In the medtech industry, establishing a product-market fit is crucial to avoid ending up as another forgotten startup.
Scott Nelson, co-founder and CEO of FastWave Medical
Diving into the medtech space can be a fulfilling journey. Still, data indicates that creating a medical device typically costs $31 million, with the majority of that spent on meeting regulatory requirements. Additionally, bringing a device to market might take over five years; securing reimbursement coverage extends this period even further.
For products requiring U.S. Pre-Market Approval (PMA), stakes rise significantly. Such projects usually cost around $94 million, with $75 million allocated solely to meeting FDA demands. The high failure rate in the industry complicates matters further, with most statistics showing over 90% of medtech startups fail to succeed. Those surviving often battle for funding and profitability.
These alarming figures highlight one key factor in medtech: the product-market fit.
As the CEO of FastWave Medical and founder of Medsider, I’ve conversed with seasoned CEOs in the field about aligning their innovations with market needs.
Below are insights from successful medtech startup leaders on achieving product-market fit early on, ensuring a smoother journey for your venture:
Innovation and Market Potential as Pillars of Success
Jared Bauer, after successfully transforming BurnFree Products and now leading Seek Labs, stresses the importance of assessing product novelty and market demand. A solution must be groundbreaking to warrant tackling the challenges of innovation. “An authentically novel product is also patentable,” Bauer asserts.
The significance of market demand in medtech product-market fit is undeniable. Entrepreneurs ought to ask, “Will this solution ever find buyers? Is there a real need?” While many target incremental advancements, Bauer chooses solutions five to ten years ahead, aiming to meet unmet needs and disrupt current markets.
“You can navigate governance, regulatory, and quality hurdles,” Bauer says, “but without novelty or IP potential, your chances are limited.”
Bauer encourages entrepreneurs to aim for revolutionary innovations. He advises validating market demands for your product, focusing on transformative technologies rather than incremental changes, and partnering with investors genuinely committed to your vision.
Informed Decision Making Should Drive Your Efforts
Parag Gad, founder of SpineX, merges academic know-how with medtech solutions, offering pioneering non-invasive treatments for neurological conditions. His team achieved FDA Breakthrough Device Designation and secured $3.6 million in equity financing and governmental backing.
Navigating medtech market complexities proved challenging compared to academia. “Publishing papers or clinical studies has its complexities, but bringing a product to market is intensely more rigorous,” Gad comments. Acknowledging early knowledge gaps, he pursued answers unabashedly, saying “I don’t know the answers to certain questions.” Grounding their endeavors in solid data—clinical evidence, peer-reviewed studies, or key opinion leader feedback—was crucial for verifying technology efficacy and achieving medtech product-market fit.
“What does the data reveal?” was SpineX’s guiding query, whether it involved clinical, technical, or user feedback information.
“Decision-making founded on solid evidence ensured unbiased progress,” Gad explains. “Seek advice shamelessly and secure the evidence required.” This philosophy allowed SpineX to transition efficiently from an academic offshoot to an early-stage startup, and finally, a clinical enterprise.
Connect with Your Target Audience Early to Ensure Product-Market Alignment
Bryce Klontz, an experienced medtech expert with a global outlook, led New View Surgical as CEO for seven years. During his tenure, the company achieved FDA clearance for VisionPort technology, a cutting-edge tool that amalgamates the laparoscope, camera, lighting, and access port, significantly reducing laparoscopic surgery costs and preparation time.
“You may have a promising concept, an exciting technology, and a prototype. But does it align with both the expectations of the clinical user and the economic purchaser?” Klontz asks.
Merely having a great solution is insufficient; market viability is crucial. A product with limited market interest will not sustain an enduring business.
In New View’s target market, existing companies had already invested in laparoscopes, colonoscopes, and bronchoscopes. “We took a bold step by integrating the camera with the access port for laparoscopic procedures,” Klontz explains. “This sped up surgical workflows and reduced costs.”
Klontz and his team fostered long-term associations with a select group of surgeons to gather substantial insights into product usage. “True adoption is visible when completed procedures involve multiple surgeons and cases,” Klontz states. This concentrated study yielded valuable feedback. Early involvement with surgeons and sometimes economic purchasers included soliciting input on ideas, concepts, and prototypes, leading to product iteration and adaptation.
Taking a cue from Klontz, prepare for exhaustive user validation. Achieving medtech product-market fit involves grasping end users’ perspectives in a refined manner. Engaging in strong relationships with clinical and financial stakeholders informs every venture phase, from product creation and positioning to commercialization.
Craft the Optimal Version of Your MVP
Marc Zemel, with advanced degrees in Mechanical Engineering from MIT and an MBA from Yale, founded Retia Medical to modernize outdated cardiac monitoring technology. Retia’s Argos Cardiac Output Monitor employs advanced algorithms for precise heart monitoring.
Adopting a software-centric approach, Zemel identified an opportunity for accurate and real-time cardiac monitoring, leading to the Argos system’s development. The concept stemmed directly from medical professionals disillusioned by outdated software. Zemel reflects, “We established Retia before ‘digital health’ was coined. I was drawn to algorithms because they’re challenging to create and protect.”
Clinicians are often invested in emerging tech, eager to give feedback. Networking events and focus groups are valuable for collecting insights. However, Zemel warns that ideas must be sufficiently crafted for useful feedback.
“In medtech, there’s no minimum viable product. Your initial impression should be exceptional,” Zemel advises. “A lot of focus groups, plenty of surveys, and stealth operations at conferences were involved.”
To follow Zemel’s path, examine market predicates, understand regulatory implications, and engage clinicians early. Strong rapport with end users ensures product development reflects real market needs. Presenting a polished product when soliciting feedback is key; in medtech, first impressions are paramount.
Building on Existing Smartphones over Outlandishly Innovative Ideas
Torrey Smith transitioned from an R&D engineer into the CEO at Endiatx, where he realized his PillBot vision—a tiny robotic device piloted through the digestive system, streaming footage to assist diagnoses. This concept has numerous applications, including enhancing the $42 billion endoscopy realm. Smith’s leadership propelled Endiatx forward, securing funding, and forming partnerships, such as with the Mayo Clinic.
Smith demonstrates that true innovation doesn’t always require reinventing the wheel. The PillBot creatively employs established technologies—combining microrobotics and remote-controlled mechanisms—into a fresh, impactful concept.
“Your greatest wins often stem from blending aspects of existing technologies to create something better,” Smith states.
Using existing technologies can expedite regulatory approval. Endiatx expects FDA clearance within one to two years, heavily relying on current precedent. This approach simplifies regulatory processes.
Smith also suggests collaborating with clinics globally when developing your tech, engaging diverse specialists across regions. “As market approval looms, acquaintances in the field aware of your tech internationally can prove advantageous,” he notes.
Solving gaps in medtech isn’t always about groundbreaking creations. Sometimes, it’s about creatively merging existing technologies to address specific challenges. This route can be just as pioneering and rewarding as venturing into novel realms. Utilizing familiar technologies aids in streamlining regulatory navigation.
Key Lessons in Carving out a Product-Market Niche in Medtech
- Prioritize innovation and market potential: Aim for authentic novelty and verify market need for your product. Strive for transformative solutions rather than incremental advances. Seek investors who are genuinely enthused about your mission.
- Align development with solid evidence: Own your knowledge gaps, inquire frequently, and gather data to confirm your technology’s effectiveness and market need.
- Connect with your audience early: Establish strong relations with clinical and economic end users, assimilating their insights to guide development and marketing. This ensures your product meets genuine market demands.
- Focus on outstanding first impressions: Present a polished MVP before soliciting feedback. In medtech, first impressions are vital, and a refined prototype signifies quality and dependability, earning stakeholder trust.
- Broaden the innovation definition: Innovate by creatively merging existing technologies. This approach can be as impactful and rewarding as pioneering new solutions and can facilitate regulatory processes, accelerating market entry.
Scott Nelson is the co-founder and CEO of FastWave Medical, a medtech startup innovating intravascular lithotripsy systems for cardiovascular conditions. He also founded Medsider, interviewing leaders from emerging medical device and health technology companies. As a medtech strategist, he took Joovv to over $20M in profitable earnings in under three years. Previously, he held leadership roles at dynamic startups and multinationals, including Touch Surgery, Medtronic, Covidien, Boston Scientific, and C.R. Bard.
The views expressed in this article belong to the author and do not reflect the opinions of MassDevice or its staff.