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Group member Mike Tipton sent in this question:
I’m working with a start up company. One of our investors asked what are the biggest threats to the medical device space in the short term, and how can you best mitigate that risk?
How would you answer?
MEDICAL DEVICES GROUP ONLINE CHAT TODAY
The family is on vacation and I’m home alone with the dogs. Let’s try something new.
I’m hosting an online chat today. You can jump online today and we can talk about anything you like.
Tue, Aug 18, 2015 6:30 AM – 4:30 PM Pacific Daylight Time
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HOME EQUIPMENT INDUSTRY CONFERENCE
If you’re in the durable medical equipment industry, you probably know about Medtrade (http://medgroup.biz/Medtrade-2015 Atlanta, Oct 26-29), the largest Home Medical Equipment (HME) Expo and Conference in the US.
Director Kevin Gaffney made code MTEXPO for free admission for Medical Devices Group members!
Make it a great week.
P.S. If you’re an early adopter of Periscope, a new live broadcasting platform, find me at @medicalmarcom (which is also my Twitter handle).
a few years ago.. Apple was 88%+ of the profitability.. but a dramatically lower percentage of the total smart phone sales….
You have to pay attention to these things.. the same company that markets your app/device – is tuned in.. eg: which OS do you develop for first? We do Android… but think of iOS links…
Just about HAVE to…..
Burrell (Bo) Clawson
Double digit DECREASE in wages over recent years: disposable income is down
Then, for who you might target, women make the supermajority of decisions about healthcare for the family.
How people find information is through the Internet, but what do they use to buy in the mobile space? People hear about something, pull out their phone & order.
Apple’s iPhone has a wealthier group of owners. On sales sites iPhone customers offer about 20% more order value, site traffic & % of sales than Android. Do you have a compelling app to present your product and possibly order direct? You must have Apple, but can’t ignore Android.
Do you promote/list your smartphone app on your home page?
I would add….
* – sustaining innovation products..
If you say “better” – than that frequently falls in the category of sustaining innovation.. BRAIN DEAD MBAs – with little success in the market – may say “be 20% less than the same thing” – or be (at a minimum) of 80% better than a current solution.. this might work for an established company.. but not for a startup… If you take this approach – then you are going to have to get creative for getting your product out there.. examples abound in Pharma….
1. – go for disruptive innovation – if it looks like you are “blocked” by established outfits.. even if they have poor solutions…
Classically, people notice Squareroot of (2) difference.. It’s how we are wired… So.. go be 2X better – and you can start to differentiate your self.. 2X is not disruptive – but it minimizes risk and at the same time differentiates from sustaining differentiation…
1. – target the world.. don’t – DO NOT LISTEN to classical business people – like MBAs – who tell you it’s too complex.. thats PURE BS and either incompetence or inexperience talking…
The US is 4.6% of the world.. we are “early adopters” – not the whole market.
UNDERSTAND how to play in the AMAZON and ALIBABA space… you will LIKE IT.. IT IS THE VERY HOT LEADING EDGE of where med tech is going.. pharma and devices….
I CANNOT EMPHASIZE THIS ENOUGH…
1. – Plan on evaluating a DIRECT TO CUSTOMER METHODOLOGY.. how do you educate? how do you train? solve the trans lingual issue…. This is really important.. you are in a GOOD spot to innovate in the US.. but think beyond.. you WILL NOT beat GE with their (a) tax free profit stream and (b) offshore manufacturing technology…..
But you you CAN win a footrace game.. and a next day delivery game..
1. – HAH! I FINALLY get to work what I have been STUDYING on for 5+ years.. BELIEVE that there is the old way of doing things.. don’t abandon them.. they talk about how 80% of what you do is “business” – the other 20% is the actual thing that you do… so there are commonalities of method… but.. times are changing.. you move in front – and in this right direction or CROAK….
That sound of change behind you… it could be A TRAIN – so get off that bridge of RISK.. it could be the sound of the biggest wave you would ever WANT to surf.. so get your board ready and catch the wave… That sound behind you could crazed maniacs at Microsoft who DO NOT know WHAT TO DO – but you MIGHT – so they will rev up their redneck truck and try to CRUSH you and all your potential… (Run little rabbit!!! aka Netscape…)
We live in exciting times.. Joe is playing the game.. Bo knows how… !!
Burrell (Bo) Clawson
If your product is really so much better than anything that came before, there can be a lot of chatter generated on social media spreading your product’s capabilities faster than you could do with ads.
The question in my mind is how to maximize social media interaction? A smart phone app in some products may aid in the consumer interaction along with a web site. It used to take “boots on the ground.” Today, I think it is finger tips on the key caps.
David Lee Scher
Burrell (Bo) Clawson
If the product is for clinicians, then you covered that. If the product is for consumers, then you need both doctor and consumer buy-in, so OTC sales must have a more complex product launch to get traction. Startups have to budget both time and money to accomplish OTC sales.
Explaining that to an investor with a rational plan is critical.
From my experience, most device companies make it through the product development and regulatory phases to produce something viable. Regardless of the steps (e.g. 510k, PMA, etc) there is generally a well defined map you can plan out for navigating regulatory pathways. The real stumbling block becomes whether or not the adoption rate in the market is a success. The factors influencing success in that scenario are much more complicated and difficult to control compared to your product development and licensing. I think one key point investors should look at with medical technology companies is their relationship with clinicians and other key opinion leaders. Given how important clinicians are to product uptake, their involvement and input with a company could be a key point of focus.
you might also need to know how much device funding has moved offshore. Knowing US spending is – if I might observe – a declining percentage of overall spending..
It is easy to substitute off shore spending for US development.
I would also observe – that declining US spending does not logically mean that only better projects get favored.. there are too many OTHER – larger – factors in the funding pools.. like where you are – who you know – and how to finagle funds.. Merit.. is down the list – (in my opinion) on funding criteria..
ALSO… development on alternate channels of medical devices is increasingly outside of traditional medical device business structures.. iPhone medical devices are rapidly rising in importance.. it’s a different channel…’
So.. don’t just look at the traditional funding channels and methods.. they are not being replaced – just supplanted..
Dr. Anthony K.
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