Jonathan Baut started Gabi SmartCare with a personal mission at its heart: to save children’s lives by better monitoring their health. Over the last decade, Jonathan has been through the ups and downs of entrepreneurship, from successfully launching a product in 40 hospitals to ultimately selling the company. He shares the lessons he learnt along the way and reflects on the meaning of success and failure.
The idea behind Gabi SmartCare started with a personal experience. Can you tell us more?
A week after my daughter was born, she caught a very severe form of bronchiolitis. This is common in children, but as a newborn she had no immunity. She turned blue in less than two hours and was admitted to the hospital’s intensive care unit, where she stayed for two weeks.
It was terrifying for my wife and I, especially as first-time parents. When our daughter was discharged, the doctors told us a relapse was possible and we should watch out for symptoms, especially at night. But the truth is that we didn’t know how to identify these symptoms. So we’d left the safe environment of the hospital for our home, where we felt helpless.
We didn’t understand why the care our daughter had in hospital couldn’t continue at home. And why medical innovation – which seemed to be flourishing in so many other areas – often didn’t stretch to issues facing newborns. So I quit my job as an investment banker and started a company. The aim was to build a solution that would give a continuum of care for children after hospital discharge.
How did the early stages go?
In 2018, we launched a smart baby monitor for parents, as there wasn’t anything like this on the market at the time. We wanted a device that was easy to use and would reassure parents that their child was doing okay.
But as we worked more closely with doctors, they explained how this resonated with their needs and suggested we move toward a medically certified device, so we pivoted and developed a clinical solution for hospitals instead. We built a remote patient monitoring (RPM) solution – a small device to monitor vital signs.
We had loads of medical advisors, strong traction for clinical studies and even remarkable commercial traction in research. This allowed us to commercially deploy our solution in more than 40 hospitals across the US, all before receiving clearance from the Food and Drug Administration (FDA). But we also faced setbacks. We initially thought we had validated the business model in depth, only to realise that the insights we gathered verbally from advisors were not enough to convert interest into sales. We discovered that commercial demand was concentrated on very small patient populations, which limited our ability to reach the revenue levels that investors were now expecting. Despite excellent satisfaction among hospitals, we had to re-explore the most relevant use cases to meet these new expectations. This led us to pivot once again, this time towards addressing paediatric sleep disorders.