Assessing a Medical Product Technology: How to Know if an Idea is Worth Building a Company Around?
The vast majority of all commercially successful medical device, therapeutic, diagnostic and biologic products arise from discoveries that can be traced back to the research of a scientist, professor, physician or engineer at an academic or research institution. The truth is, there is no shortage of medical product ideas because top-notch research is constantly being carried out at universities and research institutions all over the world.
For entrepreneurs, the more relevant question is: how does one determine if the medical technology or inventive concept is worth pursuing as a commercial product? The answer to this question is critical for entrepreneurs because of the enormous amount of time and resources that will be committed to developing this product.
Academic and research institutions carry out great discovery programs, but they do not possess commercial product development expertise, and they typically are not well-equipped or experienced in identifying which technologies will become blockbuster products. Often, during the discovery phase, the best product application for a technology is not crystal clear nor is the best product opportunity obvious to many individuals. The missing link is the skill and creative ability of an entrepreneur in translating basic research technology into a successful commercial product. If you ask any Technology Transfer Office at any major research institution or university, they will tell you that between 60-80% of all their patents sit on their shelves without any interest from others. This was the situation for Stanford University when the nascent technology that became the genesis of “Google” initially drew little interest from outsiders.
So how can you tell if a biological or medical technology is worth pursuing as a commercial product? Here are 4 fundamental principles to understand when evaluating a technology and product concept, along with guidelines for making a decision on whether or not to undertake the development of a commercial product.
Any technology, no matter how alluring, is a simply a “solution” looking for a “problem” to solve. Therefore, don’t become enamored by the technology, but objectively evaluate whether or not the problem that the technology solves is important enough to a large group of customers who are willing to pay for it.
All problems are potential product or service opportunities. However, the bigger the problem, the bigger the product opportunity, and the smaller the problem, the smaller the product opportunity. Find out whether or not there is a significant medical market need that is not being satisfied by other products, or find out if inferior substitutes still leave the customer wanting a better solution for their problem. If the problem is big, the opportunity is big.
Your product will only be as good as the underlying science and technology. Be sure to assess the quality of the science and technology, and its reproducibility. If the science and technology underlying the product idea is inconsistent and unproven, the resulting product will be also. Find out if the technology can be reduced to practice by looking for surrogate indicators. In other words, is there evidence that this technology is useful? Find out if there are hidden issues that must be resolved which would prohibit your ability to create this product. Know what the risks are, then determine whether or not you can overcome and manage them.
Make sure the features and benefits of your envisioned product are the ones that solve the customer’s problems. All technology has certain capabilities and limitations; be sure that the technology capabilities deliver the features and benefits that solve the greatest issues for the customer. A car with 3 wheels is not a solution to a transportation problem just because it is close to solving a traveler’s need for an automobile. Be sure that your product precisely solves the customer’s big problem, and the technology can deliver it.
There is more that you must assess prior to starting a company or choosing to develop a product. These include: investor interest, length of time to develop, customer and insurers willingness to pay, and the ability to protect the intellectual property, to name a few. However, if the underlying technology does not first pass the threshold for these 4 criteria, then these other downstream issues are irrelevant.
When evaluating science and technology opportunities, first be sure that the proposed product solves a critical problem that is important to a large group of customers. Then carefully assess the technology quality and capabilities before undertaking any product development endeavor. Don’t become enamored by the technology but determine if the features and benefits it delivers precisely solve a significant unmet medical market need.
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