20th October 2014: Startup of the week: KiNEMAtix
For this 'Startup of the week' post, I caught up with Paulo Ferreira dos Santos , Founder & CEO of Portugese startup, Kinematix.
[Disclosure: I have no commercial ties with Kinematix]
1. What is Kinematix?
Kinematix develops and markets intelligent devices that gather data during daily activities from movement and posture and transforms it into meaningful knowledge that until now people weren't able to access..
Our technologies are specially targeted for the medical and sports industries, solving complex problems efficiently that are the consequence of injuries or disorders like diabetes, osteoarthritis, stroke, musculoskeletal dysfunctions, etc.
2. Could you explain the essence of Kinematix, i.e it's core values?
We believe that the information extracted from the movement of each body part tells a different story and is an unexplored source of vital information about a person's physical, or even psychological condition that is often more efficient than alternatives to be used to improve quality of life.
Kinematix wants to be the best in the world in exploring that amazing source of knowledge and use it to improve people lives, directly through providing devices that can help them deal with their problems, or incorporating our technologies in products of our partners, making the products more useful and inclusive. Note that I use inclusive because some diseases and physical problems provokes negative social distinction and we want to contribute to help the people affected to improve faster and better, regaining their independence when possible, or at least increasing their wellbeing.
We are not interested in developing generic activity trackers, but very targeted devices that can really make the difference to improve someone's condition, as, for example, the treatment protocol for a stroke survivor is very different of the one of a diabetic patient, or even of an athlete recovering from a knee injury. People are increasingly focused not simply on living longer, but on living well, taking an active role in their treatments and self-management. Kinematix technologies support this vital transformation of the patient-caregiver relationship into a collaborative partnership and better outcomes.
3. What's the business model you're operating under?
We have been operating a B2B model. Our initial products have as targets, clinicians, nurses, caregivers and healthcare is a market so protected and full of barriers for new competitors that startups can’t aim use other model. At least the ones that like us develop and market physical products.
Initially we tried to deal with distributors, but found it very hard, as the ones that could bring our devices to the market, normally deal with very different products that are not electronic or use software. So their sales force resist in putting efforts in products that can generate results in longer term when compared with their traditional portfolio. For example orthotics and prosthetics distributors are normally not prepared to sell to their customers, clinics and clinicians, more complex products.
So since more or less two years we are developing and exploring relationships with big industry players who have strong market channels, that in someway we can complement and help to get a better position against their competitors. This strategy is often slow, as those players are often complex and their decisions involve normally a lot of people, but are arriving at a very interesting point with some great companies, as they see our technologies as really game changers and want to explore them together with us.
In parallel we keep working hard to arrive at a price level that allows us to sell consumer products, as we believe that self-management of each one condition will be the really thing that will disrupt the inefficient way that healthcare markets are organized. We expect to launch our first consumer device in 2015. We can do it because we develop in-house the hardware, firmware and software, which is hard and risky, but gives us a higher control of the outcome and we believe that will put us in stronger position against competitors that have opted for easier ways.
4. Is there anyone else doing the same as you?
Kinematix products do not have for now head-to-head competition, as none of the comparable products or product families in the market combine so sophisticated a sensing capability with the portability, affordability, capacity and simplicity that we provide.
Nowadays seems that there are a lot of companies on this arena, but is more a perception than a reality and it is due to the huge number of ideas and projects that are being promoted due to the crowdfunding phenomenon. However, most of them cannot be implemented with the actual state-of-art or some would be possible but not at the expected price level. It is much easier explain an excellent idea through a video or a Powerpoint than execute it. What often surprises the people and organizations we meet is that they are expecting that we would present them an idea in slides or even a prototype, but we demo them real products that really work and that we know how to produce.
We are keen on the implementation, as we are in the idea development. Both are important, but the first needs more resources, higher capability, and a very strong and eclectic team.
We often say that our big advantage is that we are really innovative, and that our big disadvantage is that we are very innovative, as being in the front of the others implies a lot of explanations and market education. However, we believe that we are in the right path.
5. Was there one moment which compelled you to begin the journey of working on Kinematix?
I started the company at the end of my Masters in Technological Innovation and Entrepreneurship, at the University of Porto, in Portugal. When I got in the Masters program I was already with the goal of looking for new technologies with high global commercial potential, as I was intending to build an international company after the previous 4 targeted for the domestic market. It was not necessary to be a genius to predict that a strong crisis was eminent and I believe that developing products with market in several countries would at least in theory increase the potential of success.
In the other hand, I was arriving to my 40’s and wanted to test my capabilities and limits as an entrepreneur before was it too late and this can only be done through the open competition with the best companies and in the most developed markets.
Finally, when the idea of the first product, WALKiNSENSE - a portable gait analysis and plantar pressure electronic device, was being matured, all people were saying to me was that it would be impossible to succeed in developing also hardware starting from Portugal, a small market in itself… but when I looked to the track record of the ones that said that to me, I found that they have never tried themselves, so I questioned myself: why not? Yes, we don’t have a big market, but we have amazing engineers and developers with skills, determination, ambition and energy much above the average and the access to these essential human resources were the trigger to convince me to start this exciting journey. I don’t regret it.
6. What have reactions to Kinematix been? Do different people perceive it differently?
Only fools can expect an easy life when trying to implement new ideas or approaches to problems: humans are by nature conservative. So, we have been always prepared for all reactions and we don’t complain when people are more negative or pessimistic, but also those reactions don’t deviate us from the way that we have chosen.
I think we have received all kinds of reactions from a very broad spectrum: from the ones that admire us for the courage of following unexplored paths, until the ones that look to us as crazy people that are completely wrong. We don’t feel so special like the first ones believe, but we feel even less crazy, as Kinematix is full of very rational people that know very well what are doing. We believe that we are right and that it is our responsibility to explaining ourselves better to convince those who remain skeptical.
However the reactions to the company have been much more positive, as demonstrated by strong bet of our main investor, Portugal Ventures, but also the strong partnerships established with reputed companies and organizations in so diverse countries like UK, Luxembourg, Belgium, Netherlands, Germany, Italy and USA.
7. Given that Silicon Valley is the world's innovation hub, it's inspiring to see a startup from Portugal pushing boundaries. Do you see more ground breaking innovations in Digital Health coming from outside Silicon Valley?
Sillicon Valley has an incomparable mix that gives advantages to the startups from there: Stanford, an university with an unique attitude and perseverance to generate new companies, it attracts talent from everywhere, there are investors from all kind, all sizes and for all sectors, it provides immediate access to the biggest world market (US), the relationships are developed close and in the same native language, what is much more economically efficient in early stages than doing it internationally.
However, nowadays someone with a good brain, one computer and an access to the internet can do amazing things and compete globally, and also with those folks in Silicon Valley.
Coming from outside US is harder because the access to the necessary money is harder, the regulatory difference between European Union countries is much bigger than between US states, and coming from Portugal implies becoming international immediately that is also immediately more expensive (note: US startups normally become international much later, as the big domestic market support them initially). In the other hand, overtaking these difficulties makes us stronger, brings us special knowledge and transforms us in tougher competitors.
In Kinematix, we don’t spend our energy in measuring the size of the difficulties, or complaining about the inequality of opportunities, but in looking for ways of overtaking them. For example, we found that the presence in the US market is an advantage to have access to all the key ingredients: financial resources, nationwide strategic players, big distribution networks, and sales volume (even more important to a company that develops hardware), so we opened a subsidiary there.
Yes, I see amazing products and services coming from everywhere, but it will take time to overtake the overall advantages of starting in Sillicon Valley. However, I am bullish regarding China and some other Asian countries like South Korea and Japan. They have heavily invested in knowledge generation and are now investing hard in engineering to explore it. The US is trying to recover from past disinvestment in engineering and exaggerated bet in outsourcing. It's going to be a good race to follow.
8. What are the weaknesses of Kinematix and what are you doing to address them?
Kinematix is one of the few Portuguese and probably European startups that develops hardware, which is very sensitive to scale economies. Without a large domestic market that quickly allows an interesting volume of production, it was necessary to look for international markets early, which is positive but creates additional difficulties, particularly when you have few resources. However we believe that the most critical phase has passed and that the audacity to develop hardware, software and apps, was essential to develop better and unique solutions. Simultaneously it brought us a very positive international reputation, essential to develop key partnerships.
We need to hire more engineers and industrial designers to develop faster. This implies more investment. In Portugal, mainly under the actual economic situation, it is difficult to go further than what we have achieved until now, so we are now trying to attract investors outside our country, mainly from strategic partners that brings also sales channels or relationships.
9. Two years from now, in 2016, what would success for Kinematix look like? What are the barriers to success?
The biggest barrier in healthcare is reimbursement, a clear incentive for the technologies in the market actually, the good and the bad ones, and a strong disincentive to the ones that are trying to get in, even if proven being better, as it is necessary a long time to achieve the right to be reimbursed.
However, we see that some factors like aging, people living longer with chronic diseases, the impossibility of increasing taxes and maintaining quantitative easing forever to keep sustaining outdated healthcare systems as strong incentives to change the game rules to allow more efficient and affordable systems. The main question is when this will be in place.
To overtake those barriers and control our future, until we can compete under more fair rules (what we cannot control), we expect that until 2016 we have established at least one strong strategic partnership in the US and that we would be exploring 2 products to be sold directly to consumers, one launch per year, to help them self-manage their conditions efficiently and economically. The expected areas are stroke and pain management.
10. If people feel inspired by your journey, and want to do something with technology to improve Global Health, what would your words of wisdom be?
The organization of healthcare markets is obsolete and what they deliver is more and more removed from the actual needs. This organization is in deep need of disruption that can be achieved through the intervention in multiple factors, but mainly with a higher engagement between caregivers (physicians, nurses, clinicians, etc.) and patients, being both responsible for positively contribute to a better, faster and affordable outcomes. Kinematix technologies are all developed to fit on this goal.