With the economy the way it is “budget” is a word on everyone’s mind- including those in the medical device industry. It has been discussed that the US might be taking a back seat in the medical technology market because of financing and economic challenges. With these concerns in the back of everyone’s mind a recent article on MD+DI caught my attention. This piece highlights these issues and focuses on cost saving strategies for device startups.
In the article, Charlie Chi, PhD, suggests six strategies for a capital-efficient business model which includes factors like:
- Choosing the Right Team
Start-ups should consider partnering with professionals who have the right knowledge and experience as doing so can save both time and money.
- The Essence of Time
Emerging medical device companies should focus on getting their product into the hands of customers earlier rather than later.
- Choosing a Sound Regulatory Strategy
It is important to note here that most venture capitalists today require medical device companies to develop parallel regulatory strategies before funding.
- Growing through Strategic Marketing
Getting the right customers talking can help validate and promote a new medical product or technology in a local or regional market.
- Outsourcing Non-Critical Business Functions
Trying to own all of the business functions in-house and build one’s own team and infrastructure from scratch could be time-consuming and costly- consider outsourcing non-critical business functions like IT, HR and accounting.
- Compensation for Sales
The ideal situation for a start-up is to have all of its sales team paid purely on commission with no base salary and benefits, such as paid vacations and health insurance.
The article concludes that “emerging medical device companies that can think outside the box by accomplishing more with less cash will ultimately succeed.”
We are interested to hear your thoughts on this business model. Do you think these six points will lead to success in a market and economy such as ours? Are there any strategies you would add or take away? Share your comments below.
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