Bridging the Chasm: The Role of the SBIR Program

Drs. Dan Katz and Eric Savitsky with Brian Bernstein describe developing a commercial product through the government’s SBIR program

Dr. Dan Katz, Dr. Eric Savitsky and Brian Bernstein describe the step by step process of the government’s Phase I, II and III SBIR program to develop a successful commercial product.

This is the second installment in a three-part series that uses a case study to describe the introduction of disruptive innovation into medical education and training. This installment reports the process of successfully guiding a nascent educational technology from an idea into a successful commercial product.

October 7, 2001 marked the beginning of Operation Enduring Freedom (OEF), followed by the launch of Operation Iraqi Freedom (OIF) on March 20, 2003. Thousands of devastating blast-related injuries arising from improvised-explosive devices (IEDs) were a signature injury pattern of both conflicts. The complex nature of blast-related injuries was unlike anything encountered to date by military care providers trained within United States medical centers. In an effort to track and analyze the high volume of casualties and complicated nature of injuries during combat operations, US military forces began in 2004 to develop and implement the Joint Theater Trauma System (JTTS) and Joint Theater Trauma Registry (JTTR). These measures were intended to “improve trauma care delivery and patient outcomes across the continuum of care utilizing continuous performance improvement and evidence-based medicine driven by the concurrent collection and analysis of data maintained in the Department of Defense Trauma Registry (USAISR 2014).” Their creation resulted in tremendous improvements in medical care and created unique opportunities to advance combat casualty and civilian medical care.

In a seemingly unrelated event, SonoSim was the Phase III commercialization vehicle of an earlier government Small Business Innovative Research program(SBIR) that began in 2007 as a direct response to unmet medical training needs arising from OEF and OIF. Through the strength of the federal government’s SBIR program the Department of Defense was able to prompt solutions to improve combat casualty care and improve efficiency within the military health system.

SonoSim was the end-result of a successful SBIR program that began with a Phase I award in 2007. Along the way, this effort culminated in providing thousands of military care providers the latest medical lessons learned in OEF and OIF in the form of a military textbook (digital and print-versions), training DVD, and a much-needed, groundbreaking ultra-sound training solution for military and civilian health sectors.

SBIR Program Background

The SBIR program was established through the Small Business Innovation Development Act in 1982 to award federal research grants to small businesses. The program originally had several objectives: (1) spurring technological innovation in the small business sector; (2) meeting the research and development needs of the federal government; and (3) commercializing federally funded investments (OSD 2014).

SBIR program founder Roland Tibetts described the program as a method “to provide funding for some of the best early-stage innovation ideas - ideas that, however promising, are still too high risk for private investors, including venture capital firms." (Congress 2009).

The Department of Defense is the largest recipient of SBIR monies and receives approximately $1 billion in SBIR grants annually (OSD2014).

The SBIR program is divided into three phases:

Historically, about 15 percent of SBIR proposals are awarded a Phase I contract, and approximately 50 percent of Phase I projects are subsequently awarded a Phase II contract (DoD 2014).

The SBIR program has enjoyed numerous successes; one of the most notable is Qualcomm. Qualcomm co-founder, Dr. Irwin Mark Jacobs, credited the SBIR program with providing critical early-stage support during Qualcomm’s formative years. Today, Qualcomm is a global publicly traded behemoth with a market capitalization of $90 billion and over 17,500 employees. However, the SBIR program has yet to enjoy similar success supporting medical modeling, simulation, and training technologies. Numerous unique challenges have made launching successful start-ups in this space elusive.

Responding To An Unmet Need

While combat operations in OEF and OIF were at a crescendo, half a world away at the University of California at Los Angeles (UCLA) Medical Center, UCLA Professor Dr. Eric Savitsky was working with his colleagues to create innovative computer-based medical education and training programs. Much of his early work involved creating computer-based “train-the-trainer” programs that were funded and used by a variety of international and non-governmental organizations, including the United Nations, International Rescue Committee, and Project HOPE. Concurrently, Savitsky was engaged in seed-stage technical research aimed at developing computer-based “hands-on training” technologies at the UCLA Center for Advanced Surgical and Interventional Technology (CASIT), which was supported by the Department of Defense.

In 2007, Savitsky and his colleagues decided to launch a start-up called Pelagique, LLC with the hope of transitioning promising university-based research into the commercial marketplace.

While presenting some of his research at an Advanced Technology Applications in Combat Casualty Care (ATACCC) conference in 2006, Savitsky gained insights into the military’s pressing need to improve pre-deployment training for first-time combat casualty care providers and learned about the SBIR program and its intention to spur innovation by small businesses.

The Start of an SBIR Journey

Fortunately, the severity and spectrum of battlefield injuries seen in military conflict is rarely encountered in the civilian sector. As a result, it was exceedingly difficult to deliver adequate training to care providers before their combat-zone deployment. This prompted the Defense Health Program to begin drafting a Phase I award solicitation in 2006, which was initiated by Robert Foster PhD, former Director of Biosystems (Office of Secretary of Defense), in consultation with senior military medical leadership. Foster identified the need to develop a training curriculum based on lessons learned in OEF and OIF, coupled with a rapidly deployable method of providing training for combat casualty care providers. The newly developed JTTR database provided a unique opportunity to formulate evidence-based recommendations on best practices, which would stand in stark contrast to traditional anecdotal or expert opinion-driven approaches. Savitsky and his Pelagique colleagues responded to this Phase I SBIR solicitation and Pelagique’s submission was selected for funding. Phase I work commenced in 2007.

During Phase I, the major elements included: (1) determining curriculum requirements and priorities for inclusion in the Combat Casualty Care Training System; (2) selecting training technologies that fulfill didactic requirements; and (3) designing a Combat Casualty Care Training System that could be widely distributed, allowing delivery of high-quality training capability to military medical care providers at varying stages of deployment.

Combat Casualty Care Training

Pelagique’s Phase I program was selected for a Phase II award in 2008. The Phase II SBIR program led to the creation of two integrated technologies, a personal computer-based multimodal Combat Casualty Care Training System and a research prototype alpha-version SonoSimulator®. The technical objectives of the Phase II effort are detailed in Table 1.

The most challenging initial element of the Phase II effort was gaining entry into a military medical facility within a war zone during peak combat operations. While the SBIR program provided financial support and technical points-of-contact to assist with program execution, there was no direct method of facilitating civilian team member travel to a war zone. Obtaining access credentials (i.e., CAC cards or DBIDS credentials), coordination of transportation, lodging, and security with the military were substantial barriers to travel.

Ultimately, travel arrangements were secured and Pelagique team members were embedded within an echelon Level III facility, the 31st Air Force Theater Hospital in Balad, Iraq. The team was able to acquire video footage of the management of severe battlefield injuries cared for at this Level III facility (e.g. IED-related injuries). The video footage was used to create a real case-based training curriculum to prepare military care providers for future deployments.

Combat Casualty Care Training DVD

The Combat Casualty Care Training System used a Flash®-based program to present text chapters, video cases, and procedural tutorials on 13 topics, which were carefully developed in collaboration with over 35 Department of Defense Joint Services subject matter experts (SMEs) through field-data collection, and by filming in the 31st Air Force Theater Hospital in Balad, Iraq. These training resources were distributed at the 2010 ATACCC conference, and subsequent distribution of training DVDs was managed by the Army’s Combat Casualty Care Research Program. Enthusiastic reviews and the high-quality curriculum motivated the Borden Institute, with support from the Telemedicine and Advanced Technology Research Center (TATRC) to publish and distribute thousands of copies of a companion textbook. The book, Combat Casualty Care: Lessons Learned in OEF and OIF, received a Washington Book Publishers Award in 2012. The curriculum was integrated into standard pre-deployment training for US Army medical personnel and was translated into foreign languages in support of allied nations.

Hand-carried ultrasonography was identified as an important frontline tool for military care providers in Iraq and Afghanistan during Phase I research. The creation of a hands-on, virtual ultrasound training program was a major component of the Phase II Combat Casualty Care Training System. This ultrasound training program leveraged an earlier patented invention by Pelagique members. The application selected for hands-on ultrasound procedure training was the Focused Assessment with Sonography for Trauma (FAST) examination, which was delivered via a laptop personal computer-based interactive simulator called the SonoSimulator®. An efficacy study performed in Phase II documented that a pre-commercial release of the SonoSimulator resulted in remarkable improvements in pre- and post-test knowledge and performance measures and even outperformed a live-instructor led ultrasound training session (Chung 2013).

The Commercialization Phase

Hand-carried ultrasonography is an integral part of the Military Health System (MHS), both in combat casualty care during deployment and in the delivery of care to the beneficiaries of the TriCare system. It has key applications in the care of wounded warriors from in-theatre point-of-injury through their return to the continental United States. The need for MHS-wide ultrasonography training has grown in parallel to more widespread ultrasound imaging and image-guided interventions.

Feedback regarding the utility and training value of the SonoSimulator from ultrasound manufacturers (future strategic channel partners) coupled with interest from academic institutions (medical and nursing schools), major medical centers, community hospitals, and individual care providers established a significant military and civilian sector commercialization opportunity. Pelagique received a Phase III award intended to facilitate commercial-grade development and deployment of the SonoSimulator in 2011. As part of Phase III efforts, Pelagique created SonoSim Inc. for purposes of fully commercializing the SonoSimulator. The SonoSim Ultrasound Training Solution was a direct extension and integrated component of the Combat Casualty Care Training System created in Phase II.

Crossing the Chasm

The SonoSim Ultrasound Training Solution overcame traditional barriers to ultrasound education and training. It validated using a low-cost personal computer as a platform for advanced medical training and simulation. In doing so, it upended traditional medical simulation paradigms and approaches to medical education. As such, it was widely viewed as a form of “disruptive innovation”.

Concurrent to these marketing challenges, the company still needed to upgrade its existing SonoSimulator prototype into a commercial-grade product. Like most start-up companies we had limited funding options. Traditional sources of federal funding that support proof-of-concept projects (e.g. National Science Foundation) did not support refining late-stage technologies. Diminished corporate interest in supporting advanced research and development efforts further shifted the burden of financing product development.

Consequently, start-up companies are often reliant upon venture capital (VC) firms for financing. Such early-stage dilution of equity and fragmentation of leadership compromises the future trajectory of such companies. Since private equity firms are motivated by company valuation and maximizing returns-on-investment, the objectives of the original SBIR solicitation often become secondary priorities.

SBIR Program Challenges

While early-stage SBIR efforts, such as Pelagique’s Phase I and II work, are well understood by program managers and staffers, Phase III efforts pose unique challenges. Phase III companies are attempting to become profitable and self-sufficient businesses. However, the majority of these companies are still heavily reliant upon SBIR funding to develop commercial-grade products. The ability of such businesses to withstand delays in government contract execution is quite limited. Delays resulting from prolonged congressional inaction, inefficient contracting processes, cyclical turnover of program officers leading to loss of institutional knowledge or memory of earlier stage SBIR efforts are potentially disastrous for start-up companies. An increased awareness and sensitivity to the challenges Phase III start-up companies face would improve the odds of the federal government reaping a reward on earlier investments.

Conclusion

Pelagique’s SBIR program journey was notable for its progression from innovative concept, to creation of a consumer product, and ultimately to commercialization. The step-wise progression of the phases allowed the team time to transition from research and development-focused activity to product commercialization. This was a dramatic evolution. The challenges companies face in Phase III are dramatically different than early Phase I and II efforts. Consistent support provided by the SBIR program was of immense value helping to navigate this complex and challenging landscape. Overall, the SBIR program was an invaluable asset that met its founder’s original objectives.

About the Authors

Dr. Dan Katz is an Emergency Medicine Physician at Cedars Sinai Medical Center in Los Angeles, CA and is VP of Business Development for SonoSim. Eric Savitsky, MD is a Professor of Emergency Medicine at the University of California at Los Angeles (UCLA) and is the inventor of the SonoSimulator®. Brian Bernstein is a Marketing Associate at SonoSim, Inc.

Reference 1. United States Army Institute Surgical Research Home Page. www.usaisr.amedd.army.mil/joint_trauma_system.html. Accessed on September 26, 2014.

Reference 2. US Department of Defense. Small Business Innovation Research. Small Business Technology Transfer page. www.acq.osd.mil/osbp/sbir/about/index.shtml. Accessed on September 26, 2014.

Reference 3. The Role of the SBIR and STTR programs in stimulating innovation at high-tech small businesses. Hearing before the subcommittee on technology and innovation committee on science and technology House of Representatives one hundred eleventh Congress First Session. April 23, 2009. Serial No. 111-120. www.gpo.gov/fdsys/pkg/CHRG-111hhrg48735/pdf/CHRG-111hhrg48735.pdf

Reference 4. SBIR/STTR. Small Business Innovation Research. Small Business Technology Transfer Home Page.  www.sbir.gov/about/about-tibbetts-awards. Accessed on September 26th, 2014.

Reference 5. Chung GK, Gyllenhammer RG, Baker EL, et al. Effects of simulation-based practice on focused assessment with sonography for trauma (FAST) window identification, acquisition, and diagnosis. Mil Med. 2013; 178:87-97.

Reference 6. Moore Geoffrey A. Crossing the Chasm, 3rd Edition: Marketing and Selling Disruptive Products to Mainstream Customers. New York. HarperCollins Publisher. 2014. Print.