We’ve written a number of articles on Commercializing Medical Devices and Digital health products and have received a steady stream of questions since then. To help start-ups conceptualize their product ideas in Healthcare IT, NIH and several government agencies have various funding and mentoring programs in place. These programs help start-ups with good commercialization strategies and best practices to your unique needs. To dive a little deeper into some realities of commercialization, I would like to share my recent presentation titled “Commercializing your Healthcare Product” delivered at Larta’s NIH – CAP Commercialization Training Workshop (CTW).
The market for healthcare information technology continues to show enormous growth potential while the industry is transforming itself. Commercialization of Healthcare IT products can be a daunting task for the untrained. A start-up has a much better chance of success with a well defined business strategy, specially if you are looking for capital in today’s constrained venture funding market. Important things to consider in your business strategy –
- Healthcare providers and payers will consider new technology systems if it supports their evidence-based care models with cost, value and safety imperatives
- Changing standards and increase regulatory scrutiny requires you to be laser focused on compliance requirements.
- Healthcare market are looking for “Solutions” model that enhance your product with various value added services. This requires a good distribution and pricing models associated with your product strategy
- Understanding and consider new markets, including focus on launching first outside developed markets
Healthcare IT solutions firms need to first understand their customer and what are the market trends and needs, before creating a product, marketing, sales and distribution strategy. Overall business strategy will require clear and honest assessments of your readiness and setting up milestones across all business functions. These strategies and milestones together with associated funding request makes up for a sound financial and business plan.
Let’s talk in-depth about some of the customer interaction touch points that should be part of every strategy for a Healthcare IT Solution start-up:
In Healthcare, understanding the Payer v/s Benefiter v/s User interactions is critical to your business strategy and to your ability to develop a compelling marketing plan.
Marketing is a science and the art of creating, communicating and delivering solution offerings that have value for customers and partners. Marketing helps you choose or define your target markets through market research and analysis as well as understanding your customer needs, communicate with market at large your brand, advertise to the world and generate leads. Some things to focus on –
- Market Research – Why should good Market Research matter? Without good Market Research, you cannot identify realistic customer needs, understand what drives customer loyalty, co-relate to what customers expect from product innovation, assess competition and define customer segmentation for your sales and distribution models. Leverage search engines and numerous free and paid web applications to know more about your customers and competitors. Check out on several best practices to test your innovation in product functionality or distribution models with good market research tools.
- Digital Marketing Strategy – Build a solid digital marketing strategy and get the best return on your marketing investment. There are several best practices and tools out there that can drive exponential growth compared to traditional marketing methods. Content marketing is one such powerful tool that can make lead generation, sharing information and corporate communication cost effective and easy to implement, while enabling you to track the metrics for success. You can use content marketing to build new client and partner connections, create a networking effect to drive revenue, manage Search Engine Optimization (SEO) and generate qualified leads
- Brand Strategy – Developing your brand strategy requires investment in time, creative thinking and use of good market research that correlates to your product and sales strategy. Both qualitative and quantitative research can help you develop a good brand strategy that can create customer loyalty and easy acceptance
Using all of the above mentioned action steps, you get a powerful workflow to first “State your Hypothesis”, then “Test the Hypothesis”, followed by testing your Product or Solution with a prospect. This iterative workflow can help you “Verify” your Hypothesis and your Product or Solution before you go all out to commercialize your business.
Distribution and Pricing
Healthcare organizations today are adaptable to innovative business models for products and solutions that can provide value and efficacy. Healthcare IT is leveraging SaaS and subscription models, are open to leverage consulting and technology services and open source products. This change is sourcing models is bringing change in Healthcare IT vendor’s business model from Product only play to Solutions model.
It is critical that your business understands its competitor(s) to provide a compelling solutions model with a competitive distribution / sales strategy.
Interoperability Focus in your Go to Market Strategy
Healthcare IT users are very focused on Data and value the data considerably. This would mean your solution can be of higher value if it can create, manage and distribute useable data. Understanding your market includes understanding the enterprise technology architecture of Healthcare organization, as it provides you with clarity on how to design, market and implement your solution. Products that are isolated and do not interface well to other products or solutions are no longer in the shortlist of customer’s procurement strategy. For a start-up, a well designed strategy, either as a product, service or both that can be developed over time is very important before commercializing.
Almost all Healthcare IT products today are likely to be used in conjunction with other existing technology products. Your marketing and sales message, your distribution strategy, your solution mix (integration and implementation services) are all dependent on a good interoperable product strategy. The simplest way to achieve scalable interoperability is to consider building an Integration Hub that can be part of or an extension of your product. See slides 22 to 24 for more details in the presentation.
Summarizing and highlighting actionable steps, a start-up can benefit from: –
- Defining your market and your customers very clearly
- Invest in Marketing and Sales –Think Opportunity Cost
- Differentiate your product, your business model or brand to compete with free products or well entranced competitors
- Create a short term (1 year) and long term business plan with market analysis, positioning, launch and demand creation as the key objectives
- Continue with research and analysis, it brings you brand and you closer to your customers and helps you define and address the customer needs better
- Define multiple success criteria, track / measure them and modify your business strategy to improve on the metrics