We've talked about the advantages of Lighthouse and some of the neat things that you go through to look at a holistic design when customization becomes important and the value that you're bringing to clients to help them evaluate the criteria that they need to consider in order to create a new product to bring into market or take their existing product and improve upon it for the next generation.

Today's topic is going to be a case study on some success that you've had on both taking the holistic design approach and seeing the different components of a product that was going to go to market, and the realization that there needed to be some customization done in order for it to be, not just successful, but then, do well in the optics market. I'd like to dive into this with you. I feel like it's a little bit of a hybrid design that you've created for this particular client.

Q - Justin Starbird: What does "hybrid design" even mean when it comes to medical visualization systems and what was the end result when you realized that you needed to take an approach that you maybe haven't before?

A - Benjamin Gray: In this context, when we talk about a hybrid design, more generically, we're talking about pulling together parts of a system that leverage both the old and new optics technology. That really can manifest itself in a lot of different ways, but in particular, in this scenario, what we’re looking at doing was somewhat of a hybrid between a chip-on-tip system, which is a much more modern approach to endoscopic visualization, but also marrying that with the traditional rod lens endoscope.

What we ended up with was a system that leverages the quality and durability of a rod lens imaging system, but then, directly applying an image sensor to that in a very small form factor, and so, it becomes the fully integrated product for the end customer to use so they don't have to worry about all the cables and connectors and whatnot that's typically associated with a traditional endoscopic system.

Q: When you did this for the client, what were some of the questions that you initially asked them to understand what the project needed and see where there were potential gaps that LHI ended up doing?

A: This specific product that I'm talking about here, it's an arthroscopic optical device that has a handheld component and then also a portable display. It's a fully self-contained unit that can be used in a doctor's office or an ambulatory surgical center. The interesting part about this project is our customer had actually tried to do this product themselves about five years ago. In doing so, they spent quite a bit of money, quite a bit of time, and ultimately, ended up with a product that, first and foremost, didn't perform well, and second, wasn't really economically viable because there is a disposable element to the product.

When it was all said and done, it was just too expensive for it to make sense. They shelved the project for a number of years until they came back to us and said, "We're really interested in doing this. Here's what we have. Here's what we found out." What we found was that using the more modern technology approach of a chip-on-tip system forced them into a scenario where they were throwing away lenses and image sensors in the disposable portion of their device, and that just became too costly. As we started talking about ways to mitigate that, that took us to the scenario of, "Well, we need to have the lenses and image sensor be reused."

When we integrated that discussion in a holistic manner with the overall performance of the device, we found that, "Well, I think we can get much higher performance if we actually move the image sensor further back, and we use more of our traditional rod lens imaging system." From a unit cost standpoint, the rod lens system is not the cheapest way to go, but in this scenario, it allowed the customer to then reuse that portion over and over again as opposed to the scenario where every time the device was used, they were throwing away optics and electronics.

Really, the primary set of questions comes around is "What are the performance requirements?" and "What are your unit cost requirements?" That really does start to drive a lot of the architecture of a system. In this case, it drove us to what I would like to refer to as a "hybrid design" where we're using both rod lens endoscopes and embedded image sensors in the system.

Q: I think to point out there that you were able to take existing technology and marry it with new technology is a real skill set and talent that you and the team possessed that allows you to see the different opportunities that exist out there. For your specific client that you did this for, what would you say the advantages of working with you have been versus if they continued to try to do it themselves?

A: Well, we have deep and broad experience in the digital visualization realm in endoscopy and medicine, in general, which means that we have a lot of contacts that we can leverage for things like rod lens endoscopes that, perhaps, we wouldn't build in-house but we would take maybe the guts of or the functional parts of and modify it to, then, work with the custom aspects that we do develop.

That's an expertise that our customer realized that they didn't have, and so, they were looking to go to a company that did, and so, they came to Lighthouse, and they were, I think, impressed with our approach to the work and our technical understanding. We have since formed a very strong relationship and a nice partnership with them throughout this project.

Q: What does that mean for the customer now that you've created this relationship with them? Always, the client has reservations about creating something custom or new because the cost can be so high, but when you have a successful project like this, and then you, meaning Lighthouse, actually does the manufacturing as well, how does it drive down the cost over the lifetime of the client relationship?

A: One of the things that we're looking to do is have control over the portion of the device that's directly related to the imaging. The more that we can have control over the design, the more that we can influence what we call "design for manufacturability" or the ability to build something easily and cost-effectively. One of the unique situations at Lighthouse is that we both design and manufacture on a contract basis.

That means that as we're designing something, we're designing it to be manufactured here at our facility, and that transition from design to manufacturing is a much smoother transition than if you had different groups doing the development versus the manufacturing. Typically, in that scenario, you end up with a case where there is often redesign required just in order to be able to manufacture the device.

The expertise that Lighthouse possesses, both on the ability to see the project from beginning to end, the ability to marry technology that's existing with new technology, and also put that into a package that allows to mass produce that to market, whether that's end consumer or to the final manufacturer for the project, there's real value in all of those things.