everyday tasks with improved grip strength and resilience.Dhruv found his true calling in building prosthetics while he was studying medicine and proceeded to co-found Aether when he was 18. Since starting Aether, he has helped raise over $15 million in funding and guided the launch of the ZEUS bionic hand, now deployed worldwide, including those impacted by the war in Ukraine.In this interview, Dhruv discusses the importance of defining a clear problem statement, his approach to using grants to supplement VC funding, and the lessons he’s learned about evaluating market opportunities while operating globally.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+ lifescience 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 VI. 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 Dhruv Agrawal.

Don't jump into entrepreneurship thinking that you are going to do something which you're going to love all the time. When people start the company, they have this feeling that they're going to be 100% of the time doing things that they love. There are many things that I don't like that I still have to do, and that's okay. You just have to accept the fact. And the reason why you do that 80% is because the other 20% is so rewarding that more than covers for that 80%. 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 Drew Vagrawal, CEO of Ather Biomedical. Drew found his true calling in building prosthetics when he was studying medicine and proceeded to co-found Ather when he was 18. Drew holds degrees in electrical engineering and data science, along with the postgraduate diploma and medical device regulatory fairs. Since starting Ather, he has helped raise over $15 million in funding and guided the launch of the Zeus Bionic Hand, now deployed worldwide, including those impacted by the war in Ukraine. Here for the key things that we discussed in this conversation. First, nail down your problem statement early.

Don't try to compete in MedTech by delivering more or less the same offering, but only cheaper. Bring real value to people's lives by addressing their genuine problems, keep listening and learning even after you've launched your initial product. Second, grants can provide critical support without giving up equity, but over-relying on them can turn a startup into a research operation, operation rather than a growth-focused company. To convince VCs, prepare thoroughly and create a comprehensive data room. If you have solid commercial numbers, this can be more effective than even a pitch deck.

Third, carefully evaluate market opportunities and avoid spreading yourself too thin too soon. While starting multi-regionally may be necessary for niche fields like prosthetics, it's important to prioritize markets based on their potential impact and your available resources. Begin by focusing on regions with higher success potential as trying to establish a presence everywhere can dilute efforts and slow growth. A quick note before we jump in, if you're a Medsider listener, I'm guessing you're pretty serious about leveling up your game, right? Well, if that's you, we just made Medsider Premium better than ever with our recent site

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2010. That's over 200 episodes packed with expert insights from proven founders and CEOs. So if you're ready to dive into all of this, check it out at medsider.com forward slash subscribe. All right, let's jump into the episode. All right, Drew, welcome to Medsider Radio. Appreciate you coming on. Ace Cod, really nice to be here. Yeah, we could definitely look forward to the discussion, especially as it relates to a lot of the work that you and your team are doing in Ukraine, which I think is pretty cool. You've got a product that is very applicable to help you. on a lot of folks there, so we'll definitely get into that.

But with that said, I recorded a very short bio outside of this interview. But let's start there. If you can give us an elevator pitch of your background before starting the company, that'd be great. Yeah, definitely. So originally I'm from India, from the central part of India,

from a state called Madhya Pradesh. Grew up in a small town, small from an Indian standard, like 100,000 people, probably not small from European standards. But grew up in Central India. Both my parents are doctors. That is a pediatrician, the gynecologist who was told that I need to become a doctor. So went to mid-school. I actually met my poe founder when we were preparing for medical school examinations because there is such a thing in

India. And we're preparing for these exams in our high school and that's when I met him. We went to medical school. I was supposed to become a doctor but was never really interested in doing that. And for my 18th birthday, what my father, Tindade, calls the worst gift he ever gave to me was he gifted me a 3D printer and journey into prosthetics and apparelian bionics began. So I started tinkering with that 3D printer looking at prosthetic hands as one of the interesting things to print and design and build. And somehow it just went from there. Apart from that, I have a bachelor's in business management,

master's in data science, masters in postgraduate certificate in regulatory affairs, medical regulatory affairs specifically as well, but dropped out of medical school to start this company back when I was like 18 years old. Yeah, back in, I think it looks like on your LinkedIn profile, what, 2016-ish, nearly approaching a decade, right, at it. Definitely.

It started in 2016 as more like a club, a biomedical innovation club in the college. But as a formal company, we incorporated in 2017, and then we moved to Poland in 2018. Okay, got it. So the company's based in Poland. Yes. Got it, got it. Okay, cool. So tell us a little bit more about Zeus, right?

Which I think is the kind of the hero project. Give us a sense for those that are familiar, we'll definitely link to the website and the full write-up on Medsider. But give us a sense for kind of your hero product and what sort of attracted you to this, trying to solve for this issue. Absolutely. So when we look at upper limb prosthetics use, first of all, is an upper limb bionic prosthetic device specifically referred to as a multi-articulating hand. What means, what it means exactly is that every single finger has its own motor. So essentially the hand can do different types of grips like a power grape or a pinch grape or a key grape to hold objects of varying sizes and shapes, bringing prosthetics closer to let's say the human hand. We're still far away, but as close as possible with technology right now. We are not the first bionic hand in the market. There have already been the bionics industry is pretty new. It started about 15 years ago, but again, not has some age already on it. The reason why we decided to build another bionic hand,

there were actually four main things that we noticed in the market. The first is the fact that bionic hands are extremely weak in terms of their grip strength, generally significantly weaker than much simpler mechanical, simple, oak-based devices. So people were never really able to use bionic devices for medium-to-heavy-duty activities. And when you look at the profile of a person who generally gets an imputation, a lot of these people are blue-collar workers, so need to go back to be. being a farmer, we need to go back to doing manual heavy duty activities. So we wanted to build a product that would be able, would be really strong and as strong

as a human hand or as close as possible, because our human hand can exert up to 300 newtons of grip force. The Zeus hand is still at 150 Newton. So it's 50% of what a human hand is capable of. But we are still 30 to 40% higher than majority of the competitors in the market. So that's the first thing. The second thing after that, that we realized was that bionic hands are extremely fragile. They break quite often. So we did our best to make the hand impact resistant. When you bang your hand against a table by mistake or you fall down or we had a guy, our ambassador who was riding on these bold scooters and he slipped down the ice and fell down last winter and the hand should be able to take loads of daily life. That was the second reason.

The third problem, the most important problem in my opinion to solve was that when these devices break, our human hand brakes as well, that's why we have orthopeditions. So when these devices break, as of now, it takes weeks and weeks to get them repaired. Because the device goes from the patient to the clinic, to the distributor, to the manufacturer, all the way back to the patient. It can be six to eight weeks on average. And the patient is living without his hand during that time. And also, bionic hands generally from the data that we have seen, they generally break from

two to three times a year. So eventually, if you do the calculations, four to six months the patient doesn't even has this prosthetic device. And then patients get acclimatized to living a life without a prosthetic device. And that's why the dropout rates in this industry are so high. So what we have built as a product is a product that is 100% locally repairable. Can think of it like it's modular like Legos. So essentially there are only seven components from a clinician's perspective.

Patient comes in with a broken hand. Clinician fixes it under 16 minutes and always sends the patient back with a fixed device. from his end. Those are the bits of the hardware side. And then on the software side, what we saw was that the software platforms in this industry are quite archaic. Healthcare is taking a really step forward towards digitization. But within the prosthetics and orthotic space, there is a lot to be done. So we coupled the hardware device with a digital platform that does end-to-end patient monitoring and kind of supports the patients from the day one of their prosthetic usage journey. Yeah, those are four really compelling improvements.

It sounds like EBITTARG. And for everyone listening at the website, if you want to go learn a little bit more about Zeus, which is the product that Drew just to explain in more detail. It's, am I pronouncing this right, Aether Biomedical? Or is it ether biometical? We'll lead to it in the full write-up, but it's Aether Biomedical, A-E-T-H-E-R-B-E-E-E-E-E-E-E-E-E-M-M-E-M-E-M-E-M-A-M-M-M-A-M-M-M-E-M-M-A-M-M-M-M-M-E-M-M-M-U. With that said, give us the sense for kind of where the company's at right now. Yeah, so we launched the product for the first time in 2021 in the European market, followed up with the launch in 2022.

In the U.S. market, we are operating in more than 15 different countries right now. So U.S., a bunch of markets in Europe, as well as certain markets in India, Middle East, Southeast Asia. We've already fitted, as of now, I think, more than 600. Devices globally, Ukraine has been a very important part for us, at least in the last one and a half year or so. In terms of people, we started as a two people company, me and my co-founder, but right now we have close to 60 people, mostly based out of Poznan in Poland, but then a few folks in the U.S., Germany, India, and a couple of other places. Got it. That's awesome. And I mentioned earlier, we'll touch on kind of your efforts in Ukraine a little bit later in this discussion. But the product is really cool. I'm checking out the website right now, edit before kind of the lead up to this interview. But not only do they look cool, but it sounds like the number of benefits, especially the kind of the mechanical benefits that you called out are really impressive. But I had no idea that it. in this space. Yeah, you know, a patient is good,

but in a lot of cases, it's going to be without their prosthetic for that long of a period of time each year, which is like a major issue. Anyway, that's really cool. It seems like you solved this with this modular kind of, modular sort of device. That's really cool.

With that said, as I mentioned earlier, we'll definitely link to the website on the full write-up in Medsider. But let's spend the next maybe 20 or 30 minutes, going back in time and learning a little bit more about your journey across a number of different initiatives, Drew. And the first question, I guess, is you're a younger entrepreneur, right?

I think you've got some experience now, right? But you started the company at a pretty young age. And I'm sure a lot of other life science or even more specifically, MedTech entrepreneurs, you're part of the Forbes 30 under 30. There's a lot of people that can make it on that list. And so when you think about other younger entrepreneurs,

maybe they're not as young as you want to take a swing at a startup or take that they've got a concept in mind and want to trim that into reality, what do you think are either some of the biggest mistakes that you've seen or you can flip that question around and say, what you think it really takes to really effectively best position your napkin idea, right, for a potential kind of success story? Yeah, definitely.

So I would say that the most important thing to really nail down is an honest response to the problem that you are solving. The reason why I say that, a couple minutes ago, we talked about views, we built ZUs because X, Y, Z were the problems that I wanted to solve. but the first time when I started looking at prosthetics, the problem that I wanted to solve was, oh my God, everything is so expensive, I'm going to build something that will be 20 times cheaper and 20 times better. That was the first 18-year-old naive problem statement that I came up with.

It took me about four years to go from that problem statement to really nailing down what are the real problems in the industry that you are solving. Because a lot of times it's very common to get swayed by, I'm going to make something cheaper. Like our product is affordable, but it's not 20 times cheaper than competitor devices that was the initial thought process that I had. So I think it's really easy to get straight down into,

oh, somebody's doing it for an expensive price point. I'll do the same thing, maybe 80% of that at less amount of money. That's generally never the right problem to solve. At least that's what I can say from a tech standpoint, unless you have done something revolutionary from a technological, standpoint that gets that ball rolling towards a significant decrease in cogs of the product or a completely different technology. But when you have similar technologies, then pricing is not something

that you ever compete in. So it's very important to nail down on the exact problem that you're solving. Apart from that, I would say that it's very important to keep it trading. Again, I gave you a simple story of launch in 21, went to US in 20, etc, etc. It was not that straightforward. The first product that we launched in the market, it actually had none of the four key features that I mentioned to you at the beginning of this podcast. All the four key features that we have now, which makes use a really strong, solid competitive device in the market were actually features that were put onto the product after product launch. So don't look at product launch as something which is like once you've done your job and

now you start to count the money and it's all about sales. But keep your mind open to listening to the customer, re-treating the product. And I think one of the reasons behind where we are today, why we are where we are today is exactly because we have always listened to the customers and made changes in the products. Like, they're already four years now and we're already at the fourth major iteration of the product. It's still used version one, but it's the fourth iteration within that's been launched into the market. Got it, got it. That's really helpful. And I think the two key takeaways that you mentioned is really making sure you nail that sort of that problem statement, if you were, or the problem that you're trying to solve. But I think even your idea of getting comfortable with shipping a good enough product doesn't have to be perfect out of the gate.

And obviously, that's going to depend on the company. And you can't ship an implant implantable that's not pretty close to perfect. But the important point being, ship and then iterate, ship and iterate. It does the iteration that the evolution doesn't stop upon that launch. Especially if you have the flexibility to do in medical device, it depends on the classification and all that stuff. But you have the ability to do that, you should take full advantage of that. And I guess I'm just thinking, even if you're sitting here listening to this and thinking, well, no, I've got to go through a pivotal clinical trial, etc. There's in most cases, there's usually a good enough product.

And we're all familiar with that phrase of the enemy of good is perfect. And that can apply to a lot of different sort of domains, if you will, but it does apply to medical devices as well. It's easy to get caught up and trying to perfect something. And then little do we know, you launch it and learn a lot, right, through that launch. If you focus so much on perfection, you may not even be achieving perfection because you haven't gotten the right type of feedback from your end users.

Launch doesn't always has to mean commercial launch. Launch can mean a lot of things. You can have a product launch. You can show it to customers. You can show it to end users. You already need to start figuring out the reimbursement side of the story. You can't be thinking about reimbursement

after the product is built. You can't be thinking about regulatory after the product is built. There are multiple stages in that development and the earlier you involve the different stakeholders, the better it will be for you in terms of what value you'll be able to deliver. Yeah, that's good stuff.

Let's transition. It's not really transition per se, but I want to kind of circle back around at the point you just made around. Launching, you launched the first version of Zeus without those four, without nailing, really, those four key areas that you miss at the kind of the outside of this interview. And so when you think about the efforts getting through your alpha versions,

maybe in your beta versions, like that iterative process, that, from my perspective, is oftentimes the hardest because you're trying to move quickly and make significant modifications to your, to your concept, your device at that stage of development, but oftentimes with limited resources. Most companies at that stage are not really well-funded, so you've got to optimize, be clever and creative with kind of your approach. When you think about either your specific journey or other companies or entrepreneurs that you've

been around, what do you think are, what's really important, right, to get right, so to speak, during those early phases of development? Yeah, absolutely. So as you rightly said, even when we started the company, it was a very resource-constrained environment. As a startup, you will always, at least from a mentality perspective, you should always function as if you are in a resource-constrained environment. So you maximize the value that you get out of the resources that you have. But specifically at the beginning, the first round that we raised was like an angel round of $35,000. And then we got another $50,000 as a grant from the Polish government.

That's why we moved to Poland. And then the first proper round was around 250K USD. Within that, we managed to build the first good enough prototypes that could be demo fitted on a patient, so to speak, not as a commercial product, but as a, let's say, pre-commercial clinical study or clinical validation study product. And we were able to do that because we were extremely frugal with our resources. We, of course, got some really strong, passionate people in the team, like our VP of Engineering, for example. He's one of the best mechanical engineers that I've ever met and he's the type of guy who, before he, we all do different types of things

when before we go to sleep, some read books, some play video games, some scroll their phone. He watches videos of CNC machines before he goes. That's the type of passion you need into solving problems and building mechanical efficiency into a product. And I find it fascinating that the guy never ever

touched a bionic hand or a prosthetic hand. He never actually looked at a physical biome. on account, these devices are so expensive that we didn't, couldn't afford to buy one. All we could do was look at some prosthetic clinics and go see it for half an hour by pretending to be a customer or something like that, right? This guy had never seen a device and just from watching videos and just from looking at the instruction manuals and stuff, he was able to come up with good enough ideas to build a prototype of what we want to do.

And that's only possible when you have a good group of people around you who might not be the most efficient people, might not be the most structured people. but are just crazy enough to solve the problem and are really passionate about the work that they're doing. And then secondly, I think specifically when you talk about METTech, whether you look in the US, whether you look in Europe, I think people should really be looking at capitalizing on non-dilutive capital. That's an area that I believe we have done a decent job at. Up till now, we have already gotten around, oh God, six and a half million or so

in terms of non-dilutive grants from various. So we were always on the lookout for different kinds of opportunities in the robotic space, med tech space, etc, etc. And that's the only reason why the company is alive today, because there were many points in the life of this company where without that non-deleative bunch, we would have been in a troublesome situation. So you can entirely side to complement because you're an antique tech medical device space. There are enough opportunities in the US and in Europe and globally overall as well to be able to utilize that and capitalize on those.

Got it. Let's touch on that for a little bit, the kind of the non-ended funding. So it sounds like you've, you mentioned this previously that maybe your first source of 9-2-2 funding came from Poland itself. But is there, if he found it to be dramatically different, the process dramatically different, getting grant funding from Europe versus the U.S. or generally speaking, is like the same sort of resources that are required? I have no idea about the grant funding from the U.S. because they are a Polish company. So you have to choose one place. Like you generally only get grant fundings in the, you have no. area in which your mother company is. So basically, most of our grant funding has either come from the Polish governmental sources or European governmental sources. There are, of course, big differences between the Polish grants and the European grants, like the European Union level grants and the Polish grants. And within the Polish grants itself, depending on what type of program you are applying to,

the process can vary significantly. So there's actually very good that you mentioned that because you also don't want to build a company that goes too much into this thesis of, I'm going to keep applying for grants. And you are not really a product company and not a startup, but you're essentially a research group, right? You're going to build that. Go for it.

No problem with that. But find that right balance between using grants as a way to leverage or improve the leverage that you have with your private capital versus becoming a company which uses grants as their primary source of income. Yeah, there's an interview. I did. I actually, he's done a program a couple times, Derek Carrera. He was throughout, he's done a couple.

He's built a couple. couple companies, but both of which have levered done a good job of learning non-doubt funding. And that's something that he mentioned. It's, to your point, Drew, it's certainly balanced, right? More of a lever is, I think you use that analogy, it's more of a lever versus anything. But there's, in a lot of, not in every sort of grant situation, but there's a long, it's a long process, right? So if he could become so heavily dependent upon grants, it's not only are, there's not a high level of confidence when that money's going to come in, but also there could be a pivot along the way, too, where, you know, you apply for a grant with one thing in mind,

maybe even got that grant funding, but you've since kind of, maybe not that I complete 180, but I've pivoted, and now that could become a distraction. So it's always, always some pros and cons there, but it sounds like your team has done a nice job, striking that balance. Is that an internal kind of resource that you've built out, or do you have a preferred agency that you work with for grant writing? It all comes down to people. Like, all of this is done by our head of operations, Martha. She never lets me have any headache from any of this grant related thing. All I know, his money comes into the account that I look at

and she has done a phenomenal job at building and setting up processes to make sure that all of these things, all of the grant management bit happens without any problems. All right. So you've got an engineer that loves to watch CNC videos on YouTube

for fun. You've got Martha and who sounds like she'll just, she pulls triple sevens on the grant slot machine every time, right? You don't have to think about it. No, I'm joking. It sounds like you'd sound like you'd built out a pretty impressive group of people. That's pretty cool. Let's talk a little bit about

your global commercialization, right? Because you're approved, obviously, in Europe, as well as the U.S. And then you've undertaken some significant efforts under, it sounds like some significant humanitarian efforts in Ukraine. Maybe frame up kind of your approach to global commercialization, because it can seem daunting, right, to go global. Like, how have you, what have you learned through that process and maybe work in some of your experiences in supporting patients in Ukraine as well. Hey there, it's Scott, and thanks for listening in so far. The rest of this conversation is only available via our private podcast for MedSider Premium Members. If you're not a premium member yet, you should definitely consider signing up. You'll get full access to the entire library of interviews

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