If you do not expect pediatric research to have anything to do with improving the bottom line of a parcel delivery service or cable company, then the story of Diagnostic Driving may surprise you.
Diagnostic Driving, a startup company spun out from The Children’s Hospital of Philadelphia Research Institute, has spent the past several months accelerating from an idea based on teen driver safety research into a thoroughly researched, successfully piloted business model for improving the safety of corporate automotive fleets. At the end of October, Venk Kandadai, MPH, co-founder of the company, traveled across the country presenting Diagnostic Driving’s success to date and seeking investments so the company can continue its growth.
The company’s journey is an illustration of what a growing number of CHOP-generated ideas may experience soon under the guidance of the new Office of Entrepreneurship & Innovation.
To trace this company’s road from research to the startup world, let’s hit reverse and see where it began.
Diagnostic Driving emerged from driving safety research led by Flaura K. Winston, MD, PhD, scientific director and founder of the Center for Injury Research and Prevention (CIRP) at CHOP, and co-founder of the new startup company with Kandadai, a project manager and statistician at CIRP. Dr. Winston has led decades of research on driving safety and risk reduction for teenagers and is a national leader in the field.
Earlier this year, Dr. Winston and colleagues at CHOP and the University of Pennsylvania reached a major milestone in their research: They validated a simulated driving assessment software package they had developed to assess driver safety and provide insight to personalized interventions to improve driving. Creating and validating the tool was a five-year process, building on more than a decade of Dr. Winston’s foundational research funded by the National Science Foundation and other sources.
“We had this validated tool to differentiate drivers based on skill and experience,” Dr. Winston said. “We knew we needed to get it out there.”
When the opportunity arose to apply to the DreamIt Health startup business accelerator program this spring, she and Kandadai applied and were accepted.
DreamIt Health, a collaboration between the business accelerator company DreamIt Ventures, Independence Blue Cross, and Penn Medicine, helps launch startup businesses focused on health and healthcare. For the past two years, CHOP-developed teams have participated alongside the independent businesses accepted into DreamIt Health to receive mentoring and training in business development strategy, finance, legal consultation, technology, and market research.
During the four-month incubation, Diagnostic Driving shifted and grew. The team built its first mobile prototype in July and constantly sought and responded to feedback from potential customers.
“It was hard,” Kandadai said. “Even though the research was done for teenagers, we determined that the market size was too small to sell to parents and teens.”
Only 2 percent of parents in Pennsylvania enroll their teenagers in driving schools. These parents did not rate preventing crashes as highly as an insurance discount as their reason for doing so.
“For driving assessment software, there just so happened to be a market in corporate fleets,” Kandadai said — and their research indicates that market is worth $4 billion.
“Corporations spend $60 billion per year on crashes,” Kandadai said during his presentation Monday, Oct. 26, as part of DreamIt Health’s Demo Day. He noted that corporate fleets lack reliable ways to predict and quantify crash risk in their employee populations, and to intervene to improve safety in targeted ways. He outlined the company’s growth and vision to an audience including industry leaders, potential investors, potential customers, and media.
During the incubation period, Kandadai said, Diagnostic Driving was piloted successfully with a Fortune 100 global pharmaceutical company that now has a letter of intent pending for continued use of the program. Diagnostic Driving also has received interest in early adoption from several other large corporations, including a large parcel delivery company and a major cable television company.
Diagnostic Driving is next seeking seed funding from venture capitalists and other investors, as well as contacts at Fortune 500 companies with large automotive fleets.
“Our work is fundamentally about population health,” Dr. Winston said. In that realm, Diagnostic Driving is poised to make a potentially big difference — making the roads safer while reducing the bottom-line cost of insuring drivers at large businesses at the same time.
Entrepreneurship and Innovation at CHOP
Diagnostic Driving is one of the earliest companies to accelerate into business based on ideas developed at CHOP, but it is not alone. Last year, the CHOP-spinoff medical information security company Haystack went through the DreamIt Health incubation process, and it is continuing to grow as an independent company.
All of the CHOP-spinoff companies are independently owned and operated, while CHOP owns equity. CHOP’s involvement also includes logistical support, such as protected time to focus on the entrepreneurial venture that Kandadai noted was particularly helpful in the launch of Diagnostic Driving.
“We have a lot of smart clinicians, researchers, administrative staff, and others who come up with great ideas,” said Patrick FitzGerald, who joined CHOP in the newly created position of vice president for entrepreneurship & innovation in June. “CHOP is a fantastic place to be to develop ideas from a scientific perspective, but people here didn’t necessarily have the outlet to explore their ideas from a business perspective.”
That realization was the impetus for CHOP’s participation in DreamIt Health and for the creation and growth of the Office of Entrepreneurship & Innovation. The office works to create an entrepreneurial spirit throughout the organization, both in the Research Institute and in clinical and administrative domains. It identifies and supports potential spinouts, develops strategic partnerships, and helps people at CHOP to develop early stage ideas including innovative devices, therapies, mobile applications, and software tools. The office has created a centralized hub for managing existing and future entrepreneurial and innovative projects. It will begin holding open office hours biweekly on Fridays beginning Nov. 6 for CHOP employees to discuss their ideas and learn about innovation.
“CHOP has always been a leader in research, a place full of people generating ideas that improve health,” FitzGerald said. “Now what we’re trying to do is build on that strength with the entrepreneurial skill set to bring those ideas to market in a faster and more commercially focused way.”