What’s in a name? Naming and branding medical device products and companies

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We’ve all been there – needing a name for a new product or even more importantly, a new company. There are a number of schools of thought about naming. For example:

 

 

  • Name it for the doctor who invented/founded it. (covert endorsement or the medtech equivalent of vanity plates)
  • Just pick something generic and get it out there (Wile E. Coyote’s Acme Products company)
  • Smash two words together with a capital or two in the middle. (“CamelType”)
  • Make an implied promise with the name. (Intuitive Surgical, da Vinci)
  • Make up a serious sounding, semi-scientific name. Make sure it has a trendy consonant in it or is loosely based on some obscure Latin word. (the Immunex factor)
  • Let the engineers name it. (any number of unmemorable names)
  • Pay a naming/branding consultant a lot of money only to find out the .com URL is taken.
  • Convene a cross-functional branding brainstorming team to identify alternatives, then: a) have an all-employee company vote or (less likely to have long-term negative repercussions) b) let the CEO pick his/her favorite.
  • Use the code name of the development project. (more often than you would think)

It’s extra difficult in the medical device space, especially if you are in a “hot” segment like digital health. There are lots of other companies casting about in the same pool of potential names and with the same requirements that you have. And, ours being a Serious Industry, I doubt that we will see the medical device equivalent of “Cheezburger Network” in the near future.

Takeaways: Naming and branding is a lot like coming up with the perfect name for your first child. You put enormous thought and effort into finding the perfect name, perhaps even creating a unique name just for your offspring. You obsess over what message the name will send and how your child will be perceived, perhaps for the next century. Big stakes, I know.

The reality is that most kids make their names fit them. Most people use the name as an association to the child and the child’s personality rather than the other way around.

The same  holds true for product and company names (as long as you stay away from the really outlandish stuff). Pick a name without endless consideration of the implications. Then, spend your time and effort making the company and product fill the promise of the name to reinforce positive experiences with the brand by customers and other stakeholders. Soon, the actual meaning of the brand or product name will fade and be replaced by the (it is to be hoped) positive attitudes toward the product/brand.

It’s also helpful if, in addition to not being similar to another company or product in the same segment, the name or brand doesn’t require a lengthy explanation about what it means or how it came to be. Just think back to an acquaintance who insisted on telling you the derivation of the name of their son or daughter.

Here are a few examples about names of companies in digital health. I’m sure all of the people responsible for naming these companies had great intentions and thought their names would stand out. Unfortunately, at least one other person in another company had the same expectation and created a confusingly similar name:

Read more: The apparent shortage of digital health names | mobihealthnews.

The 4 types of buyers for your medical device (and you need a “yes” from all of them) | Medical Device Commercialization 101

Marketing and selling medical devices is complicated. They are highly regulated, competition is intense, and the stakes are high. There are a number of stakeholders and constituents who must say yes – or at least not say no – before you can sell your device.

If you are a startup CEO, medical device sales representative, product manager, or marketing manager, use this general list and description as a place to start to develop a plan. As you get more granular, i.e., at the hospital level, the buyer types and the purchasing process will become very specific. You need a plan to address the needs and overcome the objections of every one of the buyer types and often, more than one buyer in a given category. What I’ve learned in marketing medical devices is that only a few people can say yes to a medical device purchase but many can say no.

I’ve identified four categories of buyers. There are often multiple buyers within each category.

  1. User buyer
  2. Economic buyer
  3. Technical buyer
  4. Paying buyer

Let’s examine each category in more detail:

The user buyer is typically the physician or surgeon. A user buyer can also be a physician’s assistant, nurse, surgical technician or other healthcare professional – literally, anyone who might touch the product. The caveat here is to make sure you address all of the user buyers and satisfy their needs or at least neutralize their objections. I have seen large sales get derailed because a circulating nurse in the O.R. did not like a product’s packaging and was influential enough to use her veto power.

Physician user buyers may have less power than you think to influence a purchase. While they usually have some clout to request specific items for their likes/dislikes, economics and standardization are often invoked to deny requests from less influential doctors. And doctors, just like the rest of us, like to keep some influence in reserve for a time when they might really need it. Just another way of separating “must have” from “nice to have.”

The real challenge is in trying to convert an entire department or practice to a new product. Not only do you have to “sell” all of the user buyers but you have to convince a key decision-maker like a department head to use his/her authority to finalize the decision. This is an area where your marketing staff needs to craft highly specific comparison materials detailing the beneficial features, benefits, and advantages of your product/service. Your sales representative will need to use his/her relationships with all of these people and invest considerable time within the facility to keep the sale/conversion going.

You also need to carefully consider all user requirements before finalizing your product’s features and functions. The old cliche is that you sell the benefits, not the features, but this is an exception. If you omit or include the wrong feature, someone you will never meet may kill your product’s deployment at one or more sites. Market research is extremely important at this phase – well before product design commences.

The key is to identify a need among the user buyers, then establish a value for your product by emphasizing and quantifying your product’s unique benefits, and thus justify a premium price. Easier said than done.

The economic buyer can be a purchasing agent or executive, a department head with budgetary authority such as the O.R. Director (often a nurse) or head of the Emergency Department or ICU, an accountant or even the hospital’s CFO or CEO.

For capital items and capital leases and for purchases that affect a number of people, e.g., physicians, nurses, techs, a purchasing committee (may have a number of different names) often makes purchase decisions. It will be important to know who is on the committee and how to access the committee in order to supply information. At a tactical level, the sales representative or account manager for a given hospital or other site must map out the economic buyers. This requires real diplomacy and smooth interactions, as often the information is not given freely.

The trick with economic buyers is to spend as little time and effort with them as possible. The investment should be in creating demand from the user buyers and in giving the user buyers a business case to justify the purchase. You must avoid inadvertently having your product categorized as a commodity. In that case, your product will be viewed as interchangeable with other products and the (premature) negotiations over pricing will begin.

The technical buyer can be someone in the Biomedical Engineering Department if the facility is large enough to have that resource or it could be another technical person in a completely different area who performs biomedical engineering functions in his/her spare time. In rare cases, the technical buyer could be a healthcare professional such as a physician.

In any event, get your compliance engineer in touch with this person ASAP to determine if there are unusual or extraordinary requirements. Also make sure the biomedical engineer understands all of the features and functions of your device, including IEC 60601, UL, etc. If you have a software product or a physical product with software functions, you may need to get the blessing of the CIO, CTO, or other technology executive or one of their reports. Obviously, HIPAA compliance is a hot topic with everyone so it will be helpful to demonstrate compliance in advance.

The paying buyer is usually an insurance company or Medicare. For procedures that aren’t reimbursed such as elective plastic surgery, the paying buyer can be the patient or it can be the physician for minor products that are consumed or implanted as part of a procedure.

Making sure your device has the proper reimbursement codes is beyond the scope of this article but I strongly recommend engaging a reimbursement consultant and following their recommendations before completing your plan and long before planning your market launch. That step is critical for maximizing your revenue and proving to investors that you have a sound business model and know how you are going to make money.

Whether conducting primary market research to plan a launch and understand the purchasing process for your device or moving through the sales process at a target healthcare facility, always ask two questions to whomever you are selling: First, can you make the decision to purchase this product/service on your own? If the answer is no, ask who does have that authority and then target that person. If the answer is yes, then ask if the person has a budget with which to purchase the product/service. If the answer is no, they are no longer a serious prospect.

Takeaways: Use market research, competitive analysis, and field representative input to develop a plan to address all four of the medical device buyer types: user buyers, economic buyers, technical buyers, and payer buyers. Keep in mind that anyone could have veto power over your sale. Avoid commoditization of your product by emphasizing benefits over features and by relating benefits to value.

Medtech inventor claims Ethicon lawyer tricked him into divulging trade secrets | MassDevice

This is an excellent cautionary tale for anyone with an idea or invention who is thinking of approaching a corporation: Talk to an attorney first!!!

“In court documents Nicolo spelled out his prior disputes with Ethicon, noting that, in light of his previous experiences,” Dr. Nicolo adopted a heightened level of discretion and caution in approaching Ethicon and sharing any business proposals and technical developments with Ethicon.”

Nicolo said that he and another inventor jointly developed a proprietary surgical stapling system for intestinal reconstruction and resection, which was the subject of U.S. Patent issued in September 2000. While the patent was still pending in 1998, Nicolo met with representatives of Ethicon, including Federico Bilotti, to discuss the stapling technology, according to the complaint.

Just 7 months later Ethicon filed its own patent, naming Bilotti as its inventor, describing a surgical stapling instrument that included “hemorrhoidectomy device technology” that Nicolo claims was derived directly from his conversation with Ethicon.”

Now, who knows what really happened in this particular case? People file lawsuits all the time; it doesn’t mean that they are right and the other party is wrong.

For start-up novices or entrepreneurial inventors, it may seem like a good idea (and it may actually be a good idea) to talk with larger medical device companies. They have resources (= cash) and they need new products. However…I’ve heard similar stories from entrepreneurs, physicians, and inventors claiming that some big corporation stole their idea.

Here are some tips and other issues to consider. These are from my experience and perspective as an entrepreneur and medical device professional. As the saying goes, I am not a lawyer:

  1. If you must approach a big company, try to get them to sign an NDA (non-disclosure agreement, also known as a CDA, confidential disclosure agreement). You need a one-way NDA to document what you are disclosing to the company. Many times, the company will ask for a two-way NDA to cover anything they might disclose in the course of the discussion. Of course, many times the corporation will tell you that they will not sign an NDA as a matter of policy. In that case, you need to decide if the benefit of the discussion is worth the risk of compromising your intellectual property (IP).
  2. Read the NDA form very closely before signing it. If it’s your NDA form that is being used, review it carefully with your attorney beforehand. Also review any changes requested by the corporation’s attorneys. The NDA spells out very specifically what you have to do to be covered by the NDA. Usually, that means putting all disclosures in writing within a certain time period. This is especially important for anything that is disclosed orally during a meeting.
  3. Know in advance what you are willing to disclose in the discussion and do not waver. You can always ask for another meeting! Also know what you want. If you wait for the corporation to make a proposal, you will be negotiating from a weakened position. 
  4. Keep in mind that the other company probably has done investigation or perhaps even R&D into the topic you are discussing. They will not tell you any of this information. Also keep in mind that the corporation’s representatives are only interested in itself and themselves, not you. Corporate employees may whisper sweet nothings in your ear, but keep your wits about you and maintain a high level of skepticism.
  5. If you have intellectual property, protect it. At the very least, file a provisional patent application. These are relatively inexpensive and you have one year to file a formal patent application.
  6. If you have trade secrets, do not reveal them. You can show the results or output from application of the trade secret but trade secrets are by definition unprotected intellectual property. Think of the trade secret as a handful of precious gems. Once they are out of your possession, how do you prove they belong to you?
  7. Document everything. Keep notebooks, in a secure place (or the online equivalent, with reliable backups), detailing the invention, all inventors, dates, times, circumstances. Document every interaction you have with the corporation. Note names, titles, dates and times of meetings, all attendees, take notes, and publish meeting minutes.
  8.  Do not assume anything about your interaction with the corporation. Nothing is certain unless it is in written form – and even then, can be the subject of much legal wrangling if the parties disagree about something.
  9. Sure, you always have the option to file a lawsuit if things go awry, BUT the corporation has more and better lawyers and much, much more money. Consider this option your very last resort.
  10. It is possible for a small business to license or sell technology, IP, or a product to a larger company. Most of the risk falls on the little guy, unfortunately. As Ronald Reagan once said of his dealings with the USSR, “trust but verify.” I would modify that aphorism for this subject to “engage but document.”

Read more: Medtech inventor claims Ethicon lawyer tricked him into divulging trade secrets | MassDevice.

How Restyling the Mundane Medical Record Could Improve Health Care | Wired Design | Wired.com

This is an interesting study in design and healthcare IT but lacks a clear roadmap for successful implementation – something that businesses require but design competitions can ignore.

“The results of a contest sponsored by the White House shows how powerful a dose of design can be in treating what ails our medical system.

Electronic medical records (EMR) are extremely useful tools and can help improve patient care and reduce costs — if designed and used properly. Unfortunately, good design is hard to come by in this market. Health IT data standards, privacy laws, and impenetrable health systems complicate an already challenging design process and usually lead to lackluster products.”

As the article refers to it, the “mundane” electronic medical record is becoming increasingly important as more test results, physician notes, imaging results, and patient records exist only in digital format. And everyone probably remembers the financial incentives that the Affordable Care Act dangled in front of physicians to persuade them to adopt EMR technology.

One of the key questions is who is the customer for an EMR? That’s complicated…but that’s who gets the attention from the EMR vendors, because they pay the bill. Sometimes it’s the physician or practice who pays for the system, sometimes it’s a healthcare system like Providence or Group Health here in Seattle, and sometimes the patient can be the (non-paying) customer. After all, the data belongs to the patient, right? But from the perspective of the entity paying for the EMR, does patient satisfaction really matter? Just like many things in healthcare (and technology for that matter), the consumer is the product, not the customer.

Some of the biggest issues preventing widespread acceptance of EMRs and more enthusiastic innovation in the market segment, in my opinion, are interoperability among disparate systems, lack of standards, data portability, and switching costs for the EMR owner. EMR vendors have not historically made it easy and simple to transfer records among competing systems while there is a confusing absence of standard fields and features from vendor to vendor. Patients switching to a competing system because of relocation or changing insurance plans or new specialists or switching primary care providers often have a difficult time accessing old records in the new system. Finally, physicians who switch to new EMRs have reported having to pay high costs to import and remap their old EMR data into a new system, a cost that has been referred to as “ransom.”

The benefits to EMRs are many, as the article suggests: easier management of chronic diseases, improved communications, better patient compliance, fewer medical errors, reduced waste because of duplicate and uncessessary tests, and lower overall costs to the healthcare system. Benefits to the advanced EMR concepts discussed in this article are potentially even more valuable. Will we see them in the near future? As a consumer and occasional patient, I sincerely hope so. As an industry observer, “the doctor will be with you shortly.”

Read more: How Restyling the Mundane Medical Record Could Improve Health Care | Wired Design | Wired.com.

I’ll be discussing more about the different types of customers involved in medical device commercialization in the next post in my ongoing series, Commercialization 101.

What’s Your Value Proposition? Medical Device Commercialization 101

PurchaseFirst of all, do you know what I mean by value proposition? It’s a pretty straightforward concept. Essentially, it’s why people or companies buy from you. They give you money, you give them…something in return.

That’s where some people go astray. You must think like a customer and put yourself in the mind of your customer now. As the old cliche goes, guys at Home Depot aren’t really buying drills, they are buying the ability to put a hole in something. I’d also argue that they’re buying a few moments of peace and quiet in “guy land.”

So it’s more than just the laundry list of features you or your product manager or your product engineer say comprises your product or software or (heaven forbid) “solution.” To keep things simple, I’ll be referring to all of these categories as “products.”

Customers buy products because their perceived value of the product equals or exceeds the sum of the investment required to acquire it plus all of the risks associated with purchase and use of the products. This formula is highly individualized and probably not very useful except in the abstract.

We can break it down to simplify. First of all, value is the sum of all of the benefits a customer gets from buying and using your product. Those may include:

  • Solving a problem 
  • Preventing a problem 
  • Saving money 
  • Avoiding loss (not quite the same as saving money) 
  • Reputation/ego enhancement (think iPhone) 
  • Meeting a standard, requirement, or law 
  • Assurance of risk reduction – guarantee, warranty, trade-in value, etc.

Next, the investment required for acquisition might include:

  • Cash price
  • Lease, loan, or other financing terms
  • Opportunity cost of the money being spent
  • Installation cost
  • Training cost
  • Write-off cost of product being replaced
  • Cost to research the acquisition (can be substantial for capital purchases)
  • Ongoing support and maintenance costs

Finally, the risks of buying a product from you could include, among other things:

  • Incompatibility with existing systems or processes
  • Failure to perform to requirements (poor quality)
  • Failure to perform consistently (poor reliability)
  • Support (training, repair, maintenance, updates) not available or not to expectations

Now you can see all of the factors that make up a decision to purchase.

The value proposition is that the Purchase only occurs when Benefits are equal to or greater than the Costs plus the Risks of acquisition.

Your job then, as a startup CEO, Product Manager, or Business Unit Head, is to identify the benefits that your target customers need, then turn them into physical features, then price the product attractively while still making a fair profit, and also design programs and safeguards to mitigate the customer’s risk.

Seems simple? I don’t think so, either.

By the way, these concepts apply just as well to businesses as to individual consumers. After all, businesses are nothing but individuals working together.

Think of a medical practice considering the purchase of a new Electronic Medical Record system. They probably have an existing system with which they are not happy. Price is a factor but there are many, many other factors that will influence their decision.

Takeaways:

  1. Put yourself in the mind of your customer.
  2. Never forget that customers buy benefits.
  3. A purchase doesn’t occur until perceived value equals or exceeds perceived costs plus perceived risks.
  4. As the saying goes, perception is everything.

Next time, I’ll take a look at the different types of buyers involved in a medical device purchase.

 

 

The Market – Medical Device Commercialization 101

OK, so you know that you need a customer in order to have a business. In fact, you usually need lots of customers to have a successful business. In this post, I’ll discuss that vague abstraction known as the market.

market

A market is a group of entities, sometimes people, sometimes organizations, sometimes both. In its simplest form, some of the entities in the market sell things and other entities buy things. Or you could say that some entities have problems they are trying to solve and they buy solutions from other entities.

There are an infinite – or at least an uncountable – number of markets in our economy.Think of your own personal life. You participate in many different markets, for example, music (and that could include CDs, digital downloads, streaming, concerts, and lessons among other things), food (including fresh, frozen, farmers’ markets, food trucks, fast food, restaurant dining, snacks, beer, wine, soda, and bottled water, etc.), and transportation (cars, bicycles, pedicabs, trains, airlines, hot air balloons, buses, taxis, limos, and so on).

There are probably thousands or even tens of thousands of markets for medical devices. Hospitals and physicians purchase and prescribe many different products, services, and solutions to diagnose, treat, and maintain their patients.

Markets have competition. The entities selling solutions compete for buyers. Sometimes the competition is direct but it need not be. Innovative solutions and products often do not have direct competition, at least not initially. There is almost always, however, indirect competition or at least the status quo – what buyers are doing right now without the innovation. Never make the mistake of thinking or stating that your new widget or app “has no competition.” It diminishes your credibility and usually results in someone proving you wrong.

There are concentrated markets in which a handful of sellers control almost all sales. Think of the cable TV market in your town. If you are fortunate, there are two competitors. On the flip side, there are some highly competitive markets with many sellers. For example, consider the fairly new and still evolving market for “cloud” based archiving of your digital files. This is a highly competitive market with new entrants emerging almost daily with prices falling and offerings improving rapidly. It’s pretty obvious which type of market is better for buyers. Unless you have a significantly disruptive product and lots of financial resources, the competitive market is probably more attractive for you as a seller as well.

One more thing about markets – they are almost never homogeneous. There can be geographic differences among buyers as well as language, culture, economic (price stratification as well as terms of payment), demographics  (for example, gender, age, political leaning/affiliation, income level, socioeconomic status, technology adopter status, etc.), and many, many more. Any of these differences can be used to identify consumer market segments. There are other attributes in medical device markets such as hospital size, number of procedures performed per year, hospital market share, physician experience level, and so on.

Market segments are groups of buyers with at least one attribute in common so that your offering should have value or appeal to all members of the group, for example, “household decision-makers considering purchase or lease of an electric vehicle in the next three month”s or “family practice physicians in small to medium group practices interested in purchasing an electronic medical record system in 2013”. Further, the segment must be economically reachable via the same form of marketing communications or media promotion, e.g., direct mail, webinars, radio or TV advertising, or one of the various forms of Internet advertising.

Identifying your market is fairly easy. It’s almost always dictated by the indications for use of your product. Segmentation is tougher. There may be multiple segments for your offering. The challenge is selecting the segment(s) that are most competitive (and therefore open to new offerings) and reachable (so you don’t have to break the bank with marketing programs to reach the segment members).

The objective is to create awareness and interest in your solution/product, thereby generating sales leads. A portion of the leads will convert to actual sales, creating revenue to expand marketing and sales efforts and leading to profitability.

As part of your launch plan, you should talk to market participants in person, at conferences, and in surveys. Identify as many segmentation attributes as you can.

Takeaways:

  1. Try to select a competitive market unless you are launching something truly disruptive.
  2. Identify as many segments as possible.
  3. Pick segments based on their attractiveness for your business and your ability to reach segment members economically with marketing programs.

Next time, I’ll talk about identifying the different types of buyers in your segments. It’s much more complicated in B2B (business-to-business) markets like medical devices than in B2C (business-to-consumer) markets.

 

“The one thing” – Medical Device Commercialization 101

This is the first in a series of posts in which I’ll discuss the many factors that go into a successful product development / commercialization / launch project.

I’ve given many lectures and presentations on product launches and marketing. When I ask this question at the beginning of the talk, I get a variety of answers. Keep in mind there are many things  businesses need but only one thing that is like oxygen to a living organism – that “every” business needs.

What’s the one thing every business needs? [scroll down]

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Customers!

Yes, you may have unique products, superior intellectual property, a great development team, world-class executives, perhaps even a NASDAQ stock listing. You may have efficient manufacturing, excellent internal communications, terrific PR, a slick website, and a green headquarters building. You may have ISO and cGMP-compliant processes, strategic partnerships, and cash in the bank.

Until and unless you have identified who will buy your product and why, you do not have a business.