Robotic surgery has great consumer appeal. But it wasn’t always that way, and patients definitely prefer one brand – Intuitive Surgical’s DaVinci robot. Consumer preference helps drives system sales and ongoing device usage. We can learn a lot from Intuitive.
“Build it and they will come” doesn’t work when it comes to new medical procedures. For patients, unfamiliarity and unawareness breeds anxiety. Patients don’t come, and many companies experience slower-than-planned early revenue growth (aka the valley of death).
Treating and referring physicians have precious little time to explain new procedures during typical office visits. So most medical device companies create patient brochures for physicians to hand out, posters and videos for providers to display, and patient-friendly websites for additional research. Then they hope for the best.
Big pharma, on the other hand, goes big with Direct-to-consumer (DTC) advertising. Who doesn’t know the Nexium purple pill for heartburn? Valeant and Astra-Zeneca even advertised during the 2016 SuperBowl. Pharma experience makes one thing abundantly clear: a strong consumer brand can really drive prescriptions and brand preference. Yet for most medical device companies, DTC is simply out of reach.
That didn’t stop Intuitive and its DaVinci robotic surgical system. So how have they built the DaVinci brand?
No one does the vision thing better than Elon Musk. But he is even a visionary about vision. His grand visions inspire consumers and employees. But he also knows that visions need grounding in credibility. Overly grand ambitions generate skepticism and backlash. So Tesla has smartly scaled its vision over time, as its accomplishments have grown.
In almost every business, customers weigh the downside of poor product reliability more than the upside of new product features. Consumer demand for reliability has driven automotive industry design improvements for the last few decades.
Achieving reliability for innovative products is pretty hard. Tesla has delayed new models to hit performance, cost and reliability objectives. My guess is that they have some pretty sophisticated product testing. Nevertheless, real world experience is never the same as bench testing, and even for Tesla the need for after-sales service is a fact-of-life.
Most vehicle manufacturers and medical equipment manufacturers manage after-sales service as a profit center. Tesla has taken a different approach to its real world reliability issues. Innovative medical equipment companies can learn a few things from Tesla’s approach.
No question – 2015 was a really busy year for me. So, it’s been more than 12 months since I updated my list of healthcare venture firms that have raised new funds. I finally found some time this weekend.
At Fractyl we’re building an amazing team – the best I’ve ever worked with. Our team is super smart, highly productive, and absolutely dedicated to our mission. We see the big picture but we aren’t afraid to sweat the details. We also know how to have fun.
Great teams start with great recruiting. Recruiting best practices are important, but not enough. Read on to learn how we’ve built best team in medical devices.