5 Questions MedTech Executives Must Be Able to Answer About Their Medical Device
Even during product development, medical device leaders and teams must use market intelligence and analytics to understand and tailor their product to the market opportunity,
Most medical device teams see their company’s progress in terms of phases. There are development and clinical evaluation phases. There are fundraising phases and a market exploration phase. There is a team building phase, an FDA-approval phase, a launch phase, and a growth phase. And while some of these phases overlap, often teams are focused on delivering within that phase in order to get to the next one.
But the challenge of siloed thinking is that, at times, it doesn’t take into account how decisions in one phase impact another. The most basic example is in relation to market exploration. Often companies perform this work after the device has been designed and developed. But without detailed information about your intended audience, how do you know they will want to purchase the product as conceptualized? What if there is a barrier to adoption that you are unaware of? And what if that barrier had an easy fix, if only you knew about ahead of time?
The truth is that, even during development, there are key questions that medical device entrepreneurs and executives must answer related to the future of the product in the market. Knowing the answers enables the entire team to work harmoniously because they know what the end goal is and, most importantly, why it is. This is at the heart of upstream marketing. From engineers to executives to sales and marketing, this approach ensures that everyone has the same objective and clear vision of success. Answering these questions also de-risks the product so executives feel confident presenting to investors.
Here are the top five questions MedTech executives need to answer from the very beginning to create a clear roadmap toward a successful end product.
#1: Who Are You Selling To?
This might seem like a given, but many times companies don’t properly calculate their total addressable market (TAM). Just because a device is in the digital therapeutics space does not mean that it will be appropriate for every patient. Understanding your TAM early on helps executives set realistic goals and forecasts for the company and investors.
In addition, medical devices exist in a multi-stakeholder environment. Your product should serve patients and physicians, as well as appeal to administrators and value analysis committees. Each of these customers will have different perspectives and priorities, all of which directly correspond with a product’s success. Also, consider how much sway each stakeholder has in a decision to purchase. For example, a patient might be more limited in the decision than a hospital system.
#2: What Do They Want or Need?
Each stakeholder will have different goals and needs. For example, patients want a solution to their health problems without sacrificing comfort, quality of life, or increasing risk. A doctor, on the other hand, might want to be the hero by solving the patient’s health problem.
These goals and pain points should shape how you develop and market your product. During development, take user experience and workflows into account. A doctor might be resistant to changing her workflow dramatically for a marginal benefit. Explore ways that you might tailor the use of the product to that workflow itself for easier adoption.
After launch, when marketing your product try communicating how it helps customers, not how amazing the tech itself is. You might want to advertise, for example, your “groundbreaking wearable platform.” That positioning doesn’t reflect the needs of your targets. Instead, translate it back to what the stakeholders are genuinely trying to accomplish, such as “better independent monitoring of your X condition so you can focus on your life.”
Understand what your stakeholder wants and needs and then make and market your technology to meet it.
#3: Why Does the Customer HAVE to Have Your Product?
How does your concept or product meet the customer’s needs better than anything else out there? What makes you stand heads above the competition?
Your value proposition should dispel any doubt related to the questions above. Don’t create a value proposition based solely on price – that is not a value proposition. Instead, concentrate on value. Most patients, doctors, and hospital systems are willing to invest when the benefits are indisputable, such as saving time, creating efficiencies, or delivering better outcomes. Explain, apart from just being cheaper, what makes your product better than anything else they have or could purchase elsewhere.
#4: How Do You Prove that Value?
Your product idea and value proposition need to be backed up by detailed market research. To prove your idea, extensive market intelligence that includes secondary research as well as primary research allows you to show, without a doubt, that your target audience is willing to pay for and adopt your product.
You’ve already explored your TAM when you identified your target audience, but now, through benchtop studies, preclinical studies, clinical studies, healthcare economics, voice of customer surveys, interviews, and more you can prove your assumptions beyond a doubt. And it is that proof that will drive your forecasting models so you can show a path to ROI, which is required in order to secure investment dollars.
If you understand your product, your market, and your customer at this level from the very beginning, the better you can focus your time and energy on developing a medical device that you know will win against the competition.
#5: How Are You Going to Get Paid?
Last but not least, you need to know how much your product is worth to stakeholders. A medical device that no one will pay for, or is too expensive to produce, won’t work in the marketplace. While price should not be your driving product value, you do need to ensure that it is something you can sell for a profit.
As a result, medical devices must have a reimbursement strategy when it comes to insurers. Can you fall into an existing code? Is the payment that is currently allowed sufficient for you to achieve an 80% margin? If not, what is the path to getting a new code? Is there a cash pay option? These are all questions you need to answer to ensure your product is viable. At the end of the day, financial success most often comes down to volume, price, and margin.
Product Success Starts with In-Depth Analysis
Too often entrepreneurs believe that their product will succeed because they and even their close colleagues see its terrific benefits. However, there are a multitude of players, opinions, and situations that must be accounted for when a medical device product is developed. You need to understand and answer questions about that unique market, the customer, your value, and your product.
By answering these five questions, your company is thinking with the end in mind. It ensures that your teams will work together to develop a medical device that is primed to answer a clear need in the market and be received by customers with open arms – and wallets.
Can you confidently answer all five questions related to your own medical device market? If not, Jaunt can help. Schedule a meeting.