By Rachel Lane PhD, RD
Posted December 6, 2019
Technology drives discovery. In medicine, technological advances allow us to probe further into disease pathology and to develop new, more personalized and precise treatments. Fortifying a molecular pathway with synthetic compounds was once groundbreaking, but with today’s technology, innovators can solve much more complex problems with much more precise solutions.
Through genetic engineering and immunotherapy advances, a patient’s own cells target specific offending agents in the body. Gene editing demonstrates cancer-curing potential, and telemedicine may promote patient compliance. Three-dimensional printing creates personalized knee braces and even human hearts.
These examples highlight the profound ways technological advances nurture medical breakthroughs, but how do we identify those medical applications in the first place? It starts with the exchange of ideas among highly specialized experts, such as engineers and biologists; software developers and biochemists; and physicians and biophysicists (which can create one set of dilemmas). Once experts identify an application, they must objectively evaluate the market demand for the proposed application.
As biomedical researchers, we sometimes skip this step. We invest a significant portion of our lives and energy into finding new solutions and want to see the fruition of our efforts. Unfortunately, our developments don’t always advance the product enough to claim a share of the market, and sometimes, our advancements aren’t what the market wants at all.
Bill Gates’s first company Traf-O-Data created reports for traffic engineers but failed due to insufficient market research. "…Traf-O-Data was a good idea with a flawed business model," Gates admitted. "We had done no market research."
Validating market demand for a new food or exercise trend is one thing, but how do biomedical researchers investigate the market viability of new clinical applications? The National Science Foundation (NSF) recognized the need for innovators to explore product/market fit before product development and pioneered the NSF Innovation Corps (I-Corps™) program as a solution in 2012. The I-Corps provides scientists and engineers with funds and educational support to assess the commercialization potential of basic-research projects.
Molly Wasko, PhD, Associate Dean of the University of Alabama at Birmingham (UAB) Collat School of Business, leads the UAB NSF I-Corps. Her passion for early-stage innovation stems from her own startup failure. "I built the product I wanted, but it was overdesigned for anyone else," Wasko laments. She had implemented the "Build, Hope, Sell" business model – where product development precedes market assessment – and it let her down.
Now, Wasko helps early-stage innovators avoid the pitfalls of the "Build, Hope, Sell" model by teaching the "Lean Startup" methodology to campus innovators. In the Lean Startup model, innovators explore product/market fit in the I-Corps before product development.
Companies accepted into the I-Corps receive a stipend ($2500) to complete customer-discovery market research. Innovators use the stipend to share their idea with customers at conferences, events, retail locations, clinics, and other points of contact. Through these interactions, innovators receive the critical feedback necessary to create more useful products that better satisfy the market demand.
What would you do with $2500 and a brilliant idea? Shockingly, some innovators do nothing.
"I have one group that needs to visit Disney World so they can interview representative patrons at the entrance, but I haven’t been able to convince them to go," explained Wasko.
Why would someone turn down a trip to Disney World? Because talking to potential customers is scary and risky. Some potential customers will understand the new idea, some won’t, and others will reject it outright. The nascent idea rarely satisfies the market need sufficiently.
That initial idea is tainted by the innovator’s own biases and blind spots; it doesn’t represent the complex, heterogeneous market. Market research helps to identify and correct those biases. These results either 1) cause innovators to pivot from their initial idea, creating a product that better meets the market’s needs and expectations or 2) indicate that the market need isn’t robust enough to support the product. Product pivots create better innovations and innovators, and quickly identifying futile innovations saves time, energy and money.
Sometimes products don’t fit the binary system of "stop and go." Learning to "park" an idea – setting it aside until it can be modified to better fit the market demand or until the market is more primed for the product – is an important lesson taught by the I-Corps program. Ferhat Zengul, PhD, Assistant Professor of Healthcare Management at UAB, parked several ideas after completing the UAB I-Corps program. According to Zengul, "the I-Corps program revealed how others perceived my idea and unclouded my mind from the skew of passion."
That betterment process is Wasko’s favorite part of the I-Corps program. "The [innovator’s] transformation throughout the program is amazing" beams Wasko. Innovators enter the program scared to discuss their idea and fearing rejection, but they leave empowered by customer conversations to pursue, pivot, or “park” their idea.
By Rachel Lane
Posted April 6th, 2019
When I ask young biomedical startups "What's your value proposition?" They often respond with a generic sentiment that echoes Annie's proclamation above: "Our technology/process/platform/methodology is better than that of our competitor."
This response doesn't surprise me, but it doesn't suffice as a value proposition. Technology that's touted as simply "better" will get overlooked by stakeholders every time because this claim is temporary and not testable. Let me explain.
2. Like a good hypothesis, good value propositions are testable. Customers should be able to verify the value of new technology before they commit to partnering with or investing in it. A value proposition such as "Our Super Assay delivers the quickest results with the highest accuracy" should be backed and verified with data. The customer doesn't need to know the trade secrets that enable those competition-smashing results, but they do need to have evidence that the product will perform as expected.
Adopt a Value-Proposition Mindset from the Beginning
To position new technology for an enduring impact, value propositions must identify the unique value intrinsically associated with the innovation that resonates with the target audience. The best time to begin evaluating a new technology's value proposition is during development, when the technology can still be tweaked to provide sustained differentiation from competing products and to better meet the market need. Testable value propositions that distinctly differentiate an innovation will ensure the technology thrives into the future.
The principles of testability and differentiation are basic, but biomedical innovations exhibit unique characteristics that can make the application of these concepts difficult.
Technology-Driven Innovation Mandates Education
Value propositions fall into one of two models: they follow either a tech-push or a market-pull strategy (outlined in more detail here). Market-pull value propositions satisfy a known market deficit, making audience attraction fairly straightforward. While technological advancements may have made the new product possible, a market with knowledgeable consumers already exists. A market-pull value proposition simply notifies the target audience that a solution to their known problem is now available.
Amazon Prime is a great example of the market-pull concept: streaming TV, movies, and music; next day shipping; subscription services; and easy online price checking/comparison shopping - quite a few of us happily accept that value proposition! While technology and expert project management make these offerings possible, the audience doesn't require any education to recognize or accept these benefits. We even welcome Amazon's Alexa into our lives because of perceived life improvement, without fully recognizing the ramifications of her presence!
Tech-push value propositions - on the other hand - arise from technological advancements instead of market demand. Audiences aren't primed for the innovation and may not be aware that they need it. This audience must be convinced of their need and educated on the new technology, making buy-in much more difficult. Most biotechs must develop tech-push value propositions.
Let's look to immuno-oncology for a biotech-push value proposition. In the past, cytotoxic small molecule drugs have been the most popular anti-cancer treatments, but immuno-oncology agents that activate the immune system to fight cancer (i.e., biologics) are touted as tomorrow's solution to this ugly disease.
Unlike market-driven products, biomedical innovations aren't chosen by an intrigued audience; they're often adopted by a desperate population, like cancer patients. So is the patient really the audience that interprets the value proposition of a new biotechnology? Yes and no. The patient should certainly understand the value offered, but the patient is generally not the initial stakeholder propositioned. Multiple stakeholders invest in novel biotechnology at different stages of development. Each stakeholder deserves a unique value proposition.
The Intricacies of Multiple Audiences
Biotechnology is a complex subject that must be translated to multiple audiences, such as investors, business leaders, end users and consumers. Different pain points - the part of the current process that is problematic for the targeted audience - motivate each of these audiences, and a good value proposition will successfully address the pain point for each stakeholder. For example, when a new therapeutic is developed, the end user (i.e., the clinician) will be motivated to adopt the new technology for different reasons than the consumer (i.e., the patient). Physicians will prioritize improved workflows, while reduced cost, fewer treatments, and less severe side-effects may resonate more strongly with patients. To capture each market, biotechs must communicate a unique value proposition to individual stakeholders.
Regulatory Agencies Influence Value Propositions
Regulatory agencies influence the value proposition that biotechs can present to stakeholders, which means some of the "latest and greatest" marketing strategies can't be applied to biotechnology. In the book Play Bigger, the authors argue that successful companies "don't sell better;" they "sell us something different." Selling something "different" is challenging in biomedical industries, where the consumer looks for cures, absolute disease prevention, or significant improvements in quality of life. Different isn't enough in biotech. New biotechnology must be quantifiably, justifiably, and/or significantly better than current options. Regulatory agencies enforce these requirements, which are necessary, but sometimes slow market entry and acceptance.
Biological Variability Limits Technology
One of the most fascinating things about biomedical discovery and innovation is that it is alive and evolving. Each innovation directly begets more knowledge, leading to better technology and a more complete understanding of biology. The latest biomedical advancements respond and interact with biology as we understand it at the point of invention. However, that technology will inevitably reveal more biological nuances and intricacies, enabling us to refine our current technology and create better solutions.
By nature, biological innovations and interventions have a smaller addressable market than most nontechnical innovations. They apply to individuals with specific disease states driven by precise biological mechanisms. In addition, the high stakes of biotech - which is often addressing life or death issues - elevates the barrier to market entry. This combination of small market/high barrier to entry creates a unique scenario that is uncomfortable to investors who want to quickly and safely achieve the largest return on their investment. If researchers keep these barriers in mind while developing their technology, they can shape their innovation to circumvent or minimize these obstacles, effectively strengthening the end value proposition.
Competing Value Propositions in Biotech
Evaluating competitor value propositions can be difficult in the biomedical industry: intellectual property, trade secrets, decades of subject matter expertise, and unknown side effects can make it impossible to anticipate the total biological impact of new technology. Candid collaboration between subject matter experts who are intimately aware of the technology's pros and cons and business personnel who are experts in communicating with target audiences will propel research forward, out of the lab and into the clinic.
A Final Thought
Although biotechnology may affect a limited market, such as a specific patient population, the summed knowledge from these technological advancements and their application in the clinic affect mankind as a unified whole. Information collected from the successful development and clinical implementation of new therapeutics and diagnostics furthers our understanding of disease specifically and biology in general.