The economic environment for emerging companies is increasingly difficult with decreased investor spending on risky, long term investments such as new technology introduction. In the richest nations, new start-ups fell by 10% in all sectors according to the Global Entrepreneurship Monitor. Unfortunately, in these challenging times, some of these companies have failed, causing investors to change their investment risk strategy and lose confidence.
Others are at critical points in their product and company evolution, close to delivering great products, but still struggling to clearly define a strategic direction or commercialisation approach. And some have succeeded in taking great products to market, generating both revenue and strong growth. Whilst the fundamental factor uniting these companies is a combination of great technology, scientific and commercial entrepreneurship, other critical success factors are needed to transform a promising emerging technology into a competitive product in the market place.
PA Consulting Group has a long track record of working with emerging UK healthcare technology based companies that are trying to take innovative and potentially disruptive new products to market.
Through our engagements with clients we have formed an opinion on what emerging companies need to get right to successfully bring healthcare technologies to market:
Get the right people at the right time and have a flexible work force
Having the right people in key leadership roles at the right time and finding the right size of the organisation is a critical balance. Grow too fast and the company might run out of cash, but grow too slowly and it may miss the opportunity to win in the market place. Leadership of emerging companies requires different capabilities and character traits throughout the evolution of the company as described by the Greiner curve3. To get a company off the ground and bring in the first round of funding needs a different skill-set and motivations than a company moving into late stage product development.
Plan and integrate to ensure a holistic view of product development, commercialisation and risk
Within healthcare, products are becoming increasingly technologically complex often involving a combination of biochemistry, fluidics, optics, robotic engineering, materials and software requirements. To ensure that the product reaches the market on time and budget, an agreed integrated design and development plan is essential. Executing this plan and managing technical risk, requires integrated teams with product champions working alongside technical experts. An integrated programme of work gives senior managers a holistic view of progress.
Form the right commercial, development and supply chain partnerships to enable you to do what you do best
Emerging companies often seek commercial partnerships in which the other parties have a vested interest in taking a product to market. Some emerging companies are developing disruptive technologies which are hugely exciting and appealing to a large number of potential commercial partners and investors. Undoubtedly, this is a good problem to have, but it can be a double edged sword as all potential partners and investors want to learn more and investigate the technology and company further before committing to that high value investment or buy-out. Chasing and developing these potential partnerships can deflect the focus away from getting a product to market. The work involved in developing these partnerships also plays to the perceived strengths and interest of emerging companies in the technology rather than focussing on the market and product.
Have diversity in your product pipeline - get one product to market fast but ensure additional products follow on rapidly
Many emerging companies are developing ‘technology platforms’ where the underpinning system (e.g. hardware, chemistry and software) defines how the technology is applied and what types of products can be developed. These companies must get the core enabling technology right, but need a product application to begin revenue generation. Even a disruptive platform technology is not useful without a market relevant product and emerging companies must try to develop and commercialise at least two products. Backing only one product could result in a perceived failure of the platform if the product fails in the market.
To find out more about how PA can support strategies for emerging companies please contact us now.