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The founders with Intellijoint's HIP in operation room.
Armen Bakirtzian, co-founder and CEO of Intellijoint Surgical Inc.®, was astonished when he discovered that hip surgeries relied entirely on an individual surgeon's skills, with no scientific way to improve accuracy. Together with co-founders Andre Hladio and Richard Fanson, they devised a solution that ultimately formed the basis of Intellijoint Surgical Inc., a thriving medical technology company based in Waterloo. Intellijoint's flagship product, intellijoint HIP®, is a 3D mini-optical navigation solution used in hip surgeries to improve accuracy of implant positioning. We spoke with the firm's three founders about growing a medical technology company in Ontario.
We were all in mechatronics engineering at the University of Waterloo and were working together on a fourth-year design project in 2008. The challenge was to create something novel. I asked my father, an orthopedic surgeon, if I could watch him do a hip replacement. He agreed, but was frank with me that it's a subjective procedure whose success relies completely on the surgeon's experience and training; there was no technology accessible for surgeons to help deliver the most accurate hip replacement. That was quite shocking for us—in the 2000s, you'd expect surgery to be scientific. We took that problem and tried to come up with a solution as part of our project.
By the time we graduated, we had a crude prototype that worked. It seemed too valuable to ignore, so we kept at it. We all went back to school to get our master's degrees, but we got together whenever we could to advance our technology. In 2010, the final summer of our master's degrees, we found out about the Ontario Centres of Excellence (OCE) Next Top Young Entrepreneur Start-Up Pitch Competition. We applied, were named OCE's Next Top Young Entrepreneurs, and received an $18,000 microloan to pursue our idea.
We embarked on a four-month sprint. Winning gave us access to orthopedic surgeons, and we invited them to see if they could poke holes in our idea. That process showed we had something of value, so we decided to commit full-time to the business, which we launched in October 2010 at the Accelerator Centre in Waterloo.
In our first four years, we raised about $3.5 million from federal and provincial programs. Around half of that came from the Government of Ontario, mostly through the Health Technology Exchange (HTX) and MaRS Investment Accelerator Fund. We also received funds through a variety of OCE programs, including the Market Readiness Investment Program, and the Embedded Executive Funding Program.
We've started to focus more on raising funds from private sources as government funds are not widely available to companies as they move from start-up to scale-up. We were lucky to secure Series A funding in November 2016 worth about $11 million, mostly from private Canadian investors in the Waterloo and Toronto corridor.
Product development, quality, regulatory and ultimately sales are the milestones that were extremely significant. Getting our quality systems certified, then through all the phases of development followed by Health Canada and FDA approvals were the major milestones we hit in releasing 2 generations of our intellijoint HIP product. The most memorable was watching our product being used for the first time ever in live surgery; it was a surreal experience.
I think our biggest challenge in the early days was having the confidence to create a medical device, and recognizing how much support we did or didn't need. We also learned that you tackle a big job the same way you tackle a small one—one step at a time.
I would say that happened just last year when we succeeded in making inroads into markets in the United States and Australia. It's very rewarding to create a product, but if people aren't willing to buy it, then all that work is for nought. Last year was huge for us in terms of proving that we created the right product, that it does solve a real problem, and that people are willing to pay for it.
Our aim is to create a comprehensive suite of navigation products for hip replacement and branch out into other surgical disciplines. Our core technology is suitable for many more types of surgeries—for example knee replacement. Our growth targets are aggressive. Historically, we've grown about 40% per month on average, and we hope to maintain or improve on that.
We've built everything in Ontario. There are attractive opportunities outside of our borders, but we've been here for six years and have no intention of leaving. We have already grown significantly and expect much more – we want to do this in Ontario.
The province has provided a tremendous opportunity to build a very valuable business and hire a lot of people. We've been fortunate to have mentorship and access to government funding. As a blanket statement,
I would say the culture here—especially in the Toronto–Waterloo ecosystem—is very supportive of new ventures. Access to early-stage incubators is critical too.
Ontario universities are very supportive of entrepreneurship. I'll throw in a plug for the University of Waterloo, where the inventor owns their intellectual property—we filed a patent right out of university, it was extremely simple to do and we owned all the rights. Access to early-stage funding was also huge for us. I don't know how successful we would have been outside of Ontario in raising those funds and getting access to the right kind of technical talent. I wouldn't change where we started our business, and I would encourage others to do the same because Ontario has so much to offer. I hope to see next though how Ontario plans to help scale its homegrown businesses.
I think legitimizing the role of entrepreneurship in the Canadian economy is a great thing that Ontario has done. The encouragement and support that the province offers—and the fact that it understands the value that entrepreneurs can deliver back to the province—is significant and unique.
That it's achievable. I would just encourage people to take the challenge. It's not as scary as it seems. There's a lot of support, and it's growing every day as more senior entrepreneurs pay it forward to the next wave of great Ontario-based entrepreneurs.
This interview has been condensed and edited.
February 1, 2017
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All figures are in Canadian dollars unless otherwise noted. Information is accurate at the time of publication.