«I always wanted to create something from scratch»
Already when he was young, he was driven to create and invent. Today at the age of 33, Gwenael Hannema is the CEO of the Jura medtech startup InnoSpina which develops novel implants and surgical instruments to simplify spine surgery. In the newest edition of our podcast Gwenael Hannema talks about various interesting topics.
«In general in the medtech field, especially if you are developing implants, it’s an extremely long and bumpy road», says Gwenael Hannema in the Basel Area Business & Innovation Podcast. Nevertheless, InnoSpina has already achieved some milestones. Founded in 2017 by Gwenael Hannema and his partners Nicole Beuchat and Jacques Samani, InnoSpina is now a lighthouse in the uprising medtech sector in the Canton of Jura.
Currently Innospina is one of the ten members of the Swiss National Medtech Team. During a roadshow in the USA the startups will have the opportunity to meet international investors and industry leaders. Hannema has great hopes in this journey but is also prepared to return disappointed: «It’s part of an entrepreneurial journey. There are ups and downs.»
Furthermore, in the podcast Hannema is answering these questions: Why did he choose the site Jura of the Switzerland Innovation Park Basel Area as location of InnoSpina? Why is it important for InnoSpina to work with local partners in the Jura? Was there a specific moment when he realized that he wants to be an entrepreneur? What lessons did he learn from the failure of the first startup he founded? And last but not least: Was his secret dream to become a professional athlete?
Podcast transcript – Gwenael Hannema: “I always wanted to be able to create my own company”
What’s the first thing you do?
Well first thing: I go to the coffee machine to get some freshly grounded coffee and then reflect on the objectives of the day to be able to move the project forward.
And what makes a day a good day for you?
A good day is when we manage to see the progress and we do one step further to our goal, which is to really simplify spine surgery and helping the surgeon to treat chronic back pain in less than 30 minutes.
Gwenael Hannema went to school at Lake Geneva in France, he then moved to the Swiss side to study at the EPFL in Lausanne where he did his master’s in mechanical engineering in 2014. He participated as a research and development engineer at the EPFL in large multidisciplinary European projects and was co-founder of a startup in Lausanne. After four years working as a research scientist at the Swiss federal laboratories for materials science EMPA, he co-founded his second startup but is now here in the canton of Jura. The startup is called InnoSpina and we will talk about it in detail.
I have not mentioned yet that you are a member of a national team, namely the Swiss national medtech team. How did it happen that InnoSpina became a member of this national team?
Well, so VentureLab organized intensive selection every year, ten startups are chosen by a jury of this investor to be part of the Swiss national medtech team, and so we were selected among 60 or 70 candidates. Unless I am mistaken it’s the very first time that a medtech startup from the Jura region participates in this prestigious program.
You said it: this national team has ten members. Nine of them are from Zurich or Lausanne, only InnoSpina is from another region. What does this tell us about the Swiss medtech landscape?
Yes, you’re right. The concentration of medtech startups is today mainly in one of the major clusters, Lausanne or Zurich but also Geneva or Basel for life science. And these large clusters are often coupled with either federal institutes or universities and are close to a University Hospital or a large medtech company. Some cantons such as Jura can also rely on other assets to develop their diversification, in particular in the medical sector.
So the Jura is one of these upcoming cantons?
Well, I hope if the canton is continuously supporting this diversification that they started already a couple of years ago, also with the support of the other two cantons Basel-Stadt and Baselland, I think there have really sufficient resources to make it happen.
In autumn, this Swiss national medtech team will travel to the USA for a roadshow in Boston. You will have the opportunity to meet international investors and industry leaders. What are your specific expectations for this trip?
So yes well, you have to know that the US is the primary market for our first medical product, the fusion implant, and the Venture Leader Program will fast track our business development with hands-on application, also to better understand the US medical device ecosystem and refine our strategy. And indeed it will be a fantastic opportunity for InnoSpina to pitch to top-level US investors and furthermore it will also enable us to get additional feedback and traction by building contact with key opinion leaders in the US spine care industry who could also potentially join our clinical and medical advisory board.
What would be the biggest success you can imagine?
If we can already come back with some interest from investors, plus securing additional letters of intent and that three members join our clinical and medical Advisory Board that would be fantastic.
Are you also prepared for the fact that you might come back disappointed?
Yes, absolutely. It’s part of an entrepreneurial journey. There are ups and downs but I’m strongly positive with also the team of the nine other startups that will help us to really get traction in the US.
Let’s talk about your startup InnoSpina. You are the CEO and together with your team, you are trying to simplify spine surgery. Tell us what exactly are you developing?
Yes, we design and develop new implants and surgical instruments to enable the surgeon to treat chronic back pain in less than 30 minutes. Our technology guarantees a safe and accurate positioning of the implant, drastically simplifying the surgical procedure but also considerably reducing the duration of the surgery. Also what makes us unique is that we will be able to do it percutaneously, so through a small incision in the skin and the procedure – so the patient can come in the morning, get a 30-minute surgery and walk back home the same day instead of staying several days at the hospital and also recovering faster.
At which point is the startup currently? What milestones have you already achieved?
We are currently in the final R&D phase of the first product, so the fusion implant, as well as the implementation material and we, have now begun the regulatory process with a local expert that’s supporting us. And the current milestone: we successfully managed to test on the specimen, so in three preclinical trials on cadavers, the implantation procedure and that we are able to really deliver the implant in less than 30 minutes in a safe way.
And at the same time, you are already developing a second implant?
Yes, correct. We are using the surgical instrument as a platform that the surgeon will be able to use either with the fusion implant or with our flagship product so the dynamic implant is also a smart implant where the surgeon will be able to get critical data from his patient.
What are the issues that you are currently facing?
Well, I would say maybe in general in the medtech field, especially if you’re developing implantable products, it’s an extremely long and bumpy road. The regulation and clinical trials are mandatory steps but require also a huge amount of resources and also long validation time. Particularly in the spine field, you have 5 – 6 major key players that share more than 90% of the market share and it’s very complicated to compete even though you’re developing an innovative product and you’re responding to an unmet medical need.
But so far you haven’t had a setback that made you think about giving up.
Well, we had several setbacks but then in the end it is part of the entrepreneurial journey and the startup journey and then you have to make some key decision which part do you want to prioritize on the product development, and sometimes you have to compromise on some nice-to-have or good-to-have and really essential requirement for the users. I think every setback is really a starting point to push again and go further.
Can you give an example of such a setback?
Well at the really beginning, we had a test of our surgical equipment that didn’t go well. We have a guiding needle that’s really enabling us to accurately position the implant and either at some point it was breaking or it was simply not rigid enough. Then we had some problems in the accuracy of positioning the implant, but then we changed the whole implantation instruments and now we’re at a point where we can successfully repeat also delivery of the implant at the precise position.
Many patients and surgeons have great hopes for your innovation. So there is also the pressure of expectation on you. How do you deal with that?
Yes, there is some pressure, but I would like to see it in a positive way. For us, it’s really trying to answer the needs of the patient and also the surgeon and I think it’s a positive pressure to be able to find an innovative way to answer this large unmet medical need.
Would you say that’s a good thing?
Yes, absolutely for me personally I think it’s really beneficial and it keeps our team pushing forward every day.
Gwenael Hannema, you have studied and worked for many years in Lausanne, where there are great universities and many medtech startups. Why did you choose the Jura to establish your startup?
That’s a really good question. There are different factors that made me choose, also with my partners to set up here in Jura. The Jura region is widely recognized for its high precision sectors and also the skills for microtechnic and mechanical fields. And since a couple of years, the canton has adopted a good diversification strategy encouraging innovation and creating also new opportunities for companies. I can mention for instance the New Innovative Company label that was unique in Switzerland and also offers some support that startups can benefit from which is steered by the economic promotion and also ways to attract new investors. And also as a local, as a native of canton Jura, I wanted also to contribute at my level in the development of the medtech sector which for me is really key in this region.
InnoSpina develops new implants and new instruments for surgeons. Jura companies produce these two things, 3D Precision in Delémont and Pibor ISO in Glovelier. Is it important for you to work with local partners?
Yes, and working with local partners is really in line with the InnoSpina development philosophy and for me, proximity is also an asset and Jura has many key competencies that are spread over its territory. I believe that now the canton Jura has to find a way to catalyze all those expertise at maybe one center here at the innovation park to be able to promote more this medtech sector field, which is really promising and growing over the years.
What about the ecosystem for the medtech sector in the Jura? How would you describe it?
There are a lot of different companies in Jura that are working or that are subcontractors for big medtech companies that are producing for instance surgical instruments or guiding needles or the caging to be able to wash the implants or the surgical instruments. So there are different actors in the medtech field that are present but I think that there is still a step to go ahead to develop really a larger ecosystem and a dynamic ecosystem particularly in the medtech field here in Jura.
What role does the canton play in the development of this ecosystem?
I think they have a key role. They already partnered up with the two other cantons Basel-Stadt and Baselland and I think they have a key role to play not only by supporting startups but also by setting up this whole ecosystem. I would think it would be key to set up a medtech accelerator here to be able to fast track the development of some companies, so I think they have a key role to play and they have to continue pushing to be able to create new companies in the medtech field here in Jura.
You have been an entrepreneur for four years now. What was the moment when you realized this is the profession that you love?
I would say I was driven to create and invent when I was young. Then I chose to study mechanical engineering at EPFL to have additional tools to be able to start my entrepreneurial journey. It wasn’t really like a light going on but I always wanted to be able to create my own company with the ideas that I want to develop and create something from scratch and be able to see it evolve over the years. Not something like a steady job where you’re paid and you do other things in your free time. The fact to create and be able to develop something from scratch that you were looking backward on it you can be proud of for me it’s really important.
You tried this already in 2014 when you co-founded your first startup in Lausanne. It was 3D dynamics. What happened to this startup?
Yes, you’re right. After finishing my studies, I decided to co-found 3D dynamics with a friend and we launched into this entrepreneurial wilderness and unknown that we weren’t aware of. And the idea of 3D dynamics was: you had the rays of the numerical simulation and also the freedom that’s offered by 3D printing and the goal was to create a startup that would bring really complex ideas of customers to life and also developing our own project.
There are a lot of things that went wrong. It was the first experience but I can for instance talk you through the development that we did. We did a kind of hybrid bike frame that we called carbonyum. It was a frame junction that was made of 3D printed titanium parts and then the rods between those junction elements were made out of carbon fiber. We started to write patents and do our first prototype but we didn’t manage to interest investors and also find the right business model to make it a sustainable company.
In the end, it failed.
We also made many new learning mistakes. I have to be honest with that. But what was interesting is that three years after the failure, an English company started with this exact same concept and successfully commercialized this product. You know when you have an idea it’s really the easy part. Many investors will tell you that what makes the difference is really the execution. How you bring the product from concept to market will also represent more than 90% of the value creation of the company.
I can also draw a parallel with aviation: when you’re in the cockpit of the plane you’re turning the ignition, you start the engine, that’s one thing. But then you drive along the taxiway, you have to align on the runway, you have to take off to be airborne and then you have to maintain your route and you have to deal with turbulence to be able to eventually reach your end target goal.
I learned a lot during this first entrepreneurial journey and it also motivates me to continue on this path. And I would say if I had to start over with another startup I would also do things differently. For instance, when we’re discussing with other founders one part that you don’t necessarily know when you start a company is the distribution of shares which you should do over time, for instance, that each shareholder and employee is motivated and continues to proactively contribute to the development of the company over the years. And there are many other details that you learn by exchanging with experts and other startup founders and I thank all of those who help me learn and move forward in a faster way than if I have to learn everything by myself.
So it was not that bad for you that you failed with your first job?
No, absolutely. I think most people maybe approach failure in a negative way and I would say it’s something beneficial that you always try to learn from something. What would be stupid in my opinion if you fail considerably and not changing anything and repeatedly and if you do the same thing and expecting different outcomes, and so you should learn from failure and you should cultivate that. Because I think, one of my main objectives is to learn something every day and trying to learning from other people’s mistakes as well to be able to go faster to the goal that we have.
What did you learn when you founded InnoSpina? What did you do differently?
So I would say already all this with the contract with subcontractors. Also if you talk to investors or partners if you want to do a partnership. Just basic corporate governance let’s say, so signing NDA’s when you talk to investors or securing your IP being in touch with really top-notch law firms because that’s really the core of your company, company assets let’s say and, yeah, just reaching out to experts. Not being afraid to ask. Ask people who have experience. Just say OK I’m new, I’m here to learn and if you want to share your knowledge and expertise I will be happy to take that and to analyze it by myself.
How is InnoSpina financed currently?
Currently, we successfully secured 1.3 million in non-dilutive funding and that enables us to meet our operational objective until the end of 2022. Now we’re planning our seed round for the middle of next year to be able to strengthen the R&D team, prepare the validation file and also all the clinical trials for our first product, and also obtain the medical ISO certification.
How much money are you talking about for the seed round?
For the seed round, we’re talking about 1 to 1.5 million. This will enable us to reach our other value creation milestone. Then we’ll go to Series A which will be more important. We’re talking about more than 10 million to be able to finance the clinical trials for our products.
And then the next step would be the market?
Yes, then the next step… It’s still a long journey ahead because when you’re talking of class three medical devices it’s at least three to five years of clinical trials. Then you have to get the FDA or DC mark, you have also to get reimbursement approval. And all of this takes a lot of time and it’s at least a 10-year journey.
A 10-year journey. How confident are you that you will succeed at the end of ten years?
Well, I’m confident, because I believe in the company and the vision that we are trying to push forward and bring our product on the market. It’s a bumpy road and there are a lot of unknown and obstacles but I’m confident that at least will be able to reach the seed round and from that we will see how we run and extend the runway to go step by step.
InnoSpina is based in the site Jura of the Switzerland Innovation Park Basel Area where other startups are also located. Why did you choose this location?
The Jura site of the Switzerland Innovation Park Basel Area is also part of the national network of the Swiss Innovation Park. The decision to locate here was motivated by several factors. In particular that the three cantons Basel-Stadt, Baselland, and Jura have decided to regroup their efforts and to establish a key pole of medtech competence here in Jura. This was really something that attracted us, plus the support from the economic promotion to help us kickstart our journey in our development.
How would you describe the atmosphere here in the innovation park?
Currently, in my opinion, there are not a lot of startups here. We are looking forward to seeing other startups coming to the Jura. Also with this COVID situation, we have less exchange around the coffee machine or during the break. It’s really part of the atmosphere of innovation parks that different founders exchange ideas around lunch or coffee breaks. To maybe avoid potential mistakes of others and be able to move forward. So I’m missing a bit of this atmosphere. But I’m convinced that it will come back as soon as the situation we’re going through, everybody of us, will come to normal.
What about contacts to the other sites of the Switzerland Innovation Parks, in Allschwil, in Basel, on the Novartis Campus? Is there an exchange between the startup sites?
Yes, on the startup level there is an exchange between the founders. I had the chance to be in the DayOne Accelerator from Basel Area where we were in contact with startups located in Basel. We still keep in contact now between founders after the end of the acceleration program in June of this year. I think also what the director of innovation and entrepreneurship of Basel Area, Frank Kumli said, there needs to be a diversification of the parks and exchange between the different innovation parks because each innovation park can play with his regional strength. And I think we already do that, we exchange between founders, between the different sites. For us, it’s not because somebody is in another innovation park that there is competition between us. So we try to help each other.
You mentioned the DayOne Accelerator, which is based in the innovation park on the Novartis Campus. I guess you have been there. How did you benefit from this participation?
So we’re really lucky because we took the office here in December last year and then the Basel Area DayOne Accelerator kickstarted in January. And we had the chance that Frederic Nicolet from Basel Area could make us participate in this accelerator. I’m really thankful for that also. We notice it’s more dedicated to digital health, so we were the only outsider let’s say in the medical device field. But it helped me learn a lot about all the go-to-market strategy, regulatory planning, also advice from a large panel of experts. We also gained a lot of visibility in addition to access to their huge network. I really thank Basel Area for the opportunity that we were in the DayOne Accelerator. And I hope that soon there will be a dedicated medtech accelerator here in Jura supported by the Canton where we will be able to support more medtech startups in that particular field.
In general, do you recommend startups to participate in accelerators?
Yes and no. In the beginning, I would say you should definitely participate in an accelerator. There are a lot of topics that – at least I can talk of my experience I wasn’t aware of – all the go-to-market, how you access the hospital, which is your market entry point, how you talk to investors, what is your regulatory planning and so on and so on. There are many examples. Also, get feedback from investors about your pitch, how you to present things, what are your value creation milestones and I would say these are critical aspects that every founder should know or at least be aware of.
I would say: pick the proper accelerator that’s specific in your field. You should be careful not to be only involved in accelerators and not applying all your know-how from the accelerator to the field in your particular project. But I think it’s really essential and it’s key to be part of accelerators.
To conclude I would like to ask some personal questions.
A few weeks ago you became a father for the first time. What has this done to you?
I think as every parent it’s an immense joy and a lot of indescribable moments that you can exchange with your son or daughter. And there are some other parts that you have to adapt. As an entrepreneur, you have to adapt to some situations, like maybe not sleeping as long as you want in the night, but those are really wonderful moments that I can share with my daughter and my family and I’m really happy to have become a father.
And how did it affect already your startup or your work?
I would say in terms of work I’ve become more productive in a way that I dedicate really extremely tight hours where I know the objective. My productivity went up because I also want to have time to spend with my daughter and family. I would say I was efficient before, I think but it made me shift up gears to be able to have more time to spend with my family.
In 2007 you participated in the French athletics championship in the 400-meter hurdles. Was your secret wish to become a professional athlete?
Yeah, it was a question back in 2007 before I started the EPFL. I hesitated to maybe start not a professional but a semi-professional career in athletics. I did one year of training and managed to reach this level and one of my trainers told me if you want to invest more time you can maybe reach the European level, for instance. Other than that will be more difficult. It was an open question from my side and I decided, let’s go studying at EPFL. I don’t regret that choice. I continue now, I’m switching to marathon, getting a bit older, longer, less intense sprint activity let’s say that way.
This race at the French athletics championship: in what position did you finish?
I think it was more than 37 times, there was a lot of competition in France. In Switzerland, I think I would have been enabled to go on the podium but that’s it. It was a fun experience.
You also have a pilot license. What fascinates you about flying?
Yes, absolutely. I did my pilot license already quite some time ago. What fascinates me is the freedom to evolve in all dimensions when you’re flying. So in four dimensions you can go up, down, left, right, you can turn backward. You evolve in time and you have the possibility to see things from a different perspective when you are in the air. And you see the beauty of nature and the landscape in a different way. So I really appreciate that and it enables me to really clear my mind. And sometimes you also have to train for emergency landings in fields and you have to constantly adapt to the changing weather conditions and that’s something that I really appreciate.
The landscape is also an issue when you are hiking in the mountains. What do you think about most when you are hiking?
So, yes, when I’m hiking I’m thinking basically of nothing, of nothing else. It really helps me to clear my mind. I just look and stare at the beauty of nature and the wilderness.
Do you go there alone?
Well, back in 2013, I did a long trip with two other friends in South America over four months. We were backpacking. Sometimes I go with friends, sometimes I go alone just to clear my mind, but I appreciate it when I do it with friends or family.
In an interview, you said we should go after our dreams whatever they are. What is your dream?
I would say my secret dream is to make this company successful to then have the resources to start another project. I would like to go to South America and help in the development of different projects. In either Brazil or Argentina, or Chile, where I can help people who are in need of basic day-to-day needs.
This would mean saying goodbye to Switzerland.
I would say goodbye to Switzerland, but it’s not a definite goodbye. It’s just another step to somehow if I manage to succeed, to give back to other people who are in need. And it’s a region that I affect also personally.
Gwenael Hannema, thank you very much for the interview.
Thank you, Martin.
At this point, I would like to mention that there is also a French version of this interview. You find it when you subscribe to the Basel Area Business & Innovation podcast on your preferred platform, for example on Spotify, Apple Podcast, Deezer, or Google Play. You can also find the podcast on our website.