Getting Personal With Avail Medsystems’ Daniel Hawkins Who Has Entrepreneurship In His Blood And Recipes For Businesses And Kitchens

Daniel Hawkins: My father is a primary care physician and right out of medical school, he hung a shingle, and as it turned out, he hung two of them. One of those shingles was on the first floor of the home I grew up in. He developed a practice around family medicine for DPA, or Department of Public Assistance, the precursor to Medicare and Medicaid. As you as you might anticipate, there's an extraordinary volume of patients that would end up going through a clinic of that nature and I used to track the numbers. Over the years, I developed an increasing appreciation of the reach and impact that medicine could have, I found myself attracted to things that were scientific. Hanging your own shingle out of medical school takes some ‘chutzpah’ – there’s some risk there, and I found myself interested in things that were disruptive. So even as a preteen, I found myself doing things in an entrepreneurial way. I'll give you a very brief example. One of the chores that I had with my older brother was to trim holly trees. It’s that classic, pointy leafed Christmas decoration – it’s dark green and has red berries on it. There was a market we used to go to a lot, and I realized that outside the market, they're actually selling those very same holly branches and they were a couple bucks a bunch. And I thought, ‘Wait a minute, I could do Girl Scout Cookie-style, door-to-door sales of the trimmings from the trees that were my chores and lo and behold, it turned into a heck of a little business. I’m making north of $1,000 at age 12. I was hooked!

Hawkins: Avail is in many respects a culmination of 25 prior years of medtech. I left Shockwave in 2017 because of the preceding 25 years. I recognized a structural problem and that was that medtech had to conduct its work from product design through to clinical trials, market release training, and ultimately customer support, a requirement to physically be in the procedure room. But the number of procedure rooms and the complexity of technology was getting so high, that that posed immediate structural problems. Avail has developed a piece of hardware that we own and do not charge for, but place in procedure rooms, and then a pair of software that works only on our system, and our system only works with that software, that therefore, enables that combined software/hardware set-up to develop an ecosystem where somebody outside of a procedure room can get into a procedure room virtually. And in doing so, we're providing a structural release valve for what is the medtech industries’, in my view, leading problem, which is managing growth and product innovation in a world where resources – the key resource is people – is limited. Avail has been launched and built to solve that exact problem.

Hawkins: There was a period during the pandemic where hospitals shut out medtech companies. That's right about when we were ready to launch. That explosion of activity turned into extremely high structural growth for us. When I say structural, we needed to go from a couple of handfuls of employees to nearly 100, and at this point, we're about 125, and in doing so, develop the infrastructure to enable management of customer relationships with 52 medical device companies. We’ve gone from no provider facilities under contract to well over 1,000 under contract with hundreds of our units placed. The pandemic forced awareness and review of technologies and forced the strategic thinking around how to use and leverage remote technologies. I would describe it as a catalyst of acceleration around a problem that has existed structurally for decades.

Hawkins: I built most of my senior executive team on Zoom. I didn't actually meet them live until months later. That's a challenge, to say the least. I'm used to an environment where you are meeting people over an extended period, you have a chance to interact, and you develop that relationship that leads to the foundation of trust that one needs in working together with any senior leader. There was only one category of folks that we had a hard and fast rule that we needed to have some type of in-person [interaction]. We met at airports or in hotel lobbies to conduct an interview with salespeople and field technical support staff and did that from 10 feet away, wearing masks.

Hawkins: The majority of our [engineering team] are Silicon Valley-based. We do have folks that are in South America, we have some that are in India. My philosophy on in-office versus remote is do what’s best to get the job done. I’d say we have quite a bit of remote work, but we also have a lot of in-person collaboration that ends up being necessary because of the layers of our technology and the criticality of them working well together.

Hawkins: I found myself during the pandemic doing an extraordinary amount of cooking. I was actually in an environment pre-pandemic where between where I lived and where Avail was, I’d be in the car nearly three hours a day. And that’s just an extraordinary waste of time at one level, but necessary on another level, because I need to physically be there and interact with my folks, which is ironic, because we’re a telepresence company. For me personally now, I conduct most of my meetings over Zoom. It’s enabled me to balance prioritizations. On the cooking front, I found myself looking at an extraordinary number of online cooking instruction things to create brand new culinary experiences for my two boys who are living in our home throughout the pandemic.

Hawkins: I started to develop a particular recipe for a seared Tri-Tip with a really interesting ginger brown sugar and fresh garlic glaze that was a mash-up of three different recipes that my boys loved.

Hawkins: What I'll be describing is really the evolution of remote to the degree, and very importantly, the fact that remote access into procedure rooms enables medtech to be a more effective and efficient version of itself and can structurally impact business models and the way medtech operates.

Hawkins: It’s challenging. Early-stage medtechs with great ideas and experienced management teams, I think could get funded. Series B, a little bit harder, series C to D it's all about what's your growth look like and what is your time to profitability and that's the range where it starts to get a bit more challenging. In the past decade or so, the series B/C has experienced an extraordinary amount of growth in total deal size coming from hedge funds and crossover funds. We did exactly that at Shockwave and we deployed some of the same strategy here at Avail, bringing in a couple of very large funds that invest in that manner.

But as the rest of the market starts to evolve, and I'll say negatively evolve, meaning the economy and the stock market, those growth-related funds that are really side pocket funds are even part of larger funds within the hedge world or crossover world, without a great ideal market and with a broader medtech market or even a broader stock market that is under pressure, that actually makes those funds harder to come by. My advice is to start as early as you can. Stay selective about the investors you work with. I've always had the opinion that the quality of investor matters more than the valuation.

The valuation I always care about is the last one. It's important to me that everybody along the way makes money, so I'd rather take a slightly more modest near-term valuation for the benefit of having a better investor at the table. That strategy works extraordinarily well for me and for shareholders at Shockwave and that's exactly what we're doing at Avail. So my advice would be to, again, start early, still giving yourself the critical valuation opportunity of your investors and, and keep your eye on the horizon. Play the long game.