MaRS Innovation’s portfolio includes approximately 20 companies in various stages of business development. Of these, Xagenic Inc., VitalHub Inc. and OtoSim Inc. were our initial group of incorporated companies. Each has either raised substantial capital and/or launched their products.
OtoSim Inc., which makes an otoscopy (ear examination) training and simulation system that has been shown to improve medical professionals’ accuracy when diagnosing ear pathologies by 44%, has done both.
After raising over $350,000 in seed funding, OtoSim launched the OtoSim™ device in September 2011. The company has since sold over 125 units, clearing over $350,000 in sales.
Their customers include some of the biggest medical schools in North America, including the University of Toronto’s (U of T) Faculty of Medicine, the Stanford School of Medicine and Boston University.
OtoSim’s CEO, Andrew Sinclair, was seconded from his usual role as senior director at MaRS Innovation to run OtoSim and another spin-off company within MaRS Innovation’s portfolio.
While OtoSim enjoys a strong position coming into the end of its first sales year, Sinclair admits, “There have been surprises.”
Your market isn’t always where you think it is
“Initially, we thought the OtoSim’s™ key customers would be ear, throat and nose specialists or undergraduate directors of those programs within medical schools,” Sinclair explains.
The assumption isn’t unreasonable. Drs. Vito Forte and Paolo Campisi, otolaryngologists (head and neck surgeons) at the Hospital for Sick Children (SickKids), saw a need for a device like the OtoSim™ to correct the terrible rate of accurate otoscopy diagnosis in young medical professionals—50%.
They conceptualized and designed the OtoSim™ device to meet this need. Forte is the otolaryngologist-in-chief at SickKids; Campisi is the director of graduate education for otolaryngology at U of T and the former director of undergraduate education. Both are professors within U of T’s Faculty of Medicine.
“What we found,” says Sinclair, “is that the big customers are actually medical simulation centres, physicians’ assistants, nurse practitioners, and nursing and allied professional schools, which is a much larger target than just medical schools. The newly recognized breadth of our customers has shifted our marketing focus, especially around trade shows.”
Listen to your customers
“Several of our first customers identified a crucial gap in our product line,” Sinclair says. “They wanted to simulate pneumatic otoscopy, a process whereby you blow air at ear drums to test for the presence of liquid in the middle ear, which is an infection indication.”
OtoSim listened and is launching a pneumatic otoscopy attachment this fall. The device teaches students how to apply appropriate pressure to the ear and the differences between ears with and without liquid behind the ear drum.
Be open to opportunity
Earlier this spring, OtoSim appeared on Business News Network’s “The Pitch.” Louis Hui, the team’s director of business development, went on to pitch the OtoSim™ to a panel of investors. Hui earned positive feedback, valuable experience and exposure.
Sinclair has also been creative in his approach to staffing. “We worked with the Mitacs Enterprise program to partially fund the first six months of salary for Kusala Jayasuriya, OtoSim’s director of sales,” he says. “There are a lot of grants and programs like this out there. They can really help startup companies offset their overhead costs.”
In the last three months, OtoSim has secured a total of $60,000 to support its growth, hiring expansion and additional product development from Ontario Centres of Excellence’s Technical Problem Solving program, MaRS Discovery District’s Business Acceleration Program and the Mitacs Enterprise program.
With other products coming down the development pipeline, OtoSim is well positioned to grow its successes heading into its second year.
“While we can grow out of our profits, we are seeking $1 million to accelerate our pipeline of new products and enhancements to the OtoSim™,” says Sinclair. “Not needing the $1 million for day-to-day operations puts us in a better position to negotiate a good deal with the investor and lowers the risk we present.”