Doing what you do best. The challenge for a start-up to do less so that it will succeed more.
Challenge
Our client, a venture-backed company in health care technology, launched a novel technology to automate the routine and labor intensive task of filling syringes—from both small-volume vials, as well as large-volume reservoirs—for use in large metropolitan hospitals. While many prospective customers professed interest in adopting this type of automation, customer adoption though consistent, was slow. Moreover, some customers reported adopting the device for vial-only mode while others wanted the device for reservoir-based fills. Both modalities can be combined in one platform. However, they each require a different level of technical expertise to both support and use. And customers were experiencing significant problems with sustainable operation of vial mode.
Solution
Invest more to do less?
Needing to raise another round of financing—possibly the last round if sales could not meet expectations—we determined that while vial mode was the “sexier” technology, it could not be brought to production scale in the short-term. Usage on a production level scale was the actual benefit sought by all customers. Accordingly, we reasoned along with our client that while vial mode technology was attractive in theory, the company’s overall value proposition—and its future viability—was at significant risk. We worked with the client to modify its market development and sales strategy to focus the strategy on its ideal customer: the customer that was best suited to cope with the discontinuity inherent in a novel technology. And we recommended discontinuing vial mode capability. The client decided to do less so that it could satisfy completely its best set of customers.
Result
“Since your time with us, much has happened.”
The CEO reports that since the strategy and go-to-market program was modified and implemented (Fall 2006), sales of reservoir mode platforms in the last quarter totaled nearly $3 million, with an anticipated $3+M confidently forecasted for the end of the year, a significant increase over the previous run rate. As the CEO commented, “Our focus on what we do very, very well has put a renewed spirit in the organization that should pay off with increased sales…and may even contribute to a more rapid resolution of our technical challenges…(to) allow us to move back to our original product concept.”
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