Tag Archives: Insights

The Inventors Dilemma in Medical Device Start-ups

The Story

This Post may seem a little self-serving, it may be. But I celebrate everyone’s success and feel compelled to sing out when I see inventors going down the wrong road.  To some, the issue we are going to discuss is a bit of a chicken and egg scenario. I don’t think so. It is more like the birth of twins.

I have been working with a number of early-stage start-ups [5] over the last several years [3] and have witnessed 15 ‘funding pitches’, or more. I have noticed a trend. Those that get funding have strong technology, strong teams, some traction, and have real solutions to real problems all woven into a story that shows how they will generate revenue (the business case).

The Story

To an investor there must be a viable business case. The stronger the case, the more solid the ‘go to market strategy’, the less risk is perceived, the more likely they are to invest.

I watch as these inventors ‘pitch’ their ideas and never deliver the punch line. How will this solution specifically make money? The second thing that is missing is an integrated commercialization strategy [the reason to believe that the solution can be delivered to the target market].

Passion and technology are critical, but they are not enough. Crafting an effective commercialization strategy and packaging it into a clean, understandable story is an art. It can’t be formula driven.   Yes, there are several outlines that the story can be organized into, but it is the connective tissue that links the story elements together. Humans make emotional decisions. The investors have to feel the value as much as calculate it.

There are a number of ‘approaches’ to telling your story. Lean start-ups, the Canvas, the five T’s, etc. Many inventors get caught up in these approaches because they don’t have formal business [marketing] training. They think that there is a formula for business success that is disconnected from their solution.

What Can They Do?

Developing that commercialization strategy needs to be done by a “professional” marketer. Yes, it will cost some money. As a scientist, clinician, inventor it is baked into your mind that if you “build it they will come”. The investors that you are presenting to are smart enough to know that it is simply not going to be that easy.

As an inventor/entrepreneur you need to factor into the use of funds during the friends and family or angel rounds enough cash to hire a professional marketer to develop a commercialization strategy that is plausible. At the very least you need to have them scope the process that they would use to develop the story. A plan-to-a- plan. Find a good marketer and let them craft your story and determine the strongest go-to-market strategy.

 “Experience is what you get, right after you need it most.”

Make it a great day,

Tim Walker

Tim Walker is the Principal consultant for The Experia Group. A small consulting firm that specializes in providing experience and expertise during critical device commercialization phases to increase the probability of success. www.theexperiagroup.com.

Message Congruency in Medical Device Commercialization

The Story

Have you ever seen messaging related to a new product that was clearly disjointed? Maybe you saw a tradeshow booth that spoke of the product a bit differently than the sales brochure and the salesman’s pitch was a different story all together?

A VP of Marketing hired me to figure out why their dynamite new product wasn’t gaining the momentum that they had expected. This is one of the most enjoyable and potentially beneficial services that I get to perform for clients. Consider it a launch autopsy.

There are many other causes for a slow takeoff of a new product. For this particular client the issue was a confusing message.   So confusing that one might describe it as conflicting. Why is this a big deal? Walker’s Law of Congruency™ states, “As human beings we seek congruency. We constantly are trying to connect the dots. The price has to match the value of the product. The color schemes have to represent the claims, etc. When our minds detect an incongruent message we start to doubt everything about the issue or in our case the product. The customer loses trust in the product.”

How do we prevent incongruent messages as marketers? There are lots of factors, but simply we need to know exactly what our message is, more importantly everyone that is working on or near the launch must understand the message.

How do we stay on message?

We write. We publish the five documents that then serve as the source for every piece of collateral, every training script, every creative brief.

  • Segmentation
  • Targeting (user and buyer)
  • Product positioning statement
  • Product value proposition
  • Pricing strategy

These are the five documents that act as the base. Everything else flows from here.

Slide1

In addition to these five basic documents there is a format to the story line. It is not mine; it is something that is adapted from other sources.

  • Problem statement
  • Solution statement
  • Reasons to believe
  • Proof set
  • Call to action

If you publish the five core documents and keep any promotional materials and sales pitches in the five-element format it is unlikely that you will have incongruent or even worst conflicting messages.

“Experience is what you get, right after you need it most.”

Make it a great day,

Tim Walker

Tim Walker is the Principal consultant for The Experia Group. A small consulting firm that specializes in providing experience and expertise during critical device commercialization phases to increase the probability of success. www.theexperiagroup.com.

 

© 2015 The Experia Group, LLC

STP Marketing Brings FOCUS to Medical Device Commercialization

The Story

A couple of years back, I was leading a discussion with a group of Product Mangers about, “Getting the Message Heard” in the crowded arena of Medical Device Marketing. The group felt as though their product messages were getting over shadowed by the “Big Boys”.   They were complaining that to reach every physician in the relevant specialty they would have to spend an enormous amount of money.

The question I asked in return was, “why are you trying to reach every physician?”

I received several blank stares, a few chuckles, and a yawn. The conversation turned toward the power of FOCUS. My follow up question was, “When you are in a crowded room, say a cocktail party, how do you make sure you are hearing the person that you are talking with?” The responses: get closer to them, lean in, watch their lips to see if I can see what they are saying, isolate them in a quieter location, if it is important we leave the room.

The last question was, “what do all those techniques have in common?” The response: FOCUS. By increasing the Focus, concentrating our attention on the one voice that was important made their message and in return our message get through.

Slide1

So what is the allegory in marketing? Segmentation, Targeting, Positioning (STP). STP Marketing is the thought construct that provides a vehicle for bringing focus, narrowing the beam, to those physicians who are most likely to want to use the device that you are preparing to launch.

Segmentation, Targeting, Positioning

For this post, I am really just trying to introduce the topic. There will be subsequent posts that go more into detail about each of these three elements. There are whole books dedicated to STP marketing and I encourage you to read them. The really cool aspect of STP marketing is that it can be used upfront in the new product development process to determine where the next right device opportunity is, or at the backend to focus the messaging of a device that you have inherited.

When you think about STP marketing or if you are trying to explain it to a colleague or supervisor I use the analogy of hunting.   Perhaps not politically correct but quite effective in getting the concept across.

Segmentation – Identifying the part of the forest you should hunt in. Typically looking for habitat that is conducive for your desired prey.

Targeting – Knowing the nature of your quarry to an extent that you are excluding large numbers of alternative quarries.

Positioning – Using the right equipment, bait, where to build your blind, what type of call or decoy might be helpful.

Practical Example

My first successful application of STP marketing was quite by accident. The device that we were commercializing was used to cool a blood-based mixture referred to as cardioplegia. This particular device utilized counter-current flow to optimize the efficiency of heat transfer.   It also featured two other features, it had the lowest priming volume of any competitive devices and it was easy to use, once you had it set-up.

3M Plain & Simple

Segmentation – hospitals with high procedure volume (ease of use), a focus on pediatric surgery (low priming volumes), which believed in cold-blood cardioplegia, had an active PTCA practice (quick set up required), and was a teaching hospital (ease of use)(more likely to have University educated Chief Perfusionists).

Targeting – In those hospitals identified above, the probability of success went up dramatically if the Chief Perfusionist was a graduate of The Ohio State University Perfusion program. Why, because on the final exam was a physics question, ‘Which type of flow is most efficient when trying to remove heat from blood?’   The answer, “counter-current flow.” No selling or education was needed from the sales representative; they were already biased to believe.

Positioning – For perfusionist who are required to provide cold blood cardiolpegia in the most demanding of environments. The [device name] provides the most efficient cooling, lowest prime, and over all easiest to use system on the market. Utilizing a heat exchanger technology that maximizes cooling surface area, uses the most efficient exchange method (counter-current flow) all packaged in an innovative compact housing to minimize prime volumes.

The [device] went on to become the market share leader at a premium price.

STP thinking is not easy to reduce to practice with meaningful results. It requires a good deal of insight that can only come from un-paralleled understanding of your customers. For me, Segmentation is always the greatest challenge. To make it meaningful and differentiated from the competition requires a truly unique perspective.

Slide1

More to come…

“Experience is what you get, right after you need it most.”

Make it a great day,

Tim Walker

Tim Walker is the Principal consultant for The Experia Group. A small consulting firm that specializes in providing experience and expertise during critical device commercialization phases to increase the probability of success. www.theexperiagroup.com.

 

© 2015 The Experia Group, LLC

Hard and Soft Cost Reduction defined for Medical Devices

The Story

I received a text, after the Value Proposition post, from a colleague who asked me to define the difference between Hard and Soft cost savings. This is the response to that request.

The Context

From the Value Proposition blog post: “Material management processes within hospitals have become much more sophisticated over the past decade. They no longer will “buy” a good story. They need to see the health-economic data to believe. Realized increases in value are considered hard savings. Those unrealizable cost savings that you include in your story are considered soft savings. Hospitals will hold you accountable for whatever value increase that you claim/promise your product or service will deliver.”

Slide1Hard Cost Savings Defined

The Hard Cost savings are those resource utilization reductions that are tangibly realized. Such as, your new device does the jobs of three devices.

As an example, (Price of device 1 + Price of device 2 + the Price of device 3) – The price of the new combination device = Hard cost savings.

($100.00 + $60.00 + $35.00) – $125.00 = $70.00 x 1,000 (the quantity of devices used) = $70,000 (realized cost reduction)

Soft Cost Savings Defined

Slide2The Soft Cost savings are those theoretic savings that don’t add up to a real reduction, or are those that may or may not be realized based on a probability, or those that might be saved by a department that is not in the same service line as the therapy that your new device is intended for.

Example 1: Let’s say that using your device will reduce OR time by 10 minutes per procedure.   OR time is valued at a rate of $1,000 / min. Therefore you tell the hospital that they will save $3,000 per procedure. This is a soft cost reduction. Why? The hospital has three OR suites that run concurrently. So any corresponding labor reduction won’t reduce staffing. The timesaving isn’t enough to do an extra procedure, so there is no increase in capacity. So the likelihood that the hospital will realize the benefit, in a monetary sense, is low.

Example 2: The national numbers indicate that a Serious Adverse Event (SAE) occurs for this procedure at a rate of 1/1,000 procedures.  Nationally there are 100,000 procedures done. 100 SAEs per year. Your device reduces the probability of that SAE occurring to .1/1,000, so there would be 10 SAEs per year. The cost of that SAE to the hospital is $100,000. So, Nationally the cost of those SAEs is $10 Million dollars.

The hospital you are selling to does 500 procedures per year. The probability that they will experience an SAE is .05%, not very likely. The national story is solid but the local reality is that this is a Soft Cost reduction.

Hard vs. Soft

Focus on the hard costs as a promise. The soft costs are bonus points, emphasis them in hospitals where they are more likely to matter. From example 2 above, if they are a hospital that does 10,000 procedures per year, or if they recently experienced the SAE they might be more inclined to see the benefit in the soft cost.

Remember

This post only deals with the monetization of the value proposition. If your product doesn’t add utility the cost of it doesn’t really matter.

You sell locally, not nationally. Make sure that when you localize your story it still plays. As an aside, your value proposition may not play across borders. Don’t assume, do your research.

“Experience is what you get, right after you need it most.”

Make it a great day,

Tim Walker

Tim Walker is the Principal consultant for The Experia Group. A small consulting firm that specializes in providing experience and expertise during critical device commercialization phases to increase the probability of success. www.theexperiagroup.com.

© 2015 The Experia Group, LLC

www.medicaldevicemrktgblog.com

Positioning Statement Development for Medical Devices

The Story

Once during a staff meeting, the marketing team was discussing the portfolio of products that were under development. Of the Product Managers gathered at that time, five of them were preparing to launch new products and two were post-opportunity recognition and pre-requirements planning.

The discussion worked its way around to the realization that only one of the seven managers had formally written the “positioning statement” for their respective products. We bantered about the question of when should you write the positioning statement for the new product. There were positions voiced around the table that ranged from, after verification testing, to after limited market evaluations.

Coming out of that meeting all seven managers were given the assignment of writing position statements for their new products.   Not surprisingly, over the next three days I was asked, “What makes a good positioning statement?” I was also asked, “Why one needed to be written them at all?”

Why write product-positioning statements?

I have always believed, that the most enjoyable part of being a Product Manager was the early phases of defining a potential new product. No boundaries, no conditions, a clean canvas upon which you painted a dreamscape for your product. This is when you reach for the stars. This creative writing exercise, for me, often resulted in two-to-five pages of text and included a description of the clinical environment, the nature of the clinician character, the problem statement, the perfect utility that the product could deliver, a forecast, a theme and never, never was restricted by the technology that was known to my company at that time. Very few of these stories have ever been read or even been seen by my colleagues. I used to think that it was a silly indulgence. What I now believe is that it is a critical aspect, which differentiates good new product definitions, from great ones.

What are marketers, if not the inventor of the story and the keepers of the vision?

Book with light

Why write them?

Simply, we need to write the Product Positioning Statements to be able to concisely describe a vision to others, so that they can join us in making that story come to life. It is our elevator pitch to the organization and parallels the sales persons elevator pitch to the clinician customer. It is the executive summary of the multi-page story.

One real benefit to me has been that writing and telling the story imprints a vision of success in my mind and spirit. These visions of success often infected those around me, and instill a sense of confidence within them.

When should we write them? 

So I think it is obvious that the value proposition should be written before the requirements planning process. The expense associated with research and other VOC activities is significant. You owe the organization a complete vision before you incur those expenses. If you can’t generate some excitement with your vision then you shouldn’t move forward, yet. Requirements planning reduces the grand story to something particle, that is tied to internal limits of resource and capability. The initial positioning statement never survives to the launch. Keep it current and revise it as needed.  Always ask the question, “Is it still worth going after?”

What makes a good one?*

For the first ten-years of my marketing career I didn’t know what made a good positioning statement.  I wrote good ones instinctively and mine were never consistent from product to product. At some point I took a class and some really smart instructors from Stanford laid out a template. I use this template as a starting point for every positioning statement I have written since then.

There are seven distinct elements required for a complete positioning statement:

  1. Customer identification
  2. Description of those customers problem
  3. The name of the product (preliminary)
  4. A basic description of the product utility
  5. A description of the components that offer the most relevant value (functional or emotional benefits)
  6. How it is different from competition
  7. Reasons to believe

 Format of a positioning statement

The statement is typically written as a single paragraph, I use two.  However, your style can vary as long as you include the seven elements, can recite it in 15 seconds, and it test as a strong statement. The paragraph typically follows the following structure:

 For… . Who… . The… . Is a… . That… . Unlike… . It… .

 Example (completely fictitious):

For the cardiovascular surgeon, who believes in the clinical benefits of beating heat surgery. The Squid is a combination rib spreader, holder, and electrical isolation device. The (that) Squid offers maximum visibility and access to the heart, hands-free stabilization and counter traction, with the added ability to electrically isolate small areas of the muscle, all to provide a still and placid surface on which to sew. Unlike many devices on the market today that perform only one of these functions and do not offer an integrated solution to the problem of high quality stitching on a beating heart, such as the: [list competition here].

The Squid (it) is offered by the leading manufacture of surgeon-focused equipment in the World today. It was designed for the unique requirements of the CV surgeon as directed by Dr. Spock, head of surgery at the Never-Never Land Heart Institute.

How strong a statement is it?

Test your statement against the following four questions:

  1. Is it compelling?
  2. Is it distinct?
  3. Is it achievable?
  4. Is it sustainable?

Have a group or independent marketers score the strength of your statement against the above four questions. Have them provide the reasons for their scores and then try to incorporate their feedback until an independent group scores you strong on all four counts. Strong, average, poor makes a good scale.

*I have committed this template to memory and I don’t have any of the original course material. There is no way I can attribute this to its source. Suffice it to say that I did not create it and take no credit for it. I have used it more than 20 times and every time the exercise has proven invaluable to me.

“Experience is what you get, right after you need it most.”

Make it a great day!

Tim Walker

Tim Walker is the Principal consultant for The Experia Group. A small consulting firm that specializes in providing experience and expertise during critical device commercialization phases to increase the probability of success. www.theexperiagroup.com.

Building a Medical Device Marketing Team

The Story

In my last two job assignments my role has been to build strong marketing teams. Both times there has been a nucleus of talent that were identified as “Product Managers”. These product managers had a wide variety of knowledge, skills, education, background, and ability. Each manager was a valuable asset to the department; but only a handful had the classic marketing skills and education that one would seek in a prototypical Product or Marketing manager. The choices were pretty straight forward, 1) clean house and start from scratch, 2) build and develop the people you have on board already, 3) or some hybrid. In both cases there was pressure from above to selectively clean house.

 Building a Team

Great marketing professionals come in all types of personalities, backgrounds, and education. In general terms, you need a person who is creative and disciplined, analytical and decisive, service oriented and focused, listener and doer, in short you need a schizophrenic master of all things.

Another way of looking at it is, you need many, practical, aware, mature, talent rich, knowledge rich, persons who possess all the tools that you learn in MBA classes. Or, you need a collection of professionals all who have unique skills sets that when combined give you a capability that leads to success.

In my experience it is nearly impossible to find a number of prototypical marketers with which to build a team. Too many A-players can lead to disruptive environments. Institutional memory is too important to discount. In the medical device world, technical understanding, clinical understanding, customer relationships, and marketing skills all have great value. They are seldom present in any one person, at the start.

There are so many variables in building a team that it is almost impossible to account for them all, intellectually. Sometimes it just has to feel right. What I look for in a team member are the intangibles.

  • Positive attitude
  • Appropriate motivation
  • Ability and willingness to learn
  • Strong communications skills
  • Situational awareness

The tangible aspects of the team members are that they must bring significant value. The value typically manifests in a specific knowledge or experience base and are more than likely surrounding one or more of the following:

  • Technical knowledge
  • Clinical knowledge
  • Process skills
  • Marketing skills
  • Relationships
  • History

If your team members bring value and have all the intangibles (core skills) you are likely to be able to build a team that will be successful.

Framework for successful teams
Framework for successful teams

 

My advice

Set a timeline for yourself to evaluate the current team members in several different settings, say 90-180 days. Be intentional about that activity. Hold yourself accountable for personal de-briefing sessions. If at anytime you determine that a team member is lacking in one of the above five areas or does not bring significant content value, start planning an exit strategy for them.

 Watch out

Make sure that your direct supervisor understands what your approach will be and fully supports your approach. Evaluation over a 90-180 period might look like a lack of leadership or decisiveness. Don’t make that mistake; keep your chain of command fully informed.

 My answer

A hybrid approach to building the initial team has been my choice every time. After the evaluation period it becomes pretty clear who will stay and who will go. It is not always clear when the change needs to happen. Do I think that cleaning house has a place, yes I do. Do I believe that building a team without any change to personnel is possible, yes.   If you do clean house be prepared for significant disruption and long nights.  If you don’t clean house, be prepared for a slow, patient, teaching process.

In my career, I have only needed to make three (3) changes out of 60 inherited team members.  By choosing to develop team members and let them contribute the value they brought to the team I have accepted the responsibility to teach. Fortunately or unfortunately I have a teaching gene.

“Experience is what you get, right after you need it most.”

Make it a great day,

Tim Walker

Tim Walker is the Principal consultant for The Experia Group. A small consulting firm that specializes in providing experience and expertise during critical device commercialization phases to increase the probability of success. www.theexperiagroup.com.

Annual Product Performance Reviews for Medical Devices

Last night, at 1:34 AM, I was awoken by a chirping smoke alarm, indicating that it needed to have a new battery installed.

After finding the ladder and the new battery, quickly making the change and jumping back into bed, I started thinking about how that experience paralleled my work history.

The Story

In the early 80’s, as a young product manager I received a call from a production supervisor telling me that my biggest selling, most differentiated, oldest, product line was suffering from a 10% manufacturing yield and that I should get ready for significant, sustained back orders. I wasn’t paying attention to my all-star product; I had moved on to more creative work. This is when I instituted the, “Annual Product Performance Review” (APPR).

Discipline vs. Creativity

If I had only replaced all the smoke alarm batteries when I was supposed to, I would not have been shaken from a good night sleep. Discipline often escapes the truly creative person. As a product manager you need both discipline and creativity. One way to manage these sometimes opposing attributes is to schedule the maintenance activities surrounding a downtime in your otherwise busy calendar. Never schedule them during sales meeting prep time, never during trade show season, etc.

Annual Product Performance Reviews, the minimum

I call this maintenance activity an APPR. As a product manager we have to care for our product lines, particularly when they have been on the market for a while and the excitement of the launch has worn off. Spending one day a year, on each of your product lines is a minimal amount of your time invested that could prevent you from being shaken from a good night sleep by an overlooked issue. What kind of an issue? Quality shifts, pricing slip, share slip, new competitive entry, shifting sales force focus, slipping gross margins, resurgence, increasing complaint levels all these potential issues are leading indicators of critical times for your product line.

The APPR can be done anytime of year. At its core, is a year-over-year comparison of key metrics. The more years you have data for, the more likely you are to see a trend. It is good to partner with finance or IT the first time you conduct this type of analysis to make sure your data sources are complete and comparable. For some product lines a monthly review may be more appropriate.

Each APPR took a day and included a review of the following metrics:

  • Units, total
  • Unit, mix
  • Average selling price (ASP)
  • ASP by mix
  • Complaint rate by type or category
  • Manufacturing yields
  • Gross margins (GM)
  • Revenue
  • Revenue distribution my geography
  • Revenue distribution by sales territory
  • Number of active accounts
  • Number of accounts that went inactive over the past 12 months

These metrics are all loaded into a simple excel file, which automatically did the year-over-year trend comparison and some simple charting. The output was the APPR dashboard. Often this dashboard pointed towards areas that needed my attention and a bit of investigative work.

Today, I have created custom dashboards in salesforce.com that provides real time comparisons for new product launches, after one-year the dashboard changes to a periodic based trend analysis that has taken the place of the APPR dashboard. The important thing is to monitor the product lines you are responsible for and take nothing for granted. This is a good application of the, “productive paranoia” concept that Jim Collins discusses in his book, Great by Choice.

A Happy Ending

So what happened with the product that had the yield issue? After managing a yield of 10% and all the logistical and customer service issues that resulted, for over a year, a new manufacturing process was validated and up and running.   The product was re-launched and regained 96% of it former share dominance.  The product was just that good. The customers allowed us a second bite of the apple.

Since instituting the APPR, have I been shaken from a goodnight sleep by unanticipated product issues?   Of course, the key being unanticipatedunpredictable or random issues.

“Experience is what you get, right after you need it most.”

Make it a great day,

 Tim Walker

 Tim Walker is the Principal consultant for The Experia Group. A small consulting firm that specializes in providing experience and expertise during critical device commercialization phases to increase the probability of success. www.theexperiagroup.com.