Hi, this is Joe Kalinowski of Trilogy Associates. I’ve been advising and supporting our clients in new-product commercialization since 1989. I’d like to provide some hints and reminders in that regard in this brief presentation. Deciding whether to fully develop and commercialize a specific new-product idea is one of the most important business decisions you will make. The next page explains why this is so.

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Here are the issues I’ll touch on – each very briefly but hopefully enough to get you thinking as a reminder of the topics that require investigation before you move forward with a major new-product initiative. Your business may have other key issues to address, but I think this list covers the most common ones.

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I’m focused here on medical products, simply because that class of products represents about 80% of the ones we deal with at Trilogy. Naturally, clinical need trumps everything else; if your notion of a prospective medical product doesn’t address a clinical need, it’s time to dismiss that notion out of hand. We really need some specifics here: How strong is the need? Who benefits? What are you bringing to the party? Are you answering these questions by means of a gut feeling or an edict from above? If so, you may eventually be very disappointed by a lack of excitement in the market. Don’t let that happen. Do the necessary research to be sure a real need will be met.

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First off, what’s in it for your company, your operating division, your business unit, your new venture – whatever? The questions you see here are of two kinds: financial and relational. Both are potentially important, of course. And you may be encouraged to satisfy one goal at the expense of another. That’s fine. And I suppose I could have added another question: “Will it position our firm for an attractive acquisition?” That’s a worthy goal for many early-stage enterprises. The bottom line: Make sure all the effort and expense will be worth it!

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This focus on your customer is non-negotiable and obvious. If enough customers don’t buy, you don’t succeed. You must be able to predict with reasonable certainty – say 75% -- that your target customer will find your new product attractive and will buy and use it repeatedly. Clinician-users are especially demanding. We’re not talking about a sexy consumer item here. Clinicians simply view your product as a tool to get them through their day without undue anxiety, without doing harm, and without spending a fortune! Your product is not a status symbol for them. They just need it to work reliably and quickly.

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Now, what are the risks? I suppose this list of questions can and will be considerably longer in your case, but I think these are the main potential deal-killers in the medical arena. Medical-product suppliers are very familiar with R&R hurdles (that’s regulatory and reimbursement). They simply must conduct some fully-informed prognostications in those areas before moving ahead. And, your revenue forecasts must acknowledge those projected R&R timelines.

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Time was when stakeholder economics was not an overriding issue in commercial viability. That time has long gone. Customer economics and product performance are now equally important. Unless your product concept is truly unique and indispensable, your customer’s economic interests must be served. Figure out what those economic interests are, then compare your product to the existing alternatives.

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Over the last two decades of our consulting practice, I’ve found that about 70% of our clients’ new-product plans underestimate time to market. That results from a combination of natural enthusiasm about a new product and overly optimistic planning. There are two dynamics in play: When will our product debut, and how long will it take for enough clinicians to accept and endorse its use? Clinician adoption is often the driving variable; you must formulate a reasonable prediction whether and when that will be achieved to a sufficient extent to make your initiative successful.

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Here’s a secret: You’re not alone, and you never will be. Obvious, of course, but too often not appreciated. Competition is less of an issue for a market leader who enjoys the benefit of “medical momentum” and clinical conservatism – but beware that upstart with a much better and cheaper product. For the also-ran player, competition is a big deal. That company must come to fully understand the competitive landscape in enough detail to estimate where they will fit and how much share they can take.

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I couldn’t come up with a better picture. But you get the idea. Can we exploit this new prospective product as a platform for something bigger, something longer-lasting? If so, that can be a terrific bonus, even if your initial product doesn’t make enough money to justify its investment! There are several kinds of platforms; perhaps the best known are technology platforms and their associated IP portfolios. Those are especially interesting owing to the (temporary) legal barriers that can be erected.

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Now for the hard part, the green eyeshades part. Can we afford to do this? What must we forgo as a result? Do we have the necessary technologists, marketeers, and salespeople to devote to this initiative? How much will this program really cost? Well, that’s what corporate strategies and portfolio reviews are all about.

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Hey, there are other benefits, other limitations, other considerations that may come into play. You know them better than me. Don’t ignore the intangibles, the unmeasurables. I’ve simply tried to remind you of the obvious issues so you don’t fail to remember and prioritize them when the time comes. I hope the times come often for you!

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We’ve been helping clients to navigate the new-product space for more than two decades – for big companies, small companies, new ventures, and investors. I suspect we can help you, too. Don’t hesitate to contact me to chat about this presentation or to discuss your own new-product initiatives. Thanks for listening!

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