Entrepreneurship and Medicine

Frank Litvack

How Frank Sold Conor Med for $1.4 Billion.

Frank Litvack

Location: Frank's Home in Bel Air
Date: 4/14/2020
Title: How Frank Acheived a $1.4 Billion Exit
Profession: Cardiologist & Entrepreneur

Q & A

Tell us about yourself. Who are you and what do you do for a living?

I’m Frank Litvack and I’m 64 years old. I’m a former cardiologist and I’m currently an investor and entrepreneur.

What's your backstory and what led you to becoming a cardiologist? What drives you?

I was born in Montreal, Canada. I grew up in an economically lower middle class family.  My father had a small business that was always struggling. We weren’t poor, but we certainly didn’t have luxuries or all of the privileges that some of the kids that I know in LA now have.

Early on, and towards the end of elementary school, it was generally considered by my teachers that I was, what they used to call politically correct, “retarded”. I was a horrific student and I didn’t know what they wanted from me. 

Those were the days before widespread appreciation of learning disorders. What I really had was extreme boredom and I was very young for the grade that I was in.

When I was in about fifth or sixth grade they wanted to send me to a special school.  Before doing that, they sent me in for some tests and it was determined that I wasn’t in fact “retarded”.  I’m sorry for using this word again, but that’s what they used to call it in those days. So, they let me stay in the same school.

Gradually, I started to become a better student, and towards the end of high school I was a decent student.  I was 16 when I finished high school because I started school too early, which was a problem when I was younger.  Back in those days Montreal also only had 11 years of school, so I was not only young, but also a year ahead. 

When I graduated I went to McGill University, which is a very renowned school, but wasn’t as hard to get into at the time.  You could call it the Harvard of Canada. It’s a very famous school. I started there when I was only 16, and after 2 years I applied for the seven year med program, which is the accelerated program.  

I wanted to do medicine because my father’s business had gone down the tubes.  I needed to make it on my own. I had very supportive parents, but they didn’t have money.  In Canada, education is very inexpensive. It’s not a barrier if you’re not wealthy, which is a really wonderful thing.  I needed to get a profession, and in those days it was really very simple. We had a very limited world view back in the 70’s in Montreal.  

In our community, if you had a family business that was good, you go into the family business.  If you were smart in science, you could be a doctor. If you were not so smart in science you would be a dentist. If you were smart in what they called the arts, you could be a lawyer.  If you weren’t so smart in what they called the arts, you could be an accountant.

So our entire universe was those 5 things: Family business (which I didn’t have), medicine, dentistry, law or accounting. 

Because I was living in Quebec and I didn’t know where I would end up, I decided that medicine would be the most meaningful, portable, interesting and respected profession. It also was a good field to make a living, which was necessary because my family had perpetual economic struggles.

What led you from medicine to entrepreneurship?

Well it’s a long, long path. I finished medical school when I was 23.  I finished my internal medicine residency when I was 26, and I finished my cardiology fellowship when I was 29.

I came to Los Angeles to do my cardiology training at Cedars Sinai.  At that point, I really didn’t know what I would do. I thought I was just going to practice when I was finished.  I had a job offer back in Canada, but I wasn’t really interested in going back there. I wanted to try my luck in the big pond, but I wasn’t really considering academic medicine at that point.

During my fellowship, I started my own research programs with lasers in a field called angioscopy, which is looking inside arteries. It was a “hot” and interesting area at the time. I became pretty well recognized very early in my career, which led to a very rapid rise to my academic career.

While I was in fellowship, I got a 5 year NIH (National Institute of Health) research grant, which is a very prestigious grant.  I ended up staying in academic medicine though I thought I would only do it for a few years.

I also ended up staying at Cedars, co-directing the interventional cardiology program for 16 years and published research extensively.

Ultimately, I became a professor at UCLA, where I had gone up the ranks from assistant, to associate, to full professor.  I had a full fledged academic career. 

While I was doing that, I was developing medical devices and getting involved with startup companies.  First, with the laser company that I started, which was my first entree into dealing with venture capital and companies.  I had no training, experience or knowledge of it at that point. I was a complete neophyte.  

One thing led to another.  On the nights and weekends I was getting a lot of experience as an entrepreneur.  I was basically a full time academic doctor with a very busy practice, training fellows, and doing research by day.  On the nights and weekends, I was involved with creating and directing some of the companies I was working with.

By my late 30’s I started to make some money and became financially independent.  At that point I had a lot of years under my belt relative to most others who only finish training at 34-35 years old.

How did you get involved with Conor MedSytems?

Well, I had a bunch of companies along the way.  After Conor Med I took a couple of years off and just kind of hung out.  I went to games and hung out with the kids. Then I started to get back involved in creating new ideas, some of which worked, some of which didn’t. 

I also did a little bit of investing.  At this stage of the game I’ve been involved with about 10 companies.  I co-founded a hedge fund called Pura Vida in 2012, which was something that I didn’t really know anything about, but it’s been quite successful and I think we’re a pretty well respected Health Care fund. 

Describe your time as Chairman and CEO of Conor MedSystems.

 In my early 40’s, and in the early 2000’s,  I decided to leave full time academics and become the Chairman and CEO of Conor MedSystems. That company was very successful.

We raised privately about $80 million, publicly about $200 million, and we sold it to Johnson and Johnson for $1.4 billion.  From start to finish was about 8 years. 

I can write a book on that experience.  In short, at the beginning when you work on these medical startups nobody wants to invest in you.  They throw you out.

All the best venture capitalists are rude to you, and you somehow cobble together some money.  You get a few people to believe in it, and you make progress. Then, all of a sudden, everybody’s interested in it and everybody’s throwing money at you.

All the people that turned you down are now trying to invest or are calling you to say sorry that they didn’t invest. Then you take the company public, and if the timing is right, you find a buyer and you sell the company.

It’s an extremely arduous, difficult process that resembles a perpetual near-death experience because these companies are always one heartbeat away from disaster. 

In the end, it does take some timing and a large amount of good fortune to achieve the perfect exit. In our case, we sold it in 2007 just before the financial crisis. 

It was a lot of hard work, there were a lot of smart people involved, and in the end of the day timing and luck was on our side. 

What did you do after you sold Conor MedSystems for $1.4 billion?

Well, I had a bunch of companies along the way.  After Conor Med I took a couple of years off and just kind of hung out.  I went to games and hung out with the kids. Then I started to get back involved in creating new ideas, some of which worked, some of which didn’t. 

I also did a little bit of investing.  At this stage of the game I’ve been involved with about 10 companies.  I co-founded a hedge fund called Pura Vida in 2012, which was something that I didn’t really know anything about, but it’s been quite successful and I think we’re a pretty well respected Health Care fund.  

What are you doing in your career now?

It’s kind of hard to describe what I do. I don’t really have one job.  I do some investing, I do some entrepreneuring and I do some management. 

I kind of dabble across lots of things. Maybe I’m a little bit too spread.  I’ve got a lot of projects going on. Everything ranging from investments in restaurants to healthcare, IT, medical devices and some biotech.  I’ve really expanded my interests. 

It’s a blessing and a curse to have wide interests because you learn a lot and meet a lot of interesting people, but sometimes you get spread too thin. From time to time, you have to climb a learning curve very quickly because you can’t know everything about everything. 

The secret is to find great people. You can’t always do that, but you can try to find great people.  Try to associate with people who are more talented than you are in at least one way, preferably in many ways.  People who can do things you can’t do, but who can work as a collaborative team.

So for me, the whole thing is really all about people. When I’ve not had good people around me, I’ve not been successful.  When I’ve had good people around me, I’ve had a higher chance of success.

When I look at my successes, it’s generally about people. The quality of the people, the chemistry of the team and the ability of the team to adjust. 

When you’re dealing with start ups, specifically in the healthcare field, you’re constantly adjusting. You’re adjusting to changes in the market, changes in intellectual property, regulatory issues, clinical issues, product issues, economic issues, stock market issues and private capital availability issues. 

You always need to adjust. There’s no such thing as a straight linear path where you start out thinking you’re in to go from A-Z. Almost always you’re going to be taken off path and off track. Sometimes you can get back on, and sometimes you can’t.

If you don’t have a good team around you, good collaborators, good partners and good employees, it’s very unusual for one to be successful.

Through starting your career, have you learned anything particularly helpful or advantageous?

That’s a really broad question.  For those who are not born in the right place at the right time, you need to look for opportunities and try to get to the right place - much like all of these immigrants that have come from other countries and become successful living the American dream.

With that said, everybody who’s been successful needs to realize that there’s a lot of luck involved.

Get yourself a good education.  There’s many successful people who don’t have an education, but I think an education on balance is a valuable asset to have. 

Although the world is full of billionaires who didn’t finish high school, it’s a lot harder to do it that way. Those people are usually exceptionally talented and often very lucky as well.  

We can’t all be exceptionally talented. Most of us have some talents in certain areas, but not necessarily above the rim talents.   You’re going to have to make up for that with hard work.

The next thing I’d say is to try to meet interesting people and form good relationships with potential mentors along the way who can help you and open doors for you.  Once the doors are open, you generally need to be responsible for getting in yourself.

Be realistic about your aspirations and goals, but don’t be afraid to reach high.  It’s okay to dream and it's okay to take risks, especially when you’re young, but always try to tinge your enthusiasm with an element of reality. 

Don’t believe everything you think until you critically check it.  Check in with other people. The hard part about checking with other people is that most people by definition will be negative about any entrepreneurial or innovative thing you want to do.  If it were obvious, then there would be no opportunity for you.

So, on the one hand, you want to hear what people have to say. On the other hand, you have to filter the negativity and develop your own convictions.  Most people are not creative, they’re not bold and they’re not going to take the risks.  

If you have a venture, and it’s to create a perpetual motion machine and people say it’s impossible, you should probably listen because it defies the laws of physics. 

But if you have a great idea, you’ve vetted it and you believe in then you should go for it. At the end of the day you have to be the master of your own decisions, without doing so in a complete vacuum. 

Be aware that there’s going to be a lot of people who lack creativity and imagination, or are just out right jealous of you, who are going to be negative.

To what would you attribute your success as an entrepreneur?

 I would attribute my success to a combination of good timing, good luck, good people, hard work, and a little bit of smarts. 

What would you say makes you different from others who have taken a similar path as you?

I think there are many people who have been more successful than me.  I consider myself as a kind of middle of the road person. I don’t say that to be modest, but I actually think that to be true.

One of the things I’m good at is seeing around the corner a little better than perhaps some other people. I’m not always right, but I’m pretty good at spotting trends, although I’ve missed many and I’ve gotten a couple wrong. 

It’s really just been a lot of hard work, persistence, working with great people and trying to be realistic.

What accomplishments would you say you are most proud of and why?

For my career, I’d say I’m most proud of my years as a practicing doctor. I think I was a good cardiologist, both judgement wise and technically, and I enjoyed dealing with patients. I like to think the patients liked dealing with me too. 

I was practicing interventional cardiology during a very dynamic period when the field was evolving,  So to me, I’m most pleased with the work I did as a clinician and for patients. That’s more pleasing than any of the business success, but that’s not to say that the business success wasn’t also very nice.  

It’s nice to make money. But what is money about? Freedom. That’s it.  The only real value about money is freedom.

The most important things in life are health and freedom.  If you don’t have your health, nothing matters. Depending on your health issues, the second most important thing is freedom. 

We’re lucky we live in a free society. You have the freedom to try and do anything that’s not going to harm anyone or that’s viewed as illegal.  You’re not penalized for taking risks.

What money does is give you freedom. I never wanted to be an employee. I think if you’re not financially independent and you’re an employee, then you’re not free.

Freedom was the sole purpose of making money for me. Freedom from tyranny of working for a company or a hospital. Freedom from being bossed around by anyone other than my wife.  Freedom to take care of my family in a way that is appropriate.

It isn’t about big houses and fancy cars.  It may be fun to have those things, but in terms of the meaning and quality of your life, those things are really very marginal. 

This is why you see many of the financially richest people that we know are also the most miserable people that we know.

Happiness is not correlated with wealth.  That’s very established by social psychologists. The happiest people are usually upper middle class people who don’t have severe financial stress, but who aren’t prisoners to their money.  It’s not about materialism. It’s about freedom.

I’m also proud of some of the products that we helped develop.  Many of the products we’ve created have helped move the field of medicine forward in ways that are not always recognized. 

Lastly, and most importantly, I’m proud of my family and my kids.  

What's the biggest challenge you've had to overcome in business?

The biggest challenge in what I do is having access to capital.  It’s very hard to create capital.

When you create a startup, you’re creating capital. You need capital to create capital.  So, the hardest part is usually the procurement of capital because many times most of the innovative ideas or the ones that you believe in are the ones that by definition, others don’t see because they’re not innovative.  Access to capital to me is the fuel of this whole game.

Once you have capital, you can bring in the talent.  The hardest part, once you have the capital is finding that talent.  Talent procurement, management, selection and filtering is the hardest part of running a business.

The hardest part of being an entrepreneur is not the idea.  Everybody has good ideas. They just never do it.

The hardest part is execution.  Once you have capital, execution is all about people - recruiting, training, managing, integrating, and coordinating talent. 

Also knowing when to cut people, which is very hard because nobody likes to do that, but you can’t allow weak or toxic people to damage your organization. Every organization has the risk of being infected by weak and toxic individuals. 

The culture of the organization is set by the leader. If the leader is toxic or permits toxic people to thrive, you’re going to have a toxic culture. In the end, that’s going to bite you.

There’s no one answer to solving these problems.  It’s just about having good judgement, awareness and experience.

How are you doing today and what does the future look like? What's your ultimate goal?

I’m feeling good.  I’ve got a lot of balls in the air, so I’m always doing a lot of stuff. I don’t really have any huge goals right now.  I’m just trying to make sure the stuff that I’m working on is as successful as it can be.  

I need to keep the ball moving down the field.  Keep the companies financed and try to make them successful and create returns for the investors.  It’s very important to me that the investors get a good return. You cant always do it, and you’re not always successful, but that’s the goal.

Personally, I just want to stay healthy and enjoy family.

Software & Tools:

What software do you use for your business?

We use the standard Microsoft Office Suite, G-mail, and Google combined work products like google sheets and stuff like that.

I think the collaborative work tools like Slack and Asana are very good.  I don’t personally use them, but my team uses them

We use Salesforce and Heroku for hosting and web services.

We have many websites that we’ve created, and we usually go out to small developers and individual people to build them for us.

Uber is extremely valuable.  That’s one of my favorite tools and I certainly wish that the government of California wouldn’t try to destroy the gig economy that was invented in California.

What tools, other than software, do you use for your business and why?

I use a computer and a phone.  I’m not a note taker. I’ve tried to be, but it’s just not my thing.  I’m generally very organized in my head.

Resources:

What have been the most influential books, podcasts, or other resources you’ve learned from along your journey? Why?

Books: The Bible is a very, very influential book.  I’ve read the Old Testament and the New Testament.

It’s very important to understand the basis of the Judeo-Christian ethic, how modern religion is structured and about the competition and antagonism between different religious books. 

There are also many abridged versions, which are very worthwhile reading. There are a lot of lessons in the Bible.

The people who wrote the bible were basically master psychologists. They understood human nature and human behavior.

I find that the Old Testament has an incredible amount of life lessons in it. It’s just story after story about living beings, lessons and it’s the basis of the moral code by which our society is supposed to live upon and which our laws are based.

Aside from The Bible, learned a tremendous amount from the writings of Barbara Tuchman, Doris Kearns Goodwin and William Manchester. Winston Churchill is one of my most admired persons and the Manchester biography is fabulous.

I have read several biographies of Abraham Lincoln and George Washington. If you want to learn about leadership study Lincoln and Washington. They are similarly on my most admired persons list. Indeed, I would say that every entrepreneur and aspiring leader ought to study Washington, Lincoln, FDR and Churchill and focus on their leadership talents.

I would give honorable mention to Harry Truman and Teddy Roosevelt as well. None of these men were without flaws but they all were powerful, effective leaders during times of great adversity. 

I would also recommend the writings of William L. Shirer.  He wrote Rise and Fall in the Third Reich and he also wrote a trilogy later in his life, which was semi-autobiographical, beginning with the early 20th century America and through the war and postwar years. 

As a Canadian, that gave me a really good basis for 20th century American and world history. It was a very important book for me to understand the United States.

Podcasts:  I listen to Malcolm Gladwell’s podcast, which is Revisionist History.  Other than that, I don’t really listen to podcasts. I probably should, but it’s just not part of my routine. 

Resources: Every day I read two newspapers.  I read the New York Times and The Wall Street Journal

The New York Times is a patently biased, left-leaning newspaper, but with excellent writing. 

The Wall Street Journal is more conservative. I wouldn’t call it right wing, but it’s less biased in its reporting of news and has a common-sense editorial point of view.

So, if you read those two, you actually see both points of view and can figure it out yourself. I also listen to BBC to get international news. 

I try to get my news from multiple sources. I watch the Trump Channel - Fox News and the Anti-Trump channel - CNN. Both are ridiculously biased but worthy of hearing out.

The only way you’re ever going to figure something out is through multiple sources because virtually every news media source is biased.  The American news media in particular is profoundly biased.

What courses have you taken that have been beneficial to you?

As it related to my career, definitely all of the technical courses that I took in the sciences in medicine have been extremely important.

Where would you steer someone looking to learn more about business and entrepreneurship?

The best way to learn is to get in there and do it. Go get a job. Go work with someone. Go do an internship somewhere. 

It’s all about mentoring. Nobody is an island. It takes collaboration and getting yourself out there to meet people and learn.  That’s it.

There’s no such thing as just starting on your own. If you want to start your own business, you better find some good mentors and people who can support you because there’s a lot to learn.

What are you doing to continue learning and growing in your business as well as personally?

Most of my learning comes from reading.  I read extensively.

My second greatest source of learning is from talking to people.  When I meet people I try to pick their brains as best I can.

I try as much as possible to be more of a listener than a talker.  I find that if you engage with people and you’re interested in what they have to say and you ask them questions in the right way, you can often get an enormous amount of information from people.

Final Question:

What advice would you like to share with people based on your experiences?

Always do the right thing and play the long game.  You may lose sometimes in the short term, but if you do the right thing and play the long game, you’ll be better off for it.  People will want to collaborate with you and work with you.

About Us

Education

Subscribe

© 2020 Toolsy Corporation Inc.