MassDevice Q&A: Charles Remsberg

Charles Remsberg literally learned the medical device business from the ground up.

The 47-year-old’s first job in the industry was sweeping the floors in a warehouse. That’s also where he learned that it’s more important to be judged by your work than your alma mater’s pedigree.

The Long Island native’s resumé includes stints ranging from clam digger to his current role as CEO of the American division of Hocoma Inc. in Rockland. Switzerland-based Hocoma produces the Lokomat, a robotic rehabilitation system that helps people suffering from spinal cord injuries and brain trauma learn how to walk again by acting as their legs.

Remsberg talked to MassDevice about the Lokomat, how robotics will change the rehabilitation (and maybe the medical) business and why thinking Swiss has helped Hocoma avoid the pitfalls of the current economic climate despite a capital equipment purchasing drought.

MassDevice: What was your first job?

Charles Remsberg: I used to make bagels in high school and I was also a commercial fisherman. At 16 I started digging clams. Oh, and when I was 12, I had a paper route. I’m a hard worker. I’ve always worked and always been a hard worker.

MassDevice: Where are you from and how did you get into the medical device business?

CR: I’m from Long Island originally. I started my medical device career in college, working for Biodex Medical Systems between semesters and in the summer. I was 19 years old when I started, basically just sweeping the floors. I was the rookie, so I spent my days pouring acetone and working.

MassDevice: Where’d you go to school?

CR: I went to UMass-Amherst, Stonybrook College and I have an Associate’s degree from Suffolk County Community College in business and administration.

MassDevice: You don’t have a Bachelor’s degree?

CR: I only have an Associate’s degree. I think education is important, but it’s more the kind of person you are that’s important. It’s kind of ridiculous to judge people by their education.

I spent 21 years at Biodex, working my way up from the warehouse all the way to running the physical medicine and rehabilitation division. But after 21 years, I realized I wasn’t going to be doing anything else other than running the divisions. I decided that it was time for me to try something else. My neighbor at the time owned a large boat dealership on Long Island and had a dysfunctional relationship with his employees, so I went to work with him in the boat business for a year. Basically, long enough to help him out and give me a good reason to get out of Biodex and do something else.

By the end of that year, I knew didn’t want to be in boat business, so we moved to Switzerland to raise our daughter. By pure serendipity I was introduced to the founders of Hocoma by my wife’s girlfriend’s ex-boyfriend, who was the Chief Technology Officer. They were looking for a sales and marketing guy in the U.S., and when they heard I was moving to Switzerland they wanted to talk about the opportunity to run sales and marketing in Switzerland. I was their ninth employee.

I was the head of sales and marketing and the first salesperson they hired. I set up international distribution from Switzerland and it became clear that the U.S. was a very important market for the company. The CEO and board of directors asked if I’d consider moving back to the States. That was in 2006 and now I’ve been CEO of the U.S. division for three years. We went just from myself to our 10th employee.

MassDevice: Can you describe the Lokomat for a layman?

CR: The Lokomat is a robotic exo-skeleton that is strapped to a patient with a spinal cord injury, brain injury, or a stroke victim. The robotic legs assist them in walking on a treadmill.

In essence, you’re training the central nervous system. The idea is neural plasticity. We’ve all heard the parable that we only use 10 percent of our brain, but when you have neurological injury your brain’s ability to contact the limbs is diminished. So the brain tries to find a different neural pathway to get to the limb, or tries to recruit other parts of the brain to control that aspect of function. Neurological rehabilitation is not rehabbing strength; you’re trying to stimulate the central nervous system to develop the brain’s level of control over those limbs.

A good example is people who’ve had a stroke and lost control over the left side or the right side of their body. Over time, after the shock of trauma wears off, many people recover function. That’s because the body was in shock and lost that control of those limbs, but over time recovered it.

What’s different about Hocoma is the concept is motor function. If you play tennis or golf, the only way to get good is to have a high number of repetitions. They say a million repetitions are required to be successful in golf.

In therapy, it’s the same story, because the patient has lost a significant amount of function. So it takes high intensity to regain neuromuscular control, and robotics is ideal for high reps with intensity. And at the same time, it can assess the patient’s condition, provide a form of feedback.

MassDevice: Who are your customers?

{IMAGELEFT:http://www.massdevice.com/sites/default/wp-content/uploads/headshots/Remsberg_Charles_100x100.jpg}CR: We sell to large free-standing rehabilitation hospitals like Spaulding Rehabilitation Hospital in Boston, as well as medical centers and small rehabilitation centers. We also sell to a group of people who provide exercise for people with brain injuries. That’s a cool business, because as a consumer the amount of medical care allowed is limited by insurance. With a brain injury, after the allied health portion of rehab is completed, the costs are extremely high. So those patients have a limited amount of therapy and after six weeks they’re kicked out. These people look for places they can train, so some of these small private rehab centers have opened up. They’re mostly funded as a non-profit and they usually offer a fee-for-service, sort of like a gym for people with spinal cord injuries. There’s one called Journey Forward in Canton.

MassDevice: How much does the Lokomat cost?

CR: Our price point starts at just more than $200,000 for the Lokomat and goes up as high as high as $380,000 for the pediatric version. What’s really great is the success of the technology with children. Spaulding was the first to get a pediatric version and they’ve conducted research that showed extraordinary gains in patients with cerebral palsy.

MassDevice: With hospitals cutting their capital expenditures and generally cutting costs, how do you prove the value of a large piece of equipment like the Lokomat to the finance people?

{IMAGELEFT:http://www.massdevice.com/sites/default/wp-content/uploads/featureArt/Lokomat_200.jpg}CR: Obviously, the short-term uptake is a lot slower than it was in 2006 or 2007. There’s a lot of facilities that want the Lokomat but have to delay until 2010-2011. At the same time, there are enough facilities that are well-run and well-positioned and which look at a downturn as a good time to differentiate from competitors. Our feeling is that year-on-year sales will increase; we’ll sell more this year than we did last year. But what’s also important is that we’re a bootstrapped company. We’re profitable and our event horizon is 10 years. The slowdown is inconvenient, but it’s not a bet-the-company scenario.

We’re not worried about overnight success. Yes, we have to sell, we have to work to get orders, but there’s not as much of a whip-saw effect as you see in some American companies that are run on the edge.

MassDevice: Does that outlook stem from Hocoma’s Swiss origins?

CR: Our management team has had the foresight to be successful. There’s no venture capitalists invested in Hocoma. We’re not interested in investors with short event horizons. Somebody who wants to get in and get out is not the right fit for us. We have private investors and we’re absolutely clear that an investment in Hocoma is an investment in the long term.

MassDevice: How does the Swiss business culture differ from American customs?

CR: No one person does anything alone. We do it as a team. It’s actually how we live. Consensus management is a Swiss concept. We have a hierarchical structure to our society. Our theory is that you disagree behind closed doors, but when we go out in public we’re unanimous. It’s not just in business, either.

MassDevice: What do you think the medical device business going to look like in 20 years?

CR: That’s the $64 billion question, isn’t it? What I tell people is that in physical medicine, robotics is the ideal medium. Robotics will play a large role in rehabilitation and physical medicine. The future is still quite dynamic and it will attract competitors, which is good because you don’t have a market without competition and we hope that we’re a leader in that field.

In a broader sense, robotics will play a large role in medicine. It’s only a matter of where that role will make itself known. Distribution on a large scale in retail services is a natural fit, but the same thing could be said about a hospital. There’s no reason robots can’t deliver food and clothes in a hospital. I’d be surprised if they weren’t used in hospitals.

MassDevice: And in medicine, can you see robots performing procedures?

CR: Maybe, it could be like “Star Wars,” I don’t know. The DaVinci system is the de facto standard for some surgical procedures. But cost is one side of the equation. In our business model, cost is part of it because instead of humans moving the person, you have a robot. One reality of the healthcare system is it’s very hard to justify therapy that involves more than one person. So with increasing precision, increasing success, increasing efficiency and in many surgical procedures, robotics blows away outcome with less investment and physician intervention.

MassDevice: With the increasing prevalence of gift bans and other regulations, will the industry ever go from a face-to-face transactions to e-commerce?

CR: Thank God, no. Not in my lifetime. I think all types of selling, whether it’s cars, newspapers, whatever, requires that you develop a recognizable level of expertise. We’re all becoming experts in our niche. The salespeople become experts in their niches. The biggest falsehood is the saying, “I can sell anything.”

Successful companies will develop expertise. The conveyance of information is still human-to-human, whether personally or through video conferences, and the conveyance of information has to be made through the expert. We’re training people to become experts. That’s my personal niche, I’m an expert in physical medicine. I didn’t jump around from industry to industry. I developed 25 years of providing a high level of consultative information. People trust my information, trust my reputation.

If you look at the people who followed the curve from dot-com, real estate, to mortgages, I’m sure they were great salespeople, but the problem is they aren’t experts. You can be the best closer in the world, it doesn’t matter. If you don’t understand our material, you won’t be successful.

MassDevice: Speaking of the gift ban, what’s your take on its potential impact on your company and the industry in general?

CR: We never give gifts, so it’s not anything that affects us as a company. Personally, I’m opposed to buying lunch for a presentation. The doctors speak to us because the information is valuable. One of the great things about working for an innovative company is that when you call somebody, they take the call. You don’t have to try anything crazy to get in the door. You just have be yourself.

MassDevice: What other rules or regulations have you most concerned?

CR: None. I feel that we’re a part of the solution, not part of the problem.