From Blockbuster to Blackberry, there are countless examples of companies and products that dominated their industry only to disappear, whether due to financial fallout or failure to adapt. Of course, these are some big names – when you factor in startup failures, the list becomes significantly longer. It’s no surprise, then, to discover that many medical device startups are not immune to similar mistakes and that many healthcare companies have failed as well.
Six Medical Device Startup Mistakes You Need To Avoid
Every year, dozens of medical device startups come out of the gate; will they succeed? Time will tell. However, there are six mistakes that many of those that struggle, or fail, often have in common, and here’s a look at each.
Overestimating the Market
Startups that believe they have a great medical device are anxious to bring it to life, often forgoing proper analysis of the market. And while it’s important to have confidence in the product, it’s perhaps even more important to know if it actually fulfills a real problem. Too often, companies shoot themselves in the foot by creating a product that didn’t really meet a need. These startups may follow a plan that goes something like this: build, launch, then gain customer feedback.
Wouldn’t it make more sense to get some feedback prior to spending money on building and launching the product? A better approach for most medical device startups would be to identify at least ten very specific customers and their pain points before investing time and money into product creation. If it’s possible to get interviews with these customers or to involve them in focus groups, that’s even more powerful as they can be asked about product features, pricing, market needs, and more.
Underestimating the FDA
The FDA doesn’t fool around when it comes to medical devices, which must be deemed both safe and effective. Failing to provide the FDA evidence of this results in rejection, so it’s best to get it right the first time otherwise it can become a major medical device startup cost.
Here are three mistakes medical device companies typically make regarding the FDA:
- They underestimate the thoroughness of the FDA’s approval processes
- They fail to staff or at least speak with someone who understands FDA regulations
- They tout their product as an industry disruptor, which raises FDA red flags
To expedite and receive FDA approval, medical device startups need to make sure their submission package is airtight. They need documentation demonstrating that the product is safe and effective across all potential scenarios, and experts to vouch for it.
And, even if the product is intended to revolutionize the industry, approaching the FDA with a list of similarities to other products on the market will help put them at ease when it comes to obtaining regulatory approval.
Not Valuing Experience
By definition, a startup is just beginning. The person behind it, while probably an expert regarding the product itself, is likely lacking experience in other areas. However, because they know their product so well, they believe themselves to be “the smartest person in the room.” Sure, there will often be a tech person and a sales or marketing guru on hand, but they often fail to involve a key opinion leader.
A key opinion leader (or, ideally, leaders) should always be on board, at least in an advisory capacity. These are established medical authorities with a wealth of healthcare experience who can give credence to claims and bring up concerns internally. Not only does this reduce medical device startup mistakes, but it also gives outsiders more confidence (such as investors, who want to be sure their money is being used wisely, and the FDA, which will ultimately determine if the device meets regulations).
Not Planning for Problems
Medical device startups are typically trying to bring to market something for the first time; so, there’s no history to fall back on. That means that there are bound to be some hiccups along the way – sometimes big ones. Plus, the more groundbreaking the product, the greater the potential for problems.
The most important thing for startups to do is to recognize – no matter how much they believe in their product – that challenges will arise and that they must be planned for. That means, when creating timelines and budgets, to always leave wiggle-room for delays or setbacks, and to always anticipate spending more.
Not Understanding the Audience
Many medical device companies are formed because a medical device entrepreneur has a great idea that will help patients. And while this is very noble, it’s important to recognize that patients, while often the end-users, won’t be the ones footing the bill to bring the device to market; that will be in the hands of large enterprises and insurance companies.
Understanding the complicated healthcare ecosystem and its stakeholders, which includes research institutions, healthcare providers, pharmaceutical developments, government agencies, advocacy groups, and more, is critical. One way medical device startups can do this is by bringing onboard a third-party expert who knows how to navigate these systems and their sometimes muddy waters.
Trying to Do Too Much
Many medical device startup mistakes involve chasing perfection right out of the gate by cramming every feature they can think of into their very first product; it’s what’s called “feature creep,” and it’s a big contributor to the healthcare startup failure rate. Feature creep costs more, lengthens timelines, and opens the product up to more intense scrutiny by the FDA.
Instead, new companies should focus on initially releasing their product with one safe and effective core function; if it’s successful, all the other bells and whistles can be added later. If it’s not, a lot of time and money will be saved.
Avoid Medical Device Startup Mistakes with Diberin Solutions
The worldwide medical device industry is projected to reach a staggering $595 billion by 2024, and unfortunately, not all will make it.
At Diberin Solutions, our goal is to make sure medical device startups entering the industry succeed. We help you reach your full potential, and avoid these common pitfalls, by bringing in experienced experts to ensure the success of your new company. We’ve helped startups like BandGrip, HomeThrive, DosentRx and others get off the ground, and we want to help you. Contact us today to learn more.