Why We Invested: Osso VR (Scrum Ventures)
[This blog originally appeared on Scrum Ventures’ Medium on October 30, 2020.]
Companies are increasingly adapting to a pandemic that has dramatically altered how employees interact, train, and learn new skills. This change is particularly pronounced in the healthcare space where surgeons currently have limited training options if expensive equipment like cadavers or simulators are required, and they end up relying on written instructions. This has made current medical training less effective and is exasperated because hospital budgets are more strained than ever due to Covid and have less funding for training opportunities.
However, training surgeons remains essential to ensure patients have the best outcome possible. As of now, 400K patients each year experience preventable harm, and the mortality rates of patients with lower-skilled surgeons is 5x higher than patients with highly skilled ones. In addition, without reinforcement training, nearly 31% of new surgeons have trouble properly completing surgical procedures and need supplemental experience. A new cost-effective solution to surgeon training is using VR. By creating a virtual operating room, surgeons can learn and train procedures in a risk-free environment which allows for ample training before meeting a live patient. Having VR training during Covid is important too as in-person courses are limited.
This is why we recognized the importance and potential of Osso VR and are excited to support them in their Series A. In addition to quality virtual training, the Osso VR platform helps hospital staff assess surgeon skills, and surgical teams more efficiently and effectively utilize new surgical technologies. Osso VR’s platform intelligently combines the Oculus Quest with a proprietary VR content creation engine that merges a content library with analytics dashboards to track the performance of each user. The long-term mission is to enable a wide range of medical professionals to succeed through remote training and to help increase adoption of higher-value medical technologies. We have been tracking mixed reality technologies for several years now, but only recently became confident about the market timing of VR after we identified healthcare and surgical training as emerging use cases for this kind of technology.
All-Star Founder
When I met founder Justin Barad for the first time, I was immediately impressed. Like many investors, we look for founders who display a certain kind of grit, deep domain expertise, a proactive (rather than reactive) leadership style, and a propensity to succeed under pressure. Justin has a solid combination of credibility in healthcare and an understanding of tech and gaming. Before starting Osso VR, Justin was a game developer and owns a game development credit from Activision/Blizzard. However, when a family member was hospitalized, Justin realized that hospitals were drowning under antiquated technologies and ineffective software solutions that were creating barriers for doctors to provide the best care to patients. This drove him to attend medical school and ultimately build Osso VR.
What is remarkable about Justin’s entire career trajectory is his ability to excel at everything. Armed with a bioengineering degree from UC Berkeley, Justin got an MD from UCLA’s Geffen School of Medicine where he graduated first in his class and stayed there for his orthopedic surgery residency. He also did fellowships at Harvard and Boston Children’s Hospital, and spent time as a Fellow at Stanford Byers Center for Biodesign. He is now a highly sought-after pediatric orthopedic surgeon and has built an impressive team around him at Osso VR.
Justin has demonstrated a track record of success across multiple types of roles and jobs which gives us confidence in his ability to learn quickly, iterate on the product, drive Osso’s go-to-market strategy and succeed in building a solution with strong product-market fit. But we’re not the only ones impressed. In the middle of fundraising, Justin managed to add both ILM alum Art Director Jonathan Sabella (who happened to supervise the first team to win an Oscar for a VR film) and seasoned healthcare executive Josh Willeford (CFO) to his team.
Strong Path to Market, Incredible Results
The first time we visited Osso VR, we had the opportunity to perform an intramedullary tibial nail insertion surgery in Osso’s virtual operating room. The setup and calibration were quick, and about a minute after I put on the headset, I was already assembling drivers, hammering a tibial nail into a virtual knee and learning about new tools like proximal locking jigs and stardrive screwdrivers. To this day, I can vividly remember how I felt being guided through each step of the procedure and how the real-time feedback was helping me. Though I only got a grade of ‘B’ on my very first attempt, I instantly understood why Osso’s clients, as well as surgeons who have tried the experience, value the platform.
They currently have traction with over 30 paying customers, including 12 of the largest medical device companies worldwide. Medical device training is a market that is worth over $4B globally and major medical device companies spend nearly $200M/year each on physician training. Choosing to distribute their product through medical device company sales reps creates a faster path to market, enabling Osso VR to reach hospitals and clinics more efficiently. With this go-to-market strategy, they already have captured a majority of the remote surgical market share. On top of that, Osso VR is also deployed in teaching hospitals in over 20 countries around the world with proven ROI to support quick growth. In fact, clinician tests show 3x improvement in surgeon efficacy and 7x improvement in new sales productivity for medical reps after using Osso VR. In addition, research published in the Harvard Business Review shows eye-popping results like 230% performance improvements, 20% increase in procedure speeds, and 38% increase in correctly completed steps for surgeons who trained using Osso VR compared to those using traditional training methods.
Final Thoughts
The usefulness and effectiveness of Osso VR’s platform have delivered significant customer growth for them. They provide strong value for medical device companies where they can significantly reduce the cost of training surgeons and also help shorten the sales cycle with healthcare providers which is notoriously tough and long-winded. Since they completed fundraising, Osso VR has continued to build on their success — they expanded their content creation team and work beyond orthopedic surgeries into other divisions like endovascular, thoracic, and even OB/GYN surgeries. They recently also upgraded the visual UI and UX of the immersive experience making it even more realistic. The data Osso VR is collecting from each training session will enable them to better customize future training experiences and build the most robust database of medical training performance and progress in the market.
The current remote training market is growing yet fragmented in healthcare and I believe that, with their functionality and innovative approach to medical training, Osso VR has the opportunity to be transformational. They are tackling a universal problem in the healthcare training space and are building a VR platform that makes healthcare training scalable. With Osso VR, millions of doctors will be better prepared and more effective, and even during Covid, can continue training.
Learn more about Osso VR or schedule a demo here.
Jonathan is a VC investor dedicated to helping impact-driven entrepreneurs scale and grow their business. Jonathan is regularly invited to host pitch competitions, at events like the Forbes Summit and SXSW, and speak on-stage about his experiences in VC, entrepreneurship, the Silicon Valley startup landscape, and his interest in the AgriFood space. In addition, Jonathan has been invited as a speaker at the Forbes Under 30 Summit, was selected as part of the 2019 AgGrad 30 Under 30 class, is an advisory council member for Gold House’s Gold Rush Accelerator, and hosts a podcast called Capitalist (Ad)Ventures that explores the diversity of thoughts and backgrounds in the entrepreneurship space. Jonathan has a BA in History from Rice University and an MBA from the Johnson School at Cornell University.
