To pivot is to change one element of your business model to improve product/market fit. Iterating the business model via a series of pivots is easy to imagine in a software startup, where code is relatively mutable, but aren’t hardware timelines just different? Is the idea of a Lean Startup really applicable to medical device companies?
Medical device companies can pivot too. Here are a couple of examples.
In a comment on a recent post, InfraReDx CEO Jim Muller described how his company performed a pivot by changing its primary market focus from “the identification of plaques that cause a first heart attack” to “helping with the problem of stenting safety.”
Twenty-something years ago, David Muller (no relation to Jim), then CEO of Summit Technology, had recently taken his company public largely on the size of the laser angioplasty market opportunity. During product development, Muller recognized that laser angioplasty would not succeed against then-emerging balloon angioplasty techniques. Muller turned his company on a dime, maintaining the same underlying technology, but changing the primary market focus to the ophthalmic refractive surgery opportunity. Summit achieved product/market fit, created a huge new market and became a great business success.
Volcano Corporation may best exemplify the medical device pivot. Volcano was founded in 2002 with $24M and a mission to discover, develop and treat vulnerable plaques located in the coronary or peripheral arteries (Press release 07/02/02). Shortly after launch, Volcano licensed intravascular thermography diagnostic technology (Press release 07/03/02). A year later, clinical results demonstrated a lack of product/market fit. Volcano quickly changed their technical approach to the market, licensing ultrasound virtual histology technology (Press release 09/15/03), and purchasing the assets of intravascular ultrasound maker Jomed (Press release o7/09/03). Still, they had not achieved product/market fit. Upon revitalizing the Jomed product line, Volcano recognized an untapped potential for traditional intravascular ultrasound applications, such as stent sizing. So, the company shifted market focus from vulnerable plaque detection to traditional IVUS applications and concentrated on developing improved products for that market (Revolution catheter, S5 console, and collaboration with GE for cath-lab integration). Voila, product/market fit. The company has executed superbly since then, and has become one of the 10 largest cardiovascular device companies.
Successful medical device companies often pivot behind the scenes, iterating their business model prior to public pronouncements. I’m currently working with two startups who are doing just that. Leave me a comment with your stories of medical device company pivots.