It is easy to announce a new investment in a new company when all we need to talk about is the potential of an opportunity. But we don’t speak enough about the companies that don’t make it. 

Maxwell Plus was one of the first investments Main Sequence made. We invested in 2017 around a vision for reducing deaths from prostate cancer using a machine-vision-powered clinician support system. This included a radical, patient-centric approach to the business model with the idea that this would get scale penetration in the market and save more men. 

Seven years later, we are closing down the company. We are proud of the clinical results we began to see. We tested thousands of Australian men and helped find 35 cases of clinically significant prostate cancer, many of which had been missed by other tests. Sadly, we failed to prove the business model sufficiently to reach product market fit. 

We’d like to take this opportunity to reflect on what we learned in the process. We will reflect separately as founder/CEO and investor. We have encouraged each other to be direct and not to sugarcoat.

Founder/CEO Reflection - Elliot Smith

Before anything else, and perhaps my strongest reflection, Maxwell Plus allowed me to work with some amazing people. Our families, investors, advisors, partners, and everyone who worked with or for us, I hope you know how much your contributions helped pave the way. We didn’t hit the outcome we were after, but we helped a lot of people, and I hope you all feel as proud of the work we did as I do.

Specifically, thanks need to go out to Matt, my original cofounder, and Tom, the cofounder I gained. Building a startup is a strange, challenging, and often lonely process, and having someone to do it with makes all the difference. I sure as hell couldn’t have done it alone.

Timing can make or break a startup

Looking at the world now, two and a bit years after the end of Maxwell Plus, it is tough not to be at least a little frustrated. AI companies are everywhere, some more wrapper than others, and direct-to-consumer healthcare is big business. There is, and always has been, a lot tied up in timing. Sometimes, good ideas are too early or late to hit the right combination of investors and consumers. I think, genuinely, we were one of those. We tried something a little radical in a market that wasn’t quite ready. Our product worked exceptionally well, but we couldn’t quite nail the go-to-market to make direct-to-consumer healthcare (with AI or not) happen. Putting my success aside, I am glad the market has moved on. Many thriving DTC health tech businesses are helping a lot of people. Many remain in other countries, but I am confident the Australian market will eventually get there.

Australia can be a tough market

Australia is a small market. We’re innovative in some ways, but on a global stage, we’re mostly a rounding error. Our time here showed what I think is the best and some of the hardest parts about being based in Australia.

Starting with the positives, we had a great scientific and clinical network. Australia has no shortage of brilliant people willing to work on new ideas. Those people, internal and external, helped us shape the business we built. We were able to achieve things we couldn’t have done alone.

On the other hand, this is a tough market in which to launch a startup, especially in healthcare. Part of having a generally good, generally free healthcare system is that people expect a lot for nothing. The market isn’t used to paying out of pocket for medical care, and we don’t have enough people to demand alternative models.

If I had my time again, I think it would have been best for us to ignore Australia as a market and focus solely on the US from day one. In an industry that requires so much country-specific regulation, you can’t be 100% global all at once, and I think our choice to go with the market we knew slowed us down.

The medical market is highly complex

When we set out, we wanted to sell a very specific tool to a very specific medical specialty. We were selling AI tools for analysing medical images directly to radiologists, a now common yet largely still early go-to-market. Our first application was in prostate cancer, and in working with specialists, we quickly found that any diagnosis of a complex disease lives across multiple tests and various specialties. We ran into a conundrum that no single doctor was correctly placed to have all the data and all the decision-making power to move the needle on early detection. We could deliver better accuracy but if men were diagnosed late, a more accurate diagnosis wouldn’t solve that on its own.

As a result, we shifted into a direct-to-consumer healthcare model. We employed doctors, collaborated with others and aimed to span the entire clinical journey to try to get to the core of the problem. This had a dual effect. On the one hand, we became very good at helping with this one diagnostic case. Conversely, it meant we had difficulty branching outwards to new areas.

Beyond the GTM stumbling blocks, this also muddied the waters with where we played. Some clinicians we hoped to collaborate with saw us as a threat to their business despite us not overlapping meaningfully. We had to spend a lot of time positioning ourselves carefully in the market and minds of the broader medical ecosystem.

A financial outcome is the name of the game, but it is not something to rush

We hit a strange confluence of pressures as we built our product. On the one hand, we were a deep tech investment, and there was an expectation that building a deep tech product took time. On the other hand, investors also, quite rightly, desired to show that the product we were building wasn’t just glorified research and that it had a path to commercial returns.

A funny thing happens in a startup the moment you go to market. In many ways, it's a door you can only go through one way. When you’re in the market, your metrics shift from potential to reality. If your assumptions around GTM go to plan, this isn’t an issue. You sell, you grow and you start to get judged on your numbers. In our case, we might have taken that step too early.

We had a good product at the core. Our ML models were good at what they did, and we crossed the regulatory approval hurdle. However, we hadn’t yet nailed how those ML models became fully fledged market-ready products. Our clinical network was small, and we worked things out as we went. If I had my time again, I wouldn’t have jumped so quickly to try to make a dollar.

As is the case with all of this reflection, it’s taken with hindsight, but looking back, we likely would have done better holding off on GTM and spending more time preparing before launch. The medical world is not well aligned with incremental product changes and pivots. Pulling together all the non-product aspects of our GTM was also a slow task, given the industry. The clinical world moves slowly and steadily, and it wasn’t something we could rush, even if we were confident in our results.

You most definitely do not need to do all the things yourself

In the early days, as a founder, you had to do everything yourself. There weren’t other people around to help. When we raised some funding, we brought other people on to help ease the load. Matt and I were both pretty technical, and in the early days, it was easy to hire more technical people. We knew what to ask them to do, how to hire them and how to run technical teams.

As the company grew, we needed more than just technical people. A mistake I made, one I now keep a very keen eye out for, is that I felt we needed to have that same familiarity with any other role we needed.

When we needed marketing expertise, we first learned how to do marketing. It was interesting; these are valuable skills, but overall, we didn’t need to do things this way. This was somewhere we should have leaned more on our investor network to help us find good people. Getting experts into your business in an area you’re unfamiliar with can be a bit scary, but in reality, there is almost a well-trodden path in hiring for these roles and judging their performance.

I would change a million things only because I know what I do now

To draw this all to a close, looking back, there is a lot of stuff I would do differently. I only get to say that because I took the bet at the time. Decisions in any startup are often filled with uncertainty in the moment. We made the decisions that best aligned with the evidence we had. We took bets, risks, and choices that we knew weren’t sure things. That’s what being an early-stage founder is all about.

We don’t get the luxury of jumping back in time and doing things over; ultimately, there’s no telling what the outcome would be if we did. Instead, I’ve done what I can to learn from the six years I spent at the helm. The ups and downs both contributed to who I am now, and if—or, let's face it, probably when—I put the founder hat back on in the future, I’ll look back fondly even though things didn’t work out this time.

Investor Reflection - Phil Morle

Be careful with hype cycles - know you are in a race

Back in 2017 there was an explosion of innovation around AI/machine vision products. Platforms like Google’s TensorFlow had opened up possibilities to more innovators and solutions sprouted all over the place. Whilst this is exciting at the start, I have learned that everyone else will be going after the same investors and customers to fuel the growth of the business and get to product market fit. At Maxwell Plus we found ourselves in a crowded marketplace in 2019 with thousands of startups competing with similar products and a venture market that was already somewhat jaded and moving on to the next shiny object. Hype cycles are there for a reason. There is value there. But entering them needs a deliberate strategy and the race is on to get to market.

Founder chemistry is fundamental 

When we first met Maxwell Plus, Elliot had a co-founder, Matt. We liked their chemistry very much. Matt could tell the story well and had a strong commercial focus and Elliot owned the product vision which was exciting and innovative. While we were signing documentation on the deal, Matt announced that he needed to move to the UK for personal reasons and needed to quit. The company managed this well. They were transparent and Matt transferred most of his equity to the pool for others to come in. We moved ahead with the investment and found ourselves in quite a different company to the one we imagined. Founders are at the core of a business and everything that comes next emanates from them. We should have taken the time to reassess the new company that would rise from Elliot as a single founder. 

Delaying customer engagement is fatal - eventually

The early conversations about strategy focused very much on getting products regulated and led to two years ‘in the lab’ with very little engagement with customers or with the clinical community. During this time we burned through most of the initial capital and approached the end of the runway with limited clinical proof and almost no customer insight. The latter point is particularly important because we had a radical idea around how we would go to market with customers (see below). When we approached new investors with this incomplete story, they were not convinced. This was my biggest learning. I now live the belief that there is NO deep tech company that is unable to start direct collaboration with customers from the first day. I still hear the argument that there is no point in doing this until we know the product works, but that is not what I learned at Maxwell Plus. 

Disruption is a perilous go-to-market strategy

One of the most exciting, but risky ideas for Maxwell Plus was to go directly to men with a direct-to-consumer (DTC) offering. We believed that the healthcare system around prostate cancer today was letting too many men slip into late diagnosis and that we could create a community of men who would subscribe directly to the product as their AI-powered prostate cancer guardian angel. Instead of slipping into a well known value chain with radiologists and urologists, we took the hard path to disruption. My insight isn’t that the strategy was bad, although perhaps we could have started with a more direct path to initial revenue and clinical proof. The main insight is that we did not execute well. Any new business model needs a significant and early contribution of capital and effort. We left it too late at Maxwell Plus.

Any healthcare product needs the support of clinicians. And clinicians only listen to each other

We were in the lab too long before we started speaking to clinicians. GPs even got angry with us in their private networks that we were suggesting that their current practice was not in the best interest of patients and this is not an environment that is conducive to encouraging a market to get behind a new idea. We started to recruit urologists who led the market and co-developed papers and conference presentations to help the clinical community understand the opportunity for better health outcomes from each other. This started to work very well but we had left it too late for the consensus to build.

There is no point in underfunding something just to keep the lights on - or listen to the market 

As we approached the end of the runway and went to market for the next investment round, we did not have the evidence to show that customers were behind our strategy for a direct-to-consumer market entry. I also had push-back from my own team at Main Sequence who did not believe in the DTC strategy but were open to seeing the evidence - which was not there. I convinced Main Sequence to invest behind the clinical potential we were seeing but we just put a small amount of capital in and we did so alone. I needed to listen more to the investor market. As strong as my belief was, no investor can fund a company alone and the market was telling us that they could not see something investable. With too little money to really change the outcome, the Maxwell team worked valiantly to build the evidence for continuing. The clinical case became stronger, but the business case was still unproven. I now spend a lot more time collaborating with my investor peers to see where the puck is going.