Building in Medtech: Lessons from a Cybersecurity Founder's Regulatory Journey

The transition from cybersecurity to medtech isn't a natural progression for most founders. But for Austin McChord, CEO of Casana, this unexpected pivot revealed crucial lessons about building in heavily regulated markets.

"Med device is a whole different thing," Austin explains in a recent episode of Category Visionaries. Coming from Datto, a cybersecurity company he took public, Austin found himself navigating an entirely new regulatory landscape with Casana's health-monitoring toilet seat.

The regulatory environment in medtech creates a unique set of constraints that fundamentally reshape how companies operate and go to market. "The FDA cares a lot about what you say about your product," Austin notes. "We cannot say that we do anything we do not do. We cannot claim anything that we do not have approved by the FDA."

This regulatory oversight extends far beyond marketing claims. Even seemingly straightforward components require extensive validation. "You can't do something like, say, our toilet seat is made out of the same stuff as other toilet seats, so it's safe," Austin explains. "Instead, we had to do biocompatibility testing, where they literally have to tape parts of the toilet seat to the side of a living animal for a period of time."

The regulatory process has forced Casana to adopt a unique marketing approach. As Austin describes it, their strategy is "to catch you with the humor, but then win you over with the science." This balance allows them to leverage their product's inherently attention-grabbing nature while establishing credibility in the medical device space.

But the challenges of building in medtech extend beyond marketing constraints. The funding landscape operates on entirely different metrics compared to software companies. "If we were a software company, that would be an enormous amount of money, and we would have had to demonstrate a ton of traction," Austin notes regarding their $46 million in funding. "In med device, we raised this money on $0 in revenue, and that's not uncommon."

This different funding dynamic reflects the lengthy development cycles in medtech. Austin draws a parallel to another well-known company: "The very first product that Moderna ever really shipped or sold was the COVID vaccine, and they were around for over a decade before selling that."

The extended timeline to market creates what Austin describes as "existential risk" for medtech companies. After three and a half years, Casana is still working toward full FDA clearance. While they've secured approval for heart rate and blood oxygenation monitoring, blood pressure measurement remains pending.

For founders considering the medtech space, Austin's experience highlights the importance of trusting your instincts while navigating expert advice. "I think the places that I've stumbled most are the places where I've been talked out of something, or experts have said, don't do it this way," he reflects. "We assumed time following some paths that we potentially didn't need to follow, and I should have fought a little bit harder on the contrarian opinions."

Despite these challenges, Austin remains motivated by the potential impact. "This product, unlike almost anything else you could work on, we'll directly save people's lives when it's in the market," he says. Looking ahead three to five years, his vision is clear: "There's hundreds of thousands of seats in the world, and they're saving lives every month, every week, every day."

The journey from cybersecurity to medtech has taught Austin valuable lessons about building in regulated markets. While the constraints may feel limiting, understanding and working within them while maintaining forward momentum is crucial for success in the medical device industry.