FOCUSMOTION & BRYANT STIBEL
A Bryant Stibel Deconstruction
When an innovative new technology designed to track and analyze human movement, needed to pivot, they turned to their early stage investors at Bryant Stibel.
This was the case with FocusMotion, who had launched as an advanced machine-learning algorithm designed to track human movement. Today, after a series of collaborative breakthroughs and transformative decision-making, FocusMotion offers data-driven orthopedic recovery solutions that automatically assess and monitor pre- and post-operative patients.
Cavan Canavan, CEO and Co-Founder of the company, was looking for an investment during the company’s early days and found the team at Bryant Stibel. That’s when Canavan said they passed the first test – the Kobe test.
“I recall that he liked us and understood the opportunity,” Canavan says of his first meeting with Kobe before adding that “he also needed to convince Jeff and his team that we were a company to invest in.” The FocusMotion crew eventually passed that test as well and in 2015, a small early-stage investment was secured, and the relationship began.
“I think, early on, they saw the potential for what we were doing much farther out than other people because they saw the advantages of the learning aspect,” reveals Canavan of Bryant Stibel’s foresight. “In the early stage, you’re searching for someone out there to believe in you and the idea. You want someone that shares your vision of the future, and there are not a lot of investors out there that are believers.”
In 2016, after developing algorithms in the fitness, workforce, and defense markets, it became clear that, while the SDK and the algorithms were best in class, it was a technology in search of a market. Something needed to be done, but it would require a major shift in the company. The key moment that solidified the relationship with Bryant Stibel in Canavan’s mind was a meeting at their office where this deconstruction first began.
According to Canavan, “It was a meeting that didn’t go the way we wanted it to, but it went the way we needed it to.” He says, “There’s an issue with this industry that pressures founders to create an air of success even while failing. If you read TechCrunch, etc., the articles paint an impossible landscape of unending unicorns. How many founders talk about failing as they’re failing? Additionally, some investors are understandably thinking about their bottom line first and not how to help you; presenting failure just creates anxiety without assistance. These environments condition you to present success even when you could use help because you anticipate there won’t be any.”
Canavan continues, ”So, in 2016, we walked into the Bryant Stibel office and we were presenting, ‘Hey, things are fine, we’ve got X going for us in Y markets, etc.’ and they said, ‘No, things are not fine. What do you need to do, where are the opportunities, and how can we help you get there?’”
The candor was a tough pill to swallow at first for Canavan. It was a moment of clarity and sincerity between founder and investor that Canavan recalls as “few and far between.” And he readily admits, “It gave us the agency to look at our company and say we’re going to have to make some concessions and accept some opportunities to bring in revenue. But at the same time, we’re going to be focusing on a new and complicated direction that will be the focus of the pivot.
That’s when the deconstruction began – a methodical review at the hands of the Office of the Chairman. The team broke down the old and new business and market opportunities alongside FocusMotion’s management team to see what was working, what wasn’t, and identify places where value could be achieved.
In FocusMotion’s case, the deconstruction was embraced by Canavan since it “felt like a team effort,” showing that they were willing to “shoulder the weight with us.” From there came a constructive dialogue and eventually a way to improve upon things.
The Malibu meeting provided agency to accelerate in a new direction. This, in turn, led to several key moves that pushed the company to the next level. FocusMotion opened up “a movement collection farm in India to basically farm the data necessary to build the new therapy algorithm” and they began to build their own hardware platform. “We were no longer beholden to other hardware manufacturers, we could push in our own direction. FocusMotion was becoming a more vertically integrated recovery solution for orthopedic surgeries.” These changes were massive, but paved the runway for the company to begin to work on its diagnostic AI that aims to transform human recovery.
Moving forward, Bryant Stibel was also integral in the transition, making introductions and “stretching their network” to connect the FocusMotion team to strategic partners and investors who could believe in the new vision.
Along the way, Canavan admits that being close to something can make certain things hard to see. “As an entrepreneur, I think sometimes you’re stuck on an island; you’re deep in a profession, deep in a market – and it’s nice to be able to sit down with somebody with an outside perspective that’s not going to invoice you; not going to try and be a consultant; not going to tell you how good you’re doing. Someone that’s just going to say, ‘Okay, you’re saying this, but we’re seeing this, and we’d like to work through the problems that we’re finding with you and to approach them with you.’ Few of our investors feel like teammates, Bryant Stibel created that environment. ”
It’s an honest rapport that remains to this day.
“They’ve been there with us, and we’ve learned that we can meet with them and it doesn’t have to be all hockey sticks and eventual unicorns. We can sit down and say, ‘These things aren’t working’ or ‘We’re having a problem with X and we know they’ll roll up their sleeves. They’re sincere to the point where it can be brutally honest sometimes, but I think it’s a healthy dose of tough love as needed,” laughs Canavan while speaking highly of the team’s candor.
This honesty has inspired a sense of agency in the FocusMotion team, giving them the “ability to move forward with a decision” when battling with uncertainty. Canavan admits that, “As an entrepreneur, sometimes you have moments where you feel alone, like you’re lost out at sea, looking for direction.” Bryant Stibel’s approach served as an example and as an impetus: “Jeff and his team don’t just serve as a lighthouse in the storm, they’ll swim out to meet you.”
“The thing I’ve said to everybody is: If I have another company; if I start another company, I want them on the cap table. There are very few people that I’ve met that I immediately say that about because they have been there with us, you know?” Canavan concludes.
“That’s why I would recommend them.”