Over the weekend, a friend asked what one book I would recommend to guide a first-time entrepreneur. I replied that just one book was not sufficient. My friend suggested Michael Porter‘s Competitive Strategy, which I agreed was an excellent choice. I also told him I’d address the question more fully on my blog, so that’s today’s post.
The Launching Tech Ventures Reading List
Fortunately, local entrepreneur and investor Ty Danco recently pointed out an amazing reading list for first time entrepreneurs. Harvard B-School Professor Tom Eisenmann is developing an MBA class called Launching Tech Ventures, and he posted his well-curated course reading list on his blog Platforms and Networks. As Ty says, the list makes me wish I was back in school. While you’re working through the list, don’t skip Eisenmann’s earlier compendium of the web’s best advice for entrepreneurs. For tech start-ups, Eisenmann’s recommendations are unsurpassed.
For medical device entrepreneurs, Eisenmann’s list isn’t quite enough, so I’ve put together a few suggestions from my own experience. Leave me a comment telling me what I missed or if you disagree with my choices.
Business Management and Strategy
I’ve had these two books on my bookshelves for 20+ years, and neither has been surpassed.
Competitive Strategy by Michael Porter. Grounded firmly in microeconomics, this business strategy classic gets right to the heart of business strategy – dealing with customers, suppliers, competitors and a changing business environment. Porter’s framework provides context for everything else you’ll read.
The Practice of Management by Peter Drucker. It’s difficult to choose just one Drucker book for this list, and I almost chose his Concept of the Corporation. While Porter teaches about the interaction of the business with the outside world, Drucker gets inside the business and teaches about making it run. A classic.
Product Design and Development by Karl Ulrich and Steven Eppinger. One of my colleagues at Candela liked this book so much, he suggested we buy a copy of this book for each person on our cross-functional product development teams. Designing a product requires thousands of decisions, from component selection to user interface design. These thousands of decisions must be aligned to fulfill customer and business needs, and Ulrich and Eppinger help you succeed. Make sure you check out their companion website www.ulrich-eppinger.net, with additional materials and helpful links. If you still want more, check out their MIT OpenCourseWare site.
Regulatory Affairs and Compliance
Like the rest of the American legal system, critical regulatory knowledge is embodied in precedents and history rather than the explicit language of the regulations. So there is no substitute for experienced advisors. However, a basic understanding of regulatory frameworks will help you work much more effectively with those advisors.
Medical Device Development: Regulation and Law by Jonathan Kahan. Kahan is one of the medical device industry’s top regulatory attorneys, and his book clearly and comprehensively explains the US medical device regulations for the company executive. I’ve used Kahan’s book for years (in earlier editions) and have recommended it over and over again.
FDA Device Advice Website. The FDA actually does a really good job explaining device regulations. Plus, it’s searchable. FDA medical device databases are critical resources for predicate devices, consensus standards, and historical adverse events. Spend some time getting to know them.
NY Times Economix blog postings by Uwe Reinhardt. Medical device companies almost always sell their products to hospitals, surgicenters or physician offices. Reimbursement is the term for the payment by insurance companies to medical device customers, for providing health care services to insured patients. Without adequate reimbursement, customers will not purchase devices. Like regulatory affairs, don’t attempt to navigate reimbursement issues without experienced advisors. However, a basic understanding of the reimbursement process is critical to understanding medical device markets, and working with outside resources. The world’s most important insurer is US Medicare, and Professor Reinhardt helpfully explained some of the key workings in a recent series of blog posts:
For a more detailed discussion from Medicare itself, here’s a slightly dated report from 2001.
Raising Venture Capital
Mastering the VC Game by Jeff Bussgang. You’ll find many great pointers on raising VC funds in Tom Eisenmann’s Launching Tech Ventures reading lists (above). Recently, Jeff Bussgang of Flybridge Capital published an insightful and fun-to-read guide to how VC’s work. Bussgang includes case studies from his experience, including the medical device firm Brontes Technologies.
The Machine That Changed the World by James Womack, Daniel Jones, and Daniel Roos. Medical device entrepreneurs with clever strategies, great markets and brilliant technologies ultimately need to manufacture physical product. Most successful companies spend more dollars on cost-of-goods than on any other spending categories. Yet precious few CEO’s, R&D experts or Sales/Marketing execs take time to understand the challenges and best practices of managing manufacturing. While no manufacturer is perfect, Toyota built a leading automotive business by out-manufacturing their competitors. This book explains how they do it.
I’m still looking for great resources on European device regulations (CE marking and Medical Device Directive), more/better resources on reimbursement, a good introduction to designing and managing clinical trials, and a primer on bioethics and common medical device ethical issues. I’d love to get your suggestions.