By Moshe Engelberg, Researchworks, Inc.
At most med device companies, there is no shortage of new ideas. Lots of new and potentially promising innovations may be on the table for funding consideration. This article explains how to make your early-stage business case based on consideration of what should maximize revenue, what is technically feasible, and what customers want to — and will — buy.
Then, we’ll drill down into really understanding which device problems customers perceive as meaningful. Those answers help device developers determine what customers’ needs and wants are, so that customer perspective appropriately influences innovation investment decisions and med device companies don't “drink their own Kool-Aid.” While this article focuses on the factors surrounding new products and customers, note that there are other decision drivers — such as fit with the brand, working capital, and company maturity — that will affect which innovations are supported.
Viability, Feasibility, and Desirability
How do you make the strongest possible case to win sufficient internal funding for your new device idea? As a starting point, consider the three-factor innovation model, central to human-centered design, to guide your efforts. Successful innovation lies at the intersection of what will maximize revenue (business viability), what is reasonable to make (technical feasibility), and what customers want and will buy (customer desirability).
Most medtech companies are comfortable quickly diving deep into the technology and the money. Where many fall short, though, is serious and timely consideration of a product’s desirability. Consider this example: Your revenue projections for a game-changing monitoring device promise $60M in top-line sales within three years, so business viability looks good at first blush. Your engineers have looked at preliminary minimum viable product (MVP) requirements and anticipate no problems. That bodes well for technical feasibility. Then, because your team believes so strongly in the idea, you assume “of course customers will want it and buy it.” So you check the box next to customer desirability.
While you might be right about what customers want, there is too much at stake to overlook an examination of what they’ll buy. Dive deep into understanding and validating what meaningful problems exist for customers: their needs and wants, what value they’ll see in your solution, and what they will pay for. If you haven’t ascertained from customers that a) you're solving a problem they perceive as meaningful, b) solving it now is important enough to make it a priority, and c) they will pay for the solution, you will be hard-pressed to convince management that it should invest in your idea.
Now, that does not mean that demonstrated customer desirability guarantees funding. There are all kinds of reasons — both valid and flimsy — that management might say “no.” But without showing proof that customers want what you have in mind, and are interested in buying it, your chances of winning are greatly reduced. After all, why should your company invest in developing something they're not sure customers want?
Keep in mind, too, that your manager, GM, CEO, and other internal stakeholders are your “customers” as well. In their minds, the investment equation may be all about money. To get their buy-in, you need to speak their language. You do that by having sufficient evidence and conservative projections that your product will, in fact, make money. Then, back up that conviction with an unassailable case for customer desirability.
Demonstrate Desirability First
Too many medtech companies have lost millions investing in unsuccessful innovations because they became so enamored with their offering that they literally couldn’t imagine customers not clamoring for it. The appeal is so obvious to them that they see no reason to assess customer reactions, feelings, interest, or purchase intent. Don’t get caught in this trap of product-centric, engineering-driven, myopic thinking.
In our experience, the most successful product managers start by thinking first about people, not products, and carry through with that focus while building their case for internal support.
You can start by observing customers in relevant situations, taking note of where they get stuck, frustrated, slowed down, distracted, or confused. Then, listen to them with an aim to understand what they want, what problems they’re trying to solve, what needs are not met, and what aspirations and hidden desires you can uncover. Capture what you learn. Record verbatim comments, like “The interface on that monitor drives me nuts!” Also, look for themes and patterns, such as “Most clinicians look at competing devices and see unnecessary complexity. They want something fast and intuitive.” These qualitative and emotional insights will be critical to your winning support by persuasively demonstrating strong customer desirability.
In your mind, keep framing the questions in terms of people, not technology. For example, a people question is "How can we make it as easy as possible for people who can't breathe well at night to get more air?" A technology question is “What is the optimal medical device for pushing more air into people's lungs while they sleep?" The former generates much greater creative exploration and can only make your innovation idea stronger. The latter question limits thinking and recognition of new possibilities, and it can raise a red flag by inviting your managers to ask if you’ve approached the problem in different ways.
Depend On (Some) Customer Input
Still, when learning from customers, don't expect them to ask for specific features or solutions. It is not their responsibility to figure out what features will provide the experience they desire, or achieve the result they want. That's your responsibility. What customers can meaningfully validate are the experiences and outcomes they want. If you ask them for solutions, the results could lead you down the wrong innovation path, which could hurt your business case and credibility.
For example, respiratory therapists (RTs) may tell you they want non-invasive ventilation (NIV) masks to be a certain shape. Notice, that’s a solution. You might reasonably assume they want a different shape to minimize air leakage, since fit is so critical to effective oxygen delivery. If you accepted that thinking at face value and ran it by your engineers and designers, you would likely be driving them down the wrong path and come up with undesirable innovations, because you don’t really know yet what outcome the RTs want, or why.
To avoid operating on assumptions and to ensure you know the RTs’ reasons for wanting the mask to be a certain shape and their desired outcomes, ask a series of “so that…” questions. Examples include, “You want a different shape mask so that … it fits better. So that … it’s more comfortable, especially for older patients. So that … patients don't remove the mask and there won't be discomfort from facial abrasions. So that …patients get optimal therapy and I get more done.”
You learn that the desired outcome is about maximizing patient comfort, especially for older patients, and enhancing productivity — not about minimizing air leakage. You then include maximum comfort as a key aspect of your business case, which should demonstrate that your idea is, in fact, responsive to what customers want and need.
As you build and socialize your business case internally, continue framing the problem in terms of people first. That will help you avoid getting into disputes about product details too soon (and triggering technology-centric thinking).
Once you can make a strong case for desirability, then dive deep into technical feasibility and financial viability for the company. And keep in mind that, while this article has focused on the factors surrounding new customer desire, other decision drivers include fit with the brand, working capital, and company maturity.
Avoid Drinking Your Own Kool-Aid
There almost always will be internal competition for resources to support new product investment. You need to make the strongest possible case to win funding. Use the three-factor model popularized by human-centered design to shape your case: business viability, technical feasibility, and customer desirability. Provide evidence the product will make money and is feasible to produce, and then focus on desirability. Make it clear that your solution solves problems that prospective customers really care about, and ensure that your revenue projections are grounded in the realities of what customers will pay to solve those specific problems.
This approach also will help you and your company to avoid “drinking your own Kool-Aid.” When product managers, engineers, marketers, and executives become enamored with their new product or platform idea, they risk losing any sense of objectivity; they start believing their own propaganda without applying a professional level of skepticism to what customers want, value, and will pay for. The resultant development environment can blind companies to the disparities between how they want things to be and how things really are — the differences between what the company desires and what customers desire. Such scenarios compromise innovation investment decisions, and it’s up to you to take a more logical path, so that the most viable innovations win internal investment.
About The Author
Dr. Moshe Engelberg is CEO of ResearchWorks, Inc. Founded 25 years ago, ResearchWorks is a strategic consulting firm with deep roots in custom research. The firm’s goal is to help companies in the health industry conquer obstacles, gain confidence and achieve success in the marketplace. ResearchWorks conducts custom research, develops grounded strategies and creates persuasive messaging to help companies avoid mistakes, know what to do and why, and get products and marketing right – the first time.
Engelberg holds a Ph.D. in communication with an emphasis in health communication research from Stanford University, an M.P.H. from San Diego State University, a master's in counseling psychology from University of Humanistic Studies, and a B.A. in psychology from the University of California, San Diego. He has taught graduate-level courses and executive education at major universities, including UCSD, SDSU, USD and CSUSM, and is now an adjunct faculty member at SDSU's School of Public Health. His revolutionary way of thinking has him in demand as a frequent speaker at industry events nationwide.