Capital equipment is one of the most exciting and thriving areas in medical sales right now. It brings cutting-edge technology together, from complex robotics and automation to SaaS models. Today, Omar Khateeb talks about his ventures in this area and how it changes the entire approach to MedTech marketing. In this first episode of a two-part discussion, Omar joins Samuel Adeyinka to share how he found himself deep into capital equipment by following his intuition and chasing his passions. He also gives a rundown of his capital sales strategies focused on achieving 100% utilization and explains how it encompasses more than just medical devices.
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Capital Equipment To MedTech Marketing With Omar Khateeb Part 1
In this episode, we have with us someone who is a colleague of mine. He’s a very special guest and he goes by the name of Omar Khateeb. I call him a colleague because Omar is in the space of medical sales development. He has his own company that works with medtech companies to increase branding and marketing. He also has a program for sales reps to increase their sales performance specifically in medtech, med device, and capital equipment style sales. That’s the background he came from, capital equipment. He has a podcast called the State Of Medtech. He started another podcast called Mind Loom Podcast. Omar is a trailblazer. He makes things happen. What’s so cool about everything he’s doing is he’s relatively new to the space. Barely eight to nine months in, he already has two podcasts and a thriving business, and he’s working with clients left and right. In this episode, we talk about his history and what he has learned up to this point, what got him into being the entrepreneur that he is today, and specifically what his company does. We then break down what it means to be in capital equipment sales. We had a guest that was in aesthetic capital equipment. Omar brings the other side of that with a different type of capital equipment. I am not going to say anymore because then I’ll be spoiling this wonderful interview that is prepared for you. I’m not going to say anymore. This is a two-part interview. This is part one. As always, we do our best to bring you guests that have innovation, insight, and different perspectives to the medical sales community. I hope you enjoy this episode.
Omar, how are you doing?
I’m doing good, Sam. It’s great to be here. It’s always a pleasure. It’s always an honor.
We had a nice little conversation recently. I’m glad that you take some time to get on our show. I want you to tell the audience who you are and what you do.
My name is Omar Khateeb. I am a proud father, happy husband, and former Texan. I’m always a Texan. A little background on my story. I’m a first-generation American. I was born and raised in El Paso, Texas on a US Mexican border. My father and mother are both immigrants. My dad is from Iraq and he was a general surgeon. My mother is from Turkey and she was a biology professor at our local community college. In El Paso, I admired and looked up to my father and followed in his footsteps in the sense that I decided to be a premed in college. Unlike most premeds, I actually stuck to it and I went to medical school.
I went to medical school at Texas Tech University, and about halfway through, I realized that medicine was not for me. I could see myself doing other things in medicine, specifically on the technology side. In 2012, I decided to leave medical school. Fortunately, I was on an academic scholarship, so I left with no debt. That made the decision a lot easier.
I’m very grateful that I had a father who was very supportive and understanding. He was the most supportive. For a lot of fathers out there and even myself, we can learn from that in the sense that your kids are going to make decisions. The best thing you can do is be supportive of them, love them, and give them as much confidence as you can. I tried to get into the industry. Were you in business in 2012?
I wish you guys were. I would have come to you. It would have made my life easier. I was trying so hard to get into the industry, but I couldn’t get in. I did door-to-door sales selling collection agency software. There are two doctor offices in my hometown, which is extremely humbling because every time I walked in after I got abused by the front desk, they realized, “This is Omar Khateeb. That’s the hometown boy who went to medical school on a full scholarship. Aren’t you in residency?” I would have to explain that I left. Of course, I wouldn’t make a sale. At that job, I made two sales.
You went to that type of sales role from medical school. Talk to us a little bit about what inspired you to want to go a different route when you were in medical school as opposed to going through residency and becoming a medical provider.
I didn’t know it back then, but I’ve spent a lot of time studying it over the last ten years which is, what does it mean to follow your intuition? It is very wise and very ancient but we don’t like to listen to it in the West because it’s usually based on no details. Our ego loves details and how much you’re going to make and why. Your intuition slightly nudges at you. Back then, my intuition was screaming at the top of its voice, “This is not where you should be.” I felt it and regret scares me.Ego loves details and how much you're going to make. Your intuition slightly nudges you to the right path. Click To Tweet
I spoke to a guy who was an anesthesiologist at UCSF, the University of California San Francisco. That’s the top three programs in the country. He had said that he felt the way I felt in his first couple of years in med school. He ignored that. He’s like, “It will get better.” He got into 3rd and 4th year, and it wasn’t better. He was like, “Maybe in residency.” His thing was like, “I still feel the same way but what am I going to do? Quit now?” That scared me.
I remember I sat down and spoke to my father. I was like, “This is how I’m feeling. I think I could see myself doing other things. I don’t know what those things can be.” It was weird. It was my dream since I was six years old. I was like, “I’m going to be a surgeon. I’m going to be chief of surgery.” My dad told me, “It’s not going to get easier. It’s only going to get harder. If you feel like this, then maybe this isn’t for you. If you want to leave, you have my full support.”
I get choked up thinking about it now because it would be foolish for me not to appreciate and understand that. My parents are middle Eastern parents. I’m a firstborn child. I’m the son of the eldest. For the next 6, 7, 8 years or however long it took where I got settled in my career, they had to constantly deal with questions from friends and family in the community like, “Why did he leave medical school?” They are trying to explain why and explain what I’m doing now. As parents, I accept the fact that that was very difficult for them.
That’s how I ended up deciding to leave. These days I tell a lot of young professionals to pay attention to their intuition. You might be in a job and it’s not the right place for you. You know it and you feel it, but you’re too afraid. A lot of times you’re too afraid to act on intuition, but you have to. Sam, you’re very much like me. I’m sure that you are in the biotech pharma world making good money and your ego was like, “Stay here and make money,” but your intuition was like, “No. You got to go open your own business.”Young professionals must always pay attention to their intuition. Sometimes, you know your job is not the right place for you but you are too afraid to act. Click To Tweet
I love what you said about intuition because we all have this battle with intuition. You use the word details. You listen to the details and the ego that this makes more sense for this reason and that reason. You’ll justify every reason to continue doing whatever it is you’re doing, and not make that change while this tiny voice is holding onto you. It’s not just in your head, but emotionally it’s telling you, “This is not where you should be.” That’s extremely real. To actually listen to that, I got to commend you because I don’t think most people listen to that. I’ve even struggled trying to listen to that, even though I know it’s there.
As much as I like to try, study, and understand it, it’s the same with me because it’s really scary to listen to it. I’ll end with how it pushed me this 2022, but to wrap up a little of my background, when I got into the industry, a lot of recruiters told me, “You don’t have any experience. You need to start out selling low-end products like Band-Aid or something.” I didn’t believe that.
I was able to finally get into the industry at the very top, in my opinion. I got in at a surgical robotics company. In 2012, I got in at the first robotics spine company. I carried the bag and I focused on utilization, but then I had to work closely with capital sales to help them sell robots. Management noticed that I was very talented when it came to patient marketing market development. I got promoted to US marketing manager and the rest is history.
From there, I built my marketing career at different robotics companies. It’s AI and essentially anything that’s very expensive, high tech, and first of if it’s kind technology that needs a market and needs to be engineered. Those are the companies I work for. The last thing I would add is right around 2015, Andrew Chen at Uber, who’s the VP of Growth there, wrote this article called The Growth Hacker Is The New VP Marketing. I read about growth hacking and I was like, “I should learn how to do this.” I couldn’t do that because it was a publicly traded company, so my idea was I’m going to start my own little company on the side.
I started up a fashion inventions company, of all things. We did a Kickstarter just to meet so I can learn how to run Facebook ads and all these things. I started taking these strategies into medtech only to find out that not only did nobody do it back then, but a lot of people laughed at it. The idea of trying to sell and influence hospitals and physicians using social media was a joke, but the data said otherwise. That’s what I bet my entire career on for the last 6 to 7 years.
I would say that the last thing is that it came to a head where I proved that model at Potrero Medical because Joe Urban was a very visionary CEO. He recruited me there. He was like, “Let’s implement all these things,” and it worked. What I am doing now, going back to intuition, at the end of 2021, I was in SaaS. I decided to return back to devices.
While I was getting great offers, I was the first head of growth in our industry. I launched the first device podcast at least for a company. There are a lot of great offers but my intuition was like, “Don’t take any of that.” I had a baby on the way, and I had no idea what business I was going to set up. I was like, “I’m going to be an entrepreneur.” The month of December was like, “I’m going to find a business to start.” That was my homework for the month of December. I was like, “I’m going to be an entrepreneur but I don’t know for what.”
A lot of people probably see the podcast and live webinar I have called The State Of Med Tech. The state of medtech is at the intersection of business, medicine, and technology. We interview leaders in the space. You were on the show. We had that great episode together. My company helps medtech companies grow their sales and drive product adoption using social media. Specifically, one of the bigger things is my program, The Medical Sales Network Effects Program, in which we have some founders and CEOs, but mainly a lot of salespeople going through to learn how you do persuasion at scale and how you use things like LinkedIn to actually sell digitally because the old ways are gone. It has been a trend for a while.
After COVID, everything has been ramped up. It was already going in this direction, but COVID was the catalyst. Now, this is considered a legitimate mode of doing business. It’s only going to grow from here. That’s fantastic. You are relatively new. How many years would you say you’ve been in business?
It’s not even years. It’s months. I’ve been in business for just six months. It feels like years though.
Omar, you’re trailblazing over here. Now, where do you see the focus of what you want to see with your company going?
The main focus has been this mission that I’ve had since 2015, which is I want to change how we sell and market to physicians in this industry. I thought I could do that by going to a company like Potrero and having a great success story. People are seeing how well they do and say, “That’s the way we should do things.” I then realized that’s not how it’s going to happen. That’s the mission of my company. It is to change how medtech companies sell and market to physicians. I burn the boats. This is a 5, 10 and 15-year transformational journey. There’s only a one-way street in this one.
When we think of medical sales, this is a very vast field. It encompasses a lot, not just medical devices. It encompasses biotech, pharma, dental and diagnostic. Is there a particular focus you want to go after first with your company?
In my own program and company, whether it’s individuals or companies we’ve worked with. The big ones have been robotic companies, but we’ve done AI. We had some people in biotech. One of the things that I probably have a sweet spot for is capital equipment. Some people outside the industry don’t know what capital equipment is. My thing is it costs a lot of money.
I’m glad you brought that up. For people who don’t want to get into the industry, people that are in the industry, and people that are leading the industry, you’re right, I’m sure there’s a number of people here that might not have an idea what capital equipment is. Why don’t you give us the rundown of what capital equipment is and what the sales model is? How is the sales model different from other medical device sales?
My favorite example of capital equipment is anything that’s on wheels and moves around. You can look at a robotic system or a navigation system. The older business model for capital sales, and it’s still the main one, is what’s called the Razor-Razorblade Model. You sell a razor but the real money comes from selling the razor blade. In the case of a robotic system, let’s say the robotic system is about $1 million or even some systems are $300,000, depending on what it is. That’s the capital side. That would be the razor, but the razor blade or the disposables is where a lot of money comes in because that’s the recurring revenue.
Let’s say in Intuitive Surgical, they sell deferments that can be only used for a couple of cases or for one-time use. That’s the disposable side. That’s the main business model, but added to that business model to evolve over time, one area of revenue is service. Every year, you might pay $30,000, $40,000 or $50,000 on service. It’s like the insurance for the robot. That’s to make sure it has the best software/ It’s updated and everything. To give you an idea of how much money that is, almost 1/3 of Intuitive’s revenue comes from service. That’s close to $1 billion, just coming from servicing.
That’s the main business model. The newest, and not a lot of companies are doing this well in my opinion because it’s such a new thing in our industry, is adding SaaS or Software As A Service. Some imaging companies are trying to figure out how to add a recurring subscription model. When I went to Potrero Medical, that’s what we were looking into as well, which was we had a critical care monitor. At that time, it was $15,000. The disposables, which are the foley catheters, are the ones for urine output or draining urine. The SaaS model was we were developing predictive algorithms. On a monthly or annual basis, a hospital could pay a fee to have access to that. Of course, as always, there’s service.
When it comes to capital sales, the nature of the sales rep and what they’re responsible for doing, what does that look like?
It’s a multi-pronged approach. In the basic model, there are two people. One is the capital sales manager. You can call them ASM, Area Sales Manager, or regional sales manager. That’s the person who has a territory. Oftentimes, it’s one state or multiple states. They try and sell the capital equipment to a hospital. In this case, it is a robotic system. Partnered with that person is the clinical sales rep. I’ll use Missouri as an example. When a system gets placed in a hospital, you have to make sure of the utilization. Utilization is the key to success. What that means is how often the system is being used.
My great mentor who’s a legend in our industry and passed away a few years ago was Chris Sells. He is a sales guy and his last name is Sells. I’m going to be quoting a lot of wisdom and knowledge from him, but also from a few other people who fortunately are still alive and very young and doing well, so Chris Prentice, Tim Murawski, and Ken Husted. This is their wisdom on the capital sales process. You are better off selling three robots to three hospitals, and those hospitals all use the robot at 100% utilization. They use it for almost every single case. They are centers of excellence, versus selling 10 robots to 10 hospitals, and those robots are being used 30% of the time because these hospitals talk.
If you think about the technology adoption curve, if the technology is not being utilized often enough and the value is not there, and if that customer does not see the vision, that is going to hurt you. In my opinion, clinical sales capital, meaning that the clinical salesperson or the person who is going and covering cases is extremely important. If they don’t find a way to make sure that surgeons in this hospital are all using the system, they’re bought in and speaking about it, then it makes it harder for the capital sales manager to go and sell to other hospitals. If you go to another region or even down the street, it’s like, “I’ve heard about that system. They’re only using it half the time there.”
The utilization is extremely important. As a capital salesperson, I’ll cover some important parts of what the deal looks like, then after that, I can explain where I believe social media fits in and in reality, pours gasoline on the whole process. You always start with you need a clinical champion. Here’s a little history of what made Intuitive a multi-billion dollar company. For those who might be shocked by this, there is a time in the early 2000 when Intuitive was struggling.
Their stock was under $5 a share. Johnson & Johnson could have purchased Intuitive. They were even looking at them multiple times. They could have bought them for less than $5 a share, which math-wise, I don’t know if that would have even been a $100 million deal. We’re talking about a company that’s worth over $60 billion to $70 billion right now.
It’s a clinical champion that you need first, meaning that when you sell capital, you have to sell to multiple parties. You got to sell it to the surgeons who are going to use it. You have to sell to their nursing team and their surgical team because if they’re not bought in, they’ll find ways to sabotage that deal. They’ll say, “This is going to be very cumbersome. It’s going to take a lot of time.” Not every surgeon is going to have an iron fist and say, “I want this.” They want their team to be on board.
You have to have what’s called an Economic Sale. You have to have an economic story. You go talk to the CFO of the hospital or the CEO, and not only do you have to explain, “Here’s how this system is going to technically improve your efficiency. If you do this many cases, you can do them in this amount of time. This translates to this much money that you reduce. You reduce complication by this much.” You have to have an economic story, but you also have to be able to paint a vision for them to say, “You can be the first hospital in the region to have X, Y, Z robotic surgery. You will be a center of excellence.”
This gives a patient a choice because the one thing that people have to understand in marketing is you want to force people into a choice, not a comparison. For a patient, if they need to have knee surgery and they have a choice of having regular knee surgery or they can go get robotic knee surgery. When it comes to somebody’s loved ones, even if you have to pay the extra money yourself, it’s like, “I want the best. I’ll go to the place that has robotics.” That is more or less the capital sale in a nutshell. Of course, in there, there’s what’s called a VAC Committee or a Value Analysis Committee, where after the surgeon, the clinical team validates things and they say they want it.
You go in front of the CFO and CEO, then you go in front of this committee. That’s usually comprised of physicians, nurses, and people in that admin, and you have to present a compelling presentation. Oftentimes, it’s not you that’s doing it. You have to coach your physician. This is what’s fascinating about the capital sales processes. This all goes back to finding the right clinical champion, which doesn’t mean it’s the chair of the department. This a mistake people make. I’ll quote one of my mentors, Ken Husted, about this, “The chair of surgery doesn’t even buy the pencils on their desk.” You have to figure out who buys the pencils for their desk and who owns that budget.
You have to start digging in, but finding the right clinical champion is so important because then you find the surgeon who can see the future by closing their eyes. That’s the person who’s going to find a way to make this happen. You want somebody who’s bought in because it’s a hard sale. These capital deals are not 30 or 60 days. They’re 90 days minimum. If you got a capital sales process that’s 90 days, it’s pretty good.
What’s the average?
Depending on what the company sells. At Mazor, our average was around 125 days. You try your best to get it within a quarter, but it’s often two quarters, especially the larger deals. If you’re going to go sell into Cleveland Clinic, it’s going to take time. The process is very interesting. Going back to Intuitive Surgical, what made Intuitive a billion-dollar company?
I should figure out which salesperson did this when Intuitive was able to sell into HCA or Hospital Corporation of America. It’s the largest privately held hospital system in the world. It is massive. They sold them to HCA and they started with five sites, but the deal ended up being fifteen hospitals. The moment HCA bought those Da Vinci robots, everybody hospital wanted one. At that point, they were selling robots like hotcakes. It was still hard.
This is for those looking for mentorship. If you find someone who was at Intuitive Surgical from the years 2000 to 2010 and they lasted more than one year, they’re good at something. It’s because in Intuitive, this is how serious they were. Your training was six weeks long and it’s included in your course. Let’s say you get hired by Intuitive in the 2000s, you started at the beginning of Q1. Your training was 4 to 6 weeks long, or let’s just say 4 weeks to be even more conservative, so you are already one month into the quarter. If you don’t hit your number that month, you’re fired.
I have my own opinion about that kind of culture, but there’s no denying that they can only have respect for how impressive Gary Guthart and Intuitive were and still are. One thing I would say, and this is not just any salesperson, but capital specifically, is I’m not crazy about Intuitive’s marketing. Gary Guthart is an engineer. He’s one of the few engineers that have this superpower where they’re an engineer but they can understand sales and business development and M&A well. They are very extremely process-oriented. Being a good salesperson means having extreme ownership of a process sales is not an event. For you and I, in our businesses, when we sell an enterprise deal or we have somebody join our program, it’s not an event. There’s a whole process to it.
There’s a whole process going on behind to get them to the table, in the discussion, and then to ultimately execute the business. You’re absolutely right. You’re talking about this capital sales approach and how the focus is trying to get in front of that person that owns the budget. Is that what you’re trying to do with social media to influence that person to drive this sales cycle and make it faster?
That’s exactly right. I’ll start peppering it in tandem. Let’s say you’re a capital salesperson and you’re targeting this hospital. Before you figure out who has the money, you got to figure out who’s got the pull.
That was Omar Khateeb. I love what Omar is doing in the medical sales space. He has been a rep. He has experienced so many different things. He stepped into the world of entrepreneurship, and is truly operating as a pioneer in the medical sell space. Make sure you check him out. You can find him on LinkedIn, his company, and his podcast. Tune in to this episode and you love what he’s talking about. You’ve been thinking to yourself, “I want to get into capital equipment. I want to work in a position like what Omar used to do. Maybe one day, I want to do what he’s doing.” Stop wondering and visit EvolveYourSuccess.com and select Attain A Medical Sales Role. Let’s help you get into a position to have you living the lifestyle of a medical sales rep. If you’re someone that’s in the field and you know you could be performing better, you heard Omar break down the entire cycle for capital equipment. You might not be in capital equipment. You might be in pharma, war-based surgical role, diagnostic testing, genetic testing or whatever your role is. If you want to have improved sales performance, you want to get to the circle and the president’s club, and you’re wondering how you are going to make this happen, visit EvolveYourSuccess.com and select Improve Sales Performance.Submit some information, have a conversation with us, and let us help you get to where you want to be. As always, we do our best to bring you guests that have innovations, insight, and different perspectives in the medical sales industry. Make sure you tune in to the next episode for part two with Omar Khateeb.
- Omar Khateeb – LinkedIn
- The Growth Hacker Is The New VP Marketing
About Omar Khateeb
Growing up in the US/Mexico border town of El Paso, Texas I am a first-generation American.
The idea of discipline, honor, and hard work were engrained in me by my parents.
I went to medical school on an academic scholarship and dropped out in 2012 to pursue a career in technology.
I found my way into an exciting surgical robotics company called Mazor Robotics, the first robotic spine company.
I started off “carrying the bag” as a clinical sales rep before quickly getting promoted to US Marketing Manager for my ability to do great patient marketing campaigns and market the technology.
The past decade has been spent at various high-tech startups driving growth and technology adoption through growth marketing and category design.
This includes two publicly traded surgical robotic companies through their IPOs as well as co-founding a consumer product for men’s fashion.
In 2022 I launched my own venture, Khateeb & Co, with a mission to help medical salespeople drive technology adoption using social media.
I also launched a media company called “The State of MedTech” which helps physicians and industry professionals learn more about the latest trends in medicine through a podcast, webinar, blog, and live show. The majority of the episodes offer CME credits via a physician’s reflection.
My areas of focus are category design, driving adoption of new technologies, and developing strategies to channel attention towards generating demand.
In my spare time, I love teaching and mentoring young professionals. I’m an avid reader and also paid public speaker.
You can follow me on Facebook, Instagram, Twitter (@OmarMKhateeb) or Youtube (Mind Loom with Omar M Khateeb).
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