Peter Slate knows a lot…he knows that if he picks up his chop sticks before his Chinese host then he—and his business deal—will be frowned upon. And Slate, the Chief Executive Officer of Bonovo Orthopedics, Inc., knows that in the increasingly powerful Chinese economy success for those from outside the country lies in local team building and—most of all, says Slate—a “special sauce.”
Slate and his team at Bonovo don’t just have a sales rep in a high rise in Shanghai. They have a 17 year-deep history in the Chinese orthopedic industry. Peter Slate: “We have two ISO-certified manufacturing facilities, strong R&D capabilities and one of the leading distribution networks in the Chinese orthopedics industry. Our overarching goal is to be the first China-based orthopedics company known for globally competitive quality products and surgeon support.”
Enter…the special sauce. According to Slate, who has spent years putting together international ventures, “Because we are successfully connecting surgeons from the East and West, in a short time we have created a unique bridge between these two worlds. As a result we are able to offer the Chinese surgeon community the latest quality products along with connections to Western thought leaders and training. We have assembled a creative team and we are all passionate about our mission. And our senior team has the flexibility to adapt and compete in the dynamic Chinese market.”
Slate, an avid triathlete who grew up surfing on the New Jersey shore, prepared for a life of international adventure by obtaining a JD/MBA. “This joint degree served me well as I have had to wear the CFO/General Counsel/CEO hats all at once. It has been good for Bonovo because it has helped us with speed to market and cost controls.”
As a young attorney, Slate was busy doing acquisitions and the like…but he couldn’t shake the entrepreneurial bug that kept landing on his shoulder. “When I was 24, I co-founded a beverage company, sold it, and then joined the founding team of a physician practice management company to head up mergers and acquisitions. I later worked for LG Electronics—which had invested in Zenith Electronics—to assist with the financial and operational restructuring of Zenith. It was at Zenith that I got to peer into the Chinese business world.”
Peter Slate, CEO Bonovo OrthopedicsA corporate officer at the age of 31, Peter Slate—along with his team—figured out how to make Zenith profitable enough to obtain sufficient financing to endure bankruptcy. In the process, Slate figured out his future. “We moved Zenith’s manufacturing from Mexico and Illinois to suppliers in China and Japan, something that whet my appetite for doing business in Asia. I had always enjoyed learning about other cultures. Early in my career I thought, ‘Working with a focus in Asia would be a special experience…one that would give me unique perspective and a competitive advantage.”
One hundred and fifty employees and 200 independent distributors later…Slate was right. His openness to learning about the East, combined with his business acumen, meant that he could successfully grow a company 6, 000 miles from familiar territory. Slate, who currently splits his time between Beijing and Arizona, states, “One of the things I am most proud of is The Bonovo Academic Alliance, an entity that serves as our hub for enhancing the connection between Eastern and Western surgeons. “
The Bonovo Academic Alliance has been developed under the leadership and guidance of Dr. Hansen Yuan, who has trained over 60 of the top orthopedic surgeons in China. Through our fellowship programs, international symposia, summits and surgeon training opportunities, surgeons from China have access to both our network of key opinion leaders and western technology.
Bridge-building, he calls it…with surgeons from the U.S. on one side and surgeons from China on the other.
And, to make connections you need to stretch yourself. Slate and his surgeon-recruits have done this and asked the same from those on the Eastern side of the bridge. “My Mandarin is not great, but I have made an effort to learn the language to show respect for my surgeon partners and my team. I have also become a student of China’s art, history, and business environment. Understanding these things—which are not just cultural nuances—can mean the difference between our company sinking or swimming. There is a cultural dichotomy between the old guard and the entrepreneurial community that has fueled China’s growth over the last 20 years. It is important that we build this appreciation into our planning and corporate strategy.”
Elaborating, Slate notes, “The entrepreneurial environment created through economic zones and other regulations favorable to business is evidence that China is committed to fostering significant and rapid growth. The country is wrestling with significant challenges. China spends about 5% of their GDP on healthcare while the U.S. outlays 17% of its GDP on the same…even though the Chinese population is almost five times the size of the U.S. They have a massive aging population that needs better access to healthcare; there is little healthcare available to the rural population.”
The big challenge at the government level is to try and determine how to overlay onto the existing system a healthcare infrastructure that is able to address all of these dynamic changes. These are challenges we have been addressing in the U.S. for over 40 years. While the U.S. system is far from perfect, Western thought leaders have much to contribute in helping China address these challenges.
From the ancient Xia Dynasty to today…from Beijing to Warsaw, Indiana…there have always been short term thinkers seeking get rich quick schemes. Not Peter Slate, however. He wants Bonovo to grow and endure. He knows how to make that happen and has the track record to prove it. Before starting Bonovo, Slate launched a technology transfer company named Arizona Technology Enterprises. “Using a model developed along with the President of Arizona State University, in four years’ time we created and funded 22 companies. My technology transfer experience taught me many lessons about early-stage company development. For one thing…..every invention isn’t an innovation. You may have a patent for a novel spine therapy but it takes a lot to turn it into a multi-million dollar company. It requires great people and execution. Nine times out of ten, a good technology with a great team trumps a great technology with a mediocre team. And, when the smoke (excitement) clears you want to have a team that can stand the test of time.”
“It is rare to have such research and development capabilities ‘on the ground’ in China. We are developing products that are every bit as good as Western technologies…products that eventually will make their way to other markets around the globe. We are also working with surgeons in China to co-develop products based on technologies originating in China. Being able to offer quality products, access to technology development and world-class training has been helpful as we go about recruiting Chinese surgeons because we are able to show them that working with Bonovo can provide a long-term partnership that will further their practice.”
Peter Slate: “We are making good progress but we have a long way to go to achieve our goals. I am really thrilled that we have developed such a strong international strategy—and that it is working. For those who wish to swim in international waters, my advice would be to make sure that your business model is capable of adapting to the complexities presented by the multiple cultures in which you do business. There are tremendous opportunities for growth overseas. Due to the challenges of working through the FDA, the competitive nature of the U.S. markets, and reimbursement issues, many companies are beginning to look further afield for sustainable success. We feel that this bodes well for Bonovo’s business model and for the infrastructure we have established in China. ”
Next week: Learn about selling in China and how that relates to the hospital system there. Also, find out some of the important differences between Chinese and American business culture.
