Stacy Enxing Seng
Stacy currently serves as a Venture Partner with Lightstone Ventures as well as an Independent Director for both public and venture-backed private companies.
Tom Salemi: Hey, everybody, Tom Salemi here. Welcome back to the Medtech Talk Podcast. We’re once again sitting down with one of our co-chairs. This time it’s Stacy Enxing Seng, who is no stranger to anyone in medtech. She’s one of the nicest people you’ll meet, and highly successful in what she’s done. She worked with Dale Spencer to get SCIMED off the ground and eventually acquired by Boston Scientific. Went back at it again to create ev3, and sold that to Covidien, where she eventually would stay at and lead its vascular business. She actually spent a bit of time with Boston as well. So Stacy brings a great perspective to the Medtech Conference, both from the startup level and from the corporate development level, having sat in corporate chairs for a long enough time to get a feeling of the real pressure on larger companies to acquire smaller ones to fuel their growth. So Stacy shares a bit of that dynamic. She’s also now a venture partner at Lightstone Ventures, so she not only has the startup perspective as having started two companies, but now she’s got the VC perspective. So Stacy has sat in I guess at least three different chairs in medtech at the medtech table, and we’re very happy to have those perspectives as part of our planning process. We had a conference call this morning with the co-chairs. I’m very pleased to report that Stacy had a key in securing one very important speaker that we look forward to announcing in the very near future. So do stay tuned. And I also just always enjoy talking with Stacy. So I hope you’ll enjoy this conversation with Stacy at Fox Rothschild’s office in Minneapolis.
TS: Hi, this is Tom Salemi from Healthegy. We’re here on location in Minneapolis, and I’m thankful to be joined by Stacy Enxing Seng, who is a co-chair of our Medtech Conference. Stacy, thank you so much for taking this on.
Stacy Enxing Seng: I’m happy to do it.
TS: You’ve always been such a supportive advisory board member, so I can’t wait to see what you do now that you’ve got the reins in your hand with Kevin Hykes.
SS: Yes, well, Kevin and I are very excited about the meeting, and we think it will be very engaging and very important for our medtech community.
TS: Great. We’re happy to be here. We always try to get a CEO and a VC to sort of lead this so we get those two perspectives. You were very kind to take a job as a VC with Lightstone, so it worked out perfectly for us. Can you tell us a bit what you’re doing with Lightstone, and where you’ll be operating, and what kind of companies you’ll be looking at?
SS: Yeah, sure. So I joined Lightstone in 2016. And first and foremost, it likely was because I had worked with that team when we created Fire1, which was and is still a pretty innovative model of corporate and VC partnership to create innovation. And when I was working with that group, the thought passed my mind that I like these guys. I like what the stand for, I like their investment model. I like who they are as people, and the long term commitment they have made and are continuing to make to medtech. So when the opportunity came along to join them as a venture partner, it fit very well with my interest in continuing to invest in innovation and doing that with people that I respect and feel like not only I can grow, but hopefully can contribute to that mission. And that’s what we’re doing. So the fund is focused on biotech/medtech. You know, there’s been a lot of funds that have gotten out of medtech. We are not one of them.
TS: Thank you.
SS: We feel very strong and passionate about the opportunities that remain, and that remain both undiscovered as well as are currently out there, and the importance of the need for the entire community: the strategics requiring innovation. We think we help partner with that by investing in entrepreneurs and companies that are attacking that possibility. So all of that really met with my own personal agenda, and then to do that with a group that I respect so much. We really have a great team, names that most people in medtech know with Hank Plain and Mike Carusi, Jason Lettman. And we have a lot of fun with The Foundry team, Hanson Gifford and Mark Deem. So it’s just a terrific group, and I feel very honored to work with them.
TS: This seems like a natural progression for your career, and maybe this is a nice opportunity for you to tell a bit about your story. But you were in a startup acquired by a big company, worked within the big company. VC would be the next, I guess, box to check. Tell us a little bit about what you’ve done in medtech in the past.
SS: Well, I’ve been very fortunate. I’ve worked in healthcare medtech since 1986. And it is really a big that bit me long ago for a couple of different reasons. First and foremost, I think the entire healthcare community has attracted such amazing people. You know, people that are high ethics, they’re hard working, they want to make the world a better place, and to do that through healthcare technology is a pretty awesome responsibility, and a great opportunity. And then you extend that over to the physician or hospital community. I spent my first years as a sales rep with American Hospital Supply, and just being in the hospital, seeing how hard the nurses and the doctors and the staff within the hospital were working, it just seemed like it was going to be a great community for me. I really think I cut my teeth when I joined SCIMED. And that was back in 1993. Dale Spenser, who we recently lost, just an amazing contribution he has made to our community. But I was able to join a very small entrepreneurial environment at that time that was very focused on not only growing the community of technology, partnering with physicians, doing the clinical work to demonstrate that the interventional approach was the preferred and better approach than open surgical. And so to work in that kind of an environment where there was such a strong R&D community, an amazing sales machine that was really committed to partnering with the physicians, and then working with the kind of management team that I did, with Dale Spenser, Mike Berman, Paul Buchman, Dan Cole, Dan Sullivan. Many names that have gone on to do incredible things across healthcare.
TS: That’s a great team.
SS: So we obviously were acquired by Boston Scientific. Again, another amazing experience. Boston Scientific brought incredible resource into SCIMED and when you look at the Boston Scientific interventional cardiology business today, it remains a giant and a leader in the industry. When Dale had the idea to start ev3, the thing that most impressed me was that entrepreneurial spirit of there is just tremendous potential to innovate in peripheral and neurovascular, in combination with cardiovascular.
TS: Had you stayed at Boston for a time before joining ev3?
SS: I had, yeah. For five years, I guess, post the acquisition. So one hand it was very difficult to leave Boston Scientific because again, such an incredible group of individuals, many of whom are still there – I mean that speaks to how committed people are. But when Dale talked about the fact that there was an unmet need in peripheral and neurovascular, I could actually see that because I was the VP of Cardiovascular marketing and this was during the time of the big stent wars and the emergence of drug eluting stents. And it was true that was the elephant that needed to be fed. So it was almost impossible to innovate in other areas outside of stenting. And when Dale asks for you to join him, boy, there’s just almost no one’s that’s going to say no, me included. And it was one of the best decisions, if not the best decision that I ever made was to jump in and be the first employee at ev3. And on some level, the rest is history. But that was in 2000, so quite a long time ago now.
TS: And you’d go on to be acquired again, or ev3 was acquired by Covidien. And you, once again, you weren’t looking for the next startup opportunity necessarily. You led the vascular group at Covidien, and you were in whole hog. What was it like being in the corporate environment, both at Boston and with Covidien? Because we hear one of the dynamics really driving medtech is that the big companies need growth, and we need to create the innovative products to feed that growth. Is that a real pressure within the walls of the bit companies? And how does that present itself to someone who’s leading a vascular group?
SS: Well, we were in a unique situation on some level in that Rich Milea, Joe Almeida, Amy Wendell, Chuck Dockendorff, they had an incredible business in Covidien that they had spun out of Tyco. And that leadership team was committed to innovation. And I think very quickly they saw that the vascular space broadly has had a rich history of continuous innovation. And in fact, I think it still requires that. So they saw ev3 as really, I think, a perfect entrée because we were in leading in the peripheral and neurovascular space, both spaces in which you could compete, at that time certainly, without being a cardiovascular player. And there was just tremendous opportunity for growth. There was a strong growth profile already present in ev3, just an incredibly talented team. And we were a very profitable business. And so for us to be acquired by Covidien, it was really a perfect marriage. There was almost no synergy. It was really about growth. And what was so exciting for us in leading the business was that we had a big menu of items that we wanted to attack. And as $500 million revenue company there’s only so many bullets you have in the chamber when it comes to acquisition and investment in your company. So what Covidien did for us was really provided an incredible entrée to be a force multiplier to the growth that we were already experiencing. So it was an exciting pressure. I mean of course anybody that runs a P&L, whether you’re trying to produce your first 1 million or you’re delivering on a billion, you have an accountability and a pressure to deliver that number. And that number constantly goes up. There’s almost no time when that goes down unless there’s something seismic in the space that you’re in. But it was an enjoyable pressure, I would say, at Covidien, because we had an incredibly aligned senior leadership team. Ev3 was acquired for a purpose and the management team then did not start messing with that purpose and tweaking. Instead, they fed it. And they really allowed us as a group to continue to accelerate in the PV and MV business. In fact, one of the things that I think speaks to that is in our first 24 months, I can’t even think of an individual that left the company, because everyone was so motivated from the engineers to the clin reg, quality organization, the sales team. So it was actually, I would say, a lot of fun to have a business that you know was so productive and special in ev3, to then be supported by accelerating our growth through acquisition from the Covidien team. I think we made 5 acquisitions in a period of about 36 months. And the only one of those that really didn’t pan out was the Maya acquisition in renal denervation. But even in that, I think that speaks to a calculated risk that was important for us to take, and we were supported by the Covidien team in both acquiring Maya as well as quickly unwinding it when we felt that it just wasn’t going to produce for us.
TS: Hey, everybody, Tom here. Quick interruption to remind you to go to Medtechconference.com to register to attend the Medtech Conference. It’s happening on June first at the Loews Minneapolis Hotel. Kevin Hykes, Stacy Enxing Seng and our advisory board are putting in a great amount of work to create a fantastic program. So I hope you’ll join us on June first in Minneapolis. Go to Medtechconference.com, the easiest URL you’ll ever be asked to remember. And please do register so we’ll see you in Minneapolis. Now back to this conversation.
TS: That was – the renal denervation story really unwound quickly, although Medtronic obviously stuck with it. There were a few that had made purchases that were quick to say, OK, what’s next, and moved on to something next.
SS: And I think it’s important, by the way, that we stick with renal denervation. I continue to personally be supportive of it definitely, and especially because when you have history in healthcare or in anything you do, you see how long it takes to build something special. These things don’t happen overnight. You know, the adage of the overnight success story; it really is 10, 20 years in the making. And I think there’s not a single cardiovascular or medical technology that when you really peel back the onion, you don’t find that it’s 15, 20 years in the making. So I’m glad Medtronic is really sticking with it, and I think that they’ll solve that.
TS: How personal does that get as a member of a startup? We see clinical trial results and this number of patients did this. But folks involved with a company, maybe not yourself, actually see the patients who are benefitting, and they kind of know the stories. And you see a technology that’s helped somebody, and then it hits a speed bump like renal denervation does. Is it frustrating because you know the people who had benefit from this technology, and you know it works to a certain degree. Does it get to that level for you as a startup executive that you really do believe in the personal and patient side of the story?
SS: Oh, absolutely. I mean one experience we had that was very difficult inside of the ev3 in the early years was our investment in atrial fibrillation with the Plato device, which was a left atrial occlusion technology. And to speak to, which we did, those patients in our clinical work that were unable to take Coumadin, and very fearful of a potential stroke, the peace of mind and the confidence that it gave them to know that they had an appendage occlusion device that was going to prevent emboli from their left atrial appendage, this was real. And you know, you can look at it as a large market, but at the end of the day, all you have to do is talk to an individual that’s experiencing that, and see that kind of freedom and improvement in both healthcare as well as quality of life. It sticks with you. So for us to make the decision to get out of the Plato device and atrial fibrillation, it was a really difficult and it was a big one. But we realized as ev3 we were not going to move that needle. We had a company that we had to run, we had to grow, we needed technologies that were going to produce results today. And I think in many instances, that’s why you need the large strategics as well as the countless number of entrepreneurs that, again, they sign up to deliver on something, and really when you look at it, they’re working on these things for ten, 20 years. And they ultimately get delivered. And so it is a very personal decision. And it’s, I think, part of going back to my first comment, it’s the attraction to healthcare and the reason, in my opinion, that across the healthcare community there’s just such great people because it’s not just a business. It’s an element of a calling to make people’s lives better.
TS: Sure. Those are really the stories I think we need to do a better job of telling within medtech.
TS: Especially these days. So back at Covidien when you were looking at opportunities to grow, as the head of the vascular group, did you have in your mind, well, that’s an interesting technology, or gee, I’d like to check that company out? Or did you work closely with the Covidien Ventures Group and kind of trust that they would ferret out the most promising technologies? What was that process for looking for the next big thing like?
SS: Al of the above. So at ev3 I think we really did a nice job of consistently having in the bullpen our targets that we were interested in. The limitation was that we were very serial in our acquisitions. We could typically only really do kind of one a year, one at a time. Both because of just the capital resource as well as the human capital necessary to integrate these acquisitions. At Covidien we had the financial capital to do more. We also had an incredible group in Dan Sheehan and the Ventures group. And I think Covidien ran an amazingly sophisticated in terms of its financial discipline and rigor as well as partnership and collaboration with the Venture group and the business units. And I think that’s an important component personally, whether it is the VC’s independent working with the corporate strategic groups, or the corporate’s venture capital arms working in concert with their business units. So it was very collaborative, you know, the venture team with Dan and Dave Neustaedter would come forward with a lot of their ideas, but they would beat it up with the business units, and we would do the same. And one of the things that I think is critically important is that I can’t think of, at least in the venture investments in vascular, an investment that was made that wasn’t 100% aligned with me through to the business unit, up and down. And I think that’s important because my impression, not necessarily first hand knowledge, but my impression is that there are a number of corporate strategic development venture groups that aren’t necessarily as in partnership with their business unit partners. And I just think that’s a missed opportunity because it’s not just about the money when it comes to making things happen. It’s really very much about the people and the commitment and the alignment and the kind of unwavering discipline, if you will, to see it succeed. And at the end of the day, yes money is important, but that’s more about the human component than it is, in my opinion, than the money.
TS: How important is the acquisition appetite to medtech startups? How important is it that the big companies continue to be as hungry as they were? And what is your sense of that appetite? Are the big companies truly looking to grow through acquisition as much as perhaps they were before?
SS: My impression is that definitely they are, and I actually think it’s just a fundamental fact that they need to. So it’s not really a do I like it or not like it; I think it’s more of a fact of growth that as a larger organization, when you need to keep the lights on with a portion of your investment, and you need to fight the market share battles in the spaces that you’re in, you only have so much have so much time and attention to be able to actually go and invest in internally the white spaces or adjacent markets. Those tend to come from the outside entrepreneurs and innovators. So I think it’s a fact that growth has to be accomplished through acquisition. And I think that the change has been more of a healthcare landscape change on reimbursement or value based healthcare. That has been, in effect, the large disrupter, in my opinion, over the course of the last call it five years that has, some would say, taken the wind out of the sails when it comes to medtech innovation or medtech growth. And to me, it has been a reset on what you’re going to sign up to acquire, and a better mousetrap is not one of them. So it really does need to be a disruptive or close to first mover new technology in a new market, either that’s adjacent to what the acquirer is in, or a new white space that is going to get funded by the acquirers. And I just think they’re not, you know, acquisition-a-go-go because there is another layer of discipline that now needs to come into that acquisition.
TS: And is your experience at Covidien and Boston Scientific, how does that inform your process as a venture capitalist? Do you look at things with that – through the prism or through the eyes of someone who’s led that vascular group and you know, well, this is what I would like to see if I were to buy this company?
SS: Yeah. I definitely think, and it’s not a surprise to anyone, that let’s say reimbursement is a big, new card that needs to be played in order for a technology to be adopted by the market. So the discussions around and the vetting around will this really get paid for, how will get it paid for, not just in a Medicare type environment, but now actually healthcare systems around the world or healthcare systems like Kaisers, as an example, in the US. Those are, to me, very new discussions over the course of the last few years that typically were – it’s not as if they were unimportant; it’s just they didn’t move the needle in the same way that they do now in terms of whether or not a technology will be adopted. So that’s certainly a factor, I think, in our investment thesis that is at the front of the analysis versus perhaps in the second stage.
TS: And just final question: how important are conferences like the Medtech Conference? We’re grateful you agreed to be a leader of this conference. Why is it important for you to do that? Why are these conferences important?
SS: I think the conferences are important for a couple of different reasons. I mean one, it’s called a healthcare medtech community for the reason that we are a community. And I think it’s important that there are opportunities for us to come together. And then it depends on what your own personal lens is that you’re trying to look through. I mean some folks are coming because they want to get on top of mind what is going through the mind of the strategics, what are other CEO’s working through in terms of the reimbursement or regulatory landscape, what is the financing environment like. And I think there’s just a tremendous amount to glean from the insight of others that are going through real-time experiences. The networking is obviously very important. And I think that the ability for us to, as a group, commit to continuing to grow our medtech ecosystem or community, you know, it can’t happen unless there are those human relationships. And that is certainly a big part of what we’re able to provide, as well as some of the other very good conferences.
TS: Well, we appreciate your leadership, both in medtech and in the Medtech Conference. And thanks for joining us today.
SS: Thank you. It’s been a pleasure.
TS: And that is a wrap. Stacy Enxing Seng, thank you for joining us on the Medtech Talk Podcast. It’s always a pleasure to talk to you, including on our planning meetings for the Medtech Conference. We really do appreciate the time you’re putting in to make sure this is an even more special event than it’s been in past years. Thank you to our listeners for joining us on the Podcast. Great having you here. If you could do me a favor, give a ranking of the Podcast on iTunes, whatever platform you’re listening to. Also offer a comment if you’d like, and please tell a friend if you’re a fan of medtech innovation and you know someone else, tell her or him about the Medtech Talk Podcast. We’d love to have more people enjoy this opportunity that I have to kind of continue to interview critical people in medtech and to share those interviews directly with you. I’ve been writing for many, many years. Podcasts really present another way to tell the medtech story. So I’m enjoying it; I hope you are, too, and if you are, make sure you spread the joy. Please also consider going to the Medtechconference.com website. Take a look at interviews with Kevin and with Stacy, which you’ll see in video form. You can also find that video of Stacy this week on the Medtech Talk Newsletter. If you’re not getting that, go to Medtechconference.com, just give us your email, and we’ll make sure that original videos and podcasts are sent directly to you to your inbox so you won’t miss one. So we do hope we see you at the Medtech Conference on June first in Minneapolis. Again, go to Medtechconference.com to register. And if you have any comments about the Conference or about the Podcast, feel free to email me. My email is email@example.com. That’s the word health followed by the letters EGY.com. You’ll find me. Healthegy is the producer of the Medtech Conference and the Medtech Talk Podcast. So we’d love to hear from you about other folks I should talk to on the Podcast or ideas and stories we should share on the Podcast and at the Conference. So that’s again. Once again, go to Medtechconference.com to register for the June first conference, and we will see you in Minneapolis.