For the past several years, every Candela employee has heard the story of the too tall lasers. It goes like this: All Candela US sales reps have company vans, to carry demo lasers as part of the sales process. Several years ago, after more than a year of development, a project team wheeled their latest greatest device out to the local rep’s van. You can imagine everyone’s surprise when the product just wouldn’t fit. For the next couple of months, the launch team fumed while the engineering group shaved a few inches from the design.
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?
On his blog Both Sides of the Table, Mark Suster of GRP Partners provides some of the best advice for startups, including his series on sales and marketing. Although written for high-tech startups, Suster’s advice is readily applied to medical device companies. His recent post on managing your sales pipeline is truly insightful. Enjoy it here!
On Tuesday, two news articles provided an inside look at a critical, but little-known, part of the process by which Medicare (CMS) determines physician payment levels for new procedures. A small American Medical Association (AMA) committee wields an unusually large influence.
If you are concerned with physician payment levels for your new procedure, check out the articles here:
Having trouble getting your medical device startup funded? Most likely, you have picked the wrong problem to solve. Think about it this way: When you launch a new medical device, you are asking physicians, hospitals, nurses and patients to change medical practice. That’s a big deal. A really big deal. So get it through your head that medical practice will only change if your new device solves an important problem. That’s why the lean medical device startup defines its problem hypotheses first. That’s also why the lean medical medical device startup tests its problem hypotheses early and often. You need to make sure you are solving the right problem.
What does ‘testing your problem hypothesis’ mean? How do you go about testing your problem hypothesis?
To test your business plan at its earliest stages, you have to find early adopters. Early adopters are the potential customers who have the problem you intend to solve, have tried to solve it on their own, and are willing and able to purchase a solution if one can be built. For medical device startups, true early adopters also have experience shepherding new products through the provider process (e.g. hospital purchasing and CFO) and payor process (e.g specialty coding committee and Medicare). Consequently, only early adopters are able to provide value-added feedback to the lean medical device startup. How do you find them?
The confluence of cheap computing power, cheap memory, and cheap bandwidth has fueled the emergence of web 2.0 companies like Twitter, Flickr, Tumblr, and foursquare. Because software-based-products are inherently extensible and mutable, these web 2.0 startups have rethought the concept of the product lifecycle, enabling their web-based products to evolve new capabilities monthly, weekly or even daily. (Contrast that to the less-than-annual releases of Microsoft Office.)
In turn, this rethinking of the product lifecycle has spurred dramatic changes to the way these companies and products are formed, financed, and managed. The term Lean Startup captures the philosophy and practices of this new way of thinking. Despite the relative immutability and non-extensibility of most medical devices, we can find ways to apply Lean Startup concepts to medical device startups. In a previous post, I discussed the Lean Startup concept of Product/Market fit in the context of medical devices. Now that we have defined Product/Market fit, the question is “how do we get there?”
How did we survive for so long before web applications like Gmail, Facebook, YouTube, and SalesForce.com? These web 2.0 applications have dramatically changed the way we live and work.
These web 2.0 companies are also dramatically changing the way startups are managed and products are developed. Eric Riescoined the term Lean Startup, to describe a new way of thinking about startup companies, their markets and their products. These Lean Startup concepts can be applied to medical device companies too. Let’s start with one of the most critical concepts: Product/Market Fit.
I just read Jason Cohen’s recent post on customer validation “Yes, but who said they’d actually BUY the damn thing?” (here). Given all the startups I’ve seen recently, this post really struck a chord. If you are starting a company or developing a new product, read Jason’s post and take his advice: Find 10 customers who will say “If you build this product, I’ll give you $X.” For medical device products, this is just a start towards early customer validation.