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.
I’m surprised that there hasn’t been more written about Ardian since their sale to Medtronic last month. It may be the largest venture-backed medical device exit to-date. Ardian’s $800M-plus-milestone-payments may end up being larger than Medtronic’s purchase of CoreValve for $700M-plus-milestone-payments in 2009. Even more unusual was Ardian’s relatively early-stage. At the time of sale, CoreValve had implanted devices in 2,600 patients at 125 centers in 25 countries. Ardian exited much earlier, with about 150 patients treated.
Overnight sensations don’t happen overnight. While Ardian seemed to come out of nowhere in 2009 and exited large in 2010, the truth is that the company had been hard at work for almost 10 years. Ardian achieved more than 10X return on $66M invested – at least $732M of value created, before milestones. While the end of the story is still unwritten, Ardian’s first few chapters form a great case study for medical device entrepreneurs and investors.
Over the past several months, I’ve had the privilege of meeting many entrepreneurs who are raising funds for new medical device startups. One common VC refrain they hear: “Come back when you have more data.” Many times this can be a VC’s way of saying no without saying no. Sometimes though, the VC really means what s/he says: the current proof-of-concept data hasn’t proved the concept. It’s not just startups that face this challenge. I’ve seen weak proof-of-concept data in bigger companies too. How can you make sure your proof-of-concept data is solid?
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?
Is there a medical device company anywhere that doesn’t use Microsoft Project to manage product development projects? After all, it’s a time-tested, incredibly powerful Gantt-charting tool, and it plays nicely with Microsoft Office. What’s not to like?
Okay, maybe I have a few pet peeves:
Project management is much more than just a Gantt chart. I want tools to help manage shared files, calendars, bug/issue-tracking, and assignable tasks.
Distributed teams need to be able to access and update the project plan in real time from anywhere. Sharing mpp files via email is a recipe for version conflict. And who wants to shell out for a copy of MS Project for everyone on the team?
Too many times I’ve seen MS projects enter the land of tangled task links, where timelines in project plans no longer make any sense. Too many times, project planning meetings screech to a halt so distraught project managers can run off and burn several hours untangling links and rearranging tasks.
I could go on. So I’ve been looking for a better solution for years, and I’m starting to see signs of life beyond MS project.
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.
You can’t help but be moved by the plight of the patients in Saturday’s NY Times article “New Drugs Stir Debate on Rules of Clinical Trials.” The article caused me to reflect on my role, as a medical device executive, in the design of clinical trials. The story presents the ethical challenges of a randomized controlled clinical trial (RCT) of a new drug, through the story of two patients in the trial. The same challenges faced by drug trials also apply to medical device trials. What are some of the issues and what are some of the options?