“...I think fighting consolidation is not going to be a winning strategy in the long run. That being said, I think there's still lots of room for creative, innovative, entrepreneurial operators whether they’re at the clinic level or the supplier level and... as the field gets bigger and gets more interesting from a public capital markets perspective, there's going to be a lot more opportunity for funding those exciting innovations.”
Consolidation, IPO, publicly-owned...all words that weren’t a part of the fertility world vocabulary 10 years ago. Now, they are becoming more and more common, which can be both exciting and nerve-wracking to entrepreneurs in the field. On this episode of Inside Reproductive Health, Griffin Jones, founder of Fertility Bridge, talks to David Wolf, President and CEO of Hamilton Thorne. They discuss the implications of consolidation coming into the fertility world as well as the pros and cons of both publicly- and privately-owned clinics and suppliers.
Click here to learn more about David Wolf and Hamilton Thorne.
To get started on a marketing plan for your company, complete the Goal and Competitive Diagnostic at FertilityBridge.com.
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Welcome to Inside Reproductive Health, the shoptalk of the fertility field. Here, you'll hear authentic and unscripted conversations about practice management, patient relations, and business development from the most forward-thinking experts in our field.
Wall Street and Silicon Valley both want your patients, but there is a plan if you're willing to take action. Visit fertilitybridge.com to learn about the first piece of building a Fertility Marketing System--The Goal and Competitive Diagnostic. Now, here's the founder of Fertility Bridge and the host of Inside Reproductive Health, Griffin Jones.
GRIFFIN JONES: Today on Inside Reproductive Health, I'm joined by David Wolf, the Chief Executive Officer and President of Hamilton Thorne. David has also been a senior level executive of many companies over his 20 years of his career including, he was a member of the founding management of Elcom International--played a key role in growing that business to $800 million in revenues over the course of four years and a successful IPO. David was Chief Operating Officer of JWP Information Services, where he built the operational infrastructure to support that company's growth from $250 million to $1.4 billion dollars in sales. And President and CEO of NECCO, Inc., a $250 million dollar business in IT distribution and services, also that was purchased by JWP. Now, he's in the fertility field at the helm of Hamilton Thorne. Mr. Wolf, David, welcome to Inside Reproductive Health.
DAVID WOLF: Well, thank you very much. I'm happy to be here.
JONES: When you and I spoke before the show, you mentioned that you had come to the field from a business background--so had I--that's clearly evident in your bio. Talk to us about how you ended up in the field of reproductive health.
WOLF: So, like many things in life, it involves some level of personal relationships and coincidence. I first got involved with Hamilton Thorne in the early 2000s when the company was looking at it's business and financing--a lot of my background is in corporate finance and combination of corporate finance, operations, as well as technology from more of an IT hardware and software perspective--and I was asked to help advise the team on some activities they were doing and got more and more involved over the years and including assisting the group with its successful IPO in 2009. In 2011, the founding CEO was looking at retiring and I joined the team on at that point on a full-time basis in late 2011, and it's been a short or a long eight years and it's been an exciting ride.
JONES: I'm interested in how you prioritize the learning of the clinical and lab operation side of things because if you try to learn everything, that would mean that you got the letters MD after your name, that you did a four year residency in OB/GYN, a three year REI fellowship, and the same was true for me when I came into the field. I was a marketer for another company, started working with an IVF center, and then started working with more. And the way that I prioritize my learning was what the patients were talking about. So I’d start with what the patients were talking about then most and then learn more from there. And then I had to learn the business case for speaking with clients, so I learned what was the highest margin and biggest challenges? How did you prioritize learning about the clinical and lab side of things?
WOLF: So I came at it in a way from a completely opposite direction. I started with the business side and converged on the practice side. And I think either of them is, in my view, is legitimate. So there's two things to talk about. One is, I tend to be highly focused as an individual and try to run the business on a highly focused basis. So one of the first things we did when I joined the business was really focus the activities of the Hamilton Thorne company on, not only the ART space because we had our fingers in a number of other interesting areas--but really focused on ART and, again, on clinical ART and focused in the lab. So with a lot of what went on in, maybe, clinical practice at that time was just outside our area. We just didn’t spend a second thinking about that from a business perspective. Obviously, it's important from an overall understanding of the field perspective. Secondly, I was relatively lucky in the sense that when I joined the business Hamilton Thorne was a much smaller company than what it is today. We're running kind of in the mid-30 million dollars of revenues with a fairly comprehensive product portfolio. At that point, we were mid-single digits, primarily selling lasers and CASA systems. So the activities that I really had to get involved in very early were fairly limited which was understanding our specific solutions, understanding where they could grow, and also the competitive landscape where we could help with improving outcomes. And, over time, with a combination of new product development and acquisition, we now have a fairly comprehensive solution for the laboratory, providing nearly all of the equipment and a lot of the consumables that are used on a day-to-day basis in the lab. So as I said, that I was somewhat fortunate in that the educational process could be extended over a period of years as we continued to add these products and continue to think about what were the needs in the lab.
JONES: So you’re a serial executive, it seems. The term serial entrepreneur gets used a lot, and maybe that applies as well, but you’ve been an executive for a lot of different companies. So one of the tenets that I see from really talented executives and really talented entrepreneurs is that they just know who to hire more quickly because they need that transfer of knowledge and expertise. So when you were coming into the field for the first time, how did you build that team? You say, Ok, I’ve gotta get caught up post-haste, and these are the people that are going to help me do it. Even before I ask how do you select them, that’s question number two. Question number one is what’s the baseline of knowledge that you have to be able to have to select the right team properly that is going to be the ones who transfer the expertise and knowledge to your organization and to you?
WOLF: I am going to answer your question, I may go in the opposite order, but I think we are going to get to the same place! Again, I think I was very fortunate with the Hamilton Thorne business--which is the founding, the original US-based business, it’s an equipment manufacturer and the foundational business for the entire Hamilton Thorne Group--to have an extremely accomplished team. I think if there were criticism of the team, it was somewhat lack of focus, somewhat driven by the natural entrepreneurial enthusiasm of the founding CEO, and somewhat driven by investors saying we gotta go after the next big thing. So in my view, again bringing focus to the business, I would say modestly say, get the best out of a really, really strong team. So when I joined, we didn’t really have to do a lot of new recruiting, a lot of new hiring, it was really a question of how do we retain the people that we have, refocus their efforts, and then recruit around, I wouldn’t say around the edges, but recruit over time people to fill out the team. From a growth perspective, we’ve been growing a lot through acquisition again typically bringing in very, very talented people. Sometimes through an entrepreneurial event that companies need when they get a little more mature, but sometimes that entrepreneurial event is very, very powerful because it gives you the level of enthusiasm and pre-thinking that is not always available in a more mature business. So again, I think the way we’ve grown, we've tended to have a very strong talent pool that has been internally generated. When we’ve tended to look to recruit outside, have been in areas that are very hard to kind of grow up in the seat of the pants. So regulatory has been a big focus of ours, where we’ve been hiring a lot of regulatory resources. And that's a function as well as the field has become much more highly regulated, both in the US and internationally where many countries had formerly had either followed US or European regulation and now have adopted their own and the regulations just generally get more complex and more stringent. So that could be an example where we had to look for outside hires and in that case, I think it's a question of if you're doing a decent job of recruiting and reading resumes and meeting people, you can generally assume you're working with a talent pool that is qualified. So then the question is how do you find the person who has the right fit for the organization and will work within the culture of the organization we have? And that is a talent that maybe I have, but also an approach where we don't have one person, just one person interview people. A person would interview up and down across the entire organization. And I like to sit down with a candidate at some point and look them in the eye and ask them, we’ve tried to be as open with you about the organization, open with you about what our strengths and challenges are, now you have to be open with yourself and with me, is this an organization where you're really going to be successful? And that's something that is important for--a self-reflective person told to look at.
JONES: You mentioned acquisitions a couple times, what are some acquisitions that you made since being at the helm of Hamilton Thorne and how have they contributed to the overall scope of the organization?
WOLF: So we've done five acquisitions over the last five years, so about one a year, which I think is a cadence that can make sense for a company of our size with our resources, both financial resources and human resources. And as well is a cadence where one can integrate those acquisitions into a growing global organization and in a way that can be done sensibly. I think too slow and it's not a bad thing, but then that acquisitions is just sort of a sideline to the activity. Too quickly and you can see just stress in the organization because there aren't a lot of organizations that can really do multiple acquisitions on a really, really quick basis and not have difficulty, if not real problems. That's in, not only in our field, but many fields where you looking at bringing in additive capabilities and additive products. If you're looking at, maybe we'll talk about this a little later, like the clinic consolidation, where clinics, to a certain extent, are more or less similar, I think you could probably do a quicker set of acquisitions there because everybody's really kind of pulling at the same arm and trying to do the same thing. Whereas, and again, I can talk more about our acquisitions, we've done a couple of relatively small acquisitions. We bought a great little product from Perkinelmer, The Oosight System--which is also O-o-s-i-g-h-t, so a little bit of play on words--which allows you to visualize structures in oocytes and eggs that you can't see with conventional microscopy and, therefore, be able to--it’s not quite a diagnostic--but certainly be able to look at and develop information about the development of those eggs. You can see spindle structures and other structures and there's some looking right now this could be actually an important part of the puzzle of IVF, where it's a solvable problem, where you can correlate spindle health to successful outcomes. We also just recently bought an air purification business, they ZANDAIR business from a great entrepreneur, Fred Zander, and again rolled that into our business. We've done a couple of other much larger acquisitions over the years. We bought a business in Germany. It's primarily a consumables business called Gynemed. So now in Germany, we have both a direct sales organization that serves Central Europe, as well as a line of primarily media products, but a host of other products that we're right in the process now of getting qualified for sale through 510K clearance in the US. And most recently, just last month, we bought a business in the UK, the Planer business, which is an incubation and cryopreservation business, again, primarily a hardware business, also strong monitoring products, which will allow us to do the two things we like to do: develop a direct sales operation or expand our direct sales operation in the UK, as well as buy another range of products that we can offer throughout our entire Hamilton Thorne family of companies.
JONES: I wasn't even thinking of going down this rabbit hole, but you're in so many different places, direct sales operation in the UK, consumables company in Germany, and, just by nature of you having the resume that you do, you’ve gotten good at delegating. It's one thing that I advise my clients on to a degree, to the degree that I can and one that, as someone who's in a five-year-old company myself continually getting better at doing. Give us some golden nuggets of wisdom that you feel are pretty transferable regarding delegation because I imagine that you have your hand in the most sensitive parts of these deals, but you simply can't be in everything. So give us a little bit of your wisdom on delegation.
WOLF: Yeah, so I think I could talk about it as much from an operational perspective. And if we wanted to talk about it on the transaction side. So from an operational perspective, it's clear that if you, as a company, expands certainly in the way ours has as we described with a wide product focus and geographic focus, it is absolutely impossible to keep your fingers in every pie. So, you know, there are certain people who just aren't capable of giving up micromanaging and there's certain people who are capable of giving up micromanaging. So I think you’ve got to understand the progress of your business over a period of years and I think it's a business concept of zoom in and zoom out. You’ve got to understand where you zoom out and take a look at the big picture, delegate decision-making to whether it's the management team, operational team, the sales team, whatever specific thing you're looking at, and understand that that person will not always make decisions that you would have made, but that's okay. It's not--certainly during my career, I've learned I've made a lot of bad decisions, so just because I wouldn’t have made the same decision, doesn't make it wrong and even if it is not the perfect decision, it's still much more important that the company progresses. Things move forward rather than things slow down because everybody's always waiting for management and management approval. So I think that's the key thing. And then there's the zoom in side which is the ability to figure out when you really do have to be involved and then, obviously, follow through with that involvement. You don’t just parachute in and stir the pot and then disappear. You make the commitment to zoom in and really work on project, product, or problem, or process--you’ve gotta commit to do that. And I suppose the key is figuring out and being somewhat consistent on when you step back and allow the business to run and trust your team and when you need to get involved, and not necessarily because of lack of trust in the team, but because it's such a critical issue or such a potentially long, strategic problem or opportunity of long-term strategic significance that it’s important to spend the time.
JONES: Do you agree with Jack Welch's axiom that if someone can do something 80% as well as you can, that you have to delegate it?
WOLF: So I don’t think I’ve ever heard that axiom. I don’t know about the percentage, but yeah, absolutely. Again, first of all, and I don’t know about Jack Welsh’s personal perception of his own skills, but I know my personal perception of my own skills are sometimes inflated. So the idea that I can do something at 100% and, therefore, another person does it at 80% is good enough is probably just wrong. Reality is maybe some things I can, but a lot of things I'm not doing 100% either. It's just either, I don't know enough to know that that's the case or if overall you’re fairly successful, it doesn't really matter. So clearly, my corollary would be similar to that though, you can’t expect everybody to everything you would do, you just have to choose the right people and give them the overall--make sure everybody understands the strategic direction of the company and allow your people to be successful.
JONES: It seems like most of the businesses that you've been involved with have been ones in high regulatory fields. Is there a tension between the common spirit of entrepreneurship and excellence in certain regulatory schema or in the advancement of medical treatment? Because especially when we're talking about startups and a lot of companies in the consumer sector, the way that those are launched and validated against the market place is very antithetical to how medicine is approved and processed. And we can't just do human experimenting and I think that rigor is so ingrained in the clinician that when it comes time to other segments of the business, such as marketing or automating a few processes, or even some human resources, or acquisitions, perhaps, that same rigor of it cannot see the light of day until it is fully proven or the risk is totally mitigated--are those two concepts at tension with one another?
WOLF: So yes, I think that's always a tension and even in a company like ours because we are clearly, I guess, we have, in some ways--I don’t want to say that we’re necessarily a social enterprise, but we do have multiple bottom lines, one bottom line is to make money for our investors and all of our stakeholders, which includes our employees and you know, the field and secondly, we are committed to trying to improve outcomes. So our products, as I have said, can be very influential in improving outcomes. Others, I think, are more kind of basic products, but still have to be made properly, sterilized properly, and again, regulatory is a big piece in all those things. And there's tension in all stages whether it's pure product development, which we come up with an idea and you have to validate that idea, both commercially and medically and then be able to go through the regulatory regimen so that you can offer the products commercially and that can be a really interesting question. I think you kind of alluded to maybe, you know, in IT, for example, or consumer products, when you want to launch a new product the stakes can be relatively low. You launch a new app, if it's a technical glitch, you launch, you know, 3 o'clock that afternoon you launch, version 1.1 and the next day, you launch version 1.2. In the medical field, that just can't happen. You got to have a truly validated, to the maximum extent, bulletproof product before you launch. And obviously the regulatory structures both help that and then, we'll talk about, in some ways hinder that. So innovation--it's really interesting in a highly regulated field where innovation is, to a certain extent--well, I wouldn’t say to a certain extent--to a large extent slowed down. Companies and people could be a lot more innovative if there were fewer regulatory restrictions, but on the other hand, I'm not going to argue that that would be a good thing because you know regulatory also keeps products and procedures safe and effective. What I think is kind of interesting is if of look at the history of IVF. When started in the late 70s, obviously into the early 80s, it was very much a pioneering process and they were very few, if any, IVF-specific products. People had to be innovative. They were using media from the mouse lab. They were using hand-pulled pipettes from the same thing they were using on zebrafish. So everybody was innovative. There was no other choice! And then as a field matures, people are looking more for commercial solutions, both because of time-constraints--you don’t want to be reinventing the wheel every time--as well as proven safety and efficacy. And that has, in some ways, you could argue that frees up the clinic to focus on the two things they ought to be focusing on, which is patient care and truly being innovative and things that could long-term help the field.
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JONES: This podcast is one of the examples that you gave where I said last year that we are launching January 3. I don't care. We're putting up a podcast and we're gonna have six episodes ready to go. And we've experimented with a number of different recording software and different mics and no matter what I use, my guest always sounds perfect and I sound like I'm in a frickin’ submarine. So we invest more and even talking with you before the show is that yeah, we’ve been talking about revamping our onboarding process because my assistant’s going back and forth with people, but we always start off with let's get it launched so we can have market validated and then let's reiterate it. And there are some applications that I think are necessary, even in healthcare, even other places where you know, if we were waiting for the Office of Civil Rights or Health and Human Services to issue specific cans- and can't dos of social media, no doctor would be on social media in a 2019 world. We'd still be waiting, if that were the case.
WOLF: I was gonna say you referred to earlier about does the regulatory structure, in some ways, maybe the regulatory mindset and the clinical mindset, impact and impair the clinician's ability to market. And you’re giving the example on social media, but that is an area that can behave completely differently than clinical practice where you can launch an innovative marketing campaign and you can do A and B testing and you can decide to just cancel it if it doesn't work or slow it down if it's too successful or speed it up if you like it. So there's lots of opportunity to be creative in that area. I can tell you in our companies--maybe that's because we have a lot of people that come from this entrepreneurial background--I don't think we, and I’d like to think about this a little more, but I hope we're not constrained on our day-to-day operations. There is some regulatory element around labeling and those sorts of things, but our day-to-day marketing operations, I’m thinking as you say that it has to be perfect before you launch. Marketing doesn't have to be perfect before you launch. By definition, most marketing is unproven and you don't really know that it works until you've done it. So if you wait for it to be perfect and proven before you launch, you’re getting paralyzed, you’re never going to launch anything. It's an interesting question. I haven't really thought much about how do clinic owners, who historically have been the doctors, though that is changing, shift their mindset so different that they're going to be much more unwilling to launch marketing programs until they’re “proven,” which means they're destined to be copycats all the time. So that's a question to you since that's your world. I mean, do you see it that way? Or do you spend your time trying to convince clinicians that it really is something different?
JONES: We are, I would say, there's maybe 5% of people who are ready to just try something because they see the value in it. And maybe an example that answers your question better is when I first came into the field, I knew that a certain quality of video would perform very well for clinics, but video is expensive. You want good video, it's going to cost several thousand dollars and then more to distribute it and put ads around it and to make several variations of it. So it took me a long time of doing a lower production quality of social media, of getting into Google Analytics to show different conversions in order to be able to make the case for what I already knew was going to be successful. So I would say by the time in my company's trajectory that we did the quality of the video that we knew would be successful from the beginning was 3 ½ years into when we could have done it from. And partly that's just because I'm not new anymore, but I was new five years ago. And that window is narrowing as we start to get more clients and now we have case studies and now we have more, but there are still things where it's like, I know that this will work, but I need someone to sign off on it if it's a client-oriented strategy and it still takes a baseline in order to be able to get that. Does that answer the question?
WOLF: Yeah.
JONES: Because I’m not really talking about--
WOLF: Proof. You have to have proof.
JONES: And I'm not just talking about things like regulation. I say that “regulatory mindset” because it has to apply medicine, but I'm really talking about doctors that don't want to put a Facebook post up if the color is teal instead of turquoise, or if it's sky blue instead of celeste or their logo is in the bottom right and it should be a centimeter up from that. So now--in the first project that we do with clients, we don't do a full rebrand, but we do at least, there is a branding section of the blueprint that we do and we always do before we do any implementation. It's a way of slowing clients down to be able to speed them up, meaning if I can get them to sit down and say okay, here's our brand guidelines: how we sound, how we don't sound, here's the colors we use, here’s where our logo goes, the type of creative in a brief. If we can get that approved, then the principal physician, in the case of smaller practices, doesn't need to come back in every single possible ad campaign because to your point, at that point, then it’s just a me top strategy. And furthermore, it slows it down to the point where it's simply ineffective. You've taken companies public, so you’ve worked with privately held companies and you’ve worked with publicly held companies. We read about the differences. How would you describe the pros and cons of operating a publicly held company versus a privately held company?
WOLF: Well again, I think a lot of it depends on stage of development. So in the early stages of development, private companies are funded either by some combination of personal money, friends, family, and then if the company really has or maybe the ownership has the ambition of the company, has the trajectory, venture capital or private equity funding. So there's a level of just access to capital that’s different in the private markets than in the public markets. And in the public markets, there is always access to capital. It may not be at a price you're interested in and may not be easy to access, but there is always access to capital. You have shares that you can go out and sell in the market that are trading every day. And you need capital, you can go raise more capital. Again, it's not as easy as that, as in, it has implications on share price, has implications on a lot of other things, but access to capital is always there. In the private company, there's a significant tension between where the money is coming from. Again, just talking about the capital side. So if you’re funding with your own capital or your own cash or from cash flow from operations, which is not a whole lot different because then when you want to make a growth decision, you have to decide, well, I can either put that cash flow from operations in my pocket--buy a new car, get a vacation home, whatever you’re interested in doing--or I can invest it back in the business. And that's effectively an investment decision where you're taking cash out of your pocket, even if it never made it into your pocket, you're effectively taking cash out of your pocket and reinvesting it in your business. Where if you have third-party capital, granted there’s always a dilution of ownership, but it’s also spreading of risk and spreading of responsibility. So clearly that's that's one element. The flip side of that is if you're talking about regulatory from a practice perspective and as we’re a medical device manufacturing company from a medical device manufacturing marketing perspective, there's another whole layer of regulatory that applies to you as a public company. We're a relatively small public company, but we're held to, not exactly the same standards as you mentioned--we don’t have exactly the same standards as General Electric, but largely the same standards. We report our financial results on a quarterly basis. We have to,obviously, have our results audited. We’re subject to the oversight by the Securities Regulators. And so at least it impacts our team that becomes a substantial part of my job. So probably a third of my time is spent on what I would call “public company issues” whether it's a combination between Regulatory Compliance, Investor Relations, Board of Directors oversight--in a relatively small private company, you may choose to have a board because they are effectively advisors. you may choose to have a board because you're thinking about the future and you want to have a group that holds management to a level of accountability, while the public company world its real. You have to have a board. You have to have a board that is independent. You haven board whose job is to hold management accountable and that's a really high level of responsibility to the board members, but also a significantly high level of responsibility for management to keep them adequately informed so they can make the decisions about, you know, what does it mean to be accountable, what should you be accountable for. And maybe it forces management in a fundamentally good way to articulate strategy and tactics and time frames in a way that is more measurable. I think what's interesting we’re seeing in the field in general--more, I would say, at the clinic level then at the supplier level where we sit, but I think that may change over time--is a lot more private equity involvement and private equity is kind of a hybrid between the two. You're certainly not subject to the public company scrutiny, public company reporting requirements, but private equity owners behave very much like this is almost a proxy for the public markets. They want the same things all the public market wants in terms of reporting, in terms of accountability. So I think it's an interesting hybrid. And then if you look at it, we're seeing more and more--and again, it’s, I think, on a worldwide basis, not just the US--but you’re seeing more and more of the participants in our field starting to go public. So in China at the end of last year, there was a really significant IPO in the Hong Kong market for a clinic chain. Progyny, right now, which is a benefits management company in the US, is in the process of going public. And there are other companies who have been venture-backed, private equity-backed that seem to be on that path. So I think we're gonna see--which is not that surprising as a field matures from a relatively small niche-y business to perceptibly larger and more mainstream business--that you see both consolidation and public ownership of the product of the clinics and the suppliers.
JONES: You have your eye on these players in the market, on your own acquisitions within the last five years, you just got back from China a couple weeks ago...Where do you see the IVF lab going in the next five years? What are the biggest areas for opportunity in the IVF lab?
WOLF: So I think, like in many things, there's a dynamic tension that was going on in our field--and I'll get to the IVF labs--where again, we're seeing more consolidation, whether it’s private equity or clinics merging or as I said, even public markets where clinics are getting together and then either going public or being bought by these public entities. So I think we're going to see over the next five years, to use your timeframe, a lot more consolidation. I would still bear in mind that our field is still highly, highly fragmented. On a worldwide basis, there’s roughly 5,000 clinics, in the US, there’s roughly 500. And even the largest clinic chains are still in the--on a regional basis, you could have a clinic chain that is fairly significant, I wouldn’t say dominant, but fairly significant in the market. Even if you look on a worldwide basis, the largest clinic chains are single digit percentages--most single digit percentages of the overall field. So there's a long way to go before this market, if it would ever, consolidate to a point where there are a relatively small number are very dominant players. It’s possible, but that's going to be a long way out. And when one of the things that consolidation brings is, again, that dynamic tension. There’s a lot to be said consolidation and standardization of procedures. So some of the clinics that have done consolidation--they have very, very strong standardized processes, very strong maybe national lab director that drives quality and consistency in the lab. And other labs have chosen to have a much more decentralized process or clinic chains are going to say have decentralized process that even though there’s common ownership and common sharing may be of certain kinds of activities, a lot of the individual clinics operate independently and can do what they need to do. And you can argue both sides, obviously, in a more kind of distributed decision making model, there’s a lot more opportunity for creativity and innovation. So I think one of the things we all think about is what’s the innovation that's going to come out of the labs in a much more consolidated model you can argue. And you can see it in some cases, where the lab management, lab directors, you know, in a way are freed from a lot of the day-to-day decision-making about changing processes and the labs themselves are able to devote a lot more resources because they’re bigger to innovation and they're actually doing much more--I wouldn’t the distributed model has more seat-of-the-pants innovation--but a much more organized, focused, and budgeted innovation. So long story short, I think we're going to see some meaningful innovation coming out of the labs over the next five years. Some of the areas that clearly people are looking at is improving quality control. So you're seeing that through both software systems and I think maybe some storage mechanisms and those kinds of things, and automation. Automation is another area where I think there is going to be a natural tendency, particularly in the labs, that want to have more standardized operations to automate certain functions, again, so everybody does it the same way, is held to exactly the same standards, and as our field grows and--I wouldn’t say it’s going to grow exponentially--but I think the growth is going to be faster over the next five years than it has over the last five years. There’s clearly a shortage of really skilled embryologist and lab technicians, so to the extent you can automate certain, relatively--more routine functions. On the one hand, you can leverage that skill base. On the other hand, to the extent you can automate some of the highly skilled functions, you can allow more productivity from essentially the same team.
JONES: In concluding with our audience, I'd like you to be able to share anything you feel is important that you haven't shared in the episode thus far, but I'd also like you to share any concerns you might have with consolidation and what's in the future for Hamilton Thorne.
WOLF: Alright, so that’s a lot of topics! So let me start with the concerns about consolidation. I I think I’ve learned that it doesn't pay to fight the tide of history, so consolidation is clearly something that you see in every field as it matures and the IVF world is clearly going from what was perceived even 5 to 10 years ago as a very small niche-y, kind of out of the way, out of the mainstream field, to much more central to people's thinking. So I think fighting consolidation is not going to be a winning strategy in the long run. That being said, I think there's still lots of room for creative, innovative, entrepreneurial operators whether they’re at the clinic level or the supplier level and, again, as I referred to earlier, as the field gets bigger and gets more interesting from a public capital markets perspective, there's going to be a lot more opportunity for funding those exciting innovations. So I think overall I think I'm positive about the business dynamics and the things that would make you be more negative, I just think are so far out. And again, because of the nature of where lot of clinics are publicly-owned and nonprofits versus privately-owned, I think the idea of kind of monopoly-like consolidation in our field is very remote, very hard to believe. And that’s probably the only negative one can conceive of consolidation. I think for Hamilton Thorne, we view ourselves in a way as part of the inevitable consolidation and we, probably five years ago, had to decide did we want to be consolidated or be consolidator and we've decided we wanted to be a consolidator. We are doing it in a relatively slow pace, as I mentioned about one acquisition a year, and I think that we can continue to do that and grow our business both organically, grow our business through acquisition, and probably most importantly provide better products and services to our customers for a good, long time.
JONES: David Wolf, President and CEO of Hamilton Thorne, thank you very much for coming on Inside Reproductive Health.
WOLF: Thank you very much. I really enjoyed it.
You’ve been listening to the Inside Reproductive Health Podcast with Griffin Jones. If you're ready to take action to make sure that your practice drives beyond the revolutionary changes that are happening in our field and in society, visit fertiltybridge.com to begin the first piece of the Fertility Marketing System, the Goal and Competitive Diagnostic. Thank you for listening to Inside Reproductive Health.