5 min reading time

Perhaps the most interesting part of leading the world’s largest medical device community is getting member questions. (I publish a fraction of what I get to spare you the repetition and spam.)

I hear from a lot of members in need. They need capital. They need distribution. They need talent. (See “How to help members who need A LOT of help.”)

And often times, what they REALLY need is this one thing first.

They need to convince those who might help them,

I can be successful and I’m worth your time.

We – your future investors, consultants and advisors, distributors, and employees – need to hear you tell us one or more of the following.

1. “I have a unique selling proposition.”
With money for medical device innovation having significantly dried (see MD+DI’s “Venture capital firms active in the medical device field”), smart investors want to fund product startups with a real chance at gaining market share. A “me-too” product offering isn’t going to do that.

The same for distributors. They carry thousands of products. They are not looking for more.

The same even for consultants like me. If I can’t understand your unique reason for being, I suspect we’re not going anywhere fast and we’re not going to have a successful engagement. (See “The First Three Questions.”)

2. “I have a solid business strategy.”
Remember “The Four Ps” from basic marketing: Product, Price, Place, Promotion?

I’m pitched new “products” from physician entrepreneurs all the time. They often have a handle on their “price.” It’s “place” (distribution) and “promotion” (marketing strategy and execution, commonly called the “Go-to-Market Strategy”) where things get hazy.

And that’s just the marketing part. All the other parts of the Go-to-Market Strategy including operations, regulatory, manufacturing, reimbursement, and so much more need to fit together.

Without these, don’t expect the funding or distribution you need.

3. “I can offer your sales team solid training.”
Distribution houses are reluctant to take on conceptual or difficult sales without being sure you are there to train their employees.

Features and benefits, yes, and also the unique selling proposition why your product is better than present solutions. Perhaps an education about how your product solves a new problem the market and future customer need solved, or one brought on by new regulation, such as the Patient Protection and Affordable Care Act here in America.

Again, sales reps have way too many SKUs to carry. You can’t expect they’re going to spend too much time learning about a new product… and what time they DO spend has to be efficiently spent. If your training does not spell everything out for them, don’t be surprised if they are unprepared on a sales call, resulting in poor sales.

With distributors, you are renting a portion of their time. It is all about their time – the time they invest in selling your product.

Distributors want winners right out of the gate. Don’t expect them to throw good money after bad to give you a second try. Misfires are expensive for them and you.

4. “My product will do a high volume and/or have a healthy margin.”
It comes down to profit potential.

How much money can the investor or distributor hope to make? What is the upside earning potential for your employees in the form of bonuses?

It’s worse in the case for distributors. What is the opportunity cost of selling your SKU versus an incumbent’s, especially if there is a private label option offered by the distribution house.

If you can’t demonstrate how much more money we’re going to make by taking an interest in you, don’t expect to hold our interest for long.

What’s in it for me?
Ultimately, the people you need for help want to know what’s in it for them first.

Be prepared to answer them.

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Aaron Call
medicoventures.comx
aaron@medicoventures.com
Thanks Joe. Great points. At MediCoventures we spend a great deal of time helping new entrepreneurs or physician entrepreneurs position their venture to be able to answer most of the questions you pose. We encourage answering questions regarding value proposition and market opportunity as soon as possible to determine if a venture is “fund-able”. To do this we walk through an 8-point criteria that looks at everything from market opportunity and IP through clinical feasibility, regulatory and reimbursement. By doing this it puts the venture in a better position from the beginning or, on the flip side, it may reveal that the venture is not going to be lucrative after all…which is a good thing to know ASAP.

Dave Sheppard
davesheppa@gmail.com
Joe, excellent post ! You captured a lot of key points. In this comment, I will focus on just one item that I am noticing that many start-ups have not fully anticipated or analyzed – the regulatory path for each separate market they want to pursue. It’s critical to understand that a CE mark or a 510K (while both great to have in their own right) are not necessarily tickets to entry for all global markets. And without the regulatory clearance on a path for approval, most distributors will not want to waste their time. For a small company, one thing they can consider is to have a local partner help them with the regulatory clearance. Sometimes this can expedite entry into the market. As with any other key alliance or business deal, if a start-up chooses this route to market, it is also important to capture the termination “what ifs” up-front so there is not ambiguity later on. In quick summary, there are many paths to market and it’s important to fully execute on all aspects of the route chosen. And there is usually benefit from seeking many alternative inputs before making the final decisions that impact your business for years to come.

August Charles Trevino II
bcms.orgx
august.trevino@bcms.org
Product or brand recognition is very important to start-up companies with products amid at the medical community. No physician wants to experiment with their patients or practice. One of the best ways to overcome this is to join a medical society. Become part of the medical community, get known the physicians, get feedback and then proceed with your marketing efforts armed with an inside prospective and advantage. I am a director with the Bexar County Medical Society and we have a program called the Circle of Friends, the Circle of Friends program is a great way to reach out and promote your products or services to the Bexar county medical community and our 4800+ physician membership. In addition valuable (PR) as an honored sponsor and supporter of the Bexar County Medical Society and our local medical community. I do know that most medical society across the United States have a similar program. I highly recommend starting here prior to any heavy marketing, because this will give you the insight needed to produce a successful campaign.