Caution: Physician-Owned Distributorships Ahead

Payments to physicians always raise conflict-of-interest issues for medical device companies (see my post on When Is It Okay to Pay Physicians?). These issues never go away. Today, the Wall Street Journal reported that five US Senators have requested an investigation into the legality of Physician-Owned Distributorships (PODs).

Not being in the spinal implant business, this is the first I’ve ever heard of PODs. What are PODs and what are the implications for medical device companies?

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David Weekly’s Introduction to Stock and Options

I have strong opinions about stock options, and my posts on the subject have been among my most popular (“Stock Options – Wilson’s Rules” and “Stock options – everybody in the pool“). For those of you who want a more basic introduction to stock and options, David Weekly just wrote a great primer on the subject. Check out his Scribd document: An Introduction to Stock and Options. It’s everything you need to know.

“The Dwindling Allure of Building Factories Offshore”

Interior of the 3m Co.(Minnesota Mining and Ma... — Image by The U.S. National Archives via Flickr

A recent article in The Economist describes “The dwindling allure of building factories offshore.” The article concludes that “Increasingly, it makes sense to make things in a variety of places, including America.”

I agree. Medical device companies face the same global opportunities and challenges as other manufacturers. While moving medical device manufacturing to a low-wage location sounds like a no-brainer, it takes real skill and experience to make it work well. Sometimes it makes sense, and sometimes it doesn’t.

How do you decide?

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Monitoring NE Medical Device Startups

Developing new products to improve patient care is the best part of being in the medical device industry. Who can argue with that?

You’ll find the most exciting devices being developed in venture-funded start-ups – a structure that provides the single-minded, do-or-die focus needed for success, along with the risk capital needed to fuel the work. Here in New England, we have a great medical device start-up ecosystem, with dozens of companies working to solve significant medical problems with great new devices.

Each quarter, the MoneyTree Survey lists virtually all venture financings in the US. The 2011 Q1 numbers just came out. Reviewing the data, I thought it would be a good time to look back at the New England medical device companies started in the past several years.

I was surprised by what I found.

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The Medical Device Matrix

Medical imaging systems have been talking to PACS systems for years, saving costs and improving care. I’m always impressed that my children’s doctors can access current and historical x-rays and MRI’s at the drop of a hat. Integration of devices with PACS enables medical images to be captured, backed up, transmitted, analyzed, and reviewed in other care sites and at other times. The age of the standalone medical imaging system is long gone.

Other medical devices are beginning to follow suit, interfacing with electronic medical records (EMRs) and hospital inventory management systems. Networked devices are on the way, and the age of the standalone medical device is heading to a close.

The era of networked medical brings challenges and opportunities. Are you ready?

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Fresh Money: 2011 Q1

Old Beggar, 1916, by Louis Dewis, painted just... — Image via Wikipedia

According to the Boston Globe, the top New England venture-funded sector in Q1 2011 was medical devices and equipment, at $145 million. That’s great news and a testament to the local medical device innovation economy.

On the other hand, life science venture capitalists in New England closed no new funds in Q1. That’s not great news. There has been some fund-raising activity, so we can hope for a better Q2. In fact, Bessemer Ventures closed a $1.6B fund in early April, which will include medical devices as a target investment sector, so Q2 is off to a good start.

If you’re raising money, you should know which life science funds actually did raise money in Q1 2011. How do you find out? Continue reading “Fresh Money: 2011 Q1” →

Customer-Facing Metrics for Product Launch Assessment

Adoption Curves — Image by Nathan Laurell via Flickr

Medical device product development is justifiably hard. Innovative devices push technical and clinical boundaries. Before being used for patient care, new devices must undergo rigorous analysis and testing. It takes months or years to bring new medical devices from concept to reality. So it’s a big milestone when the last signatures finally authorize product release, and the first units ship to the first customers. Time to celebrate? Not so fast.

Your first customers decide if you should celebrate. Initial shipments are just steps towards the ultimate objective – satisfying unmet customer needs and building a great business. How well have you really done? A couple of weeks ago I wrote about the need for metrics to be customer-facing. Here are a few suggestions for quick-and-dirty customer-facing metrics to help you assess your product launch.

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Kickstart Your Social Media Strategy With a Blog

My post on social media strategies for medical device companies remains near the top of my most-read list. If you still haven’t gotten going, Mark Suster of GRP partners explains both why startups need to blog and how to get started. Advice worth following.

Why Startups Need to Blog (and what to talk about …) (techcrunch.com)

Finding Your First (or Next) Medical Device Position

It’s March, so if you’re graduating soon you should be well into your job search. When asked for advice, I always give the same response to job seekers. Few of them take my advice, but it hasn’t stopped me from trying. This post isn’t intended to be a comprehensive guide to finding a job, and it really isn’t that specific to medical devices. It’s just one person’s view.

I am surprised that so many candidates expect to get in the door of a company by flinging a resume at an HR department. As a hiring manager I dread poring through piles of resumes, the vast majority of which aren’t even close.

Getting someone to hire you is like getting someone to buy a product. An employee is a big investment, and employment decisions are not taken lightly. As a job seeker, you are the both the product and the sales rep. The hiring company is the prospective buyer. In sales, you identify suspects, qualify them into prospects, then sell the prospects on the unique value of your product. Imagine a sales rep trying to close a sale by flinging a brochure at the purchasing department. How is that different from flinging a resume at HR?

I advise job seekers to think like a sales rep. Here are some specifics.

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Customer-Facing Metrics for Customer Service Operations

3010 Canton, Dallas TX, Ace Equipment Repair sign — Image by coltera via Flickr

I can’t say enough good things about Candela‘s service team. To a person they are skilled, dedicated, hard-working, customer-focused, and great to work with. The customers love them, so the team plays a key role in Candela’s continued market leadership.

When I rejoined Candela in 2007, Candela’s service team was understaffed and overworked, the result of a corporate hiring freeze, higher-than-expected service demand, and some turnover. While we were working extremely hard to support Candela’s customers, we were behind in preventative maintenance visits and sometimes late finishing product repairs. To me, it was obvious we needed two changes: more service staff and product reliability improvements. How could the rest of the company have missed this? How could we set up a system to make sure we meet our customer commitments in the future?

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