Kellogg faculty and alumni launch med-tech incubator aimed
at capturing a $50.4B market
A few weeks before the doors opened in February, David Schonthal ’09 walked into MATTER, Chicago’s new incubator and innovation center focusing on health care technology. The familiar raw space of concrete, columns and windows was gone. Instead, there were offices, workspaces and rooms nearly ready to simulate everything from an operating suite to a physician’s exam room.
“The vision has become totally real,” said Schonthal, a clinical assistant professor of entrepreneurship and innovation at Kellogg and co-founder of MATTER, a 25,000-square-foot space inside Chicago’s Merchandise Mart. “I’m feeling more excited about MATTER today than I’ve ever been about it.”
But what really excites Schonthal is the interest he’s seen in bringing entrepreneurs, investors, providers and medical innovators to the same table.
Already, more than 70 startups have become members of MATTER, including a pharmaceutical company that specializes in alternative remedies and a robotics company that’s merging telepresence technology with cardiothoracic procedures. MATTER itself has secured more than $8 million in funding to help support these companies as they grow.
MATTER is becoming what Schonthal and co-founder Andrew Cittadine ’98 envisioned back in 2011: a call to arms for both the health-tech and startup scenes in Chicago.
Translating R&D into Growth Strategies
New class delves into commercializing medical technology
For early-stage companies, having an innovative new product is one thing, but having the knowledge to commercialize is another. Enter Kellogg’s new 10-week course, Medical Product Early Stage Commercialization.
Taught by lecturers Katie Arnold ’02 and Eric Benson, the lab course asks teams of students matched up with eight early-stage, precommercial medical technology companies from both Northwestern and the Chicago area to develop marketing strategies and investor decks. All the companies are either preclinical or are in the earliest stages of commercial activity or clinical trials. “The course provides real-world examples to crystallize frameworks that students can apply in the start-up environment or in a large company,” says Arnold. “It’s the idea of identifying and clearly communicating the potential value proposition of a novel health care product.”
The goal of the course, which debuted in Spring 2014, is to have all 24 students walk away with a good understanding of the value of each company’s technology, what it takes to bring that product to market and how to assess the opportunity the technology enables in the market.
“For students interested in leading medical technology companies,” Arnold says, “understanding how to position your technology for success takes practice, and we aim to have the course replicate this process in as real a fashion as possible.”
Cittadine and Schonthal drafted and iterated the concept that would eventually become MATTER. At $50.4 billion, the medical technology market in Chicago is burgeoning. With labs, hospitals and universities throughout the region, Chicago has a huge crop of potential – if inexperienced – health-tech innovators.
“It’s a young community. It’s one where there aren’t many entrepreneurs and the culture is somewhat nascent,” said Cittadine, president and CEO of Chicago-based Diagnostic Photonics.
In 2012, the MATTER team shopped the idea to multiple stakeholders, including ChicagoNEXT, the public-private collaboration launched by Chicago Mayor Rahm Emanuel to turn the city into an innovation hub. There, it got the attention of Pritzker Group Senior Vice President Steven Collens ’01, who spent a decade in the health care industry before developing MATTER’s next-door neighbor, tech incubator 1871.
“It certainly caught my eye as something with a lot of potential to make a difference,” said Collens, who now serves as MATTER’s CEO. He noted that while Chicago has the nation’s third-largest health care economy, “We don’t have something that really connects all the pieces to support entrepreneurs.”
Collens joined the team and together they began speaking with stakeholders about their needs and visited co-working and incubator spaces across the nation for inspiration. The results of these explorations are facilities inside of MATTER that include “The Shop,” a dedicated makers’ space where entrepreneurs can update devices and software, and “The Stage,” a simulated procedure room (OR, ER, ICU) where physicians and other medical staff can test prototypes in context and provide critical feedback to innovators in real time.
Working backwardThose resources, along with newly formed strategic partnerships with companies such as AbbVie, Allscripts, Astellas Pharma US and the American Medical Association, will be key in getting these products to market, Schonthal said. The next step: reaching out to more companies, entrepreneurs and innovators outside the region.
“We would love to see more non-Chicago-based companies get involved and hang a shingle at MATTER,” Schonthal said. “The challenge of improving health care outcomes and patient experience is a global one. We expect that over time our member base will reflect the scope of the problems we are aiming to solve.”
All of this, he said, will make it easier to achieve MATTER’s overall goal: getting novel and powerful health care technologies to market.
Schonthal adds, “Every decision we make and every partnership that we form is based around the question: ‘Is this helping health care entrepreneurs get their products to market more effectively?’”
