Market validation insights drive successful Seed Round and SBIR grant funding
Artificial Intelligence-assisted Medical Device Start-up
The physician inventors of a novel medical device approached an experienced executive to lead their commercialization efforts. After his review of the available market research and business case, he realized the ideal customers/users and the specific applications for the device were as yet unverified. Until addressed, the executive would not commit to the venture. Thus, he convinced the inventors to issue a request for proposal (RFP) for a comprehensive market validation study to answer the following questions.
• Can one or more “burning platform” applications be found?
• What is the profile of the ideal customer/user?
• Is the hospital the best customer setting to target?
• What are appropriate pricing expectations?
• What are appropriate feature sets and do we really understand the workflows?
• What disposables pull ratio we should expect?
Leverage Point Advisors completed the RFP, recommending a two-phased approach: The first to identify the ideal customers/users and applications, and then to undertake the remaining questions only for the identified users and related applications.
Although the RFP asked for all items to be addressed in one market validation study, the start-up leadership appreciated the more cost-efficient approach Leverage Point Advisors recommended. Phase I utilized short telephone interviews with a broad cross section of healthcare providers. Phase II included face-to-face in-depth interviews (IDIs) with the customer audiences identified in phase I.
For phase I, Leverage Point Advisors conducted a total of 63 telephone interviews with healthcare professionals, 9 from each of the following specialties: emergency medicine physicians, emergency department nurses, general surgeons, anesthesiologists/pain management physicians, PICC team members, directors of nursing, and orthopedic surgeons. This approach allowed the facilitator to ask more open-ended questions, clarify responses, and inquire further to better interpret interest and nuance, while maintaining respondent interest and engagement. Phase I identified three “ideal customers” and two key applications which drove the phase II research.
Phase II comprised two parts: user experience research and qualitative direction on pricing expectations. For the user experience research, Leverage Point Advisors completed 16 two-hour, in-person IDIs, placing the prototype device directly into the hands of the potential customer. Conducted at market research facilities in two Midwestern cities, the recorded sessions yielded insights on design specifications for each application, device benefits and concerns, the proposed value proposition and proof points, the frequency of use, and their purchasing process.
Lastly, Leverage Point Advisors interviewed health business administrators with budget authority for capital equipment to provide direction on the device’s pricing potential, utilization rate, and the influence of specific value statements, as outlined by the physician respondents.
Collaborating with the executive team throughout the engagement, Leverage Point Advisors developed screeners, recruited participants, wrote discussion guides, and facilitated the telephone and in-person interviews. At the end of each phase of research, Leverage Point Advisors delivered a final report of findings and paid all honoraria, based on fair market value for each specialty.
The rich insights gathered during the two phases of the market validation study laid the foundation of the commercialization strategy, thus convincing the medical device executive to join the start-up as its CEO.
His new team now understood the primary applications and target user groups, which offered the best opportunity for a successful launch. The team gained significant input on design specifications to facilitate prototype improvements, as well as guidance on the value propositions and proof points that most resonated with the ideal users. With this and directional insights into the pricing expectations of users and projected utilization rates, the team fashioned a robust business plan and financial model.
The start-up medical device company, under the leadership of its new CEO, leveraged these insights to successfully land a significant Seed Round investment and receive a federal Small Business Innovation Research (SBIR) grant. Now, they’re off to launch this novel medical device.