Jane Chen and Linus Liang presentation question and answer session.
>>ELIZA WILLIS: We have time for questions. I'm going to ask the first question. I'm very interested in learning more about the distribution system and the funding for distributing the warmers.
>>JANE CHEN: I can talk about that a bit. So we have different partners that we work with to do distribution. We do private distributions directly to small clinics in small towns and villages. We work with government hospitals as well. This is primarily in India. So India is our home base, but we're doing small pilots in other countries. And then we work with NGO partners. These are both local and international NGOs that are really able to reach the poorest of the poor. Lastly, we work with institutional partners. So GE Healthcare is one of our biggest partners. They're our global distributors. And we're forming partnerships with other partners like that such as Novartis, for example.
And the way the funding works, we have a mixed model. As was said earlier, we have a for-profit and a non-profit that sit side by side. The non-profit takes philanthropic donations to give away these products to the poorest communities, and that happens exclusively through our NGO partners. And alongside that we provide education. So hypothermia and temperature regulation is only one aspect of infant mortality. There are other important things like nutrition, breastfeeding, how do you manage diarrhea, so we try to incorporate all of those educational materials into the distribution of our product.
The for-profit side of Embrace manufactures the product and does more of the capital intensive activities. We sell the product to the clinics that are able to pay for it. And for every product sold on the for-profit side, a royalty payment is made to the non-profit. It's a way of creating a sustainable model that over the long run will not have to be dependent on donations.
We're happy to take more questions. Feel free to ask.
Yes, back there.
>>PROFESSOR DAVID HARRISON: [inaudible] ...As an educator, it's sort of flattering to think that the class was the intellectual incubator for the incubator. I'd like to know more about how that class was structured. What I mean is, what was the role of the professor? Were there prerequisites? I mean, did you, did everyone come into the class with a certain project that you were working on? How did the professor manage the projects? [inaudible] ...How was the class structured that permitted this to occur?
>>LINUS LIANG: I can answer that question. The class was actually really interesting. It's called "Extreme Affordability," you can look it up online. The idea of the class is to combine the seven different schools of Stanford together, graduate students together, to come together, be taught design and then apply that to a social cause. To answer your first question, the class is pretty competitive actually. I think it's becoming more and more competitive because more and more people are interested in this and hopefully have been inspired. But there is an application process.
For me actually, personally, I didn't get in the class originally. It's kind of a funny story. When it came out, when the class was offered, that day I applied, and I had this like Jerry McGuire moment where I was just writing, pouring my heart into why I wanted to get into this class. But then they said, "Why does a computer scientist, like what application or what skills can I add to this class?" because they're looking for product designers, mostly, or business school students, or medical students.
But I said, you know, design, anyone can do design. And that was the whole point of this class was that to teach that great products can be designed by anyone as long as you learn the methods about it. As long as you're diligent, and you're passionate, and you believe, you can actually achieve this. That is the purpose of the class is to show that products can be designed if you follow, sort of, their method, and you can look this method up online.
So you join the class. I actually called the professor and begged him to get in, pretty much, and he let me in, fortunately. But it's a very interesting class. It's no class like any other I've ever taken in pretty much my whole life. The first day, you prototype something. You build your ideal wallet. It's a very, very interesting way to think and be taught, but the structure sort of is that the professors are from the product design world, from the business world. So it's also the professors are very interdisciplinary. They come together and teach you something about how to build a business plan, or how to do an elevator pitch, or how to do prototyping. And so they kind of rotate around. It's very sort of, you have go in on your own. And you always partner with an NGO partner.
The problem itself wasn't actually defined or really planned out until we got into the class. The issue was presented to us pretty much when we got into the class. But the good part is it combines a lot of these students who are very passionate about making positive impact in the world. Which is good because there are so many problems we can tackle. It sort of narrows down the scope and focus. Once they list out the different problems, you get to pick and choose. Jane and I were very interested in this problem once we learned more about it.
It's two quarters, and it's quite intensive.
>>JANE CHEN: I can add just a little bit to that. The class really focuses on experiential learning. I think that's what makes it so fun- everything is super hands-on. You learn this entire design process that starts with needs finding and observation, really building empathy for your customers and being able to see things from their lens. Then you do rapid prototyping, testing, all the way up to product launch. By the end of the class you actually have this physical, tangible product that you can choose to do something with.
But prior to that as you, for example, learn about empathy, they take you through an exercise where you prototype a wallet for yourself. You're just given construction paper, bits of materials, and you create this wallet for yourself. And then you interview someone and you understand what their needs are and what they would like out of a wallet, and then you make one for them. That teaches you that the wallet you made for yourself and the wallet you made for the other person look totally different. It's a very simple exercise, but it really drives that message home.
Again, everything is very hands-on. And in addition to the process, you also learn a lot about team dynamics. So this is probably a very Californian thing, but we had a design school shrink that was in the class...
...that after each of our assignments you would actually debrief and understand how the team worked together, learn how to give each other feedback. We had sessions where we would just mediate. Maybe a little too hippie for here, but very fun nonetheless.
>>STUDENT: I was wondering if there's any interest in the developed world where you use the Embrace warmer instead of the traditional incubator? For example, I was a premature baby and I spent the first three months of my life in an incubator and my parents couldn't hold me. It seems like a major advantage of this product would be that physical contact. Is there any interest in possible expansion?
>>JANE: Yeah, yeah, absolutely. There is actually quite a bit of interest in this, and we're doing a study right now at the Lucille Packard Children's Hospital at Stanford to show that you can wean babies off of incubators and put them in our device instead. Neonatal intensive care unit costs are amongst the highest healthcare costs in the U.S. You could actually drastically reduce those costs through products like ours. In fact, that's something we're thinking about as we think about future products. What are products that we innovate for developing countries and places with limited resources, but that we can then bring back to the U.S.
>>STUDENT: Being a senior at Grinnell, I have spent four years here engaging in academic discourse and figuring out what other people think, and engage in the broad field of knowledge, one of the things that I really like about this is the part that it's not just about researching the other, there is the research component, but it's a lot more sort of trial and error, try new things, and personally the prospect of doing that is very daunting, especially coming out of somewhere that values, and rightly so, basing a lot of new directions, new ways to solve problems on this sort of massive knowledge that we have. [Inaudible] As a twenty-one year old who's about to graduate and go off into the world, it's exciting to see the broad range of things people are doing now and there's lots of different things I'd want to go do, but in order to break into any particular area and change the world, as broadly defined as that is, there are so many different ways out there that people are already doing this, that it's very hard for me to motivate and get involved and starting something and engaging, even where to put the first steps in doing that. [Inaudible] What kind of challenges did you face with regards to that, and what advice do you have with going out and finding new, innovate solutions to problems?
>>LINUS: I can answer that question. There are a lot of problems in this world that are daunting. I think one thing that was very important for the class was actually, for me personally, I never thought I'd be doing this when I enrolled in Stanford. I knew I wanted to make some positive impact in this world, but I didn't know what it would be. That's why I really liked this class because it combined other people together. That's one thing for advice to do, is to really surround yourself with people who share that similar passion. And you're smart and you're very competent so you can probably come up with something and figure out what that need or what that interest is.
Luckily, at Stanford, I met with Jane and two other co-founders. And yeah, none of us had any clue about it, but it kind of narrowed down that scope from the class and we realized that yeah, this is something that we are very passionate about, we're interested in and then we kind of went forward to doing that.
So yeah, I would do that. And just try a lot of different things. I come from the startup world myself. I used to do software before this, completely different from like a physical product. We used to brainstorm all the time and come up with hundreds of ideas, kind of play with them a little bit. Luckily, software's a little easier to throw out an idea faster. We would always brainstorm, and it takes time. It won't come to you immediately, and it might take several months, but if you continue to just stick through it, eventually you'll find something that you're very passionate about.
>>JANE: I think that's the most important thing: is finding what you're passionate about, and then really taking the risk, taking the dive and pursuing that with all of your heart. And that doesn't mean necessarily starting your own company. It could mean joining someone else's. There are plenty of great ventures out there. So it could mean joining someone else, getting experience there, doing something on your own later. Innovation comes in many forms. It's not just about product innovation, but process innovation, business innovation that can happen within an organization. So I encourage you to think about it from that perspective as well.
>>STUDENT: Thank you. First, I think I'm going to have to work to bring a version of the "Extreme Affordability" course to Grinnell. That could be something that we might need. But I want to ask you real broadly about the role that technology plays in solving global problems, and then also, how did you implement that technology? How did you go about implementing your piece and what lessons we can learn from that as we implement other technologies? I think technology is a great thing, there's a lot good you can do with it, and the challenge is often getting it to the people who need it. I just want to hear your thoughts.
>>JANE: Yeah, absolutely. We often say internally, we've developed this technology but that's perhaps one percent of the solution. The real problem is how do you effectively deliver these technologies to people, and how do you think about it beyond just the technology, and more around the outcome? Because the outcome we're trying to influence, affect here is infant mortality. It's not about selling or getting technology out there, it's how do we reduce the death rates of these infants. That's where creating a whole ecosystem around the technology becomes very important and providing the education, the training to nurses, doctors and so on. So you're absolutely right, I think the dissemination is really important. And there, the way we think about distribution, we don't know what's going to work. In most of these countries, medical device companies haven't distributed to these very rural areas. So even there we take a very experimental approach. We do, this is more relevant for software testing, but we do A/B testing where we go to one village and we try one set of distribution tools, or awareness-raising tools, and we go to another village where we try something totally different. We collect tons of data and then we assess which is working better, and we keep refining our strategy along the way.
So I think what's most important in trying to solve problems out there that haven't been solved, is that notion, that culture of experimentation.
>>LINUS: Just to add. This technology, this PCM, is actually very, very old technology. It's not something that we spent time in the lab and wrote a paper on. It actually was used to warm cell phone towers and different things like that. It's been around for fifty years or so. My point is, yeah, you can invent new technology and I think there is a place for that, such as mobile technology and mobile health technology has become very prevalent and actually very effective, but you can also rethink existing technologies. What led us to this actually was we needed something that didn't require electricity that could provide heat. This was actually used to incubate vaccines as they travel long periods of time because they're very specific, these vaccines. We thought about it and said, well if it's being used to incubate vaccines, why not be used to incubate babies? So it's something that is very, very old and just thought of in a new light. There are many things you can do and you don't have to be a PhD candidate or something like that to come up with these technologies.
>>STUDENT: I'm curious about the whole process of coming up with something like this. You talked about how there were a lot of iterations of it, but were there any major setbacks or points where you thought it just was not going to work, or you weren't able to come up with something this cost effective? Were there major points when you thought that this project wasn't going to work? Or was it kind of smooth sailing the whole way?
>>JANE: I'd hardly call it smooth sailing. I often laugh that whenever I need comic relief, I read our first business plan where it says we're going to launch the product in three months, we're going to have global domination in six months, and it's only going to take two people to do this. And now, seventy people later, three years later, we've just started the journey. So there've definitely been setbacks along the way, but I think the key mark of an entrepreneur, and perhaps even more so of a social entrepreneur, is you always believe the impossible is possible, and you just never take no for an answer. As many times as we fell down, we got up and we just kept going. We didn't let anything get in our way.
>>LINUS: Just to reiterate what Jane was saying, yeah, it's tough. There were a lot of challenges. There were a lot of problems that we faced. I remember this one time, this is going to sound very hippie too, but, there was this one time where we couldn't solve a problem. We were making a prototype but we didn't know which direction to go or there were all these different things. So we actually all left the lab and climbed up a tree, and just sat in the tree and just talked things out. I still remember that moment with our other co-founder. And it actually really helped. We came up with a solution and then we came down the tree and started prototyping. So my point is, it's Jane and I here today, but there are actually two other co-founders, that really helped. These are really really big problems and I couldn't have done it without my other co-founders. They lend the support, they lend the drive. There's no way that I could have got this far without them.
I think that the key thing is that with big, challenging problems, you really need to find, again, the people that will share that same passion that will keep motivating you to continue on, and to make you believe too. There are a lot of times when I get a little sad or a little stressed, and if you don't have those other people, then you might quit. And so, it's that teamwork, that team effort that really carries us through.
>>STUDENT: Now, you mentioned that when you sell one of the Embraces to a country, or to a hospital that can afford to buy it, a certain amount gets put into the non-profit. How much is it that gets put into the non-profit, and at the same exact time, how much are you selling them for, and how much is the manufacturing cost itself for the product?
>>JANE: You should be a venture capitalist.
>>JANE: So the retail price of the product today. We have two versions: one that sits in a hospital setting and one that sits in a home setting, and there's different business models within this as well. But the one that sits in a hospital setting that uses a short burst of electricity, that one retails a little over two hundred dollars. And the one that is used in home setting that uses purely hot water, retails at about seventy dollars. Again, these products are entirely reusable, so the cost per baby is very low. Within this, we're experimenting with different business models. So looking at a rental model. Can a doctor or even a midwife carry this with her and rent it from household to household? And in terms of the royalties, it's a small percentage for every product sold that is given back to the non-profit.
>>RAYNARD KINGTON: What happened to the other two founders?
>>LINUS: Well so actually, one's in India right now. We all are based in India. So they're there. But actually this is really funny, they're coming back to the U.S. for the Tech Awards also this week. So we're all still together and hopefully we'll have a little reunion soon.
>>JANE: It's really fun team. It's a diverse team. The other two founders, one's an aerospace engineer, the other is a PhD in electrical engineering, and so what they're doing now, what all of us are doing now, is nothing really much to do with what we study, but it's just something that we all felt very passionately about.
>>STUDENT: When and how did you make the transition from working on a product in design class to actually mobilizing the idea and setting up a base for doing field work in order to implement the product?
>>JANE: I think it started as we, we knew we were sitting on a good idea. We knew that if we weren't going to take it forward, no one else was going to. But all of us were still in school at the time, we didn't know how we were going to do it. So we started applying to different business plan competitions. I think we won a couple thousand dollars at the first one, and then for a whole year we didn't win any of these competitions. But we kept plugging away at it until one day we won this prize. It's an Echoing Green Fellowship, and it requires that you be committed to the project for two years. And so at that time the four of us sat together and we said, hey if we're going to do this, it's at least a two year commitment. I think that's when things really got serious and we decided to take the leap forward.
But one by one, all of us started doing it full-time. We always laugh about the early days of this, where Linus and I used Starbucks as our office. We'd bring a long extension cord and a portable printer with us, and then any time we had conference calls, we'd run and take them from my car, as our little conference room.
>>STUDENT: I really liked what you were talking about how the warmers can help empower the mothers to feel like they can actually take care of their own children, which I'm sure would be a terrible feeling to not be able to provide and take care of your newborn baby, and I would love if you could talk a bit more about the social justice aspect of that, about how it's empowering women and affecting these communities, or how you'd like to see this affect communities?
>>JANE: Yeah, it's an interesting question, because when we first went out to India, a question we got was babies are dying in such vast numbers, it happens all the time, do people even care? Do women even care? I didn't believe that was true, but it planted this seed in my head and I wondered if that was the case. But as I said, over the last three years as I've travelled across the length and breadth of India talking to these mothers, it's become abundantly clear to me that these mothers will do anything to save their children. That intent is very important, because the power of technology, technology can only be effective with intent. It can only be multiplied if that intent is there. And it clearly is, and so I think that is going to be the enabler for us to make this huge social impact.
But with regards to women's empowerment specifically, I think a part of this comes back to the education piece. It's not enough to just provide the technology, but to educate these communities that it is not the mother's fault, and to provide things like nutrition and things that help prevent these low birth weight or premature births from happening. So that definitely is being incorporated into the work we do today.
And part of this, Sujapa for example, she is a wonderful example of a women who despite having lost all three of her babies; she uses that experience to educate other women in her community. And so Embrace has employed Sujapa so she can be a community advocate to bring awareness and create tools, co-create tools with women in her village that we can then more broadly disseminate. We never want to take the attitude "we know best." We really want to integrate ourselves in these communities and take ideas from local people that we then help to distribute.