Author: Marcia Costa Edited by: Jun Pang
At our interactive workshop on November 16, Dr. Jeff Skinner explained to the participants how organisations and markets work. Although he admitted that investors look first at how sound the science is before thinking of investing on a new technology, he discussed how strategy and focus are important on driving the commercialisation of technology and how a bad marketing strategy can ruin the chances to translate the final product to the market. The workshop was conducted based on a real case study of ‘Silverglide’, where Jon, a scientist, developed a novel non-stick coating which is non-degradable and can sear tissue without adhesion. The final product was a reusable probe that could be used in surgeries and cauterise tissue without scarring it. This aspect was important particularly in plastic surgery, which was Jon’s initial target market. Through the case study, participants were shown the different components of any commercial strategy: application, market, investment, internal tasks/outsource and revenue model.
Application is the first component when considering a piece of technology. Jeff introduced three important questions to consider: (i) Who is the end user? (ii) In which circumstance will the end user utilise the product? (iii) In this circumstance, for this user, what is the benefit? It is common for scientists to brainstorm about many potential applications of their product. However, it is important to have a specific focus (at least in the beginning), in order to succeed. Another important aspect is being prepared to how the new technology will be received. On one hand, there are no competitors if the product is novel. On the other hand, people are often sceptical to new technology and the possibility of having to re-adapt and to re-train their staff.
Market is another area where it is important to know the target and keep focused. A smaller, niche market might be a good start to test the response and create a reputation for the technology. On the other hand, there are less people who will be able to buy the product. What is the best way forward? Essentially, it involves thinking in scientific terms – ‘Have a carefully defined (logical) hypothesis and test it in the market.’ If it works, one can build a reputation to move forward into another new market. Otherwise, the developer has to re-think the target market and re-test it. The adoption of new technologies is often slow in the beginning, and an entrepreneur should devise new ways to accelerate this lag phase.
Finding investment can be difficult and also risky, especially if a reputation has not yet been established. In this specific case, Jon had the opportunity to find investment from himself, his friends and family. This approach enables to keep a tight control over the decisions made about technology, but it is not always possible for the developers. Here, marketing is important as it can find solutions to help selling the idea of a new product to potential investors. Brand, for example, is a very important aspect to promote any new healthcare device. For example, Jon created the brand ‘Silverglide’ when he started marketing his probe. Presently, although the company has been acquired by a larger company, Stryker, the probe is still marketed as ‘SILVERGlide’.
Another important decision for an entrepreneur is to determine which aspects of the business could be conducted internally or to be outsourced to third parties. Scientists are great at what they have been trained for: doing science. Therefore, it is often a good idea to find other partners, particularly in marketing and finance, who can help finding investors and defining the market. For the particular case study, Jon had performed the research and development, regulatory and manufacture internally. The sales of the product were partially outsourced to distributors. However, this did not turn out to be effective, not because the distributors were bad, but because the technology was quite new that one had to spend more time convincing the customers. The time spent would be worthwhile if the product was going to be bought several times. However, the probe was reusable and the target market was individual plastic surgeons, hence repeated or bulk buying was very unlikely, and thus not a priority to the distributors.
Finally, careful consideration must be given to the revenue model of the business. If the product is expensive, relying solely on conventional sales might be a too simplistic approach. Licensing, renting or creating ‘premium’ accounts for customers can be helpful tips. However, Jeff also stressed that the most important safety measure a scientist can take is to get a patent! ‘This ensures that you are recognised for developing the new technology and that part of the profits from it are yours.’ Since Jon’s company owned the IP for their coating technology, they won a lawsuit over a company who was producing similar products. Not only did Jon receive compensation, the lawsuit also strengthened their brand.
In an era when healthcare market changes so quickly, doctors are constantly being bombarded with new technology. These novel products are often very good and have the potential to make a difference in clinical practice. Nevertheless, doctors cannot choose them all and frequently they will get the product which was ‘sold’ to them the best. Therefore, a scientifically sound product is very important, but so is the market strategy.
For the readers wondering what happened to Jon’s company, he modified his technology to have forceps, instead of probes, as a final product based on feedback that he received from plastic surgeons. Although reusable, surgeons tend to have many sets of forceps, so there were also better incentives for distributors to sell. Jon initially targeted plastic surgeons because he had already known their needs better. Jon finally learned how to look back and create a new commercialisation strategy that worked the second time around.