DUE DILIGENCE: The Key to Executing Robust Medical Product Launch

If you don’t do your due diligence at the beginning of medical product launches, it could cost you in the short and long run. It could mean the difference between taking the steps to execute commercialization or experiencing severe and costly delays.

Due diligence pays off; addressing the gaps early on will save you energy, time, money, and strained relationships.

Take it from me.

Being 15 years in healthcare – from salesperson to leader in sales and marketing roles – and now consultant, I have worked with different companies and technologies to help them drive innovations.

Due diligence was always at the core of my System for Success (S4S) approach for launching medical products or technologies.

HIRE PROMISING TALENT

First, ensure you hire and build the right team; they are human capital on wheels. If they are not primed to solve problems, identify the critical gaps, and harness the right skills and healthcare experience, you are setting themselves up for failure.

You must start with a winning team.

But how do you know what a “winning team” looks like?

The vibe or energy reveals itself – it never lies – you can “feel it” in your gut. Does your gut scream “yes”, “no” or “maybe, but take caution” when evaluating your team fit?

First, assess what kind of team players you need at every launch stage.

Brainstorm and get feedback from experts if necessary. As a healthcare executive, you must solidify your foundation with enough research.

Whether building from the ground up or upleveling an existing product from $10M to $50M, you need the right resources and talent to support and scale.

So, be honest with yourself and the people you hire so that expectations are appropriately managed and adhered to.

ASSESS THE MARKET

Say, you have a $2B opportunity.

Certain concerns need to be addressed.

• What is your addressable market today, what can you serve, and what can you win early on to build momentum and scale?

• What will the next six to nine months look like regarding all the logistics – fundraising, setting up sales and marketing, and customer service?

How you handle the first set of customers will differ greatly from how you handle the second and third sets – needs and requirements change.

MAP OUT AND BUILD, THEN ASSESS CAREFULLY

Sometimes, we work with organizations that can burn too bright and fast. I know because it has happened to me.

Map out and build, then assess.

Often a slow and steady burn may be advised depending on the situation.

Either you will fail fast or clean up and adjust. The reality can be harsh when leading and executing medical product launches.

The scary thing in startups, though, is delaying decisions – if you sit on your hands, you can get stuck.

As an activator, I have worked with early-stage companies and prefer to be agile while making efficient decisions after careful assessment.

So, please assess carefully and thoroughly before proceeding. You have a vast opportunity to learn from limited market releases.

HEED COMMON PITFALLS

Be prepared for common pitfalls.

You may initially experience initial success, then incur a more significant investment, and finally want to double down, and guess what?

You may not receive the actual ROI expected – or even close.

Evaluate the adoption curve because different technologies are adopted at various times.

• Do you have accurate, valid, and in-depth clinical data?

• Do you need bigger contracts?

• What specific things do you need to allow the full scale of the organization to see products take over?

The sad reality is that during an overzealous attempt to launch the greatest product ever, they failed to do their due diligence – they went too fast, too quickly. The result? Failure, of course.

We learn through mistakes, though.

The irony is that lessons cost us and the key stakeholders and organizations we deal with.

I have had some interesting conversations with a CEO who believed he possessed the greatest technology ever. As a Medtech consultant, I had to tell him.

This was painful, but it made things real.

The numbers, the time to market, and other metrics he was armed with were simply unrealistic.

The shoe dropped.

I could tell he could feel his dream that was on the verge of being shattered. His vision was fading, not because it was not good, but because it was unworkable.

I know – since I was once there too.

All hope is not lost though.

No worries. It just means that there is room to rethink the strategy or model and do things differently. Trial and error and networking coupled together can be translated into powerful wins or mediums for transformation.

Seriously, what happens if things do not fare well?

We don’t give up – just remember – never give up.

It’s about having tough conversations and setting people up to have realistic expectations. That is the foundation for success.

The reality: the logistics may also take longer, including bringing in new technicians, capital, and funding requirements. People expect massive returns, but they are often hard to come by and are few and far between, especially within a volatile economy and several constraints faced by hospitals across the board.

Even if you have a great executive team, solid product, and promising strategy, and you see things to fruition, you can expect minor hiccups to obstacles – even major ones. That is why DUE DILIGENCE is your best friend.

And you need to simply be TOUGH to be prepared to handle what will and could go wrong down the road.

THE DIFFERENCE BETWEEN FULL LAUNCH AND LIMITED LAUNCH

Choosing the right strategy will help you gain competitive advantage, differentiate you from your competitors, and build a solid business.

A full market launch differs from a limited market launch or soft launch. It is essential to know the difference to identify the right company strategy, especially for a startup.

FULL MARKET LAUNCH

A full product launch aims for broad market penetration from the beginning, while a limited market launch is more cautious, focusing on testing and refining before scaling up.

A full launch involves making the product or service available to the target market or a broad geographic region. This approach aims for driving widespread availability and reaching as many potential users as possible.

Significant resources are required, though. The risk is higher due to the large investment and potential for uncertain market acceptance.

Yet, the potential reward is also greater with the possibility of capturing a significant market share quickly. The company could receive a large volume of feedback. While possibly overwhelming, extensive feedback may provide a detailed view of the market’s response.

LIMITED MARKET LAUNCH

A limited or phased or pilot launch involves introducing the product or service to a smaller, more controlled market segment. This segment could be a specific geographic area, a particular group of healthcare providers, or a targeted patient population.

Fewer resources are required, and risk is lower in a controlled environment. However, the reward is gradual as the company builds confidence in the product’s performance and market acceptance before further expansion.

However, there is more manageable feedback and opportunities to improve the product or service before a broader release occurs – which helps address issues and enhances the offering based on real data.

Suppose you’re planning a Limited Market Release (LMR) or Phase Zero launch. In that case, it depends on the type of technology, funding, and expectations involved – so many different factors need to be weighed.

Is your company very well-funded?

OR

Is there only a certain amount of money you are dealing with?

Some companies need to act very fast and strong. They have major competition they’re facing in the market. Longer runways require massive funding, whereas in other instances, if there is not a lot of funding, you can only dip your toe gently in the waters.

Not one size fits every company – so tread carefully.

You may need to take an extra 90 days with an LMR. And that’s OK.

When there is a clinical study involved, you will need to speak to well-informed people to get out in the field to understand the market there.

Ensure that you are also pressure-testing your messaging and pricing.

• Consider the 64-million-dollar question and the one that many CEOs sometimes avoid – do you have the “right” strategy?

This includes customer service.

To ensure full engagement and a profitable venture, a launch needs to fully integrate the customer at the center of its launch.

• It’s one thing to sell, but can you fulfill the order?

• Can you implement that specific technology?

• What does the staff’s feedback look like? Real numbers, we’re talking.

• How about patient feedback, and how can it reinforce the marketing message?
• And finally, remember the overall ROI contributed to society, which will positively impact the product’s success and continuity?

Profits, people, and planet is the holistic equation – Triple Bottom Line. All three need to be integrated into the DUE DILIGENCE model. Often if people and planet are considered in the strategy, then the profits will align too.

LONGER SALES CYCLES THAN ANTICIPATED

I once conversed with an executive where three accounts were targeted in specific geographical areas, and 100 patients had to be put through the technology. Data needed to be run and the sales cycle took a lot longer than expected.

After reviewing all the KPIs and metrics, I realized that this is the caveat that many executives experience. They may experience longer than expected – say, 3 to 4-year sales cycles..   It may take them much longer to adopt the technology – even from the initial research to the onboarding of the healthcare professionals.

• And what about capital constraints that are not even considered that could very well delay the medical product launch? Those are priorities, like unmaintained hospital operations or machines.

• When you expand in different markets, this factor may bring in a different set of complexities. Are you having GPO issues – what are the top concerns in the dominant markets?

Due diligence will save you, your team, and organization – in the short and long run – considerable time, money, and stress – so you can do what you need to adjust to scale and hit revenue in the current stages.

Learning and harnessing the lessons along the way adds value for the future stages. It is critical in making the tough decisions and prevents hassles and painful situations that would be trickly to resolve later.

I’ve worked with CEOs who fiercely believe in their product. But if they are too nervous or hesitant to execute their due diligence approach, their dreams of launching that unique medical product or technology get stalled or never happen.

It’s important to interpret and understand the data and the precise feedback after analysis and implementation to ensure product execution.

Tip: Exercise the due diligence muscle and get used to seeing and experiencing the unexpected – so you can improve your game and product/service offering.

It seems so complex, but really, it’s that simple.

You might learn a great deal during the initial pressure testing or market launch. You cannot ignore the critical issues that need attention – because they will resurface 360 degrees and come full circle – like bad karma.

Please put on your creative executive thinking hat and deal with it.

Accept all the feedback possible because you never know – you might find a new product or revamp your techniques – including changing the pricing or offering. You could learn a lot by working in a certain market.

FINANCING

OK, the F-word – financing.

Here’s the problem – financing is available. Yet, it’s becoming increasingly complex to obtain when you consider our economy, the market, and all the dynamics involved in securing funding from trusted investors. Trust is elusive today.

• What message will you pitch to the investor about your product in a specific market?

The problem: Even though financing is capable, healthcare executives must be realistic regarding the amount they can obtain and the projections.

CEOs often can oversell an opportunity and secure funding, yet never feel they are doing well enough because projections are frequently unrealistic.

• So, think long-term – what is the initial addressable market you are working in today? Remember, it is contingent upon the board and investor – support through strategic partnerships and collaborations is vital.

They offer valuable access to critical resources, skills, and capital. More options exist with private equity, debt financing, and alternative financing solutions.

Medical device startups must thoughtfully consider ALL POSSIBLE financing options to navigate the intricate process of garnering innovative products to market. Next, investigate the strategies and opportunities harmoniously aligning with their growth goals.

• Are you going through an institutional investor or family medical office?

• Have you done this before, and how did it work?

These factors will matter in the type of funding and how quickly you will obtain it.

Be VERY strategic.

Healthcare executives can harness their past experience.

• If you are self-funded, what can you do to take on the next level of funding?

DUE DILIGENCE – there’s that critical D-word – involves knowing you are taking money from. Who are you engaging in a relationship with? There needs to be trust, collaboration, and integrity in that relationship for growth.

Bottom line: You must know all the ins and outs, expectations, and timeframes.

Obtaining money from someone will result in someone’s true colors to shine. Yes, you will quickly find out their intentions and their agenda.

So don’t be naïve. Get real. Do your research. Think strategically.

If you ask for too much funding initially, you can set yourself up for failure. But if things do not go well, what happens? It’s about learning to manage those tough conversations.

Yet, a strong, confident, forward-thinking CEO knows how to handle these scenarios, especially if they have experienced it before.

But I have heard stories with funding where it went well. Companies experienced a strong market launch and needed another round of funding for scalability. The other company supported their initiative, allowing them to quickly move the market.

Why?

The CEO knew the data – he was prepared – he possessed the metrics, and a promising dedicated executive team equipped with solid data to support it.

What a huge confidence builder.

KEY LESSONS LEARNED

As a healthcare executive/CCO and MedTech consultant, I have learned many eye-opening lessons, especially during turnarounds. You will too.

Reflect before moving forward:

• Have you built product that the world really needs now and in the future?
• Is the messaging on point?
• Who is the sales talent?
• What is happening in the market now?
• Who is succeeding and who is not?
• What is going on with pricing?
• Who are the competitors?

Do a deep dive into the data and understand it. If it doesn’t make sense and you are without concrete answers, you need to review and get the answers. No one will know until you perform your DUE DILIGENCE – until you are fully ACCOUNTABLE for your success.

As a healthcare leader, I don’t sugarcoat – I respectfully give people a healthy dose of reality and pave the way to unlock a complex situation.

Train your sales team to be ready and have the right AMMO at the right time.

I believe in harnessing solid business acumen and high emotional intelligence (EI) to navigate challenging conversations in difficult selling times. Whether it’s a good or bad market, it’s about collaborating, learning, and doing your best to make a difference, one step at a time.

Without due diligence, you swim upstream rather than going with the flow, which could impact your objectives and derail you from a successful medical product launch.

As a healthcare executive, you owe it to yourself and the key healthcare stakeholders you are serving that you simply take an approach rooted in DUE DILIGENCE.

You’ve got this.

Stay in action (the right ones),
-Steve Sappot