Ep. #994 - Digital Pathology Software Solutions
In today’s episode of Startup Hustle, let’s dive into digital pathology software solutions. Matt Watson picks David West‘s brain, co-founder and CEO of Proscia, on major developments in pathology. So with tech advancements, the field is shifting from microscopic to digital solutions in modern labs for patient and disease diagnosis.
Covered In This Episode
Modern laboratories are transitioning to digital pathology software solutions. And that means no more looking into the microscopes. But what are its implications on diagnosis and patient prognosis?
Find out more about this development from Matt and David. Moreover, they discuss the use of AI and machine learning in the field. And enjoy their discussion on how big data pools are processed and stored in the cloud.
Be updated on the latest news of pathology tech. Tune in to this Startup Hustle episode now.
- David West and his backstory (02:33)
- Introduction to pathology (05:56)
- Challenges of pathology technology (08:46)
- Using machine learning technologies and AI (10:17)
- Focusing on pathology and how it works (12:08)
- Managing large amounts of data (15:01)
- Liability and data retention (16:59)
- Costs of handling huge data amounts on the cloud (18:53)
- David’s first company experience (21:05)
- How they ended up focusing on pathology (24:02)
- Being a founder and having a co-founder without pathology experience (25:24)
- Matt Watson’s first company and experience (26:32)
- Why does pathology need attention and a solution? (27:26)
- Competition in pathology tech (28:40)
- Proscia’s current partners (29:28)
- Proscia’s go-to-market strategy (30:32)
- How David chose company leaders and members (34:04)
- The future of Proscia (37:28)
- Building a team in Europe (40:27)
- Tips for entrepreneurs and founders (42:22)
Over the past five years, pathology has been increasingly image-based. These labs have started to buy these huge scanners from companies like Phillips or Leica, which most people know for cam manufacturing. But they have a big medical business unit.– David West
The bigger the company becomes, the more it becomes corporate. Like the whole culture, it changes over time.– Matt Watson
Pathology has been so ignored by Silicon Valley because it has a certain black box aspect to it. You’re a patient, you get a biopsy, and you get a pathology report back, and no one knows what happens in the basement of that hospital.– David West
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Following is an auto-generated text transcript of this episode. Apologies for any errors!
Matt Watson 00:00
And we’re back with another episode of the Startup Hustle. This is your host today, Matt Watson; excited to be joined by Mr. David West from Proscia. We’re going to be talking about his company and pathology software, AI, and all sorts of things. I’m sure. Before we get started today, I do want to remind everybody that today’s episode of Startup Hustle is powered by FullScale.io. Hiring software developers is difficult. Full Scale can help you build a software team quickly and affordably and has the platform to help you manage that team. Visit FullScale.io to learn more. How’s it going, David? Welcome to the show.
David West 00:36
Great. Thanks for having me, Matt. Appreciate the opportunity.
Matt Watson 00:39
So I think it’s interesting to talk today about pathology software. Most people probably don’t know this, but actually, one of the first programming jobs I ever had was for a medical lab. Really, this might be an interesting conversation. Yeah. So I’d love to hear your feedback.
David West 00:59
Yeah, you got the rundown on this.
Matt Watson 01:04
Yeah, I didn’t, either. And I was like 21 or 22 when I started working at this place. We built some. Basically, it was like an order-taking software to put in, like regular clinical laboratory orders and some pathology orders. And then our software would like us to actually end up building a whole laboratory information system. That is what it turned into because Cerner wanted millions of dollars a year to use their software. And our crazy IT manager at the time said screw that, we’re going to build one, which was like a crazy idea. Yeah, I was the lead developer to build it. So it was interesting but so exciting to learn more about your background and how you came to start Proscia?
David West 01:53
Yeah. So I started kind of age-wise around when you started doing some stuff. And in the lab space, I went to Johns Hopkins as an undergrad and was kind of a wide-eyed college student, really curious. I studied biomedical engineering; I wanted to just soak everything up and get, honestly, a little bit jaded by the, you know, really aggressive sort of GPA-focused culture there. A lot of my classmates were saying, hey, I’m gonna go to medical school. I have a 4.0. Everything’s got graded on a scale. And it’s a really rigorous academic curriculum. And I started kind of looking for other things in the kind of Hopkins ecosystem that I was interested in. And there were a lot of smart people there at the medical school that were doing interesting work. And I kind of started wandering around and, you know, I met a few scientists that were doing some interesting things. They introduced me to other people, and I became fairly close with the founder of the Cancer Center at Johns Hopkins. A guy by the name of Don is towards the end of his career. And he and one of his colleagues, Bob Veltri, we’re working on really interesting technology to use computers and computer vision to measure the properties of cells in images of tissue and predict prostate cancer. Yeah, it was like, wow, we can use computers to look at cancer and say things that, you know, otherwise, we would rely on a human pathologist looking at a piece of tissue on a piece of glass underneath a microscope. The same technology that’s been used for the past 150 years that you’d see in an eighth-grade biology classroom. And sort of scratching my head. Why are we not using this technology? All pathology should be based on software and based on images. And we should be able to use this data to do things like predict cancer outcomes. I started building some stuff, and, you know, on the side, I can call up one of my buddies from back in one of my co-founders. We’ve known each other for 20 years. So we went back to kindergarten, a brilliant software developer and another one of my classmates there at Hopkins. I know they’re just really smart guys. And we started building and putting something out there for free to help pathologists and scientists manage all this data. And maybe even pull in algorithms to be part of their workflows and put it out there for free. Got a couple 100 users on the platform, raised some money, and it became my full-time job in a real company around 2016.
Matt Watson 04:52
That’s awesome. Yeah, I love somebody that you know takes a problem and understands the problem. You know, inventing a solution for Wow, that’s amazing. I love it, man. It’s a great story.
David West 05:02
It’s a very humble beginning, always with a big vision. The first version of the software that we built wasn’t anything fancy. It was kind of just like, you know, Google Drive for pathologists. It’s a way to easily manage and share data. But so I built it. Yeah, go ahead.
Matt Watson 05:20
I was gonna say so for those who are listening. I’m gonna guess most people don’t know what the hell pathology is. And so we might want to back up there. I didn’t know what pathology was either. All I knew was that when I was building software, we had to order these tests. And our IT manager, for whatever reason, always for pathology, uses his wife’s pap smears as an example. Which always felt weird. But pap smears are probably one of the most common things done in pathology, right. But there’s also a lot of things like, like, for example, like, looking at placentas after a baby’s delivered, there’s a lot of different types of pathology, right. So explain what pathology is?
David West 05:56
Yeah, so pathologists spend their time usually looking at tissue to try to understand the disease. A lot of people think of like, you know, pathologists in, you know, crime television or something, or looking at autopsies. And there’s autopsy pathologist, but a lot of what pathologists are doing most of what pathologists are doing is they’re taking a biopsy or something that your dermatologist maybe shaved off your skin, or your gastroenterologist took out of your colon in a colonoscopy, or out of your, you know, out of your upper GI and something like that.
Matt Watson 06:38
And sending it down to a lab and basically, that put it under a microscope.
David West 06:40
I mean, is that largely what they do? That’s what they do. There’s somebody there’s kind of two parts of it. One is there’s, there are people that prepare, take that piece of tissue and stain it with a bunch of chemicals, putting the wax slice it kind of using this thing is like a really fine. A Deli meat slicer, honestly, is what it’s like. Like it has a little cranking wheel, and it cuts very thin pieces of tissue. You put that on a glass slide, and then they send it off to the second part, which is when you have a medical doctor, a pathologist looks at this, and they just look for patterns, patterns of cancer. They’re trained experts in trying to understand patterns in tissue.
Matt Watson 07:20
So does your guys’ software almost replace the pathologist? That means do your guys’ software take the photos that come out of the microscopes and then be able to identify what they should have found from those? Like how does your guys’ software fit into that, then?
David West 07:35
So we’re definitely not replacing the pathologist. We start when an image is created of the class slide, and this is really relatively new technology. Unlike radiology, radiology has been digital for 20-plus years, right, and you’re mostly not getting film X-rays. A lot of times, there’s, you know, firms that have outsourced reading like Nighthawk radiology has a lot of people overseas that will read your radiology cases. It’s super easy to just beam an image from point A to point B, and one of my neighbors does that.
Matt Watson 08:04
Yeah, totally right to the home. And he’s like an emergency room radiologist.
David West 08:11
Yep, yep. Pathology is not like that, totally tied to the microscope. But over the past five years, pathology has been increasingly image-based, these labs have started to basically buy these huge scanners from companies like Philips or Leica, which most people know for camera manufacturing, but they have a big medical business unit, a bunch of these big medical imaging companies that sell these machines that take a glass slide, usually like 400, or 500, glass slides at once you put a rack in, and they generate images of these slides. And these are not iPhone photos. They’re like 40,000 iPhone photos. So yeah, we’re talking about a gigabyte per image, super high res, a lot of data, right. And that’s really the first problem or challenge with this technology. You can’t even talk about AI, reading these images, until you have the image in the first place. And they’re huge, cumbersome images to deal with. So that’s the first thing that we do, we basically pick up these images from any scanner out on the market and help whether it’s a scientist in a research setting or a pathologist in a diagnostic setting. Look at this really big image, do things like reporting, managing their work list, we’re integrating with the kinds of systems that you would have built, like the lab and from the order results, things like that. Exactly, you know, we’ll pull all that data in any kind of power their workflow. But over time, we think algorithms will start to be layered on top of that workflow and help the pathologist do everything from cell counting to measuring the expression of a particular protein, or whatever that might be or predicted. In cancer outcomes, right, there’s a, there’s hundreds or 1000s of applications that will be built using AI and this new kind of data.
Matt Watson 10:08
Yeah, I mean, it would make sense to me that you could do different kinds of machine learning algorithms, AI, and stuff, right to tag all these images. And then over time, can you guys almost say, hey, we think it’s this, and like, the pathologist is almost confirming it.
David West 10:24
Yeah, we’re already seeing that right now. The first versions of this technology were used for research purposes. So pharma companies do a lot of this work as well. It’s not as regulated as the diagnostic space. But we’re starting to see some applications, some of which, you know, our partners build, some of which we build. And they’re doing things like identifying, you know, tumors, and sometimes a pathologist is searching for a tumor in a sort of needle in the haystack. You know, the geography of otherwise benign tissue. And that’s a super challenging, time-consuming process. And if you can point the pathologist to, Hey, look here, or we think it might be this, that’s super valuable, we can also be a, you know, a quality control, sort of check in the background, hey, you might have missed something that looks like a malignant melanoma, maybe you should read this case again, or have another pathologist read it.
Matt Watson 11:23
So does your guyses software do other kinds of imagery, like CAT scans, or MRIs, or radiology, or any of these other kinds of things? We just focus on pathology.
David West 11:29
And while we work with other companies that do different kinds of medical imaging, a lot of that space is pretty mature, right? Like there are those companies that have been built, the companies that manage that kind of data and do those kinds of workflows. And there are a lot of algorithm companies in that space. Pathology is like, really a blue ocean opportunity. It’s just exploding right now. And that’s kind of been the attractive thing, we think there’s a chance to build a multibillion dollar business in this critical field of medicine that is kind of a late bloomer, when it comes to, you know, adopting software and these data driven approaches.
Matt Watson 12:11
And it’s different enough that like, whatever software would generically handle images from radiology or whatever, can’t just do the same with pathology. Like there’s, you guys do a bunch of spots, special stuff really unique to pathology? Yeah, obviously, the machine learning part of it would be totally different, right? Machine learning for X rays would be totally different than figuring out skin cancer or whatever, from a melanoma biopsy, right? I understand that part of it.
David West 12:39
It starts with the images right there. Just so like, in terms of scale, pathology, images can be hundreds, possibly 1000s of times larger than radiology images, and just in different order of magnitude, they’re more like, a good analogy, for folks that like, have dealt with this kind of technology, like we all deal with, like Google Maps, you have satellite imagery, and think about that experience of like zooming in and getting really close on to your house, right? That’s kind of how pathology images work. They’re just so big that you have to use different types of technologies to be able to stream it to the person who’s viewing that image, you have to manage it in different ways. They’re generated in different ways. And with all those complexities come unique challenges. But that’s where we said, hey, there’s an opportunity to build a sort of category leading business in this field.
Matt Watson 13:32
And so I’m curious now, so if you’re doing a biopsy on a liver or whatever to test for liver cancer, or whatever it is, how many slides are there? Are there a lot of slides?
David West 13:43
It totally ranges so you know, take like a year most of most of, say dermatopathology, or skin pathology volume, you’re gonna see something like one or two slides per case, typically, you go, you know, you get like a breast cancer cases can be in the, in the dozens. You see, you see other tissue types that might be many dozens to maybe the very low, hundreds of lots of slides. But it really ranges, it really ranges the gamut.
Matt Watson 14:21
That’s really fascinating. And it’s, yeah, that’s got to be a lot of very large files to deal with, as you said, moving that amount of data around in itself is its own challenge.
David West 14:31
Yeah, typical labs are producing 1000s of images per day. So you think every 1000 images is like a terabyte of data? huge challenge, right. And, you know, we work with some pharma companies that have 12 r&d sites. The pharma companies are especially high volume. They have 12 r&d sites at one pharma company with, you know, each half a dozen scanners at those r&d sites and they’re just pumping out hundreds of images per day, right? That there’s a lot, there’s a lot of pipes of images that we have to pull in.
Matt Watson 15:06
And your guys’ system is all, is it all cloud-based? Like you have to move all that to the cloud? Or does it run on-premise?
David West 15:13
Yeah. So when we started the company, we basically said that cloud was a critical technology that would make this possible because it democratized access to, you know, to store and compute capabilities that you need to handle this volume of, of data. But a lot of our customers are using hybrid strategies or occasionally on-prem strategies. But really, our ability to build a sort of cloud first product allowed our customers to deploy this technology in really flexible ways, which you need to handle this. So for example, a lot of customers will scan directly to like on-prem, and then we’ll archive to cloud after something like 30 days, and I’ll sit in cold storage, that’s lower costs. That’s just how you manage the costs, if you have sophisticated kinds of infrastructure strategies to be able to handle that.
Matt Watson 16:16
Well, do you guys have to keep this data for years or anything from a liability perspective?
David West 16:21
A lot of labs do. And not only from a liability perspective, but we actually think that this data is really valuable. And, you know, we work with our customers to help put in place the right sort of retention policy. So a lot of them say, Well, hey, I want to hold on to interesting cases for five or 10 years. And this might be valuable to help us discover new therapies or, you know, maybe this is a patient whose cancer is likely to recur. So there’s a lot of reasons why you’d want to hold on to this data. laws require labs to hold on to the physical slides for 10 years in most states, but in say, New York State 20 years, wow, they’re holding on to the physical slides, for liability purposes, or for really just good, good practice.
Matt Watson 17:10
And that will be a boon to your guys’ business. If you could get those laws changed, like, hey, the digital copies good enough? Yeah, exactly. So for you guys.
David West 17:18
Yeah, this technology is really early. But we think that the we’re seeing the kind of regulatory and legal infrastructure around or landscape around this technology, take, become, be built, be built around an image based paradigm, the one thing with health care, and you know, especially when it comes to health care policies, that that tends to lag the technology, but we’re starting to see that. And I think that would have a huge impact on businesses like ours.
Matt Watson 17:48
Yeah. Well, do wanna remind everybody that finding expert software developers doesn’t have to be difficult, especially when you visit FullScale.io, where you can build a software team quickly and affordably use the Full Scale platform to define your technical needs, and see what developers are available to join your team right away. Visit FullScale.io to learn more. Yeah, I would imagine you guys must have a giant AWS bill or something for hosting all this stuff.
David West 18:13
Yeah, it’s not it’s not cheap. We’ve had to get really smart about how we manage that over time, not to mention the fact that, you know, we’re being trusted with healthcare data, and that with unique privacy, and compliance considerations that we’ve had to get really good at. And one of the things about, you know, building a business from the ground up in healthcare is that trust is critical. And so you can’t really cut corners around those things. But when you can, when you can do it, right. You can use that as a competitive advantage.
Matt Watson 18:48
The good news is, there’s you know, things like AWS have really good support for stuff like this, where I’m gonna guess you guys will use those images, maybe for a week or two or whatever. And then like, literally nobody will ever read them ever again, because they just like get archived off. And things like AWS are great, it’s great that they have some really low cost storage for basically putting it in cold storage. And I have the name AWS glacier. Exactly. And it’s perfect for you guys. Like it’d be hard to imagine building what you’re building like 20 years ago, you’re like, Oh, you need to get sand and the amount of storage space it would take to do all that and the cost of constantly buying that storage and all that kind of stuff is a nightmare.
David West 19:27
Exactly, right. Like the idea that you can kind of move between different storage tiers with a click of a button. And enabling technology. You’re right, you could not have imagined doing this, even just you know 15 years ago, and that was kind of part of our core thesis, we said that this data is so big, that frankly, the technology has existed for a while to scan these images, but it took the you know this the importance cost of the storage infrastructure to be able to do I enable this and, and that’s kind of proven true, right like that. That’s what’s allowed this space to take off in many ways.
Matt Watson 20:07
Well, and you guys have been doing this for a few years, but I would guess even now the cost of doing it now is probably a third of what it was, you know, then right when you started, right, the cost just keeps going down and down for some of this orange.
David West 20:18
So Moore’s law is on our side here. Yeah, absolutely.
Matt Watson 20:24
So this is, was this the first company you ever started?
David West 20:29
It’s the first, the first company that’s grown like this. But I guess I’m kind of an entrepreneur at heart. I’ve always, I’ve always been tinkering around. The first. The first real business that I built when I was a kid was like tape to disk. Dotnet never got off the ground, but we would convert VHS tapes to DVDs, and people would sell their VHS tapes. And, but but but I didn’t scale much beyond, you know, the local neighborhood.
Matt Watson 21:01
Yeah. I love the entrepreneurial spirit. But so you started this right after college? Is that what you said?
David West 21:07
I did, yeah, started playing around with technology while I was in college, and then it really became my full time job, pretty much the day of graduation, we signed the term sheet for our seed round. Like literally while I was graduating, I didn’t admit it to many people during the first few years, but now, not now, have a few more, have a few more gray hairs. Been a while since that.
Matt Watson 21:36
And so did you start it with anybody else, or you were the only you have some of the co-founders,
David West 21:40
I had a couple other co founders who have been really instrumental in helping build this technology and bring it to these customers. One was a college buddy, and then Nathan, and then my other co-founder, Coleman, whom I’ve known for 20 plus years. Coleman really is that brilliant technologist behind this. He’s a phenomenal software engineer and, and, and has been deeply involved in building this in a really smart way.
Matt Watson 22:15
And I think you mentioned earlier, your background was more from the pathology side, right?
David West 22:20
Yeah. So I studied biomedical engineering, with a focus on computational biology. So I’ve always been interested in the intersection of software and medicine.
Matt Watson 22:32
Well, I think it just goes it but you don’t have any background in software engineering, right? So some of the early days of this, you didn’t help create the right to code or do any of that part of it. Your friend did.
David West 22:43
Yeah, I was. So modest I was doing a modest amount of development, but not a whole lot. It ended pretty, pretty quickly, most of what I’ve been doing was just kind of rolling up my sleeves and doing some front end work. I’m super interested and passionate about design and very much a believer that you know, really well designed software especially is critical in medicine, where you’re trying to enable some change management so I played a role in that sense, but I’m not I’m also not a pathologist by background, right? Like I don’t have the medical sort of medical doctor background.
Matt Watson 23:18
So where did so where did you guys who did you lean on from like the kind of practical real-world like pathology part of it just your customers? Or was there somebody else on the team that kind of brought the pathology background?
David West 23:29
We talked to a ton of customers, you know, being customer-centric has been really deeply ingrained in our company’s DNA from day one, we’ve we’ve basically just planted ourselves at, you know, places like where I was at Johns Hopkins working with the scientists, and pathologists there who became some of our first paying customers, other other academic places.And then we built some momentum from there and had a few pharma companies start reaching out and say, hey, I’m interested in this in this software, and then add V became a customer. And then we grew from there and had some bigger diagnostic labs become our customers. And along the way, we just stay really close to them and listen to their problems, listen to their challenges, start with the problem and work backwards and iterate really quickly. I think that’s been critical to, to our early successes, especially as a lot of people start companies especially in health care with like, you know, a lot of money maybe they’re, you know, spin out of big organizations or, or something like that. And they and, and they lose that kind of formative component of A of, of building great products.
Matt Watson 24:46
Well, I love highlighting this part of the story because, you know, for a lot of early stage companies, you know, having co-founders that bring different parts of it, you know, different talents, you know, to the company. He is really important. And I love the fact that neither, neither of you were necessarily pathology experts, right? But you still figure it out, you still see the problem, you identify the problem, you’re and you guys had the guts to go tackle it, and you made it work. And now you’ve got this great company, right? Like, just goes to show that, you know, I don’t want to say anybody can do this, but anybody that, you know, sees the problem is and has the talent and puts in the effort can go do it if you get the right team and and make it happen. Yeah, exactly.
David West 25:29
It becomes so much about who we put around us, because over time, we’ve been able to put in great pathology experts, brilliant software engineers, great, great commercial leaders that know this market super deeply. And, and in a sense, have become experts, ourselves. But it’s all just been about, you know, putting great people around us and staying super close to the customer.
Matt Watson 25:54
My first company was software related to car dealerships. And so I did that for like, about 10 years. And people always asked me, Well, have you ever sold cars? Have you ever worked in industry? And I’m like, No, I never did. But I feel like I knew way more about the industry than they did. Yeah, just because I was around it, you know, every single day and saw every aspect of it. And, honestly, most people who worked in car dealerships only worked there for a few months or a year or two and were gone like that. The turnover in that industry was so bad. Yeah. So I just worked around it for so long that I just sort of knew the insight, it’s an ounce of it. And I wouldn’t have become an expert at the industry, but from the technology side definitely did. Yeah, totally. And sounds like you’re in the same place. Like I’ve never actually been a pathologist, but I’ve been talking to them every single day. And I feel like I know more about how they did it. And some days, right?
David West 26:47
Yeah, like, and he did say one of the things that that been, you know, pathology has been so ignored by Silicon Valley, because it has a certain, you know, black box aspect to it, you’re a patient, you get a biopsy, and you get a pathology report back. And no one really knows what happens in the basement of that hospital. But pathology is so critical to everything that we do something like you know, 70% of the data in the electronic medical record comes out of the pathology lab. And so there’s really a big opportunity to take this field of medicine and equip them with the kind of technology that they need to be effective in the 21st century where our lives are governed by data and software where you and I can just jump on this zoom and have a conversation. But it takes bridging the gap between the mentalities of Silicon Valley and the mentalities of, of the pathology lab. And they’re very different universes. Connecting those two universes is challenging. But I think that’s where there’s a lot of, for me, a lot of the excitement has been.
Matt Watson 27:57
So do you guys have a lot of competitors in this space?
David West 28:00
You know, it’s a very, it’s a, it’s a growing field. It’s a field that a lot of money has poured into over the past three or so years, because it’s growing very, very quickly. But we’ve been able to build a really solid category leadership position in our space by focusing on Bing, that platform where the pathologist do their work, where their data lives, and being open to partnering with companies that say, are building algorithms that will live on our platform, and not trying to do everything ourselves.
Matt Watson 28:32
So I’m sure you probably know this because you work in industry, but I’m from Kansas City in Kansas City is home to Cerner. Sure which Oracle bought or is in the process of trying to buy or wherever they are with that. But I would imagine you have people like Cerner, like what Siemens epic, and all them knocking on your door knocking on your door to acquire you guys are partnering with you guys, I would imagine that’s a never-ending process there.
David West 29:01
So we work a lot with the seat with the centers and the epics of the world because we integrate with them and they have lab information. So they’re managing basically the non image data, things like patient history, and text as information and the pathologist wants to see that alongside the images. So that integration is really critical. And then we’ll push data back to those systems. We work really closely with Siemens they’re a partner of ours and they’ve helped us create distribution leverage in a market where that’s really hard you know, building distribution from scratch in healthcare where we don’t have access to these you know, a lot of the big hospitals we don’t have, you know, the 150 year trusted brands that companies like Siemens do, so steam has been able to help us get into market we signed a partnership with them a few quarters ago and and that’s been starting to see some early successes from that.
Matt Watson 29:54
Yeah, is the sales like go to market strategy for a product like this? Kind of hard like a long sales process hard to hard to sell into hospitals, it’s definitely a hard sales process.
David West 30:03
But over time, we’ve really been able to optimize it. And it’s a continuous, you know, optimization of that go to market motion. Your go to market strategies in healthcare can be complex, and, you know, we’re serving, we’re serving a market that is a lot of times seeing this technology for the first time. And, and so and so that takes a lot of hand holding with those customers. But we’ve been able to figure out how to really optimize that and, and build a machine around it.
Matt Watson 30:44
So when you first started out, was it just kind of cold calling in the hospitals and trying to get your foot in the door? Or was it like an early partnership that kind of helped get you guys going? Or how did you guys do that, in the early days?
David West 30:56
It was all about those early customers, like we’ve sat really closely with a couple of mostly academic centers, places like Johns Hopkins that had a really big brand that other hospitals would look at when thinking about how they would adopt this technology. And working really closely with them, we kind of built a moat around those early customers, and word of mouth drove a lot of our early growth, then after we raise you know, we’ve raised most recently a Series C, we raised especially like Series B Series C, it’s it’s been really about putting creating scale to our, to our, to our go to market process. And that’s been a bit of a bit of a shift from that kind of word of mouth driven growth to more intentional growth.
Matt Watson 31:46
Yeah, cuz then you go from with any kind of business referral is always your best source of leads, right? But you know, moving to doing like, kind of more cold calling, enterprise type sale, like complicated sale, like that’s, that’s gonna be very difficult compared to the like, hey, my friend that works at John Hopkins said I needed to call you is like a slam dunk in comparison.
David West 32:11
Exactly. Yeah. Yeah. You know, not not just not just those early customers being critical to us, but it was, it was myself and my co-founders, that were kind of working those relationships, and more or less networking our way around. And then we say, Okay, well, we need to build a team around this, and how do we get a team that can help us get to the next level? And, you know, we’ve we’ve been able to bring on some people that are super, super talented at this, and have helped us create scale doing things like, like cold calling, building a process that, but it’s a super iterative, you know, process, you’re, we’re figuring out what works, we’re finding out how do we access our customers? What kind of story do we tell them visually? You know, who do we sell to? Where do we find them? And what do we tell them? And that seems like a really easy, a really easy equation on the surface. But this is a multi stakeholder enterprise sale in a kind of murky, protective market that cares a lot about trust, and isn’t super, they’re skeptical. They’re not super receptive to, you know, a salesperson calling them on the phone. And so we’ve had to, we’ve had to really figure that out.
Matt Watson 33:26
So if so to help scale that up, did you guys go and recruit people that worked at places like Cerner and Epic too, to join your guys’ team that that kind of knew, had some background in it?
David West 33:37
Yeah, especially on the commercial side, we have some amazing leaders in the company who have done it before, the people who have been there at, you know, have been at say, the, the companies that build these scanners that know the customers and know the market, and know the technology, but also people that know enterprise software, and healthcare and life sciences. And those are the sort of the vertical expertise, knowing the customer and then there’s the horizontal expertise, you know, knowing that technology and finding the people that can kind of that know, that inner that are at that intersection to know both the technology and the people who we’re selling to was critical. And we’ve had to go to some of the some of the big guys, if you will, out in this space to recruit them over to the Rebel Alliance, if you will. Yeah.
Matt Watson 34:25
Well, I feel like that’s one of the hard things as a founder, and CEOs are trying to figure out when you need to bring those people in, like, I gotta pay the big bucks and go recruit somebody to come do this. I’m gonna have to give them stock and do all these things and fame or fortune. Versus like, you know what, we’ll just figure it out. We’ll hire the intern and have the intern do it. Right versus like, Hey, where’s Patrick Mahomes or Tom Brady to come do this, you know, and I feel like a lot of CEOs struggle with that where they’re like, they don’t want to pay the big bucks to bring people in, but I’m gonna guess the At some point, you guys had to do that at some point, right? Yep, totally, totally critical.
David West 35:03
You know, it’s all about putting the right people around us that can help us get to market and, you know, accomplish the things that we want to accomplish. We’ve always, you know, we’ve always thought big. But one of the things I’ll actually say is that in that experience of bringing people in from those often bigger, more established companies is that, you know, it’s, it can be a culture shock for them, yeah. To a startup and operate in a much more nimble environment. They come in and say, Wait, we don’t have a process for x. It’s like, yeah, that’s why we hired you, right? Like we want, who’s gonna come on and build this with us? And, but also, let’s make sure that we don’t get bogged down in the process.
Matt Watson 35:47
Well, and that’s part of the struggle too. It’s like, oh, we hired our new Chief Marketing Officer, and they start and they’re like, where’s my team? I’m like, you don’t have a team? Yeah. Yeah, you are the team. And there’s no budget for a team, you have to do it all. Yeah, that’s hard, right? Like, especially you recruit those people in and like, we’re starting from scratch here. And we don’t have a budget for anything. Yeah, yeah. That’s, it’s hard. Well, I do want to remind everybody, again, that today’s episode was brought up, brought to you by FullScale.io. If you need to hire software engineers, testers, or leaders, Full Scale can help us have the people on the platform to help you build a managed team of experts. When you visit FullScale.io. All you need to do is answer a few questions and let our platform match you with our fully vetted, highly experienced software developers at Full Scale, we specialize in building long term teams that work only for you to learn more when you visit FullScale.io. So as we wrap up the show, I’m curious, David, what do you see? Is this the future for your company? Where are you guys going? What’s next?
David West 36:50
Yeah, you know, the days are still early in, in our market, but it continues to grow. And I think we’ve, we’ve created a position in this market, where our customers are trusting our software to manage their data, and to do their work. And that’s a really great position to be in. And so now the question is, first and foremost, how do we get that to scale up? You know, we’ve got 10 of the top 20 pharma companies on our platform, we’ve got some world class diagnostic labs, and academic medical centers that are trusting us to power their pathology work. And we want the world’s pathology data to live on our platform. We want the world’s pathology work to happen on our platform. And, and that’s kind of the immediate next step. But you know, beyond that, this is more than anything, a data opportunity. There’s a billion slides, glass slides created for diagnostic purposes, every year, each of those is a billion pixels, that otherwise would be sitting on a shelf, collecting data, selling storage and trust, right? And so, the next chapter of our company is all about how we leverage that data to do things that we couldn’t with glass alone. I think that’s where there’s tremendous potential for this field. And it’s where it’s going to totally reshape, you know, the contours of pathology and hopefully medicine. So there’s a lot to build, you know, we think the next 1520 years of innovation and pathology are going to be a very exciting one. We’re, we’re still in the early days, and we want to be at the center of it.
Matt Watson 38:39
So as you guys go through this growth curve, what percentage of pathology do you think is digitized at this point? I mean, are we still early in the growth of this?
David West 38:48
You know, for research purposes, most of pathology is largely digital, you go to any pharma company, and they’re using image based pathology, they’re using AI, but you go to diagnostics, which is a more regulated space is a little bit slower moving, you’ve got a patient on the other side of this who’s dealing with a life and death situation. And, you know, the world has gone from in 2017, when the first scanner was approved by the FDA for diagnostic purposes, less than 1% of those billion slides or scanned per year. Over the past, whatever, it’s been four years. That’s grown 15x, but it’s still 15%. Yeah, there’s Yep, there’s another 85% of global diagnostic volume set to go digital. And most analysts expect that to happen over the next five to seven years. So early days, but moving very quickly.
Matt Watson 39:43
Awesome. Do you guys also do a lot of international business too?
David West 39:47
Yeah, we do. So we’ve built out a team in Europe over the last 12 months, and frankly, Europe has leaned into the adoption of this technology ahead of the US. For whatever reason, their regulatory and sort of healthy economic landscape has been more permissible for the adoption of this technology. And the US leaders have kind of followed that. So we leaned into Europe pretty early on, which has been strategically beneficial to us. And we’ve got some amazing customers over there. But it also comes with a lot of complexities, you know, going international puts an overhead, puts a tax on the business, in a figurative sense. And managing that and staying lean has been one of the biggest, you know, areas of kind of deliberate growth for us.
Matt Watson 40:41
That’s, you know, deciding to make a leap. Like that is always hard, because, like, in our business before, always felt like, hey, we have so much opportunity here, we can’t conquer, like, why would we take this on, you know, like, we can’t even conquer all the opportunity here. But at some point in time, you gotta do it, because there’s, it’s a big ocean and, and you didn’t even mention Asia, which I think is like half the people on the planet.
David West 41:04
Yeah, totally. And, you know, we’ve gotten our hands full with our expansion to Europe, but you’re right, you know, Asia, Asia has been a fast-growing market in pathology. And, it’s a market that is kind of, you know, ripe for this technology. So that’s kind of a natural next step, geographically.
Matt Watson 41:29
Big opportunity for you guys. And sounds like you guys have built a great business and lots of growth opportunities there. Growing market. So, any last tips for other entrepreneurs and founders that are listening in today?
David West 41:44
Yeah, you know, I’ll just say, like, I think more than anything, starting with a customer and working backward is key. It’s so easy to forget that too. It’s especially easy to forget that as you scale up, and it’s one of the things that my co-founders have really valued as being critical in our growth journey. And, you know, try to try to get the rest of our team to be able to keep that fire of customer centricity alive as we grow.
Matt Watson 42:20
Yeah. Yeah. Yeah. All right. Well, once again, this was David West from Proscia. And, David, thank you so much for being on the show. For those who are curious, it’s Proscia, which is P-R-O-S-C-I-A.com. Check them out. And thank you so much for being on the show.
David West 42:47
Yeah, appreciate it. This is awesome. Take care.