The latest quarterly MoneyTree Report was just released, providing some insight into the state of medical device venture funding in the US. I downloaded and plotted the historical trend data for medical device VC investments in the U.S. from Q1 1995 to Q1 2013. Click on the thumbnails for larger images.
What do the trends tell us?
My colleague Chris recently noted: “the right way to do things is often a pain in the butt.” No question that most engineers see protocols as a pain in the butt – yet another file to sherpa through the document approval process.
There’s an important logic behind the practice of doing protocols. Imagine doing an experiment on humans (aka a clinical study) without one. But “good product development practice” isn’t the only reason star medical device engineers write protocols. Believe it or not, star medical device engineers view protocol writing as a key element of team leadership and team effectiveness.
Let me explain. Continue reading
In 2011 I urged extreme caution for medical device companies considering selling products through physician-owned distributorships (Caution: Physician-Owned Distributorships Ahead). This week, the US Office of the Inspector General (US OIG) issued a fraud alert for physician-owned distributorships, stating that “OIG views PODs as inherently suspect.” Don’t say I didn’t warn you.
Sir Ronald Aylmer Fisher FRS
If you haven’t learned to fear adhesive bonds, you haven’t lived a complete medical device life. Adhesives are truly marvels of transmutation: liquids stay liquid until they magically become solid, and a drop or two of base substance can hold dissimilar materials together with superhuman strength.
Yet control of adhesive processes is always a nightmare. UV fluence or position changes from lamp-to-lamp, and oven temperature varies seasonally. The environment is always too damp or too dry. Dispenser accuracy varies. Somehow the location of your adhesive on today’s device has shifted slightly from last year’s location. With adhesives, you just never know which variable is going to cross the line from in-control to out-of-control. You don’t need a masters in statistics to see that a large number of low-probability process failures adds up to a higher-than-desirable probability of bond failure.
I routinely bore people with my assertion that everyone should be required to study and master statistics in high school. We all need statistics to better understand the world we live in and the news we read. Without statistics literacy, we can easily be misled. In our personal lives, we make financial investments, buy insurance, and make decisions with risks. At work, engineers and scientists need statistics to understand designs, processes and experiments. Sales and marketing people need statistics to understand market attractiveness and sales probabilities. Supply chain and operations experts need statistics to understand forecasts, materials plans, and manufacturing processes. Even accountants and finance types need statistics to understand currency risks, stock options, and financial instruments.
Star medical device engineers master statistics to make better designs in less time. How? Continue reading
My colleague Jeff shared a great blog post recently, “The Start-Up Trap” by Uncle Bob. While the post is ostensibly about coding, the philosophy applies broadly.
Definitely worth checking out.
Posted in Lean Startup, management
Tagged Lean Startup, New product development, startup, Startup company
In the eight years of data I’ve collected on New England medical device company venture funding, I’ve never seen it this tough. Only four new companies were funded in 2012 (see my complete list below).
You might be tempted to blame VC belt-tightening or the “Patient Protection and Affordable Care Act.” You’d be wrong. While the macro environment has its challenges, four new NorCal medical device startups were funded in Q4 alone.
What gives?
Ask most medical device marketers about market segmentation, and you’ll get an earful about physician specialty (and subspecialty), hospital/facility size or type (academic, ASC, for profit, large system, etc), or adopter type (early adopters, followers, and skeptics). Unfortunately, these approaches rarely help companies identify customer groups that are differentially addressable – i.e. best served by different products or services, different price points, and/or different marketing channels and sales techniques.
Contrast the typical medical device approach to the sophisticated techniques of consumer product firms. Are you a Barry, Jill, Buzz, Ray, or Mr. Storefront? Best Buy’s in-store staff segments you with a few questions before steering you to the products you’re most likely to want. Amazon suggests possible purchases for you, based on your clicks plus the buying history of other customers who bought the same products you did. Target buys your demographic data to combine with your Target purchase history to create custom coupons for you.
Medical device firms can do much, much more to understand and better serve their markets. Even back in the 1980′s much more could be done. Let me explain how I approached market segmentation twenty-something years ago.
