Building innovations that make life (and death) better

Hey builders, welcome back to build mode. I'm your host Isabelle Johannes.

mode. I'm your host Isabelle Johannes.

[music] You know, going to market is an expert level strategic puzzle for any founder, [music] but this week I talked to two founders who had the added challenge of launching in heavily regulated industries. For both of these

regulated industries. For both of these companies, the idea of build fast [music] and break things simply won't work because the problems they're solving are a matter of life and death.

>> [music] >> First up, I spoke with Gabriel Sanchez, the CEO and co-founder of Inspectra Health, and they've built a device to do away with the need for skin biopsies at

the dermatologist. Gabriel and I break

the dermatologist. Gabriel and I break down their almost decadel long process of achieving FDA approval. And if I didn't already have the utmost respect for the tenacity of health tech

founders, I sure do now. And in the second half of this episode, we discuss a very different kind of regulated industry with Earth Funeral founder Tom Hares. They've built an entirely new

Hares. They've built an entirely new process to compost human remains as an alternative to cremation or burial. So,

not only did Tom and the team have to consider the regulatory hurdles that vary state by state, but also how to get to market solving a problem that is pretty much the ultimate taboo topic in

Western culture, death. Both founders

offer tactical advice from the challenges of iterating while waiting for regulatory approval to planning your runway when so much of the success of your company is out of your hands. So

that's enough from me. Let's get into it. First up, I'm talking with Gabriel.

it. First up, I'm talking with Gabriel.

[snorts] >> I'm the CEO and co-founder at Inspectra Health. Our mission is to move skincare

Health. Our mission is to move skincare and dermatology from guesswork to precision medicine. And you know, we say

precision medicine. And you know, we say everything beautiful to clinical because everybody wants clinically healthy skin.

Healthy skin is beautiful and we think that there's a lot of value in supporting that as our body's largest organ. We are enabling that by creating

organ. We are enabling that by creating really a new imaging modality. It's

actually the first new imaging physics that was approved by the FDA in about 28 years. It allows us to look under the

years. It allows us to look under the skin. We can see cellular structure,

skin. We can see cellular structure, molecular composition and features that you would normally only other see on conventional hisystologology and biopsy.

So we call that process a virtual biopsy. And so we can use that to

biopsy. And so we can use that to evaluate things like the amounts of collagen, the amounts of melanin, photo damage. We can look for signs of

damage. We can look for signs of atypical cellular growth. And then the idea is to create a window basically into the skin. As a regulated device, you know, we've been through a lot of

processes. We've run multiple clinical

processes. We've run multiple clinical trials. We are now FDA cleared last

trials. We are now FDA cleared last year. We also got a a separate

year. We also got a a separate breakthrough designation which is another process on our future AI products and we're just excited to bring this into the space.

>> Inspect Health had a long road to FDA clearance. The company was founded in

clearance. The company was founded in 2014 and as Gabriel said they just received their FDA clearance in 2024.

>> So it's a long journey app. Uh we are a university spinout. So the the journey

university spinout. So the the journey has been basically a tech translation of research that I was working on at Stanford where I had invented the original core technology in a completely different medical application. And there

was this core science question there.

We're always trying to get data. We I

was in a lab that build computer models.

And the idea was could we build some some more fundamental data on how muscle in the body work so that we could fuel these these computer models with better data. And everything was based on

data. And everything was based on biopsy. And the problem is once you

biopsy. And the problem is once you pretty much cut tissue out, you kill it.

And that sort of eliminates a lot of the living properties. And I started working

living properties. And I started working on a basically a way to image the structure in the body. And in doing that realized I had solved a lot of the problems that had been plaguing

translation of of some of these new emerging techniques in biophotonics into the clinics particularly things like multifoton microscopy, second harmonic generation and reflectance confocal. So

those are very technical terms for ways of imaging. Usually on big benchtop

of imaging. Usually on big benchtop systems they're about 500 lb and they're they're eight on 8 foot by 8 foot optical tables and then the problem is that's very limiting because you obviously can't roll that into the

clinic and so I thought it'd be better if we could make a portable version and get it to the patients and I made one of those and then as we looked at the space started to realize that this would generally just be a very powerful tool

for illuminating the biology within the cell across the body. We then sort of took uh before I left the university a proactive process which we call needs finding. So you you don't want to jam a

finding. So you you don't want to jam a technology down the pipe and then try to force it to find an application. You

sort of want to look for a market and then develop your technology in that opposite direction. And I was very

opposite direction. And I was very interested in oncology and when you look at oncology and you just look at the numbers cancer is a big disease. The

most common cancer is skin cancer. skin

cancer is on the surface of the body.

And in developing some of these custom microscopic tools and research, I realized I could start working on a version of this for skin that could be completely non-invasive, would basically give us a window into the body and allow

us to do some things that we've never been able to do before. That was sort of the inspiration to start, which was just really a focus on trying to get some technology out of siloed academia and maybe have more impact in the social

sphere. I had some patents there at

sphere. I had some patents there at Stanford, so I had to then license them out. So that starts the process of

out. So that starts the process of licensing. We had to raise some initial

licensing. We had to raise some initial money so that we could do the license and start to build some technology and prototypes and work in this new direction. And we did that for a few. So

direction. And we did that for a few. So

that would have been 2015. And we were in a very prototypey hacker mode for those first few years. All bench kind of technology development and iteration at

a really high pace. And we're able to get to an initial bench version to show the feasibility of the technology. We

raised a series A in 2019. And when we raised that series A, that transitioned us very much into the the the focus was regulatory. So it was like how do we

regulatory. So it was like how do we turn a functional bench prototype into a true clinical version of the technology that we can take into multiple sites to do clinical trials. We'll talk about

this, but we were pretty certain we were probably going to have to do a clinical trial for our device to get this cleared by the FDA. And then how do we then run those actual studies and navigate the

FDA and get the FDA clearance? So I'd

say from 2019 through most of 2023 was focused on running clinical trials, positioning for the FDA, interacting with the FDA, and then I will say though

our submission went very quickly. So we

submitted uh there's multiple pathways for FDA clearance. We use the 510K pathway which has a minimum review time of 3 months. It probably more on average

6 months for for the industry and we got approved in 3 months and a week. So it

went that went very quickly but it was the four you know years ahead of that to to basically get everything in place so that we could document the device under design controls and then run the

clinical trials all the testing verification and validation that you need for a system. You also have to run human factor studies which is like a mini clinical trial on how you operate the device. All of that comes together.

the device. All of that comes together.

You submit that to the FDA and and they actually that went very smoothly. So and

that brings us to where we are now. So

now we have our clearance and like we say we have kind of a a foothold on some future clearances that we're looking at which are in more of the AI realm.

That's the uh breakthrough designation.

Uh the other thing that we did in this in this process was we strategized a lot about reimbursement and um I should probably if you don't mind I might take a little bit of a tangent in this

direction. So it turns out that

direction. So it turns out that reimbursement is becoming one of the big sticking points for commercializing medical technologies. It FDA is huge.

medical technologies. It FDA is huge.

It's a massive milestone, but if you can't get payment for the device, you really can't commercialize it. And one

of the things we did early on was align our regulatory strategy with an approach that would bring us to reimbursement.

And and so if if you don't mind, actually, I'll delve a little bit into the different types. So if you have a completely new technology that will go through uh a denovo process if it's low

risk uh there's a 510k which is for low-risk devices that are that are similar substantially equivalent to devices that are already out there.

Denovo is low-risk devices but where you don't have a predicate so it's completely new and then PMA are like the high-risk very invasive devices. Those

are going to be typically surgical and implantable devices and where you may not have a predicate for it. what we had invented at Stanford which was this built on this multifphoton backbone

multifphoton has been used in academic research for 30 years but it's never been taken through the regulatory bodies at the FDA so this would have been a denovo like there would have been no question and then if you're denovo you also that means you don't have no

reimbursement you're going to have to start from scratch develop getting your own CPT codes which Stanford did a study on recently and for for the companies that succeed they average about six

years post regulatory clearance to get that So you can imagine just the challenge that introduces in terms of investment and commercialization. So we

looked at that space and we said, well, okay, if we bring our new thing to the FDA, we're going to have basically the hardest pathway we can for a for a low-risk device. And so we took this

low-risk device. And so we took this approach of something old, something new. And we made a hybrid microscope.

new. And we made a hybrid microscope.

There was a type of imaging that was cleared back in the '9s called conffocal. And we realized we could

conffocal. And we realized we could build a combo microscope that would do both con focal and multifphoton. And so

what that did was that gave us now that gave us a foothold in in terms of a predicate that we could use for conff focal. And then that allowed us to go

focal. And then that allowed us to go through the 510k pathway. Uh but what's a little unusual with that is when you usually when you go through the 510k pathway, you are then classified with that predicate and they say you're

another version of this device that has previously been cleared. In our case, since we introduced some completely new physics, we got reclassified into our own product classification like a denovo. So, it's a it's a really

denovo. So, it's a it's a really interesting process. There's no way we

interesting process. There's no way we could have figured that out on our own and just hoped that it would have worked. So, the magic in all of this was

worked. So, the magic in all of this was that we we took advantage of what's called a presubmission inquiry. And so,

this is an opportunity to interact with the FDA early. And we had we had multiple pre they call them either presubs or Q subs. We had multiple presubs where we plotted out the strategy, got buyin from the FDA and

then said if we wanted to go with this approach, what type of evidence would we have to supply to be able to do it and then we just executed on on that for like three years, you know, so quite a journey.

>> Yeah, absolutely. And I mean that overview of the different types of FDA sort of pathways is really helpful because from my end we see a lot of startups that you know apply to startup battlefield or want to talk to tech crunch and they say things like FDA

approved FDA submitted FDA like different you know variants of it and it's a little hard to weed through what that actually means. And on the other end the reimbursement challenge I can absolutely imagine. I mean needing to

absolutely imagine. I mean needing to invent CPT codes to get the insurance. I

mean that is something I've never thought of personally. So So it sounds like from day one you knew you'd have to go through this FDA approval process.

Did that ever intimidate you or deter you from wanting to pursue this endeavor?

>> Well, no. Well, I'll take a quick step back. So, you're right. This whole thing

back. So, you're right. This whole thing is on a spectrum. So, so the interesting thing is skin, like I said, it's clinical to beautiful, right? So, like

what what causes skin cancer ultimately is, you know, excessive UV exposure and then that causes sort of malignancies and atypical structures to grow within the skin. It's also photo damage is also

the skin. It's also photo damage is also what basically causes premature aging in the skin and you know which then is like the loss of collagen you know increased wrinkles maybe loss of epidermal thickness and so it turns out that all

of these things are connected within the skin environmental exposure sun exposure it's it's everywhere on that spectrum whereas the most clinically egregious is going to be something like skin cancer so when we looked at that we said well

we kind of want to play in the realm of skin but you have to look at the deep end of the pool and the deep end of the pool is going to be on the clinical side and so knowing that you will have to approach that at some point that really

drove our strategy. Now I was not really I I was more excited about it because I thought that this would be a way to differentiate ourselves and to bring some deep science into the space. I I'm

from this direction. You know I I've I've been doing all of my research in the deep life sciences. I came up through sort of the Stanford bioesign ecosystem. So I was very steeped in in

ecosystem. So I was very steeped in in the in the world of of regulated technologies and that actually more motivated me but I knew that it was going to be it's very daunting. Anybody

that you talk to that has ever attempted to to bring a technology into the space will tell you that it is it is very difficult for sure.

>> I want to dive a little deeper into this presubmission process because it sounds like that's what enabled you to actually get approved pretty quickly in the end.

And it sounds like it's a pretty intensive process where instead of, you know, maybe the typical tech startup is iterating with their customers feedback, you're iterating based on FDA feedback for the most part, right? So what does

that process look like?

>> Yeah, it's it's the it's the one chance you get to have some interaction and some feedback. And it is fundamentally

some feedback. And it is fundamentally different than developing a a tech product, you know? So we always talk about like the iPhone and it's like obviously iPhone 17's better than iPhone 1 and but you can get iPhone one out.

The whole point typically in tech is like let's get it out there because if you know the market will give us feedback if they don't like it they don't buy it or we'll get feedback on the product and we want to go fast but because we want to get that iteration.

The the fundamental challenge in life sciences is we're talking about medicine and healthcare and people and so we can't really experiment with people and it and and for good reason. It's it's

regulated and it's protected by the FDA.

And so we always say you have to sort of start like an iPhone 8, you know, or somewhere in between something better.

It takes a little more of a heavy lift on the front side and then you have to build in you know we focus on what we would say between form and function we would we focused on function. It's like

let's get the the the the clinical skeleton of the architecture in place in terms of the way we generate the core data and how that's interpreted and how that's used clinically and basically

lock that. Honestly, we will we will not

lock that. Honestly, we will we will not do a lot to that because if you start changing that, that would substantially change your in indication for use and then you'd have to go do a whole new submission. So, we want to lock those

submission. So, we want to lock those things in place. But, we do have some then flexibility to play with like form in terms of of some of the elements of the technology that don't change fundamentally how it how it behaves with

people and what kind of information it provides you. So, it's very

provides you. So, it's very front-loaded, right? So, we're using

front-loaded, right? So, we're using these Q subs to kind of talk with the FDA. It's a little tricky. It's like

FDA. It's a little tricky. It's like

inviting the IRS. Some people think it's like inviting the IRS to your, you know, to lunch. I I I enjoy talking with the

to lunch. I I I enjoy talking with the FDA. I think they are people and they

FDA. I think they are people and they are working very hard. I've been

surprised the more I've met folks from the FDA how inundated they are and how how how intent they are and actually bringing new innovation into the space.

So their mandate is to balance the it's to balance the health risk benefit and they do care a lot about the benefit and so they don't want to overly stifle innovation because that can backfire too

in the sense of of preventing technologies that could be useful for the community from reaching you know patients that need it. And so what I found is they are scientists they're evidence-based and they're PhDs and we

have actually quite a few PhDs on our team and we speak a lot of the same language. And our goal was to be very

language. And our goal was to be very transparent and we promoted plans. You I

do not think you should go to the FDA and say what do we do? Like what what do you think would be appropriate? They're

conservative and they and and they're like we can't design this thing for you and if you ask me I'm just going to say do a massive, you know, RCT trial, you know, with with a thousand patients

because that's not their job, you know.

So our job was to know our technology inside and out and the space and the way we thought we would use it and then come up with a with a complete plan and we'd say this is the plan. This is what we

expect. That gave them something to to

expect. That gave them something to to really dive into. And then through multiple back and forth interactions, we converged on an approach that would be what we ultimately pursued. And like I

said, we were merging two different aspects of our strategy here. We wanted

to get through regulatory. We want it to stay on the 510K pathway. It has some advantages in terms of making those changes to the form factors of the device as you go further. So some of these incremental changes you can do

within the 510K with without having to redo trials and with minimal a minimal amount of of oversight. But we also wanted to connect ourselves to some existing CPT codes. And that's where

this whole combination of multifphoton and reflectance conff focal. Reflectance

con focal had a lot of history in the medical space and has existing CPT codes and and that's a whole other story.

There's different categories of these, but let's just say they're the good ones that they're category one that have payment and and even some coverage. And

so that was a huge opportunity for us.

So we tried to merge both of these things together through the technology and then navigate that process with the FDA. And I found that they were they

FDA. And I found that they were they were very positive and responsive to to proactive planning. It may be different

proactive planning. It may be different in different groups, but uh but we really uh we really enjoyed working with our team and within Inspector, we're a pretty science deep company and we also like running, you know, rigorous studies

and and building evidence. We think

that's part, like I said, of our brand.

So, I thought that went fairly smoothly.

But it is a very different iteration and feedback cycle approach than saying, "Let's just try it out there and let's see what happens." you know, the FDA can't let you can't let the market, you

know, provide the feedback from a health perspective. This is just it's just not,

perspective. This is just it's just not, you know, responsible, right? So, it's a little different.

>> Yeah. I mean, that sounds like a very complex go to market. I think that's also what we wanted to talk about in this episode, right? Is that it's not for everyone to tackle these sort of challenges. I've seen, you know, health

challenges. I've seen, you know, health tech founders who come from a science and sort of a regulatory background like yourself and then others who have a brilliant idea and are finding, you know, co-founders who might have more of

that background and are shocked when they start, you know, embarking on the journey of working with the FDA. But I

really love the collaborative approach you took with working with them. I'm

wondering if you have any other advice for founders who might be embarking on a journey like this with the FDA. How can

they also take some of your experience and apply it to their journey?

>> Yeah, it's not for everyone. You need a certain mentality. You need to be really

certain mentality. You need to be really motivated by really the end goal which in our case is having impact and trying to change a field honestly that you know pathol specifically our long-term vision

is on pathology and that field has has not materially changed in about 150 years. So we still cut pieces off of

years. So we still cut pieces off of people and we put it on glass and put it under a microscope, you know, and so that and that's just everything that's always been done in that space. You

know, we have this long-term vision of in some ways eliminating the need for a lot of hisytologology because we're opening a real-time window into the tissue and that drives the motivation

for these really long cycles. In terms

of advice, you know, I I would approach this from a transparency and a proactive direction. Fortunately, there are a lot

direction. Fortunately, there are a lot of people, there are a lot of companies, there's a lot of expertise in the network that have gone through this and and you know, we benefited tremendously from that. So, one of the things that we

from that. So, one of the things that we did was we aligned ourselves immediately into a medtech life science incubator.

It's called Fogerty Innovation in Mountain View and it's uh California.

It's a nonprofit incubator and it's focused mainly on education and bringing new innovation into the field. And it's

it's ideally designed for, you know, folks like like myself, like a like a mad scientist coming out of the university with a cool idea, but you are now jumping into this space which is completely foreign and and you're used

to just like trying things and like that didn't work and you know like let's go make it better and they they were able to coach and teach us through this process and provide some of that

expertise. So it is a little different

expertise. So it is a little different mentality. It's not the we can't we

mentality. It's not the we can't we can't break things, you know, we try our best to move fast and make things, right? But it's different, you know, and

right? But it's different, you know, and and so you need some of that kind of steady endurance to be able to do it and, you know, take your time but hurry up sort of thing.

>> Yeah. And I I think that element of, you know, working with an incubator can apply to, you know, many different industries as well, but particularly in your case and in your industry. I'm

curious sort of adjacent to that fundraising, right? when there's a

fundraising, right? when there's a regulatory risk involved. I mean, how did you sort of plan your runway when waiting for FDA approval? Because going

in, you know, it might take a decade and you're going to need cash. So, how did you sort of manage that? And also your pitch to investors when there's a possibility you wouldn't get approved and then what, right?

>> Yeah. Well, if you don't get approved, yeah, then yeah, good luck. Uh, no, but I mean it depends. Uh so so you know the on average industry average it takes a

little over 50 million for a clinical device to go from concept through to the market like through regulatory and I will say we've done quite a bit better than that but it but it still takes you know tens of millions of dollars right

even if you're really on top of it and so you're looking for investors that are they have to be generally in this space because if they have an appetite for those timelines and the the process that

you're going to go through to develop this type technology knowing that it's going to go in big intervals where you're between milestones where those those milestones are the typical milestones are going to be things like

d-rest the technology then it's going to be like get some clinical evidence fortunately you can have very nice exits out of these you will see in medtech life sciences you can have exits you know north of 500 million even into the

billion dollar range so they can justify those long timelines if you if you can if you can navigate through the end but it really requires there's, you know, deep expertise. So, so part of the

deep expertise. So, so part of the challenge as an early startup is you're you're cash strapped. You need to grow your team, but adding team is is probably the biggest expense, especially when you have really long intervals. So,

you're trying to stay very lean. So, we

did things like very targeted hiring of very focused, specific positions. We've

never gotten very large, you know, we're we're still only like six people now, you know, and we we run very efficiently. And then a lot of the work

efficiently. And then a lot of the work we do through contracting and consulting. And so we can we can dial

consulting. And so we can we can dial that burn up and down. So when we're doing heavy R&D and we're building or we're or we're doing heavy lab testing for val ver verification and validation, we don't necessarily want to rebuild all

of that and bring it inside because then we got to carry that burden, right? So

we'll we'll do that with outside entities and then we can throttle that up and down. But you do have to plan a lot for these intervals and it's very tricky. It's it's like driving across

tricky. It's it's like driving across the country and you can only put a hundred, you know, 10 gallons of gas in your tank. And so it's not the same as

your tank. And so it's not the same as if you fly straight across the country.

You're going to be taking all these weird routes, you know, and and and it's it's tricky. And I think that's part of

it's tricky. And I think that's part of the part of the magic of really managing one of these teams is in in this space is understanding how to like what's the right amount of function that you need

to hit your next milestone. What is that next milestone and how far out it is it?

And how do you budget to it, you know?

And it's a mix of timing, resources, and and planning. And then one thing that

and planning. And then one thing that really helped us was we we have had a high success rate in bringing in non-dilutive funds. So all along this

non-dilutive funds. So all along this way, we have been consistently applying for grants through the SBIR program and particularly at NIH and the National

Cancer Institute. And so we we've always

Cancer Institute. And so we we've always been able to pair some of our third party venture investment with government non-diluted funds. So that we've been

non-diluted funds. So that we've been able to sort of amplify and extend some of the runways in in these really long intervals between funding. But it is a very harrowing journey. You it is not at

all uncommon that a very well functioning team will simply run out of gas in that interval. even if ultimately they navigate it like you know you you submit to the FDA and you're you're

everyone's hoping that it's going to be that three month or six months you know but sometimes they come back and they're like no you need to do more or you need to do this or you need to do that and

you you do the best you can to protect against that by using these Q subs and planning but it does happen and and and if you get you know a question back from the FDA that requires you to go back

into the clinic that probably will require some new funding and that will then create had an interesting discussion with you and your investors about, you know, do we keep going and how do we do that? And so that becomes

part of the the dance and the challenge of navigating these these spaces.

>> I mean, yeah, it sounds like a a pretty big challenge just to keep the team motivated, right, with all these twists and turns and unknowns and but I mean, you're also talking about maybe a decade where the world is moving quickly around

you. There's new competitors, new

you. There's new competitors, new regulations, new tech, right? AI emerged

in the middle of all of this. So, how do you handle all of those factors? And I

mean I get that you can make some aesthetic changes but in 10 years there have been a lot of major changes. How

have you been able to adapt to that?

>> You have to be very adaptable. It's been

an interesting journey for me. I feel

like I grew up in this era of AI. I when

I invented this imaging approach at Stanford and I defended my PhD. That was

the first year that a neural net won that uh the imageet competition. It was

the Alex net you know and that that that was so we've grown up with it. So to our credit, I think we have been looking very much into the future and future proofing this from the get-go in the

direction that we want to go. We don't

get everything right. I think we got a lot of things right, but it's tricky because yeah, there's there's a big there's a big gap between when you say go and when you're going to be able to get this on the record and cleared and

then what's happened in between. Now,

there's a lot of activity in dermatology. So I'm not there's no

dermatology. So I'm not there's no there's no question that there's competition in that space. Where we are unique is the way we do things. We we

really do have a a completely differentiated technology and so we are very confident in our in our patent portfolio, our domain expertise, our knowledge and our knowhow and and the

the advancement of the technology itself. Now that was an investment from

itself. Now that was an investment from our perspective because all in all that time AI has been exploding but we make the data. So, so we think you know the

the data. So, so we think you know the legs feed the woof, the data feed the models and we have a platform that produces data that nobody else can produce and we have a lot of protection around it. So the data sets that we have

around it. So the data sets that we have right now that is our tool for the AI that that powers our AI models and it's it's actually to some degree future proofed us during those those 10 years

even though this world went from you know kind of traditional image processing to fully AI embedded at this point just because we have access to a

type of data that that nobody else has I think that's been really uh has protected us. Yeah, I'm glad to hear you

protected us. Yeah, I'm glad to hear you guys have uh so many strategic moes, right? I think that's very important in

right? I think that's very important in a space like this. But I'm curious if you have any insight into sort of the market in a larger sense. How often

maybe incumbents come in and are able to, you know, with their existing regulatory relationships are able to get things approved when startups might be taking 10 years to go through this process. What's what have you seen in

process. What's what have you seen in that in that sense? Well, yeah, it's a definite risk, you know, and the the the challenge is as as a startup. So, you

know, we did this whole process. We

we've now introduced multifoton to the FDA. It's been evaluated by the FDA and

FDA. It's been evaluated by the FDA and they created this new class for it. So,

now it opens up a window for other companies now to go through a 510k process to bring multifoton technologies, right? And that's always a

technologies, right? And that's always a concern for I think a lot of startups is if they plow the road so to speak and then you can have a company with a lot more resources come up with an iteration or you know a version of that

technology. My my experience is that

technology. My my experience is that tends to be in the spaces that um technologically they're a little more I don't mean that this will sound it's not degrading but there they'll be a little more in incremental but the technologies

tend to be more invasive. So this is things like heart valves, stances, uh catheterss, you know, where there's there's a lot of you see a lot of companies where, you know, something gets some traction and then you'll see

12 companies explode out of it, right?

And then they're all working on some variety of that, you know, and the challenge there is that yeah, I mean, you you you do worry that you might have laid down a pathway and then somebody else can now come up and follow

immediately behind you. So in those situations, it's a lot I think about establishing yourself early with the clinical evidence and and kind of the brand. The first mover can be tough.

brand. The first mover can be tough.

Sometimes they say it's the fast follower that sort of really benefits from that. Imaging is just kind of a

from that. Imaging is just kind of a weird space where there's not a lot of new imaging technologies that get introduced. There's a ton of imaging

introduced. There's a ton of imaging technologies that get introduced and cleared by the FDA, but they're variants of the existing modalities, right? So

it's MRI with AI and then it's ultrasound with AI and it's so it's CT or OCT with with AI and but they're not inventing the new physics of the of the mechanism for generating the images. So

we do have sort of that moat but yeah I I think that in some ways you open up the window. We actually aren't really

the window. We actually aren't really afraid of that in some ways because we want to bring some benefit to the space and I was actually fairly excited that we opened up an avenue for a new branch of physics in multifoton. I think that's

a way to have a big impact in the space.

And then we are just confident that we have the knowhow, the nimleness and and sort of the head start to stay in front, but that that's where it does switch to you're out of stealth now and then like

everybody knows and now you now you have to run, you know, and so we're yeah, we're running.

>> Yeah. But I guess I mean on that notes, I mean now you have FDA approval, you have the breakthrough device designation. So where are we running to?

designation. So where are we running to?

What's the plan? How are you going to get this thing to the market now that you you have all the approved? Yeah. So,

we're we're raising a round right now and it's and it's to basically to do a limited launch. The idea is to get a

limited launch. The idea is to get a batch of these systems out there into some high volume locations and kind of test the market and hone the workflow.

There's a lot of challenges still and then and then scaling up the commercializations. So, dermatology is a

commercializations. So, dermatology is a very crowded. It's a physically very

very crowded. It's a physically very crowded space. We have about 45 million

crowded space. We have about 45 million visits to the dermatologist and only 10,000 dermatologists to manage that. So

you can imagine the bottleneck. So it's

very fast-paced. These are very short meetings, you know. So we think a lot about how do we integrate into that workflow. What's the ideal pricing model

workflow. What's the ideal pricing model based on how the reimbursement sort of pans out. And so the idea is to go

pans out. And so the idea is to go thoughtfully, dip the toe in the water, build some evidence, build some experience, pressure test, and hone some of these models. you can run the risk of

if if you go a little too head first into commercializing a little too quickly. If you just flat out miss

quickly. If you just flat out miss something that you didn't really you weren't going to really like see until you get into the commercial sphere that could really backfire. So, we're trying to be thoughtful about it and and sort of take a phased approach to getting

this technology out there. And I think it's warranted because like I said, we we've only diagnosed or evaluated skin in one way for the last 150 years, and

that is to physically take samples off of people and then send them to the lab, you know, and even the emerging field of digital pathology does the exact same thing. It's just you scan it after it's

thing. It's just you scan it after it's on the microscope. And so we have a broad vision of how this can be incorporated, but we we need to really explore that in the environment and make sure that we we can do this in a way

that really benefits everybody. And

there's a there's just so many stakeholders. You know, we didn't quite

stakeholders. You know, we didn't quite touch on this, but like medtech is weird. Like they uh you know, the the

weird. Like they uh you know, the the person who benefits from the product is not the person who operates it. It's not

the person who buys it. It's not the person who regulates it, and it's not even the person that pays for it.

Whereas in a consumer technology, that's all one person. and then you just say if they didn't buy it or they didn't like it, we get feedback immediately and let's go and work on it. This is uh this has to make everybody happy. You know,

obviously patients don't want to get cut unnecessarily. They'd like to get

unnecessarily. They'd like to get information sooner. Identifying cancers,

information sooner. Identifying cancers, detecting things that are problematic earlier should save money and should be better for the overall system. But you

are coming into a space that has has a huge history and has built an entire machine around an inefficient process.

And so you have to you have to break into that, right? And so that's where we're like, let's let's take kind of a phased approach and we'll we'll kind of work our way there.

>> No, that's such good insight. And I

mean, health tech is so exciting to many people. I mean, myself included, right?

people. I mean, myself included, right?

I I love seeing applications to battlefield and health tech. And knowing

that people are out there working on these things, but to really consider all of these added stakeholders and challenges as you've outlined has been um you know, really fascinating. And I

have um even more respect for health tech founders than I did before this, which I was already pretty high.

I'm excited to see what's next for Inspectra as they move into this next phase of their development. But while

Inspectra has the potential to save countless lives, we're going to switch gears now and talk to a founder building a solution for the other side of the circle of life. Tom Harry's the co-founder of Earth Funeral and I get

into the regulatory challenges he's faced in the death tech space. His

customers are individuals and families amid endof life planning and the market size is well, everyone. And yet

legislative and regulatory barriers have required patience and careful consideration over how and where they go to market. [snorts]

to market. [snorts] >> Yeah. So my name is Tom Harries. I'm the

>> Yeah. So my name is Tom Harries. I'm the

co-founder and CEO of uh funeral. Um and

we are building uh a business with a difference but a business that we believe uh people need. So we are in the end of life space and we offer an environmentally friendly alternative to

burial and cremation. We have called this process soil transformation and fundamentally what we are doing is transforming bodies into nutrient-rich soil. This is instead of being cremated

soil. This is instead of being cremated or buried as a nicer alternative to the status quo. So we've innovated in terms

status quo. So we've innovated in terms of creating a completely new process but also how we've brought it to market too in terms of creating something that is incredibly easy to access. So I think

the two things we're solving at uh uh the problem level was sort of antiquated industry both in terms of consumer choice but also how you access the service too.

>> Death is probably the ultimate taboo topic in western culture. So I'm curious how you reach your customers when most of them probably avoid ever thinking

about death or ever thinking about the solution that you're you're offering.

How do you first get in their line of sight if you will?

>> Yeah. I I think it's uh before I answer that, I think it's interesting to unpack why this is taboo. And I think when you unpack why it's taboo, that informs how you then sort of uh address it. And I

think addressing taboness, I don't think that's a word, but addressing taboness is both intentional, but sort of a culmination of just finding something people resonate with uh to. So I think

this is taboo because people don't have a positive association with the funeral industry. Typically, there's also a

industry. Typically, there's also a great sadness just given the fact you're interacting with the funeral industry in the first place. So, obviously, someone close to you has died. So, uh that's a pretty uh bad starting point, but you're

then going to go through this pretty old school process. It's complicated. You've

school process. It's complicated. You've

had the same options for the longest time in terms of what happens to your body. You're either going to be buried

body. You're either going to be buried or you're going to be cremated. Burial

is expensive. It's pollutive. It's not a great use of great use of land. So a lot of people are moving towards cremation.

Uh but cremation then becomes very functional. It does the job but people

functional. It does the job but people don't really resonate with it as a process. All of that's to say is people

process. All of that's to say is people don't have a good association with this industry. I think you can kind of change

industry. I think you can kind of change that and this is what we are trying to flip in as respectful a way as possible.

So if that's sort of the problem set, we're obviously not going to be able to change that. This is a really difficult

change that. This is a really difficult time in your life. Um I think that is obviously just a given. But what we can do is offer solutions that align better with your beliefs and preferences are

perhaps a nicer alternative to the um existing options, but also making it far easier for you to make and manage these arrangements, too. So, I'd say we're

arrangements, too. So, I'd say we're tackling the taboo head on. We do that through unpacking what the taboo actually means and then really driving education around that concept. So, I

feel like that was your original question. Um, but I think you had to

question. Um, but I think you had to kind of unpack it first because that informs the sort of tactical approach then to spreading your message.

>> Yeah. No, I mean that makes a lot of sense and and really what I was asking is is how you do that education, right?

Because I mean it's it's not something that people are necessarily searching for if it's, you know, not something that's happened in their life recently or currently top of mind. But how do you go about educating people when it may

not be top of mind?

>> Number one step as you say is is really driving education. um traditional media

driving education. um traditional media still remains really effective there. Um

I feel traditional media doesn't get uh spoken about that much but I also think traditional media is relevant to the demographic we are working with too. So

obviously you've got phenomenal online distribution channels like Tik Tok and stuff like that these days uh but that's just not really relevant to our audience. So traditional media has been

audience. So traditional media has been really good to us. Think television

features, think newspaper articles, think both national and think uh locally too. And there's a lot of general

too. And there's a lot of general interest in this. Like this is a new concept to most people. So it's an interesting story to tell. I think it's really hard to generate media around an uninteresting topic. It is much more

uninteresting topic. It is much more much easier to uh generate media interest around something something that's different. People seem to

that's different. People seem to naturally really resonate with the process. People like what we're offering

process. People like what we're offering because it's a gentle natural process unlike uh cremation. Perhaps it offers a return to nature. It's better for the environment. We're not creating man-made

environment. We're not creating man-made CO2 in the same way that other processes are. So I think it's inherently quite

are. So I think it's inherently quite press worthy. It therefore gets press

press worthy. It therefore gets press pickup and people just by learning about it sort of resonate with the concept and then from there it's sort of building trust around it and making it easy for people to purchase.

>> Yeah, I can back that up that we found it very interesting and wanted to talk to you as soon as we could. So I can completely understand how disrupting a space that it will always be an industry, right? people will always need

industry, right? people will always need to have funeral services and and burial services >> and and I think that's exactly it. I

mean, there is an inherent need for this product. People have to choose something

product. People have to choose something and the closer you can get to aligning with people to people's beliefs and preferences, the better. And then of course making it as easy as possible to

interact with is always going to be a winning solution regardless of the industry.

>> Yeah. And so let's talk about market expansion. So I would assume that the

expansion. So I would assume that the funeral industry is a heavily regulated industry especially at the state level.

How has that impacted your SP expansion across the US and have you tried to expand internationally yet?

>> Yeah, I mean this is probably the single greatest obstac obstacle we faced as a company. I think the greatest risk we

company. I think the greatest risk we took when we launched in 2020 was our process was legal in one state only. So

Washington state was the first state to legalize this back in 2019. They came up with some really thoughtful regulation.

I think writing regulation around this is really interesting. You have to set a sort of a flaw that means there is like a good initial quality bar, but it's also a changing industry too. So you

don't want to put a ceiling on innovation. Um, so Washington did a

innovation. Um, so Washington did a really good job at uh creating really good initial regulation. Fast forward 5 years, this is now legal in 14 states and that has been obviously great for

us. Um, but really interesting to follow

us. Um, but really interesting to follow as a process. So this gets driven at a very grassroots level. People like the idea of this for themsel natural process, better for the environment,

returns you to nature, etc., etc. You don't really have to sell people on why this is a nice alternative to the existing option. So there's not been

existing option. So there's not been some big uh trade association or like big funeral pushing this. This is very much driven by consumers. We have

expanded. We launched in Washington um in 2022. We then opened a second

in 2022. We then opened a second facility in 2024, so last year. And the

goal is to continue to expand throughout the US, continue to help people pass uh legislation in their state should they uh want it. But it's true. I mean it's basically 50 different regulatory

systems that you are having to work with it. It is something we put a lot of time

it. It is something we put a lot of time and focus into because without it we can't expand access to people.

>> Yeah. But so how do you sort of take measures into your own hands? Right. If

there's a state that you think would you know this would be really successful in but they haven't quite made it legal yet. Are you involved in some of the

yet. Are you involved in some of the lobbying? Are you pushing for it? How do

lobbying? Are you pushing for it? How do

you access the markets that you want to even if the regulation is not caught up yet?

>> Yeah I mean it's a fair question.

Obviously some states where you're going to see much more demand than others.

There are some states that are obviously significantly larger than others too.

Again, it comes back to education. It is

educating policy makers, it's educating regulators, it's educating consumers.

Once people understand the concept um and the benefits of the concept and also that this is very high-tech and like extremely safe process, it's not that

controversial and it's also pretty nonpartisan too, I would say. And the

reason it's nonpartisan is most states are very proconsumer choice. And if

consumers would like to choose this and it's safe for people that planet and animals and nature and all that sort of good stuff, there's really no reason not to not to pass it, provided you're

putting proper guardrails in place. So,

I say pretty nonpartisan and it's kind of rare now. I feel like it's rare to get uh different political opinions agreeing on things, that sort of thing.

And this has kind of brided that gap and been successful for that reason. But

again, very much education driven. I

think that's probably uh the theme of our conversation is it's expanding awareness and and helping people learn about what we do in the process.

>> Wow. Well, I'm very glad to hear that we can finally agree on what we should do with our own bodies in this country.

That's um even if it comes a little too late in the process, but I'm glad that that that's working for you guys. Just

out of pure curiosity, when when it's not legal in a state if you have a customer who is like a state next door, is it then illegal to transport the remains? Like what what about it is

remains? Like what what about it is illegal?

>> The legalization piece for us is where we can open facilities and perform the process. Someone in a neighboring state

process. Someone in a neighboring state can very easily be taken across state lines and access the process that way.

And that's really common. We have two facilities at the moment. We have one in Washington. We have one in Nevada. But

Washington. We have one in Nevada. But

we work with a lot of families in Oregon. We work with a lot of families

Oregon. We work with a lot of families in California. We work with a lot of

in California. We work with a lot of families in Arizona. All accessing the neighboring states facility. That said,

over time, localization is really important to us. It makes it less expensive for people. It makes it less logistically complicated for people. And

it's also better for the environment if you're sort of going one hour away versus sort of traveling five hours away to undergo this process. So yeah, really expanding access is making it as local

as possible to to people.

>> And so I'm I'm curious how you think about scaling, right? As a two-time VC back founder, I'm sure that there are some metrics that you are needing to hit for your investors, but of course also for your own your own ambitions. How

does that limit your ability to scale potentially by needing to wait for regulations to catch up to you? And also

of course, you know, scaling in the end of life space can have kind of a double a double meaning that you know, hopefully it just means that there's more awareness of your solution and not actually more deaths. But how do you

kind of manage growth while also having some barriers?

>> I think the first thing we really invested in as a precursor to scale has been research and development. So as we think about like challenges to the business when we started the

legalization of the process throughout the US was obviously very limited. Um

but the second piece was this technology did not exist before. So we have spent the past 5 years um developing industryleading technology. So we've

industryleading technology. So we've spent in excess of $15 million to invest in the science, invest in the technology. We have industryleading

technology. We have industryleading scientists in our team. We have

mechanical engineers, we have electrical engineers, we have software engineers.

So very different to your average sort of funeral company I suppose. So really

improving every day continuous improvement like feedback loops making everything incredibly robust and then we follow where the demand is. It's kind of that simple and we've been really lucky

that a lot of people are not that happy with the existing options and therefore really resonate with what we want. So

venture money is a tool for us. It's

really not the be all and end all. It's

not particularly validating for our families and the people we work with that we've raised venture money. So, we

don't really talk about it that much, I suppose. But it's a tool to offering

suppose. But it's a tool to offering this to as many people as possible. And

yeah, we have metrics, we raise cash like any other company and we have milestones that we have to hit. But the

beauty of this business ultimately is you can do well, but you're also doing good in the world and you're really helping people and the planet in an industry that's otherwise pretty overlooked. I mean, yeah, you're

overlooked. I mean, yeah, you're probably one of the only, if not the only VCbacked funeral arrangement, you know, service. I think that's a very

know, service. I think that's a very unique space indeed. Yeah. And I'm, you know, I can imagine that from a VC perspective, the market size is is hard to argue with. It's, uh, everyone

everywhere. But, um, it's a unique case,

everywhere. But, um, it's a unique case, I think, that you guys have built for the VC space. And I think it's an inspiring one to many companies that are building in sort of niche or taboo spaces that may not think they're VC

backable, but you have proven that you absolutely can be. So I'm curious what advice you would have for founders who might be building in a taboo or sort of undertalked about space. I think

provided you're not doing something completely crazy and it is crazy could be defined in many different

ways I suppose but provided it's not completely insane and there is going to be a market for what you sell I think you just have to have more conversations

than the average company. That might not sound like particularly great advice but I think it's kind of like keep going.

You kind of have to accept that this is not going to be relevant to every investor you talk to. Not every investor is going to be excited by it. We're

lucky in that we're taboo socially versus taboo to a point where like investors cannot touch you. Like um a lot of investors will have LP agreements that mean they can't invest in gambling

or alcohol or stuff like that depending upon where they have uh raised their own cash from. So we're lucky in the sense

cash from. So we're lucky in the sense that it's taboo from a cultural perspective. But yeah, you just have to

perspective. But yeah, you just have to have more conversations and if you believe in what you're doing and there's a path to making it happen and there's a market that supports the business, you

just have to plug away and it gets easier over time if what you're saying is borne out to be true.

>> So to sort of wrap up, I would love to understand a bit about where Earth is today, how it's going, how many families you've helped, and what you see for the next maybe two years of growth.

>> Yeah. So business has gone well. Um and business going well for us

well. Um and business going well for us is helping as many families as possible.

We've worked with close to 7,000 families now since launching uh a few years ago. We have been historically

years ago. We have been historically very West Coast focused. So serving all the way down from sort of Washington to Oregon to California, Arizona, Nevada, etc. We are very committed to expanding

access throughout the country. We

believe that anyone who wants this and resonates with it should be able to access this locally. So that's very much our goal over the next couple of years.

To that end, we will launch on the east coast the first half of next year. So

that is incredibly exciting for us. This

is the first time this will be offered to anyone on the east coast. So anyone

that would like this, we are committed to sort of making it easy to access >> as soon as they allow it. As soon as it becomes legal in that state.

>> Exactly. Exactly. With that one caveat.

>> That's it for this week, builders. We're

taking off next week for the holidays and we hope you are too. We will see you back here in the new year.

Build Mode is a TechCrunch podcast. Each

episode is produced and edited by Maggie Nye and hosted by me, Isabelle Johannes.

Our art and design is also by Maggie Nye. A big thanks to Morgan Little who

Nye. A big thanks to Morgan Little who leads our audience development, the Foundry and Cheddar video teams, and most of all to you, the builders, and everyone else in the wider startup community. We'll see you back here next

community. We'll see you back here next time.