Filtering by Tag: sales

Getting Ready to Launch a New Product? Don't Make Either of These Timing Mistakes

Developers and entrepreneurs spend months or even years preparing their product for market introduction. A danger they face is misjudging when to launch. They must heed the old saying, “You only have one chance to make a first impression,” but some may obsess over this too much and, therefore, delay their product’s introduction longer than necessary. This can lead to losing the first-in-market advantage and/or missed sales. However, in an attempt to beat the rest of the market, other vendors make the mistake of launching prematurely, with sometimes-devastating results.   

Do you remember Apple’s disastrous 2012 launch of its new Maps app? It worked perfectly unless you didn’t want to have to find a train station in the middle of lake or were confused by aerial-view interstate maps that resembled overcooked spaghetti. Once a product gets cast as inferior, it can take years to recover. Some never do.

In order to avoid this mistake, some companies overcompensate and wait too long. This potentially creates two problems:

·         If your product is groundbreaking or transformational, a delay gives competitors extra daylight, and you could forfeit your “first to market” advantage.

·         Delays slow down cash flow, something which can prove fatal to a cash-starved startup.

Recommendation:  If you are introducing a groundbreaking service or product, seek the sweet spot where your minimally viable product performs all its essential functions adequately yet still gives you a head start in the market. A product that does exactly what it purports to do – even if it’s not particularly fancy – establishes your credibility and starts the cash flow so vital to continued development. If early adopters like what they see, they will likely talk your product up among their peers.

Why Startups Fail

One of Facebook’s cool features is its habit of occasionally reminding you of your previous posts.  Our friends in Menlo Park recently notified me of a link to an article called The Main Reason Why Startups Fail I forwarded two years ago when my business – Pearson Health Tech Insights, LLC (PHTI) – was still relatively new.  (PHTI helps tech-oriented startups selling into the hospital world hone their strategies to maximize market success.)  As I re-read the article with two more years of helping clients under my belt, I was able to confirm just how easy it for a hospital-targeted product to get derailed.  PHTI’s tagline is If you build it, they might not come.   

The article’s author Gijs van Wulfen presents some sobering statistics.  He cites a study of 2,000 startups financed by venture funds between 2004 and 2010 that reports that an estimated 30% - 40% failed outright.  Only 60% lasted three years or more, and only 35% made it to ten years.  Van Wulfen also references a report by cb insights that presents the top 20 reasons why startups fail.  (Since failures are caused by multiple factors, the total percentages add up to over 100%.)  The top two reasons for startup failure were:

·         No market need – Cited by 42% of the failures

·         Company ran out of cash – Cited by 29%

Other factors were:

·         Poor product – 17%

·         Need for or lack of business plan – 17%

·         Poor marketing – 14%

·         Product being mis-timed – 13%

In addition to these factors which plague startups in any industry, companies selling to hospitals face additional challenges.  A couple of weeks ago, I met with the CEO of a leading medical device innovation center.  Her opening statement reflected what her organization has learned over the last few years.  She observed that most device developers clearly understand the following hurdles:

·         Achieving FDA approval

·         Understanding the reimbursement climate

However, she said they often overlook one that is equally important:

·         Figuring out how to get hospitals and clinicians to actually adopt their technology

And that brings me back to our tagline:  If you build it, they might not come.

PHTI can help any company targeting hospitals sharpen its approach and strategy.  Our signature offering is the Healthcare Marketing Tune-Up Program that consists of three parts:

1.  A review of the company’s products in light of the “7 Ps of Marketing” 

  • Product
    • Place (distribution methods)
    • Positioning
    • Promotion
    • Packaging
    • Price
    • People

2  Suggestions for avoiding the relevant pitfalls PHTI has identified from our list of 79 Pitfalls of Marketing to Hospitals

  • 3 Timing Pitfalls
    • 9 Credibility Pitfalls
    • 4 Product Design Pitfalls
    • 3 Market Misreading Pitfalls
    • 10 Data/Technical Pitfalls
    • 9 Communications Pitfalls
    • 14 Financial Pitfalls
    • 3 Legal/Regulatory/Bureaucracy Pitfalls
    • 2 External Political Pitfalls
    • 11 Internal Political Pitfalls
    • 11 Organizational/Operational Pitfalls

3.  A summary S/W/O/T analysis

 

Let us help you avoid becoming an unfortunate statistic.  Contact me at glenn@pearsonhti.com or (770) 861-6941.   http://www.pearsonhti.com.

 

Vendors' 3 Most Common ROI Mistakes - Part 2

Last time, I presented the first of three fallacies vendors often succumb to in their ROI projections to potential clients, namely the idea that saving time in a worker’s day results in cost savings to the hospital.  The typical methodology they use is identifying a certain number of minutes per procedure the new approach will save, multiplying the time saved by the number of procedures per day that job function performs, and then multiplying the result by annual salary plus benefits.  Viola!  Savings.

Not so fast.  As I pointed out, very rarely will a worker be sent home after seven hours and 45 minutes (instead of working a full eight-hour shift), thereby truly reducing costs.  When I point this out, the vendor typically counters by stating there is value in freeing up someone’s time to perform other neglected tasks.  True, but that doesn’t save a dime.

The example from last time concerned a vendor who had a product he claimed would save physical therapists’ time.  He was a little rattled after I explained Fallacy #1, so his next line of reasoning was, “Well, even you don’t send the therapist home early, reducing the time per procedure ends up increasing the therapist’s capacity so he can see more patients and bring in new revenue.” 

Fallacy #2

Nice thought – if the facility is literally turning patients away due to capacity constraints.  That may hold true in for some clinical areas, but it’s certainly not universally true across all hospital services.  Depending on the service line, some providers may be idle for parts of their days due to low patient volume.  So increased efficiency doesn’t necessarily mean bringing in new patients, meaning incremental revenue will probably not materialize.

There is a further complication to the “increased throughput argument.”  There may be other staff involved in a clinical or operational process who wouldn’t be directly affected by the positive effect of the new technology.  A good example relates to Operating Room schedules.  Even if a technology saves a few minutes per procedure for the surgeon, those saved minutes evaporate if housekeeping is understaffed and can’t turn the room can’t over quickly enough to slip in an additional procedure.  

So increasing patient throughput is Fallacy #2.

What It Takes to Avoid Fallacy #2

·         A revenue-producing service where the hospital is literally turning away patients due to capacity limitations

·         No other volume-based bottlenecks in related service areas

So demonstrating credible and persuasive ROI numbers is harder than it seems.