The #Takeoff series is about crowdsourcing issues important to Canadian small businesses. They tell us about their defining moments and we write about their stories, the issues, and strategies for success or how to overcome obstacles.
Tell us your business’s takeoff moment: tgam.ca/takeoff
In August, 2012, Michael Chrostowski got his PhD in neuroscience from McMaster University in Hamilton, Ont., with a thesis focused on a treatment for tinnitus, chronic ringing of the ears commonly experienced by people with hearing problems.
Two months later he co-founded a company in Hamilton to turn the technology into customized sound therapy, embedded into music, that helps “retrain” the brain to stop producing the errant noises.
In its quest for commercialization, Sound Options Tinnitus Treatments Inc. has received funding from organizations such as the Ontario Brain Institute. The company won innovation awards, carried out clinical testing, has been part of technology incubator programs and last fall started selling its product through independent hearing clinics around Southern Ontario. Today the company is looking to raise awareness about tinnitus and its own unique solution, to scale up into more clinics – especially large franchises – as well as to break into the international market.
“It’s a huge field,” says Dr. Chrostowski, Sound Option’s chief executive officer and president, who has a background as a computer engineer. He got into research on tinnitus, which is most often brought on by noise-induced hearing loss, because of an uncle who suffered from the condition working in an auto-body shop.
Dr. Chrostowski’s personal impetus for starting it earns kudos from experts such as Jeff Goldenberg, entrepreneur-in-residence at the MaRS Discovery District, and Mark Evans, an independent marketing consultant, both in Toronto.
“They’ve got a good solution and a big market – that’s half the battle; there’s a ton of growth potential,” says Mr. Goldenberg, who specializes in customer development, go-to-market strategy and digital marketing.
Mr. Evans, who assists tech startups, says the company “is a classic ‘I just ran into a problem so I solved it myself’ situation.” He says such startups have the most potential. “Many of the best solutions are real problems that entrepreneurs understand first-hand, as opposed to someone tackling something they don’t really have a connection with.”
Tinnitus affects millions of North Americans, and almost 400,000 Canadians have it badly enough to seek treatment, Dr. Chrostowski says, especially veterans and older people. Most sufferers like his uncle are told to “just live with it,” he says, noting that some treatments on the market are one-size-fits-all and require special devices, costing thousands of dollars. Others’ claims are untested.
Dr. Chrostowski found that changes in the brain cause the ringing sounds, with neurons firing when they’re not supposed to. The key is to use specially modified music to stimulate the ear and brain, customized to each individual based on how he or she hears the tinnitus.
Michael Chrostowski, co-founder of Hamilton-based Sound Options, which has developed a software-based tinnitus therapy, is in the sound booth at the The Voice Clinic in Toronto. (Mark Blinch for The Globe and Mail)
Sound Options did market research, talking to tinnitus sufferers and hearing health professionals, and came up with software to make the personalized music recordings. The hearing clinic produces a model of the patient’s “hearing brain” and transmits it to the Sound Options server, which then embeds the corresponding treatment into music recordings. These are then uploaded to the clinic for delivery to the patient.
The critical element is that individuals can easily put the music on their own MP3 players or other music-playing devices, Dr. Chrostowski says. Listening for one to two hours a day over time significantly reduces the tinnitus, though does not entirely eliminate it. Five or six hours of recordings cost $350 to $400 at the clinic. The treatments are currently available only with classical music, he says, which is popular among the 50-plus age group and offers rich sounds for the therapy.
The product is sold in the software-as-a-service model, which Dr. Chrostowski says is a “great medium for start-ups,” because it doesn’t require a bricks-and-mortar investment. It also makes the product “scalable” so can be sold widely, although it can be hard to build awareness without a physical presence.
Sound Options promotes the technology on its website and mostly advertises on the Internet through Google Ad Words, which Dr. Chrostowski says works well because people diagnosed with tinnitus often search online for solutions, and the company only pays “by the click.”
Mr. Goldenberg gives the company high marks for having a huge total addressable market, with a growing demographic, and offering a “mass-customized” solution that’s affordable. One concern he has is that the search terms associated with Sound Options, such as “tinnitus cure” and “ear ringing,” are quite competitive.
The company, which is based at the McMaster Business Park, remains small, including just Dr. Chrostowski and his two fellow co-founders, Shelly-Anne Li, vice-president of research and operations, who has a background in clinical research studies, and Lu Han, vice-president of business strategy and operations, who has life sciences commercialization experience. There is also an “almost-finished MBA student” helping on the business side.
Dr. Chrostowski says the company raised about $150,000 over two years through founder investment and awards to develop its software, conduct clinical testing and do a soft launch in Southern Ontario. The founders do not take a salary, he notes, which would otherwise cost $180,000 to $240,000 annually. The current overhead is “quite limited” marketing, costing about $500 monthly. “We are trying to raise angel investment to scale up.”
Sound Options posts testimonials on its website and Facebook from some of its 100 or so customers and the 70 people involved in its clinical research who have had their tinnitus decline as a result of the recordings.
But Mr. Goldenberg points out that the company has “obvious gaps” in terms of marketing and suggests the equation for startups should be 50-50 product development and customer development, “to bring in new customers or business-development deals.”
He notes that because it sells its product through sound clinics, the company’s marketing efforts and resources are split between hearing professionals and tinnitus sufferers. “That’s an expensive proposition.”
Both Mr. Goldenberg and Mr. Evans note that the company website should stream these two different target audiences toward different information right from the beginning. It should also focus on “thought leadership,” providing expert advice on hearing health, for example, and offering insights into different solutions to hearing loss.
“You want people to say, ‘These guys are smart, they’re informed, they’re the real deal,’” says Mr. Evans, who worries that the company’s marketing is limited to search-engine optimization, which then brings users to a website that has no “conversion engine to turn potential customers into customers.”
Dr. Chrostowski is examined by otolaryngologist Alexander J. Osborn with an ear microscope at the The Voice Clinic in Toronto. (Mark Blinch for The Globe and Mail)
He finds no “call to action” or ability to experience the product on the website, and says it includes little social media content.
Dr. Chrostowski says that challenges for the company include the number of “untested solutions” that are available on the market, which can make tinnitus sufferers and potential backers skeptical. The main priorities for Sound Options are to ensure its credibility and keep costs for customers manageable.
Mr. Goldenberg says the fact that Sound Options has “non-credible” competitors is a serious concern. “They’re going to have to work ten times as hard to prove that they’re the credible ones.”
Dr. Chrostowski says the company’s goals are to bring the product to clinics across Canada and take it global (they are already talking to a franchise of 300 hearing clinics in China), and to offer the sound therapy with various types of music and make it more accessible, perhaps through an “iTunes for tinnitus” model.
Looking forward, beyond tinnitus, Sound Options has also heard from potential collaborators about developing sound therapies to address sleep disturbance issues, he says.Report Typo/Error
Follow us on Twitter: