August is a slow news month (and I’ve got other things to do) so I am updating past blogs. Last October, I wrote about Gradian Health Systems (GHS), a non-profit enterprise that is trying to deploy its “universal anesthesia machine” to improve the safety of surgery in low-resourced parts of the world. For some background, here is an excerpt from my post, “Universal”:
GHS was started in 2010, is based in New York City, and is funded, possibly solely, by a grant from the Simons Foundation, a philanthropy that funds basic science and mathematics research (Simons). GHS’s lead product is a “universal anesthesia machine” (UAM) that was designed by the company’s scientific founder, Paul Fenton, is fully-engineered and manufactured, and has earned a CE mark (a European Union medical device approval process based on a safety demonstration and intended use; see Medcitynews for a comparison to the USFDA approval process [Medcitynews article]). To learn more about the commercialization of the UAM, I watched a December 2011 TED (Technology, Entertainment, Design) talk by Erica Frenkel, GHS’s Director of Business Strategy, (UAM talk) which has had about 250,000 views (congrats!). Ms. Frenkel spoke mostly about the need for safe anesthesia (“35 million annual surgeries without safe anesthesia”), some about the machine’s unique features (has a backup battery and can use room oxygen), a bit about its current use (some number are in 13 hospitals, donated or sold?), but, unfortunately, nothing about affordability/pricing, distribution, partnering, funding, revenue projection, or other bits of a business strategy.
I expect that the management of GHS has worked out a commercialization strategy since the CEO, a consultant, and one board member have medical device company start-up experience (GHS Team). To me, such a strategy is key for convincing founders, whether grantors or investors, that GHS can effectively address the need. Whatever plan exists though, it apparently needs additional details since the company is advertising for a Director of Product Management (GHS Blog) among whose responsibilities are: develop a marketing plan; liaise with the manufacturer for production, R and D, and introduction; find distribution partners in target countries; and create training programs for use and maintenance along with eleven others.
I am clearly an amateur in the medical device field and not knowledgeable about surgical anesthesia, but my quick search indicates that there is some research that GHS can draw on to build its marketing plan. A study by Hodges et al. gathered data that defined the problems in anesthesia delivery in Uganda (Hodges et al. 2007) and Jochberger et al. gathered similar data for Zambia (Jochberger et al. 2008). I also found that the World Ananesthia Society (WAS) is dedicated to supporting anesthesiology in the developing world including through training, so may be helpful in assessing UAM adoption and use. GHS could also contract with consultants for specific parts of its plan to get a handle on pricing, adoption rate, and customer preferences and ability to pay, but the consultants would need to understand emerging world markets which may be a rarity. While GHS as done an amazing job of building and testing its UAM, it still needs to leap over the commercialization valley-of-death.
Recently I checked the GHS website and found the company has not made much (any?) progress in explaining its marketing strategy or designing and implementing its marketing plan. As indicated by a blog posting last November (GHS Nov post), it is still looking for director of product management and may still be working out a strategy because it hired a “Business Strategy Associate” in March of this year. The new associate seems to be a nice, capable person with an MIT business degree but has no medtech operational or practical marketing experience (GHS Mar post). I also found on the site an article written by students in Stanford University’s School of Business Program in Healthcare Innovation dated August 2012, “Marketing to Multiple Stakeholders in a Complicated Field” (PHI article). In it, Ms. Frenkel describes GHS’s general strategy consisting of six parts:
- publish meaningful results [this helps but should be limited to a few otherwise conducting multiple “pilot studies” is a distraction from finding potential buyers];
- build a network of key opinion leaders [these are known in the biz as KOLs and are a standard practice; again a few is better than putting effort into getting many];
- connect with potential users through conferences [again, standard in the biz and should be coupled with on-going information gathering on potential customers and decision-makers];
- develop audience-specific talking points [goes without saying];
- bid on contracts (Ms. Frenkel noted that GHS hired a consultant to help but perhaps one for each type of contract, NGO, government, private, is needed); and
- create a database of donor organizations that buy and distribute medical equipment [I surprised this hadn’t already been done; a basic question of any company with a product is who is going to buy it].
The parts are sound, but a strategy needs to include more stuff like distribution channels and partners, comparative products, differentiation from competition, pricing, service offerings, identification of decision-makers, and closing sales. As Ms. Frenkel said in the article, “We’re working on it.” I’d suggest she tap into local medtech expertise, starting with NYC Tech Connect, an entrepreneur support group that has an “executives-in-residence” program with one exec, Jerry Korten, who looks to have the right experience (NYC Tech Connect EIR). GHS is facing all of the challenges of starting a business plus selling into an under-resourced market and may as well draw on and adapt the experience of other medtech start-ups.