Penetrating and Expanding Your Medical Device's Market Reach

Last year was full of highs and lows for the medtech industry as profitability didn't quite meet investor targets. Even so, there’s plenty to be optimistic about. Revenue growth surpassed expectations and a record number of innovative products hit the market.

From where we stand, the future of investor confidence in medtech hinges on two key factors: the industry's ability to navigate the current economic headwinds and its aptitude for expanding margins and profitability. Investors are keenly interested in how companies will handle these upcoming opportunities and challenges, particularly in light of the anticipated decline in interest rates.

As the co-founder and CEO of FastWave Medical, I know the challenges medtech markets can present. And my many interviews with industry pioneers on Medsider have given me insights into the strategies and frameworks of the best leaders in our field.

In this article, I delve into the essential steps and insider tips for expanding your medical device’s market reach and achieving growth in medtech.

Boost value proposition through an ecosystem

Joe DeVivo, CEO of Butterfly Network, has steered startups and billion-dollar companies, successfully acquired and integrated eight companies, and turned around four struggling businesses. At Butterfly, DeVivo and his team are developing hand-held ultrasound devices that make the technology more accessible and affordable.

Related:Have a Solution, Not Just an Idea, Expert Advises Medical Device Startups

Medical device companies traditionally rely on relationships and salespeople to train, contract, and sell to hospitals, doctors, and procurement groups. But Butterfly pursued a different path when they first commercialized. Instead of the default approach, they opened up a direct dialogue with practitioners and launched their ultrasound probes online. This strategy proved to be successful in building a strong foundation. “We have sold more than any other company,” he said. “We have the largest install base around the world.”

Today, Butterfly's ultrasound device is sold in 18 different countries online in local languages.

However, eCommerce revenue isn’t the whole picture. Understanding the potential of their device, the company created a store-like network app called Butterfly Garden, where third-party developers can create and sell applications to Butterfly device users. This has opened up numerous partnerships and created additional revenue streams. Developers pay for access to Butterfly’s software development kit, and Butterfly gets a percentage of each app sold. This ecosystem, which delivers new applications every few months, strengthens Butterfly’s value proposition to customers.

Related:Medtech Innovator Names First Latin American Grand Prize Winner

For Butterfly, being able to build a marketplace was the result of focusing on direct online sales early on. To follow in DeVivo’s footsteps when it comes to market penetration, don’t be afraid to explore unconventional commercial strategies that synergize with your product's strengths.

Reduce end-user workload

Dr. Bill Hunter, CEO of Canary Medical, is a former practicing physician, a seasoned entrepreneur, and an innovator with a portfolio of over 200 patents to his name. Hunter has been at the forefront of developing groundbreaking devices like the TAXUS drug-eluting stent and paclitaxel-eluting balloons. At Canary Medical, he’s leading the charge in smart, implantable medical devices that provide real-time data on patient recovery and health.

One of the most pressing issues Hunter sees in today's healthcare system is the crushing workload that providers face. "We don't have enough human beings to do the work that needs to be done," he said.

To address this need, Hunter recommends focusing on how to reduce hospital stays through technology. “If your technology converts an in-hospital to an out-of-hospital procedure, or it allows earlier discharge or in some way, shape, or form shortens that episode of care within the hospital, that's really, really important,” he explained.

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Secondly, Hunter said, "You have to reduce the workflow in practice, period."

In the past, the odds of a new therapy being adopted were heavily tilted towards those with superior clinical results, without much regard to the additional workload they put on the practitioners’ shoulders. However, today, healthcare professionals are increasingly facing burnout and early retirement due to excessive workloads. To make sure an already-busy practitioner reaches for your device, you need to come up with minimally invasive solutions that promote faster patient recovery and patient discharge.

Overall, Hunter reminds us that seamless adoption and a broad market reach hinges on your device’s ability to streamline processes by fitting into the existing workflow of practitioners, reducing in-person visits, and minimizing the time healthcare professionals spend on tasks. To do this, pay as much attention to your offering’s efficiency and user-friendliness as you do to its clinical efficacy.

Orchestrate mutual benefits

Before taking the helm at Reimagine Care as the CEO, Dan Nardi played a key role in scaling Livongo from a small startup to a successful IPO and honed his vision of value-based care at Carrum Health as its COO. He now leads the development of virtual solutions at Reimagine to move cancer care to the comfort of homes.

Nardi offers two key pieces of advice for expanding market reach effectively. First, find early adopters willing to try your solution. Working closely with them allows you to collectively establish what a ‘win’ is before a full commercial launch. Identifying the right client partners who are open to innovation and willing to invest time and resources into your product is crucial to get off the ground. As Nardi puts it, "It can sit there and look great on paper, but when the rubber hits the road, you'll have to be able to prove it."

Second, Nardi is a big proponent of mutually beneficial partnerships. For him, there’s no point in spreading yourself thin trying to develop every aspect internally. When it comes to forming partnerships, he advises identifying the areas where your core strengths lie, as well as where others excel better than you do, and partnering up with them. The goal is to foster a collaborative environment rather than a client-vendor dynamic and channel resources to what truly sets your company apart. That’s how you build a business at scale. “If your partner isn’t able to be successful and make money, your whole strategy falls apart,” Nardi explained.

To borrow a page from Nardi's playbook, seek out clients willing to try your solution early on. Work closely with them to define and prove success before a full commercial launch. This establishes credibility and provides valuable feedback. Then, identify your core strengths and partner with others who excel in complementary areas. Create collaborative, mutually beneficial relationships to build a scalable business model that can help ensure long-term success.

Balance commercial efforts and clinical validation

Trent Reutiman, former CEO of Mercator MedSystems, has worked in the development of minimally invasive interventional products for 25 years. At his last venture, Mercator MedSystems, Reutiman led the development of the Bullfrog Micro-Infusion Device, an FDA-cleared and CE-marked technology that delivers targeted therapeutics during catheter-based interventions.

Reutiman takes a prudent stance with market penetration. Rushing to the market prematurely, especially if your device faces complex clinical trial work and you don’t have a reimbursement strategy, will potentially do more harm than good and may waste your resources and harm your credibility.

“Even if the product is commercially available, without adequate reimbursement, its use may not align with the best clinical practices, resulting in suboptimal data and outcomes,” Reutiman said.

To avoid these pitfalls, he advises measuring commercial usage carefully. Bullfrog is a really powerful device, but it comes with great responsibility. Recognizing this, Mercator restricts sales of Bullfrog — not selling it to parties that aren’t positioned to use it appropriately. Their target audience is clinicians who understand how to optimally use the device, who also happen to be frequently involved in clinical studies. This ensures the Bullfrog’s potential isn’t wasted, and its credibility isn’t harmed.

“We have distributors that have been chasing us down for 10 years, saying 'Just give us your device,'” he explained. “It might sound great, but there really isn't much upside to getting ahead of yourself commercially."

For him, taking every offer that comes your way will likely lead you to a development plateau — a stagnant phase where neither revenue nor clinical data for your device advances.

To take a page out of Reutiman’s book, instead of leaping at every chance, remain disciplined and patient in the face of opportunities. Carefully calculate the risks and gains and balance commercial efforts with clinical initiatives. Additionally, ensure meaningful reimbursement before going all in. "Step on the gas when appropriate, but don't just step on the gas for the sake of stepping on the gas,” he said.

Team up with the big players

Marissa Fayer, CEO of DeepLook Medical, has been leading medical device businesses for over two decades. She’s the founder of HERhealthEQ, a non-profit advancing global women's health, and an entrepreneur-in-residence at Graybella Capital. She also consults many Top 500 healthcare companies and innovative start-ups, including Pfizer, Boehringer Ingelheim, Nuvasive, and the National Institute of Health (NIH) at Fayer Consulting. At DeepLook, Fayer and her team are improving diagnostic accuracy for radiologists with their AI-powered software to provide accurate, efficient, and personalized care.

Fayer has been in medtech long enough to know that the odds for a small technology company making inroads into hospitals are slim. That’s why DeepLook decided against hiring direct sales representatives. Instead, it partners up with entities that have established distribution channels, leveraging the market presence and resources of such large companies to get into hospitals. “Partners like Bayer Healthcare, a billion-dollar company, or Barco, which owns 90% of the medical monitoring business, can make those calls and get us in more efficiently as an additional product,” Fayer said. “That's how we get into radiologists' hands."

This has been a proven strategy for DeepLook. For example, during the COVID-19 period, when healthcare focus shifted away from cancer, DeepLook secured four commercial contracts with major companies and integrated their technology into existing product lines.

These partnerships provide alternative revenue streams that are different from the regular screening and diagnostic tools offered by DeepLook. For instance, the company’s partners might enroll people in their trials and use DeepLook’s software. “We're a utility there, and every time we get used, we get paid,” she said. “Some of it is passive income, and it works.”

To mirror Fayer’s approach, look for established companies with robust distribution channels. See how you can add value to collaborating company processes and explore ways to form mutually beneficial partnerships. Such collaboration can accelerate your market penetration and potentially open up unconventional yet surprisingly efficient revenue streams.

Don't get lost in the maze

A generic market strategy won't cut it in medtech. Understanding how to position your product for specific audiences can make all the difference. Here are some key strategies to help you reach and grow your target market: