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Outstanding OEM: From Garage to Lab, Finding a Path to the Digital Era

Instead of using a glass slide and a miroscope to examine a patient sample, clinicians can use technologies from Aperio to view a digital slide on a computer monitor.

Ideally, digital technologies provide faster and more accurate results, and in turn drive cost effectiveness. Aperio Technologies Inc. (Vista, CA) is ahead of the game and has spent more than 10 years developing digital pathology technologies. Digital pathology is an image-based environment for managing pathology information that originates from a digital glass slide.

With more than 80 patents issued and pending, Aperio has made significant contributions to the field of diagnostics. Its technologies allow clinicians to distribute and analyze slide images in a Web-based environment, a process that streamlines pathology consultations, lab workflow, medical education, and research.

During the last four years, the company has enjoyed a 50% compound annual growth rate, and the challenge for Aperio has been managing this growth. “The challenge is, how do we build a sustainable business that can grow every year at this rate forward?” says Dirk Soenksen, founder and CEO of Aperio, who says he started the company in his garage 11 years ago. To help meet those challenges, Aperio brought in a new executive management team, including COO Keith Hagen and Jared N. Schwartz, the chief medical officer who was named 2010 Pathologist of the Year by the College of American Pathologists.

Dirk Soenksen, founder & CEO of Aperio Technologies

Aperio’s competition includes GE Healthcare, Roche Diagnostics, and Philips Healthcare. Although it’s a relatively small venture capital–funded company, it has established itself through its strong knowledge of the market, customer loyalty, and a continued path of innovation. During the past six months, Aperio made a sizeable investment in its product development team, increasing the group by 30%.

In September, the company launched the Discover Your Path program to help healthcare organizations identify their most appropriate applications for digital pathology. “Our theory of adoption of the market (because digital pathology is an emerging market), [is that] there will be distinct full adoption. This means that every slide that is prepared in the pathology lab will be digitized and then reviewed on a monitor,” Soenksen says. The Discover Your Path program is aimed at confirming for a potential customer how they can begin to use digital pathology. When broaching the subject with doctors, the company promotes phased technology adoption. According to Soenksen, this strategy is a sharp contrast to some of the company’s competitors, which encourage full product adoption immediately.

Although product acceptance is a challenge that Aperio faces, getting customers to use its products isn’t the obstacle—it’s getting the industry as a whole to understand the value proposition of digital pathology. “That’s sort of

Aperio has 700+ systems installed in more than 30 countries, including the top-rated U.S. hospitals, leading academic medical centers, and reference labs.

the chicken and the egg thing—you can’t demonstrate the value until you get it adopted, and you can’t get it adopted until you demonstrate the value,” Soenksen says, adding that most entrants into the digital pathology market don’t understand the segment.

In addition to increasing its focus on patient care, moving forward, Aperio’s strategy will be based on driving efficiency by simplifying its processes. “The reason scalability is so important is that as we get closer to full adoption, the business will grow faster than 50% each year—it will grow 200%, 300%, [or] 400% a year,” says Soenksen. “Scaling means you can just add people to the team and still deliver the same level of quality of before without hiccupping.” Being scalable will allow Aperio to keep up with demand as the adoption rate of its technology continues to increase. “We know it’s coming, because when you talk to pathologists, they absolutely believe that pathology will be digital in the future. We’re already seeing the noise level in the industry increasing dramatically based on the entrants into the market—in a positive way.”

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