Why this former spine surgeon built an incubator for healthcare startups in Seattle (GeekWire)
“We recognized that there was this pain point both on the entrepreneurial side, as well as the industry side.“
Dr. Jeffrey Roh started his career as an entrepreneur after creating a method for a less invasive form of spine surgery. He started knocking on the doors of spine companies to sell the idea and got what many first-time entrepreneurs experience: lots of rejections.
Eventually, he landed a buyer that would later take the technology to a number of surgical platforms — but only after discovering a brand new opportunity. We recognized that there was this pain point both on the entrepreneurial side, as well as the industry side.
“We recognized that there was this pain point both on the entrepreneurial side, as well as the industry side,” Roh said. Here was the problem: large healthcare businesses had shifted their appetite away from internal research and development teams in favor of acquiring companies. But life science companies need lots of early-stage support, which is hard to come by.
Roh took a page from the tech industry’s handbook and started an incubator in Seattle called IntuitiveX with the goal of supporting startups during those critical early years.
“In the tech industry, you can actually start up a company with relatively low barriers and low initial investment capital,” Roh said. But for life science companies, early investment in intellectual property is essential to getting up and running. Roh co-founded IntuitiveX with Mark Hahn and Simon Robinson, who both brought extensive intellectual property knowledge.
Since launching in 2016, IntuitiveX has amassed a portfolio of a dozen startups, which includes digital health, medical device and biotech companies. Given Roh’s own background in spinal surgery, it’s no surprise that six of the incubator’s startups are working on efforts related to surgery or spinal conditions.
The format is a hybrid of accelerator programs like TechStars and Y Combinator as well as “startup studios” such as Pioneer Square Labs. The idea for an IntuitiveX startup can come from people within the incubator or from outsiders, which in most cases involves someone with technical knowledge who needs business and financing support. In exchange for equity, the incubator provides both funding and expertise to young companies.
IntuitiveX joins a long list of organizations supporting startups in Seattle, but what sets it apart from tech-focused incubators and accelerators is that IntuitiveX is tailored to the needs of life science companies. The incubator places a high emphasis on securing intellectual property protection early on and commits to supporting startups for a longer period of time.
Seattle was ranked the top emerging life sciences hub in the U.S. in a report from commercial real estate firm CBRE in April. The city won the top spot based on job growth, new science graduates, government funding levels and real estate for life science companies.
InutitiveX decides how much equity to take based on how far along a company is when the investment is made. That timeline is used to gauge the amount of business, legal, clinical and scientific support that the company will need. IntuitiveX uses a crowdfunding model from a network of investors who pool resources through a holding company rather than a traditional investment fund
IntuitiveX’s latest spinout is Transpara Health, a startup that is bringing price transparency to the healthcare marketplace by publicly listing the costs of services from individual providers. The site recently launched with information from around 250 providers. Increasingly, providers are offering direct pricing for services at rates that are lower than what a patient might pay to their insurance for the same service.
“Everything that we buy, period, we can get the cost of it before we purchase it — except for healthcare,” said Transpara CEO Susie Kataoka. “We believe that it is the patient’s right to know how much something is going to cost.”
The startup may benefit from political intervention, as price transparency has become a hot target of the Trump administration. On Monday, the president signed an executive order that would require hospitals to disclose prices.
Transpara is currently limited to the direct cost listed by providers, which means you can’t use the platform to see how much a service would cost if you used your insurance. Many of the initial providers on the platform are those that don’t traditionally accept insurance, such as massage therapists, or “concierge medicine” providers that charge an annual fee to patients in exchange for services.
Roh acknowledges that bringing innovation to healthcare — especially around price transparency — is an uphill battle. But he wanted to launch a life science incubator for the same reason that he became a physician.
“The potential to disrupt and create great solutions for tens of thousands, hundreds of thousands, if not millions of patients is within our reach,” he said. “I truly believe that.”
Seattle-based journalist James Thorne is an NYU business and economics journalism grad who has written for publications including Reuters, CNBC, and Financial Planning. Follow him on Twitter @jamescthorne.