Field Service Organizations Are Burdened With Incompatible Business Models

This post originally appeared on Field Service Blog.

pristine eyesight smart glassField service organizations encompass two distinct business models that are intrinsically incompatible, yet the norm. How is this possible, and how can service organizations reconcile these models?

I’ll start by explaining the business models that service organizations are burdened with. They have two types of customers: those on contract, and those off contract. Sales divisions are asked to sell service contracts because they’re intrinsically high-margin, and in some cases, 100% margin if the customer never calls for support. And yet, once the equipment sale has been made, if the customer is on contract, the service organization is incentivized not to come out and actually service the customer. Why? Because the trip is purely a cost and is eating into what was 100% gross margins. I’m not suggesting that service organizations act unethically and violate service contracts by not sending staff out; rather, I’m saying that on a marginal basis, with a service contract in place, service organizations would rather not come on site to service a customer than come on site because on-site trips incur significant costs that cannot be recouped on a marginal basis.

On the other hand, service organizations are happy to service customers who are off contract. Why? Because the service organization can gladly mark up the cost of the ad-hoc visit to cover the marginal costs of the trip. For off-contract customers, service organizations profit from every service trip. The irony of this is that although service organizations profit from servicing off-contract customers, service organizations are always trying to upsell service contracts!

Thus is the paradox of service organizations: they’re incentivized not to service their best customers – those who have agreed to pay for a service contract – and are incentivized to service their worst customers – those who won’t pay for a service contract.

How did these incompatible models come to coexist?

In short, the current divergent business models are based on legacy assumptions. Decades ago, field service was different than modern service:

1) equipment wasn’t as complicated, and was thus more capable of being fixed by local technicians rather than experts employed by the manufacturer

2) there were fewer electronics. Electronic components are increasingly difficult to fix by non technical experts, requiring professionals with entirely new skill sets

3) customers were less demanding in terms of guaranteeing reduced downtime and response time

Over the last few decades, these assumptions have broken. Equipment is more complicated than ever, and businesses are increasingly less willing to deal with downtime. Despite these changes, the field service model hasn’t materially changed. Service organizations still try to up-sell service contracts, and still do everything they can to avoid on site trips since on-site trips are so expensive on a marginal basis.

The output of the structural changes is that field service has for many organizations devolved into a cost center, or at best a marginal profit center. But given the antithetical models that service organizations have to house, service has lost strategic relevance.

In the next post of this two part series, I’ll explore how some of the leading equipment manufacturers and their service organizations are re-inventing their service models to align with customers more effectively, and as a result, drive strategic value of service organizations.

How to Maximize Jet Flight Time Without Sacrificing the Health of the Aircraft

Business customers value comfortable, hassle-free travel, available on-demand. It’s thus no surprise that business executives love private aviation: executives want to be efficient with their limited time.

Unfortunately for private jet operators, they are competing for a fixed pie of corporations and super high net worth individuals. Private aviation is a luxury service and the pool of potential customers is limited. Because of the high price, customers expect a flying experience that’s 10x better than the commercial experience. For that improvement, they’re often willing to spend 100x. Private jet travelers expect their jets (even those partially owned) to be be kept in near-to-new condition, available in under four hours, and able to fly to wherever they’d like.

To achieve this level of service, operators need more flight-ready jets in more locations. These jets in turn depend on a litany of logistics for routine maintenance, parts, stock items, auditing, certification, booking, customer service, etc. The more cities a jet operator operates in, the larger their support network must grow. It isn’t feasible for small operators to staff every airport they serve. Most operators staff a home base but depend on local Fixed Base Operators (FBO) to provide support and maintenance services. Unfortunately, the quality of services at smaller airports is not standardized, despite FAA compliance regulations. Nonetheless operators who use these contract services must essentially guarantee the work of a third party service providers.

Between third-party servicers that have varying skillsets and service levels, combined with a customer base that demands extremely high quality, “always-on” service, operators must do everything they can do maximize the usefulness of their fleets while conserving capital and reducing costly jet downtime. So how can operators expand reach efficiently, while ensuring high levels of service?

More efficient maintenance and service operations, powered by remote diagnostics

Imagine a business charter that’s en-route from New York to London. The passenger on board has an early morning meeting and has arranged a single day turnaround.  An hour before landing, the pilot receives a high temperature notification.  Unable to determine the cause or severity of the problem the pilot is forced to land in Yarmouth, Nova Scotia. The FBO at Yarmonth only has one technician with experience working on private jets. It takes the technician an hour to get to the airport and an additional 4 hours to access and fix the problem.  The passenger misses his important meeting and the trip ends up costing the company well over $100,000 in labor, parts, and fees.

Now imagine that charter again, but with a suite of remote diagnostic capabilities. In this case, a technician in Chicago reviews live flight data from sensors on the aircraft. From here, he starts a video call with the pilot. Through a pair of smart glasses, the pilot can share what he sees–the avionics in front of him–with the technician, who walks the pilot through further diagnostic procedures. With the telemetry data and a ‘pilot’s eye view’ of the inside of the aircraft, the technician determines that the flight is safe to continue, and that the local FBO at the destination can handle the problem. He shares all the data and video collected thus far with with the local FBOs on the ground, who prepare to quickly repair the aircraft. To ensure repair quality, FBO staff send pictures and video documenting the repair to the home-base technician, who remotely oversees the service and advice as necessary.

This scenario is not science fiction; it’s feasible given today’s commercially available technologies at affordable prices. Improving inflight data channels, the Internet of Things, and technologies like Google Glass are rapidly turning technological fantasies into operational realities. Major leaps in efficiency, quality, and speed in every core aviation service are already underway, and poised to benefit FBOs and operators alike.

Smart Glasses Will be the Internet’s Portal to the Physical, Hands-On World

This post originally appeared on Huffington Post.

The Internet has been the most democratizing technology of all time. It has enabled knowledge, ideas, culture and expertise to be transferred between people and places more quickly than ever before.

We’ve seen entire industries disrupted by the Internet including newspapers, magazines, encyclopedias, libraries, travel agents, music, taxis, hotels, the Yellow Pages and more. All of these industries were predicated on controlling proprietary information flows. When the Internet brought the marginal cost of communication and information transfer to $0, the old business models failed and new ones emerged that took advantage of a fundamentally new way to communicate.

What About Non-Information-Based Businesses?

The industries that have been disrupted are, at their core, information-based businesses. The Internet hasn’t transformed industrial enterprises and more hands-on industries such as manufacturing, warehousing, energy, healthcare and field service. Operationally, these industries are remarkably similar to their 1960s counterparts: They still rely on airplanes and cars to move workers around to do things — inspection, audit, diagnostics, repair and service. Why can’t people communicate virtually in these scenarios across distances to address the problems at hand? Why hasn’t the Internet virtualized communications around real-world, hands-on collaboration?

The Internet hasn’t yet disrupted many hands-on industries not because the Internet is deficient or because management is incompetent, but because the Internet end-points have been deficient. The client devices we’ve been computing with — desktops, laptops, phones and tablets — are simply not designed for hands-on jobs; using these devices in hands-on settings is simply ergonomically impractical in most cases.

Enter Smart Glasses: The Internet’s Portal to the Physical World

Today, we are finally on the cusp of the industrial Internet. Using smart glasses (like those manufactured by Vuzix, Google and others) as a portal, the Internet will reshape traditional industries by bringing information and expertise where it was previously not possible: into hands-on arenas.

Field service in particular is ripe for disruption. When mission-critical equipment is down, business operations come to a halt. Using glasses, workers will be able to remotely collaborate to diagnose and repair problems. Rather than waiting hours or even days for the right people to arrive, workers will begin collaborating immediately and fix problems and order of magnitude more quickly than ever before.

This problem manifests in all kinds of industries: airline manufacturing (e.g. conveyer belt not working), pharmaceutical manufacturing, contract research organizations (CROs), HVAC refrigeration (industrial, commercial, academic), midstream and downstream oil and gas, and telecom.

Healthcare is also ripe to adopt glasses. Smartphones are remarkably filthy. Why are healthcare workers touching these devices all day while taking care of patients? This seems like a recipe for accelerating the growth of hospital-acquired infections.

There are incredible opportunities ahead. By breaking old assumptions about who can do what and where, entire industries can be reshaped. Just imagine being able to extend the knowledge and insight of your best workers to the periphery of your distributed workforce. Or training your customers on a new machine daily over the course of the first month, instead of 0- and 30-day trainings.

The future of traditional industries look remarkably different — for the first time in a long time — through Glass.

Vuzix Partners with Pristine to Optimize Smart Glass Technology for Enterprises

ROCHESTER, NY, February 24, 2015 — Vuzix® Corporation (Nasdaq: VUZI) (“Vuzix” or, the “Company”), a leading supplier of video eyewear and smart glasses products in the consumer, commercial and entertainment markets, today announced a partnership to utilize Vuzix M100 Smart Glasses for Pristine’s EyeSight platform for the enterprise market.

vuzix-smart-glass-pristine

The alliance brings together industry-leading hardware and software to offer one of the best telepresence solutions on the market empowering enterprises to dramatically improve how teams remotely collaborate for hands-on activities.

“Our customers are generating incredible ROI. What used to cost them $2,500 per day now costs next to nothing. Using Vuzix technologies, we are delivering an incredible telepresence solution for clients in life sciences, industrial equipment, field service and healthcare.” said Kyle Samani, co-founder and CEO of Pristine.

“Pristine’s EyeSight platform is a killer app for the exploding smart glasses market and enables users to collaborate in industries and locations never before imagined,” said Dan Cui, Vice President of Business Development at Vuzix. “Having Pristine’s solution optimized for our award-winning smart glasses will open new opportunities and deliver real value and ROI to customers around the world.”

Customers who take advantage of the combined Pristine and Vuzix platform will benefit from numerous advantages including outstanding video quality, strong integrations into safety goggles and a vertically adjustable camera, useful for surgery and hands-on repair tasks.

Pristine’s EyeSight is a powerful video communication platform for wearables that allows colleagues to securely collaborate and solve problems hands-free. Users just power on the glasses, and say “request support.” Relevant colleagues are notified, and can call into Vuzix’ smart glasses powered by Pristine’s EyeSight platform. The cross-platform architecture is built on powerful open source technologies and hosted in the cloud, requiring no on-site hardware and allowing users to get up and running quickly with zero capital investment. And for healthcare organizations, EyeSight also fulfills strict requirements for HIPAA-compliance.

The Vuzix M100 Smart Glasses are the world’s first commercially available hands-free display and wearable computer designed for enterprise users. The M100 contains a virtual display with an integrated camera and a powerful processing engine, running the Android® OS to wirelessly connect via Bluetooth or Wi-Fi directly to most standard networks or to a smartphone.

About Pristine

Pristine is pioneering the “wearable worker,” with enterprise software solutions for smart glasses. EyeSight, Pristine’s flagship platform, powers secure and scalable audio/video streaming for hands-free collaboration and remote support in life sciences, industrial and manufacturing environments, field services and healthcare. With on-demand expertise from off-site specialists, Pristine’s clients are reducing costs and driving ROI through case pre-screening and guided service workflows. EyeSight is available across every platform: Mac, PC, iPhone, iPad, Android, Google Glass and Vuzix, and is HIPAA compliant. More information can be found at on Pristine’s website (www.pristine.io), Pristine’s blog (www.pristine.io/blog), and by following @PristineIO on Twitter (www.twitter.com/pristineio).

About Vuzix Corporation

Vuzix is a leading supplier of Video Eyewear and Smart Glasses products in the consumer, commercial and entertainment markets. The Company’s products include personal display and wearable computing devices that offer users a portable high quality viewing experience, provide solutions for mobility, wearable displays and virtual and augmented reality. Vuzix holds 39 patents and 12 additional patents pending and numerous IP licenses in the Video Eyewear field. The Company has won Consumer Electronics Show (or CES) awards for innovation for the years 2005 to 2014 and several wireless technology innovation awards, among others. Founded in 1997, Vuzix is a public company (Nasdaq: VUZI) with offices in Rochester, NY, Oxford, UK and Tokyo, Japan.

Forward-Looking Statements Disclaimer

Certain statements contained in this news release are “forward-looking statements” within the meaning of the Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. Forward looking statements contained in this release relate to the M100 Smart Glasses, Pristine, Pristine’s EyeSight platform, a telepresence solution and future business and further product developments, among other things, and the Company’s leadership in the Video Eyewear and AR display industry. They are generally identified by words such as “believes,” “may,” “expects,” “anticipates,” “should” and similar expressions. Readers should not place undue reliance on such forward-looking statements, which are based upon the Company’s beliefs and assumptions as of the date of this release. The Company’s actual results could differ materially due to risk factors and other items described in more detail in the “Risk Factors” section of the Company’s Annual Reports and MD&A filed with the United States Securities and Exchange Commission and applicable Canadian securities regulators (copies of which may be obtained at www.sedar.com or www.sec.gov). Subsequent events and developments may cause these forward-looking statements to change. The Company specifically disclaims any obligation or intention to update or revise these forward-looking statements as a result of changed events or circumstances that occur after the date of this release, except as required by applicable law.

For Vuzix investor information contact:

Andrew Haag
Managing Partner
IRTH Communications
vuzi@irthcommunications.com
Tel: (877) 368-3566

Vuzix Corporation
2166 Brighton Henrietta Townline Road
Rochester, NY 14623 USA

Investor Information – Grant Russell
IR@Vuzix.com
Tel: (585) 359-7562
For further sales, and product information on Vuzix, please visit: www.vuzix.com

Pristine Media Contact:

Cybele Diamandopoulos
FOLIO Communications Group, LLC
cybele@foliocom.com
Tel: (512) 535-4422

The Technology Hype Lifecycle: Google Glass Edition

The Technology Hype Lifecycle: Google Glass Edition

This post originally appeared on Forbes.com.

Recent announcements from Google about the future of Glass naturally ignited an explosion of commentary in the tech media. For those of us in the Glass at Work world, the news that Glass has “graduated” from Google[x] into a true business unit headed by Tony Fadell is very promising. Yet many outlets’ coverage focused on the end of the Glass Explorer program for consumers, characterizing it as the final death knell for the technology.

So why the disconnect?

Historically, Glass has fallen victim to the technology hype lifecycle, and has done so more strongly than most technologies.

The Technology Hype Lifecycle

There’s a famous graph you’ve probably seen before on the Internet that charts the lifecycle of hype for new technologies.

But in a number of ways, this graph isn’t quite right – specifically, the plateau of productivity isn’t illustrated correctly. Technologies plateau far above the peak of inflated expectations.

Consider Mobile Computing

In the late 1990s and early 2000s, Microsoft recognized the potential of mobile devices, so they built Windows Mobile and worked with OEMs to deliver Windows Mobile phones. They were way too early and made some fundamentally poor design decisions. They dreamed big, but failed to deliver on most of them. By 2004, BlackBerry was emerging with phones that could support basic business communications, contacts and calendar functions. Mobile computing was exiting the trough of disillusionment. Google saw this and bought Android in 2005. Rumors suggest Apple started development of the iPhone in late 2004/early 2005. They saw it too.

What no one foresaw was not only how fast the curve would ramp up, but the magnitude of the peak. Even in 2009, no one could have imagined Uber or Tinder or Snapchat, let alone 2007. Even today, we still do not know where the curve will plateau. How could Microsoft, or anyone else for that matter, have seen the potential of mobile computing in 1999 when they committed to building the (failed) future of mobile computing?

The mobile computing hype cycle graph actually looks something more like this.

Who knows which of today’s Series A and Series B stage startups are the next Uber? Kevin Spain from Emergence Capital has recently been evangelizing that today’s enterprise mobility market resembles that of the cloud in 2004. If that’s the case (and given mobile’s incredible penetration today), there is only one inevitable conclusion: mobile is eating everything.

So What About Glass?

Right now, in early 2015, Glass seems to be deep in the trough of disillusionment. The media has been hammering Glass lately, declaring its demise and failure, and before today’s announcement, Google itself was very quiet about Glass’s future. For the record, Glass is not just alive and well, but thriving in professional and enterprise use cases.

But what’s much more important isn’t Glass’s near-miss with death, but its tremendous potential. Glass is today where mobile computing was in 2000: dreams seemingly shattered by early setbacks.

The Glass curve will look a lot more like the mobile curve than the famous generic curve. We are seeing tremendous growth as enterprises adopt Glass to solve painful economic problems that were previously unsolvable.

The Glass growth curve will not mirror the mobile growth curve identically. Glass will peak at a lower point on the hype cycle graph than smartphones did. Smart glasses simply don’t have the upside potential on a per-person basis that smartphones do. Glass competes with smartphones; smartphones compete with laptops. The marginal improvement from always-on-you smartphones to hands-free Glass is material, but not as large as the jump from sitting-only laptops to always-on-you smartphones. Moreover, the best use cases for Glass are for desk-less, hands-on workers; these workers typically earn substantially less than their white collar, desk-bound counterparts. Smartphones amplify the productivity of expensive workers; glasses multiply the productivity of less expensive workers.

Having said that, Glass is still nascent today. We are at the tip of the iceberg. There is tremendous potential to be had in hardware, software and services. Over the next few years, we will see tremendous innovation from startups and giants. Hardware experiences are going to diverge. Software developers will experiment and pioneer new user-interaction models. Cloud services will evolve and take on an increasing percentage of computing. We know nothing, which means we can still do anything.

If you have any questions, thoughts or ideas about Glass, feel free to drop me a line at kyle@pristine.io.

Kyle Samani is a Co-Founder and CEO of Pristine, the leading company pioneering Google Glass in healthcare and the broader enterprise; he’s also a regular public speaker and blogger at kylesamani.com.

Wearables Aren’t About Wearables

This post originally appeared on Wearables.com

Wearables are one of the hottest trends in technology today. They are forecasted to grow tremendously over the next decade as consumers adopt these devices to track health data, interact with notifications, and look up information. Indeed PWC predicts that sales of wearables could reach 130 million units in 2018.

As CEO of a startup (Pristine) that builds enterprise software for Google Glass, I of course have a very vested interest in understanding how people interact with wearable devices. But more time I spend interacting with, thinking about, and talking about wearables, the more I realize that wearables aren’t really about wearables. Wearables are about the physical world.

A Look At Glasses

When Sergey Brin first unveiled Glass in 2012, he showed images from a concert in which hundreds of people were holding up their phones to record an artist. He showed a subway full of people, all with their heads down buried in their phones.

Google say they built Glass to solve this problem. Glass was intended to help people stop fiddling with technology but instead live in the moment. Glass was designed to free consumers from interacting with their personal technology.

At Pristine, we adopted this framework for our enterprise solutions from day one. We proudly tell our customers that the entire point of our solution is to wear Glass, but hardly interact with it. It’s counterintuitive, but our guiding hypothesis is that the wearer shouldn’t be forced to fiddle with the glasses, but rather should be focusing on the task at hand. Our tech for Glass helps mobile workers do exactly that. Hundreds of Glasses later, we can confidently say that we were right. Mobile workers don’t want to be distracted by interaction with Glass. They want to do their jobs, and be aided by Glass when they need it.

But what about solutions like Atheer and Meta? These devices promise an incredible future filled with rich interactivity through glasses. The problem is in the form factor. The “immersive glasses” are just that…immersive. They cover both eyes, look like a pair of ski goggles, and puts screens in front of each eye that create an experience closer to an Oculus Rift than a Google Glass (Microsoft’s Hololens presents an interesting “screenless” experience, though, with a lot of promise!). Touching virtual objects projected in the air is wildly un-natural and presents a huge educational challenge. They may have some chance in the enterprise, particularly in applications where sterility is important, but the consumer use cases outside of gaming are weak

What About Watches?

Watches are more nuanced than glasses. They don’t offer nearly the potential for enterprise use cases that glasses offer. On the other hand, it’s much more socially acceptable to wear a computer on one’s wrist than on one’s face.

Apple highlighted three tentpole functions for the Apple Watch: a timepiece, a health and fitness tracker, and a new way to communicate. The first two are intrinsically passive activities that require no input or interaction from the user. The third – a new way to communicate – refers to notifications, messages, favorites, sharing sketches, and sharing one’s heartbeat. But even Apple recognizes that the Watch isn’t about texts, it’s about connecting seamlessly with other people.

Apple’s messaging makes sense. They recognize that a device strapped to one’s wrist is not intrinsically designed for robust interactivity. If it can’t be interactive, it needs to passive. If it’s passive, it’s about getting back to the real world. And indeed, most of what Apple highlighted in the keynote was not about the device itself, but about how the device fits into real world.

The initial release of Android Wear was focused around expediting and improving the processes around notifications. Google wanted to make notifications more convenient and useful so that people spend less time on their phones, and more time on the real world. Several of my colleagues with Android Wear watches have verified that it excels in expediting notification management.

Where Are Wearables Going?

Although wearables may replace certain functions of the smartphone – especially around notifications – they will never provide the flexibility or interactivity that smartphones provide. Thus, wearables will never fully replace the smartphone, but rather will complement it. They may eventually assume  75% of the smartphone’s functionality, but they won’t provide core functionalities like a canvas for reading and writing on the go.

To put this idea in practice, consider reading and typing on wearables…can you imagine poking at your wrist for an hour? Or waving your hand in the air poking at virtual objects (this will fail for the same reason desktop touch screens never took off: it’s just not a comfortable user experience).

Instead, wearables will assume very specific functions from the smartphone so that you don’t have to perform that particular function on your smartphone anymore. Why record calories manually in your phone when your calorie-sensing tooth can record it for you? Why record your pulse manually when your smartwatch can do it for you? Why pull your phone out for a notification when you can look at your wrist?

So the future of wearables isn’t to totally replace the smartphone, and it’s not about ‘wearability’ necessarily either. It’s about dividing functional responsibility–breaking off certain functionality from the smartphone, one step at a time, to create the best experience on each device.

Can Life Sciences Companies Evolve to Accountable Care?

This post originally appeared on HIT Consultant.

Healthcare providers continue to assume increasing amounts of risk in care delivery. This has major implications, not just for providers and patients, but also vendors in IT, diagnostics, therapeutics and devices. If providers assume risk, why shouldn’t their vendors?

We’re already seeing this to some extent in emerging health IT companies. Most health IT innovation discussions revolve around driving value through population health, big data analytics and patient engagement. But many of these startups fail to generate any revenue until they prove the value of their solution through improved outcomes or reduced costs.

Life sciences companies, on the other hand, still generate all of their revenue in a fee for service (FFS)-like model. The more implants implanted, the more arteries unblocked and the more pills prescribed, the more these companies are rewarded, even if it’s the same patient receiving their third implant. The life sciences industry is still in the “sick care” business as opposed to the “health care” business.

How can life sciences companies transform from their traditional FFS business model to a new model that assumes risk and drives accountable care? How can they demonstrate value on a per patient basis? How can they re-shape their businesses to be more consistent with new care delivery models? Data.

Risk cannot be assessed without the measurement of data. It’s impossible to understand the efficacy of a treatment for a given patient if the outcome isn’t assessed in a granular, measurable way.

Today, efficacy data for treatments is typically captured at discrete points in time. Usually this happens when the patient sees the physician and the physician records a data point in the patient’s siloed electronic health record. Moreover, life sciences companies are only formally held accountable to data captured during clinical trials. After a treatment receives FDA approval and is commercialized, life sciences companies hardly understand how their treatments are performing in the wild.

The Internet of Healthy Things…Within People

The road to better measurement of product efficacy may lie with embedded sensors. These sensors would capture data 100 or even 1000 times per day, rather than weekly or monthly during physician office visits.

For pharmaceuticals, that likely means pairing sensors with pills and capsules to measure specific changes in chemistry and its effect. In some cases, these sensors could even be ingestible! Imagine after taking medication, the medication itself could measure and report against the key indicators it’s supposed to effect. Companies like Proteus Digital Health are developing some of the core IP in this area already, and have plans to license to their technology to other pharmaceutical manufacturers. In the future, cholesterol-lowering statins are paired with a sensor to measure both the target of the drug (the HMG-CoA reductase enzyme crucial to cholesterol production) and overall cholesterol level. Then this data is reported back to the care team in real time.

Google Contact Lenses monitor glucose levels in real-time. With an always-connected passive monitor, diabetic patients could learn about the peaks and troughs of their insulin throughout the day and better manage their diabetes.

In the medical device world, one could embed sensors right into the device. For example:

Many pacemakers already contain sensors to adjust electrical impulse to match heart rhythms and conditions accordingly. What if that data were tracked historically and tied to particular events (e.g. meals, activities, stress)? Patients would be able to understand how their heart is reacting to their lifestyle.

Or what if the recipient of a total knee replacement also received accelerometers within that implant to measure motion and gait? The patient’s physical therapist could use this data to adjust the rehab schedule and long-term data could be used to assess the success rate of the implant, surgeon and physical therapist. Then aggregating that data could then be fed back to the device manufacturer so they could better understand how their device affects patients.

On Storage of “Connected Healthcare” Data

Once a medical device captures data, the information could be transmitted to the cloud seamlessly. Patients wouldn’t have to remember to prick their fingers and go to the doctor to see how they’re doing. Just as businesses can take a pulse on themselves through dashboards and data, soon patients will be able to track and manage their health through measurable data in real time.

As patients better understand the impact of their treatments, they’ll react, creating virtuous cycles for effective treatments and vicious cycles for ineffective treatments. Patients will rightfully demand a new implant at no cost if their implant is shown to be statistically inferior to what they otherwise should have received.

Concluding Thoughts

Accountability has profound implications for the life sciences industry at every layer of operations. The entire product development, regulatory and commercialization strategies need to be re-thought around accountability. The most lucrative therapies will be those in which patients can clearly see and feel the benefits of the treatments.

Software is eating the world. Life sciences companies will need to embed intelligent software into their products and connect the local devices to proprietary cloud-based services. This will require massive changes in the development processes.

Regulatory processes will change. Perhaps the most important question to answer as a result of the regulatory process will evolve from, “Is the treatment safe and effective?” to “For whom is the treatment safe and effective?”

But commercialization strategies will change the most. The most successful life sciences companies won’t rely on providers as much to manage on-going success with a given therapy. Life sciences companies will employ data scientists to identify trends and patterns proactively. The data models will need to account for dozens, if not hundreds of variables. There is simply no way providers will be able to make sense of this data on a per-treatment basis so these companies will need to get more involved and develop a (even perhaps automated) direct relationship with the patient.

Healthcare is finally on a march towards accountability. And although it’s been a painful march, the march continues. The effects are slowly permeating throughout the healthcare ecosystem at every layer. It’s often said that un-innovative industries are that way because that’s what their customers demand. Hospitals have traditionally been FFS, but are transitioning to assume risk. Thus, it’s only natural that their vendors will be forced to do the same, although they may be kicking and screaming along the way.

A Sea Change for the Medical Device Industry

The medical device industry is at a crossroads. Indeed if AT Kearney’s recent report is any indication, the medical device industry is extremely vulnerable to disruption, with changing market conditions and constraints on several fronts at once. From the fundamental shift in device buying power to the changing healthcare payment landscape to an increasingly difficult pathway to innovation, success in the device industry is more challenging than ever before. A cursory examination of these three challenges reveal the critical need for medical device manufacturers to innovate quickly, and respond to these changing market conditions.

Shifting Purchasing Power

Traditionally, the purchasing relationship for surgical implants has been that of the surgeon and the device rep. Tradition is changing fast! The rise of the healthcare provider purchasing committee fundamentally changes the criteria by which devices are evaluated. Evidence-based evaluation coupled with stringent business model assessment have replaced physicians’ personal partiality as the driving force in purchasing. Per AT Kearney’s report: “Physicians’ preferences still matter, [but] their freedom to choose can no longer be taken for granted.”

Evolving Healthcare Economics

As more and more treatment falls under the purview of new payment models, cost reduction has come to the forefront. In bundled payments for instance, the fixed cost of a procedure puts a direct pressure on providers to lower the cost of care; demanding lower cost devices is one means toward that end. In turn, device companies must figure out ways to satisfy that demand for lower cost. ACOs provide similar incentives to maximize value per dollar spent, including those spent on the device. If a newer, more expensive device does not provide a compelling improvement in outcomes, it’s a hard sell.

The Challenge of R&D…and Commercialization

Compounding existing challenges requiring lower-cost devices in the marketplace, R&D is becoming more challenging and expensive. Per AT Kearney, FDA auditing has increased sharply in recent months. Coupled with new regulations, this increased regulatory oversight has pushed much of the R&D focus to improving existing devices, rather than creating novel ones. On the other side of the coin, smaller companies (and innovative divisions within large companies) are struggling to commercialize novel products. Training new experts to go into the field to demonstrate, sell, and train new products is a costly and expensive process, and slows the spread of very novel devices.


What’s next

Of course, there are already early disruptors within the industry. Smith & Nephew’s Syncera division is the oft-mentioned standout on that front, offering the parent company’s hip and knee implants “rep-less” for a dramatically lower cost. In the case of Syncera (as well as similar efforts from other device companies) an iPad replaces the rep, and offers the OR team the ability to communicate with the device company’s central support staff. Naturally, technologies like Google Glass fit well into this model; the first-person “surgeon’s eye view” of the device in the field provides (quite literally) an unmatched perspective, leading to better support. And because Glass is hands-free, it’s avoids the intrusiveness of a tablet or smartphone in the OR.

So it seems that for device companies, the decision is not whether to innovate, but when…and how. Will they self-disrupt? Will they fund/acquire their disruptors? So far, even the self-disruptors are keeping their efforts somewhat contained. Syncera and programs like it are designed to increase addressable market for devices (e.g. those hospitals that cannot afford the full-price, with-rep implants). At the same time, it’s easy to foresee a future where this model is the predominant delivery method for many devices. Either way, we’re keeping a close eye on the market, it’s going to be an interesting ride.

What Does the Future Hold for Google Glass?

Google just announced a number of changes to the Google Glass project and team:

1) The project is “graduating” from Google[x], the company’s research division, to a full-blown Google division.

2) Tony Fadell, the creator of the iPod and Nest thermostat, will oversee the division.

3) The consumer-centric Explorer program is ending; the general public will not be able to purchase Glass anymore (though Glass at Work certified partners like Pristine and Augmedix still have unrestricted access to all the Glass we need)

So what does all of this mean?

The short version is that this is a great sign for the future of Glass.

Here’s the long version:

As an independent division at Google (and not part of the experimental lab Google[x]), Larry Page will keep a closer eye on Glass. The Glass team will receive its own unique office space and resources, and will be allowed to interact with the public more than in the past. All of these are great indicators of Google’s serious investment in the future of Glass.

New leadership also bodes well! Tony Fadell is widely regarded as one of the best consumer hardware executives of the modern era; he’s built two multi-billion dollar consumer technologies (iPod and Nest). Google CEO Larry Page would not ask Fadell to step in unless Google was committed to the future of Glass. In other words, Page wants to see Glass succeed and is pulling in the most senior talent he has to ensure success.

And although it may seem counterintuitive, the end of the Explorer Program is a harbinger of the next phase of Glass’s growth. Ending the public beta program (which Explorer essentially was) is a prerequisite of any future release of new Glass hardware. With the experimentation phase of the Glass project complete, Google is now able to bring new Glass devices to market.

As Glass Certified Partners, we’ve been fortunate to partner with Google and witness the rapid investment of resources into the Glass at Work program. The Glass at Work team is growing and helping shape the future, not just of Glass, but of the wearable worker more broadly. All in all, we’re thrilled to celebrate Glass on its graduation day, and we’re very excited about what’s coming next.

Stay tuned for more, and feel free to reach out with questions, comments, and thoughts!

In Defense Of Google Glass

This post originally appeared on Forbes.

John C. Dvorak from PC Magazine UK recently wrote a piece outlining all of the reasons that Google Glass will fail.

He is largely wrong.

Dvorak’s primary thesis is that Google is taking a cavalier attitude towards privacy and that the public won’t stand for it. He predicts that as a result of slow sales (which he doesn’t quantify), Google will shut down Glass in the next year.

There are a few problems with Dvorak’s hypothesis:

Glass is not a walking invasion of privacy

Most peoples’ negative reactions to Glass from a privacy perspective are rooted in the camera. Theoretically, this camera could be recording at all times. Although technically true, that fear is not a logical interpretation of reality. Just because one is wearing Glass doesn’t mean that one is recording. But more importantly, new technologies don’t create new behaviors out of thin air.

In other words, if everyone was so adamant about recording their peers, what’s stopping them from doing that today with their phones? If people aren’t doing that today with smartphones, why will they all of a sudden do that with Glass? Glass’s camera is more convenient than that of a smartphone, but that doesn’t mean people will use it in the most nefarious, privacy-invading way possible. Social norms and self-image will prevent the vast majority of people from recording when inappropriate.

“But what about the creeps in the world?” you may ask.

Just because most people won’t use Glass for nefarious purposes, that doesn’t mean that some people won’t, right? And those bad apples will rot the entire tree, right?

Once again, simple logic comes to the rescue: people who want to record others in public typically don’t want others to know that they’re being recorded. Glass is a particularly awful tool at being discreet. It rests clearly on one’s face in plain sight and forces the recorder to look at the intended target. Google Glass is more likely the least deceptive technology than the most deceptive. Smartphones, given their ubiquity, are far more apt for deception.

Smart glasses in 2014 are where desktop computing was in 1978

Google initially designed and marketed Glass for consumers. Eighteen months later though, it’s clear that like desktops and cell phones before it, Glass will be adopted by enterprises first.

The first real application for desktop computers was spreadsheets (in the form of VisiCalc). In 1978, despite all of its limitations, the Apple II desktop computer was capable enough to render a 2-dimensional spreadsheet of numbers linked by basic addition and multiplication. Business analysts in finance and the corporate world immediately rejoiced because they no longer had to calculate each cell by hand. Spreadsheets made business analysts and executives 10x more productive.

In the early ’90s, Motorola released the first commercial cellphones. Despite their poor performance, poor network coverage, high price, and excessive bulk, business executives bought them in droves. Why? Because there was undeniable value in making phone calls while mobile. They would have gladly paid $1,000 / month for a phone in order to make billion dollar business decisions on the move.

The teams that built Glass intended it for wide-scale consumer adoption, but like Steve Jobs in 1978, were too early. However, early “killer apps” are emerging for Glass for use in the enterprise.

Of course, I have every reason to believe in a wave of enterprise Glass adoption. My company, Pristine, is on a mission to dramatically improve field service, training, and education through Glass. We’ve built a scalable, secure, robust, remote-collaboration suite for Glass to help local technicians fix problems that they otherwise never could have. Rather than struggle with a phone call to remotely diagnose mechanical problems, our customers empower their engineers to share what they’re seeing securely to remotely collaborate and fix mission-critical equipment, leading to massive ROI in healthcare, manufacturing, aerospace, oil & gas, and more.

What Dvorak gets right

While the killer apps for Glass in the enterprise are clear to many, Dvorak is closer to the mark in terms of consumer adoption. Currently, “consumer” ownership of Google Glass is limited to very early adopters who are trying the technology for its own sake, in absence of a truly game-changing application.

For consumers, the emergence of a killer app will be predicated on a few things:

  1. Glass won’t achieve mainstream adoption until you can no longer tell the difference between Google Glasses and regular glasses.
  2. Glass needs a killer app. It’s clear that given current hardware constraints, there isn’t a killer app for consumers. Perhaps augmented reality technologies will deliver the killer app for consumers.
  3. The price needs to fall dramatically. Luckily, Moore’s law dictates that the price will drop.

So where does this leave Glass?

Is Google going to kill Glass like other high-profile projects (e.g. Wave, Reeder, Buzz)? Doubtful. Larry Page just handed over most of his daily responsibilities to Sundar Pichai so Page can spend more time accelerating commercialization of Google’s most promising nascent technologies such as Glass and self-driving cars.

Instead, I offer this: Glass is going to change the world. But like other world-changing technologies before it (desktop computers and smartphones), Glass will solve expensive problems in the enterprise before achieving broader consumer adoption. Agree? Disagree? Drop me a line at kyle@pristine.io to talk more.