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.