News

Tech transfer on track

By Jules Bernstein

Friday, October 13, 2017

Tips for going from scientist to CEO

Sandstone Diagnostics co-founders and former Sandians Greg Sommer (left) and Ulrich Schaff. Sommer is holding Trak, their in-home male fertility testing system.  (Photo by Jules Bernstein)

Sandstone Diagnostics Chief Scientific Officer Greg Sommer has the following advice for aspiring entrepreneurs: “Whatever you think it’s going to take, multiply that by four or more, and see if it still makes sense for you to do it.”

Sommer was referring not only to the money and time it takes to bring a product to market, but also to the grit and persistence required to get a start-up off the ground.

Fresh off receiving their Federal Laboratory Consortium award for outstanding commercialization success, Sommer and Sandstone co-founder Ulrich Schaff were featured speakers at a Sept. 20 event in Pleasanton, California.

The former Sandia scientists discussed market analysis, fundraising, legal permissions, and other aspects of turning technology they helped develop into a top new fertility product currently being sold on Amazon.

Sandstone manufactures a device called Trak, which they describe as the world’s first system allowing men to measure and track their sperm count at home. The system includes a website with tips to increase counts and an app, as well as the diagnostic device.

Trak is based on Sandia’s SpinDx, a four-pound spinning lab-on-a-disk system originally developed for disease and biological threat detection. As Schaff describes it, “SpinDx can do lots of stuff. It can count cells and analyze nucleic acids and proteins.” Part of the early challenge for Sandstone was to narrow its focus to one specific product.

Market analysis

Sommer said Sandstone started building its product in an order that isn’t necessarily optimal. They licensed the SpinDx technology from Sandia and formed Sandstone before settling on a direction. They looked at different applications, ideas, markets, and competitors before realizing that male fertility held the greatest promise for a potential business.

During this period, Schaff and his wife were expecting a child, which helped direct their thinking. Initially they considered making pregnancy tests, but that market is already saturated and those devices don’t require centrifuge technology.

Then Sommer said they discovered that men’s sperm counts have been on the decline for decades, and that the only device on the market for men didn’t quantify the sperm count or help the consumer improve their numbers.

“You have to keep your smiles up and hopefully things like that will happen."

“When we talked about the usefulness of other products out there, we used the analogy of trying to lose weight with a bathroom scale that only says, ‘overweight or not overweight,” Sommer said. “You want to see that you lost five pounds since last week and set some targets to hit. We applied that to male fertility.”

Ulrich’s wife Sara, a third co-founder, also did a lot of market analysis once the idea was born. She spoke to many hopeful parents who expressed unequivocal enthusiasm for a Trak-type system, and this let them know they were headed in the right direction.

Fundraising

Once settled on a product, raising money and setting up clinical trials were the next hurdles for the company. Sandstone got its start-up money after knocking on a lot of doors that didn’t open for them — a task requiring tenacity because of intense competition for capital.

“You have to have a really good story and be flexible. Take all the ‘no’ answers, get better with your next pitch, and early on talk to anyone who will talk to you. Try to get as many introductions as you can and find the right people,” Sommer advised.

He said the very first money finally came as the result of a pitch competition. One of the other presenters heard Sommer speak and introduced him to some well-heeled investors. After a 15-minute meeting at a Starbucks, Sommer says they were in. That money then helped raise a formal funding round with a bigger syndicate of local angel investors.

“You have to keep your smiles up and hopefully things like that will happen,” he said. Just as critical, Sommer says, is for entrepreneurs to set near-term, achievable milestones for fundraising. As of today, the company has raised approximately $5 million between private investments and grants.

Clinical trials and FDA approvals

Getting the right endorsements from the medical community is vital to establishing credibility for any consumer health product. Just as important is getting approval from the Food and Drug Administration. A large portion of the early budget has to be set aside for this, Sommer said.

Schaff explained that clinical trials required for FDA approval are costly because “you need lots of experts to figure out the intricacies of federal law and regulations on medical devices. It’s not that the FDA shows up at your door and charges you a million dollars,” he joked.

In addition, trials require the investment of time to recruit hundreds of men to test the device, and then the time to confirm in-home results in a laboratory. There are considerations like documentation, training, and flights to meet with doctors who run the fertility clinics they partnered with in multiple states.

Many companies fail at this stage, so Schaff says Sandstone is really proud of having overcome this hurdle.

As far as in-home diagnostic devices go, the Trak system is now the proverbial talk of the town. It has earned national media attention from publications like Popular Science, Bloomberg Businessweek, Men’s Health, and TechCrunch.

“It’s really impressive how quickly they were able to take it from the garage to the company down the street, to FDA approvals, clinical trials, having partnerships with manufacturers, doctors in New York and LA, putting all that together, and now having a commercial product and being featured in Newsweek,” Sandia virologist Brooke Harmon said at the end of the evening.

The result of all this rapid growth is more than professional success. Schaff says that founding a company has been personally enriching as well.

“It’s both the highest and lowest level job you’ll ever have at the same time because you’re responsible for everything from company vision to garbage collection,” Schaff said. “When I started Sandstone I was a scientist. As we progressed, I’ve learned manufacturing, engineering, how to run clinical trials, and manage a team. I’m a different person now than I was five years ago."