While at my 25th Harvard Business School reunion last weekend, I heard a nice presentation by Clayton Christensen on disruptive innovation. He is one of my favorite academics and his books (Innovator's Dilemma, Innovator's Solution and others) are iconic in business strategy. Hearing again his theories on disruptive innovation reminded me of a Boulder based startup I recently encountered and what a perfect example they are of Christensen's disruptive paradigm.

Just Right Surgical provides miniature precision surgical devices targeted primarily at the pediatric surgery market. The company is run by Russ Lindemann (past President of Valleylab and 19 years in the surgical device industry) and founded by the engineering design team of Dale Schmaltz and Jenifer Kennedy. Dale has 20+ years of medical device development experience, over 50 patents, and a dozen successful medical device products on the market. While at market-leader Covidien, Dale led product development teams and championed the LigaSure™ vessel sealing technology from concept to a $500 million business. Jenifer built and ran the Applied Research Group at Valleylab in the 90's (before being acquired by Covidien) and invented the first vessel sealing technology using RF energy and her IP allowed Covidien a nearly competitor-free environment in this arena over the last 13 years.

They left to start Just Right Surgical because the devices available on the market (vessel sealers, staplers, etc.) were designed primarily for adult patients and there was nothing available for pediatric surgery. When you are operating on an infant that can fit in the palm of your hand, having a tissue stapler that is over two feet long just doesn't work very well. Turns out the pediatric surgery market, although almost $700M annually, is only 1/10th the size of the adult surgical market and market leaders like Covidien are unwilling to engage in the R&D necessary to develop miniature instruments because they view that development as cannibalistic. As Christensen would describe it, this is just the opening that a disruptive innovator is looking for - targeting a largely un-served adjacent market vertical with products that offer a new and never addressed dimension of value, and most importantly a segment of the market that the market leader is unwilling to address. There are approximately 950 board certified pediatric surgeons operating out of 220 Children's Hospitals in the US and they are desperate for better tools. They are so frustrated with the current alternatives that many have become champions for Just Right and have purchased JR's sealer and stapler sight unseen given the lack of alternatives.

That by itself is a pretty compelling opportunity. The truly disruptive part comes from the fact that once these miniature devices exist, there is no reason not to use them for less invasive adult procedures as well and there the market is ten times as large.

Really cool company right here on the front range. They have raised over $22M, have a great board, have obtained FDA clearance on four products and have built a formidable IP portfolio. I am excited to see them put Christensen's theories to work in the surgical device market!