|An Embarrassment of Riches
The following is a situation that arises frequently in our consulting practice. There are helpful lessons that can be learned from it about gaining the market intelligence you need and making strategic choices without breaking the bank.
We received a detailed request for proposal (RFP) this month from a prospective client, a technology transfer office of a major university seeking to commercialize some apparently innovative technology that might greatly enhance the field of medical imaging generally and computer-aided diagnosis in particular. I'm often wary of these formal RFPs from organizations we've not served before, but this one was intriguing, and the technology seemed compelling. This academic group had already tentatively identified five imaging modalities or market segments where their technology might be applicable -- all reasonable choices as far as I could tell. The client's goal was to identify just one of these market segments as the first step toward company formation and product commercialization. So far, pretty straightforward, right?
Yes, but then the client greatly complicates matters by asking RFP respondents to address a large number of issues (16 in all) dealing with application niches, competitive technology assessment, and business development strategy. And, all these issues were to be addressed for each of the five imaging modalities -- 80 deliverables by my count! Therefore, any fully responsive consulting organization would have proposed a very large engagement lasting many months and costing north of $200k. Remember, this is from a tech transfer office of a university. Do you think they can afford such an engagement? Neither do I.
Here's the problem: What the client wants is not what the client needs. (This is not an uncommon problem in my experience; separating wants from needs is one of the major added values of a capable advisor.) This particular client enjoys an embarrassment of riches, namely a technology platform that is ostensibly applicable to many medical imaging markets, all exhibiting excellent clinical and commercial vitality today. But they're going about their analysis and selection process in the wrong way. What they should do, in my view, is focus first on a relatively simple -- and inexpensive -- approach to identify the best-fit market segment (if any), and only then embark on a more comprehensive investigation to sort out how best to bring the chosen opportunity forward as a new company or lucrative licensing arrangement. That's the only realistic approach to their dilemma under the circumstances.
So, what might this first step be like? It's hard to generalize, but there's almost always a way to shortcut the selection process. In this case I might consider the following steps:
Survey the various clinical communities and radiological specialties to discern relevant clinical needs, especially unmet needs
Assess the likely fit of the subject technology with those needs
Gain an appreciation for the competitive climate and participants in each market, identify prospective distribution partners and possible threats, and get a rough measure of latent demand for a new product entry
This approach is likely to be sufficient to identify a strong prospective market, if not the very best one. (Is it really necessary to identify the very best market for initial entry? Is it better to remain on the sidelines waiting for the perfect opportunity?)
I hope you will find this real-world case study useful in your own work. Think first about what you really need to discover in order to get started, then frame your overall approach in stepwise fashion. You will likely save precious time and money.