Health Innovators
Health Innovators

Episode · 1 year ago

Michael Eckhardt On Crossing the Chasm Between Early Market Success & Main Marketplace Adoption

ABOUT THIS EPISODE

The results many innovators gain in the early market phase, don’t necessarily translate into main market success. In order to cross that gap, we have to look to adopt different ongoing models and frameworks. How do we take a fundamental breakthrough solution and bring it to market successfully? What does it take to deploy and instill what’s required to complete the solution for the buyer? On this episode, Chasm Institute Managing Director Michael Eckhardt, shares on the framework for increasing the chance of commercialization success, and how innovators can adopt it into their business practices. 




3 Things We Learned 

Inability to close the chasm accounts for many commercialization failures.

The chasm is the period between early market and mainstream adoption. This gap exists between the early, enthusiastic, visionary risk-taking customers (who represent 5-8% of the market) and the mainstream market, which includes the pragmatists, conservatives, and regulatory groups. The excitement of the early market may not be enough to fuel adoption of customers in the mainstream, and innovators need to be aware of that.

 

Not everything in innovation is disruptive.

Disruptive innovation is defined by having 2 or more of the following conventions - a change in behavior for the customer in that market sector, a change in skill, and a change in process of workflow.  

 

9 criteria and factors for failure and success in crossing the chasm.

The primary indicators of success or failure when we go to the market are target market focus, a compelling reason to buy, and a whole product solution. Additional factors are strategic partnerships, sales channels, pricing models, competition, positioning and messaging and how to move into other segments.

 

Guest Bio- 

Michael Ekhardt is a keynote speaker, Senior Workshop Leader, strategy advisor and the Managing Director at the Chasm Institute. He is a veteran of Price Waterhouse (PwC), Harbridge Consulting, Hewlett-Packard, and Pepsico. An MBA graduate of Harvard Business School and a Wall Street Journal Award winner, Eckhardt is a recognized expert in leading 1-day and 2-day Market Strategy workshops aimed at one specific client outcome: accelerating growth for their technology-based products and services in the next 12-24 months.

 

Visit http://www.chasminstitute.com/ for more information and connect with Michael on LinkedIn https://www.linkedin.com/in/michaeleckhardt

Welcome to Coiq and first of its kindvideo program about health, innovators earlier doctors and influencers, andthey are stories about writing the roller coaster of health care andovation. I'm your host doctor, Roxy Founder of Legacy, DNA marketing groupand it's time to raise our COIQ welcome back to you, Li Qu listeners.On today's episode. I have with me Michael Etgart. He is the managingdirector for the Chasm Institute and this episode is going to be slightlydifferent. We are going to be diving a lot deeper than we have, maybe in thepast, around the commercialization strategy that health innevaders use andthe different stages of that process and the strategy that's developed, soMichael welcomed to the show great thanks. DOTR Roxi, hey great, to behere, and I heard a lot of great things about the people in your audience andall the health care and medical focus that you all have so o Li, be here andlooking forward to the jhed great. So one of the things that I like to do isto just kind of kick off for listeners who don't know who you are and aren'tfamiliar with. Your background is to have you just start off theconversation by sharing a little bit about what you do, and you know littlebit about your background sure yeah happy to do that. So yeah name isMichael Leccaran. I've been working in disruptive inivations and going tomarket with new commercialization strategies. It's actually flown by veryquickly actually closer to twenty years, and the Sol focus has really beenhelping, bose new ventures that are fundamentally new startups, but alsowithin larger companies. You know the Phillips, the world, the an Dicken sinsand so forth on health care and others to really take inovation in a way thatspeeds things to market in an effective way, and so we hol tools around thatwe've written some books. If some of your listeners or viewersmight have heard of our crossin, the chasm book came out more than fifteenyears ago, were havping recorded sold about threemillion copies in that time period, which is lock by the way Harry Pottersold three million books on like Tuesday afternoonn his boom time so,but we think they've got in the right hands of entremreneurs and MEDTECH andhealthcare, init and other areas, and so that's really been our focus pacehere in Silkan alle and you know working worldwide, but really love thework and see the impact of it on a regular basis, which is great, yeahyeah. So you and I have had some really rich discussion around the defusion ofinnovation theory and so just to kind of go a little bit deeper. What do youmean by the Chasm? Go? What does it mean to cross the chasm yeah socrossing the casm on the name of the book? But, more importantly, theconcept is, as you Dr Roks you're, asking yo about it. It's really. How doyou get from the early? You know enthusiastic visionary risk takingcustomers which only represents about five to eight percent of the overallmarket and most technology based businesses to we call the mainstreammarket, the real market, the place where there's pragnatists conservatives,people under regulatory requirements, much of that and healthcare inothers,and really taking early break through solutions. T A cant just remainbreakthrough, but actually B have become pragmat, but we call wholeproducts to solve real workflows, real painpoints, real physical and and workflow based product lines andproblems O. that's really where we go with this and the chasm is the delaybetween the early market actually adopting os something and later so. Youhear a lot of buzz words, IOT and AI and distributed computing and things inMedtech and in health care. A lot of that noise is about early market things,but that doesn't necessarily mean that main marketplace. Customers areactually buying and Usingi, and so what our books do is really build. A set ofpredictive models that allow you to take the excitement from the earlymarket, which is not enough to fuel...

...adoption. Bo Customers actualy get itacross and that's what he've done for about. Oh, we just counted up the otherday about two hundred and twenty five companies in the last fifteen years ashelp them cross this casm into the main marketplace. I think that's fantastic.You know. Our listeners probably heard me talk about this stat very, veryoften that over ninety percent of innovations that are brought to marketfaile to reach any adequate level of profitability or coster adoption. Soyou know the work that you do. The work that we do is so needed in themarketplace. So it's great to see how you've been able to help hundreds ofcompanies be more successful yeah. It really is very rewarding. I mean it'sworked that I've been doing, and people sometimes ask Cay, Michael after awhile you and your Casminto, don't you get bored working onto spend problemsall the time? My answer is: every week literally Dr Roxy, we learned newapplications for what we did. We did not START OUT IN HEALTHCARE AND MEDtech. We start off an it as oftwere and computing almost twenty years ago, andthen, in the past fifteen years, things like medical device ads and things likepatient mier equipment and things like FDA software requirement for new drugtrial results all those kind of drove adoption, the other into other areas,and that you and I had a conversation a few weeks to go back than Christiansonwho's. A hard business gool professor, who I know you've, done a lot ofreading and took a course there as well, and my MDA is actually from Harvard andthat's many years ago. But ever since then I've been focused on. How do youtake a fundamentally break through a new solution? We call those of course,disruptive inevations and bring those to market. That's really the the secretsauces. We should call it and it turns out that there's actually nine ways tofail in doing that. We can talk about that a little bit later in the Poyeah,but it turns out that those nine ways only one of those has to do withproduct there's so much occession around. Oh, my God is the product readyand, of course, that's a key question, but there's eight other indicators offailure or success when you go to market, and so that's really thelearning that we've had both in our books but, more importantly, in theworkshops and the podcasts and everything else that we've done. So Ithink you and I are pretty closely aligned that there's still some goodwork to be done in this area, absolutely absolutely and enough workto go around. That's for sure, so so for listeners who don't know some ofthe concepts that just really roll off our time. How would you describe thedifference between bringing a innovation to a high tech, innovationto market versus other market solutions? Yeah whatiso the distinctions greatwell and as you as we all know, who's on this podcast, there's buzz wordsfloating around in the ether way too much, including words like disrruption,IK, innovation. Those are all you know. It's like. I hear those one more timeof someone te like that ight and we have a very specific definitionof what we call disruptive innovation versus what we call incrementalinnovation or what we call sustaining innovation, they're, both valad yeahthey're, very different in terms of WHO's, ready to buy and use those andby disruptive innovation. This is something that you and I hadn't talkedabout a few weeks ago, but disruptive. We actually have three specificdefinition: factors that cause your product or solution to be dintruptiveor not so disruptions used in many many. You know ill conceived ways. You know,I'm my stomachs feeling a little funny. I must have had a disruptive breakfastthis morning I ar or my fatherinlaw was once again. Disruptive at the othoseare all interesting uses, but our definition is software. Hardwaresolutions are disruptive if two out of these three indicators ar a yes or astrong yes, one of those is: Is there a change of behavior acquired by thecustomers in that target segment? Yeah change the behavior: Do they have to dosomething differently or think differently? Secondly, is there achange in skill required by the customers, who're going to use thisproduct and then thirday rtation processor, workflow required he changeof behavior, changing skill and...

...changing he workflow and what we'veseen the two hundred and twenty five examples of the companiy you work with.Is that if two ont of those three Ar a yes or strong? Yes, then you're notgoing to the mainstream market place or RI WBA? U Mark Coil deny you thatopportunity, because it's not ready to adopt an example. What the artificialintelligence AI has been in the early market for decades, and it's finallycrossing it's finally crossing into area voice, recognition andcybersecurity and there's some healthcare applications to that arebeing talked about, but not yet fully baked for the main marketplace. Otherthings like devices, think of an apple phone with extended better battery life.That's not a disruptive inidation! That's a sustaining inivation! Now theengineers at apple working on the battery life might have been workingvery hard and had some technology break throughs, but for the custer Rifer youand me would be hey cool the batteries. Now. Fifty percent longer lasting, nochange, N behavior or no change in skill. No chancing work flow formation.That goes right to what we call main street mainm marketplace, and so thosecompanies that confuse those two get so excited about disructive ones, thinkingthey can adduct those into the main market place immediately. They getrejected, and then they do all the wrong things. They retrain the salesforce. Again they cut price. They do all these things. No, those will work.We need to do something different, that's crossing the chasm with focusedtargeted segment approaches, and that's really what part of our conversation isabout here today, yeah yeah, absolutely- and you know a lot of companies thatI've worked with talk about targeting strategy, but in in a different context.So the lens that they're looking through is maybe especially inhealthcare, is the difference between a user versus a buyer. Right reversessomeone who's going to prescribe it right, O they have a tendency to segment based upon roles or use cases,and and really often forget that this whole, you know defusion of innovation,theory right and in the wins of of really reshaping the messaging and theproduct offering for whateer. They are in that continuum, exactly yeah. That'sa great way to summarize this important point that we're describing here,because it turns out this difusion of venedation or this lifecycle Imentioned five to eight percent of customers- are the non normal customer,ther earliadoctors, they might not be physicians. Actually treating patientshit might be an research in instoduce. They might be. Universities EAdifference that Ar pressures than somebody actually doing a normal set ofdiagnostics on a on a pation. At this point, the main marketplace is thendivided into. We call early practice or early cautionary customers. That's aboutthirty percent of the market. The next remainder of that is aboutforty percent, which are conservaatives which do not want to buy until they'veseen ten other clinics or physicians or other people in their city, not inJapan. If they're in Toleto Ohio, but in Ohio, actually defining that usingit and recommending it, and so this is what makes the world so interesting,but also so frustrating to a founder some of these people at be on thepodcast or executives in large companies who say we are so excitedabout this breakthrough and the problem is you, as the vendor is more excitedabout the break through than the customers about excited about it? Yeahspecially, when you think about what you just mentioned a minute ago, whichis there's the patient, there's the caregivers. There's the payers, there'sinstitutions that regulators that's a very completico system to go into sueyeah, so give you an example that happened not too long ago was workingwith the Cliet and they were in the early phase right and they werepiloting their their solution and they were reallyexcited. They had a pretty big local hospital system. That said, yes, theywould participate in the study and they finished the work and they had greatresults to promote. So they thought...

...that that was just a home run likestraight past, go collecting their two hundred dollars right, I mean they justthought that they were destined for success, and so they go to this otherhospital system. That's literally right down the road and they the you knowthrough the dialogue. They tell them well, we need to do a pilot study firstand they said Oh well, I'm so glad you want to do that because in fact, we'vedone that and here's the data of what we did at the hospital system down theroad and they said well, no, we have a different patient population yeah, it's the same community. How do youhave a different population, sae same highway off ramp but differentcommunity right yeah? And that's what makes this complex, both with how youwork with some of your clients and what we've seen a CAS mistitude is that theonly references that customers Parfup are what we call relevant referencesand relevance is not something we's, the better could efine Sho ihavecustomer themselves, and so it turns out that MEDTEC and health care- andperhaps even things like pharmaceutical each one of those three- has thedifference that hurt and points to go after so I'm with your permission, I'mgoing to use the F word a few times during this assion its Tory. Don'tworry, the WORRD is focus yeah, the other word and it says, as you'recrossing the chasm. We've now got these couple hundred examples that if you tryto go bload or horizontal, you will fail. You can do everything about it.You can double the feature set in the product line. You can retrain the salesforce you can cut price. None of those things will get you across what theFword Prinso is. Can you focus on specific set of well- and you mentionedhe word a few minutes ago. It's really about the buse case or the workflow in a segmentin a Specifi geography that really focuses and drives things through, andso, if you want a little bit later in the in the discussion here, I can giveyou a vivid example of how healthcare actually relates into this as anexample, but will preamble this with is the idea that, if you're more excitedabout your product than the market is excited about the product, then you'rein the chasm yeah you're getting maybe pilot programs you're lucky, but notrue, adoption, no use etcet, it's really just early Markes Uccess, whichis interesting, but not indicative of future success. Well, ind a lot oftimes. I see companies that they end up. You know burning through their entireeighteen month. You know runway because they are pitching an early adoption,early solution to the mainstramg market and there's you're describing no armtwisting. No pricing nothing is going to persuade them to buy at that stage in fhact. You know if you'd like I'd,be happy to just put very briefly two examples out there. I think to resonatewhat you're coming up with and describing one is a nonhealth careexemple and one is a health care and medical example. The nonhealth care oneis we started working with Google about three years ago. They bought a companycalled nest. You A no nes. That's does the third stats that you can controlwith your smartphone and nest had a very successful early stage of earlymarket. They sold tens of millions of doc put nes devices, and this isbasically you selfinstalling, this thermistat in your home. So you canmanage your air conditioning in Florida or you're heating in Minnesota, withouteven being there right so remote and now they're. Moving into you, know,security, cameras and other things to, of course yeah, but the thermistatexample was they sold tens of millions in the early market who got excited andbought them for three billion dollars. We were brought in to help them cross.The chasm turns out that the whole product, which we don't have time toget into here in the podcast but a whole product, is what's the totalsolution needed to solve a customers. painpoint of problem yeah and as oreWorkclote, they had it for the early market. They had the Wyfi capabilities,they had the install they even had a screwdriver and the brackets and screwsin the box with the thermist at to...

...allow you to assemble it and Eh. Now,if you or I are one of your viewers in the podcast are a earlier doctor, you'dsay to yourself they've thought of everything. Look at this screwdriveretcet. This is awesome. Why, on Saturday afternoon, I'm going to spendsome time put this up, get it to run and my life will be better as resultI'll be the first one in my neighborhood with this, and I can bragabout t a little bit to exactly. He just uve got to my house that you don'tyet have right w right that first mover for early customers a big deal to attimes now, even though this is a BTC example in the case of nest, what theyfaild to recognize is that most normal people don't want to spend a Saturdayinstalling their own thermis out of their house. Most normal people have,and people laugh when I say this: They actually have a life. A life outside oftechnology rather be spending time with her family or painting or golf orsomething Yep, no, that five to eight percent. What nested was misread that- and thisis public information, or else I wouldn't be sharing with you. Theymisread that and thought that that was an indicator of the entire market needs.So now they launch into the main marketplace with this given truesuccess in they early mark and they fail. The res they fail is the wholeproduct failed to include something that normal customers wanted in theirwhole product. What was that installation deployment by somebodyother than themselves yeap? They wanted somebody n to white band, Tod drive upto the House with a leather belt don typically, you know somebody in theirforty or fifties have done this a million times and they're going to comein in an stall it for you, and this didn't have that solution. That's agreat example, so so the example would be, they have a hundred percent wholeproduct for the early market and they had an eighty percent complete solutionfor the main marketplace. As a result, they hit that chasm without having theright solution in play so that s that's it's a nonhealthcare example, but isvivid that sometimes it's not about the product. It's about the suppluce, thistheployment, the install all those things required that complete thesolution for the customer and otherwise they're not going to buy right right,yeah gest in terms of how people sometimes misunderstand the idea abouthow you actually win in the early market versus the main marketplace: WheYeah! Absolutely so you kind of touched on this earlier, and I want to have you answer thisquestion for our listeners. From your perspective, why is having a decisionmaking framework important? What are the benefits of using a model? That's grounded in theory versusinstincts and past experience, Yeh, great okay, so past experience isvaluable. Don't throw that one over the you know under the bus, but on theother hand the past experience. We see fom marge companies where they comefrom Johnshon, Johnson or from decton Dickinson or from other companies inhealth care. They come from large companies and start a new ventureeither within that large company or on their own yeah, and all the rules ofengagement on what it takes to win in mature markets is the opposite of whatit takes to win in early markets, and so the experience is the wrongexperience. Unfortunte yeah, the other Pece Tha should mention, is if you're,really a lucky person and every time you go to Vegas you win and everythingyou've touched is turned to gold. Then you don't need frameworks or tools. Youcan just go out there and launch a product. You've probably got about athree percent chance, O wink, but if you're a lucky person go for it rightright, the other, if you're, the other. Ninety seven percent of really smartpeople who want to hedge their bets and manage risk, then, whether it's ourbooks or some methodologhy needs to be used to build what we call a systematicapproach to going to market, and so I'm putting a little bit tongue and cheekhere that hey, don't underestimate! Look it's part of every strategy you at,but if it's eighty percent of your strategy, then you're screwed, yeah yeah. If it's ten percent of yourstrategy, great and so to answer question directly, what we've done istake the luck factor out and the gut...

...feel out and say: We've actually putLikin place for nine key variables. They ECAN score and rig and Renk, andlook at different segments and decide which ones do you go after yea of theefrward focus on which ones do you hit the paws but non because they're notready to adopt and which ones do you actually cross off m? I remember backto my Harvard Business School days. One of my professors said: If you haven'tcrossed anything off lately on your target market approach, then you don'thave a strategy. You have a hope, you have a wish. You have vision, but youneed to say notice on things too Giveiu the other example. But yourpoint is a really good one that the vivid nature of whyis a systematicframework helpful. It gets all the smart people on the right page and theright direction across RND marketing, executive management support productetce. That's really the goal: Yeah Yeah, that in yet unity for a team,especially I mean really at any stage of the business lifecycle, but thatunity is just critical for success. Righe, like you would describe earlier,you know a company with a better product can be superseded by a companythat is all working together in a single direction. The other thingthat I think you touch on is setting priorities, so focus and priorities,and so you know, every organization has limited human capital, limitedresources, limited funds, and so you know having a framework kind of h,helps you decide what you're going to spend your resources on and what you'regoing to cross off the list right and it's that framework around a word.That's overused, but it's about alignment. It's getting not just RNDand development, but product management EXPEC, tee management, everybody on thesame page, and so when I ask sometimes I'll as a client, you know who are youfocused on they go. Oh we're very focused where you focused on we'refocused on finacial titutions, who are they well all ensurers and banks andcredit unions of all sizes. It's like you're doing spray and pray you're, notfocus right or in health care. It could be well we're going after hospitalsystems. Oyah, that's inting on large ones, mediums smalls, which country inthe US ore in the UK are they small, private hospitals or large publicinstitutions. Those all have very different buying scenarios, and so ourlevel of detail gets to the job title and the type of segment, and it may bethe purchasing officers in small Te, midsize private health care networks inthe US. That's the level of Grannulartyyo got to get to as opposedto to spray and pray at horizontal, yeah, yeah, absolutely so, and you'rekind of touching on this a little bit. But you know what happens you know forfor those folks that don't have a framework or a model that they'refollowing what happens when they overlook one ofthose decisions. You overlook one of those strategies right, so I did myhomework on targeting and I did my homework on pricing and maybe even theproduct, but I really didn't flesh out this whole partnership and alliantstrategy right, Yeph well, and even though we're not working off of slideshere. Let me just list out the nine criteria and people don't need tocommit these to memory. You know there might be some slides that can get fromDr Roxy after the podcast. If you like that, we provideer Youcan go to myLininton page, whatever you want to do, but what this really does a say:There's nine criteria and factors for failure. If you do them wrong or ignorethem that the nine factors for success, if you get them right, the first oneyou mentioned a few monments ago, which is what is the target market focusyou're going after not health care institutions worldwide, that's sprandprey, that's Torecipe for failure. Yeah, either way I should vention of the twohundred and twenty five examples of US helping companies cross the chasm,software and hardware and technology services. We have zero examples, notthree but zero examples of going horizontal and broad and wooing in themain marketplace. We've got two hundred...

...twenty five examples of verticalfocused segment, systematic approach, much like what you're saying and andwhat I think you believe in totally yourself. In fact, I know- and youdidn't ask me to say this- I know you're coming out with the book here inthe nearer term yeah. I think it very much ecchoes and reinforces what we'retalking about here as well, which is great. Thank you, sory o theycompliment eah other very well. They do yeah. Their book ends to the same idea. The nine factors one s are youtargeting properly. Two is what we call compelling reason to buy and Copellereason to buy is not just. Is it worth? It is the price point right? It's is itsolving a near term problem? I have where the regulatory pressure, patientpressure, workflow problems and if you have to explain to the target segmentthat they have a problem and they don't reck and they don't recognize they havethe problem go find a different segment. Oh my Gosh, can you repeat that you see that way too much which anexecutive an a founder goes. You know we have a new break through in you know,in Orthodoncha or in hearing ad solutionsor in medical monetoary equipment and hospitals forheart patients. The only problem is, we have to educate the market on theproblem because they don't get it right, answe, wor, B, Thay. No, you don't getit Tbat, they don't get it and they're not going to get it go, find a segmentthat hecthat actually cares. Oh, my goodness, absolutely again, this is oneof those instances where so much I mean I've seen companies fail because theyaren't willing to look at it from the lins of their customer Wul, just goingto continue to pound everyone in that market to convince them that they havea problem Y ur out of money before they get to the people. That know they havethat problem. Well, and you know if there is no one in the market whorecognizes the problem, then it's a good idea to find some other hobby orlocation market, but the reality is. The sad thing is, I think you- and Italk about this. Dr Roxy in our call a few weeks ago- is that there's so muchwaste in the system were great entrepreneurs and great corporateexectives are going after markets and not gaining traction, because theyrefocused on the wrong set of painpoints, where customers don't get educated,they don't need to it's. The real reaction should be what took you solong. Of course, I'm ready to adopt this. Please come ou or o this sothos,the first to is target market segment and compelling reason to buy the thirdone is whole product and again we won't go through these in great detail, butit's what's the total solution needed like for nest, its installation, whichwas missing, fourth, is really who are the partners and allods who actuallywill support your whole product partners are people you pay to workwith you to complete tolbig allies are journalists and bloggers and industryexperts, who you don't pay, but you better have them on your side, yeah atleast neutral. The next one is your sales channel? How do you actually goto market? Is it a dret sales force? Is it bars? Is that third party experts isit some other version and ther remaining ones really drive down intothings like pricing and price model, on into your competition and who you'recompeting against into position and messaging and finally, and much moreimportant than anything else you can think of? But that point is it's notthe ninth most important one, but it's. If we win in this segment, how do wemove into other segments as well? So every product line we had theliberty of working with the Phillips back in the day on their aed device?And while I can't and the that's the automatic external Dhe firmilator,which is now a worldwie phenomenon, Phillips has sold three billion ofthese or more. I can tell you a the scoring rating and rank ing theyutilized with our help. They did all the hard work we just provide hem withthe adalytics and the screen got them to one precise stepment that drove thefirst fifty thousand out of seventy thousand ND AD devices on the planet,and it wasn't hospitals and it wasn't a...

Jims and it wasn't schools. It was airlines right, Brim,airliner, scored a forty one out of forty five on the nine point scale,whereas other places was not as high a compelling reason to buy so can't gointo too many details there, just because I don't want to dovolse toomuch, but that drove it into the full set of what will call Tornado strategylater m yeah yeah gain changer. Dame Change Rupo, yeah, absolutely and theirony is: I think, that anybody listening to your series of podcast,whether prior ones or follow ones, ones to this or this one. If they'relistening n watching, they probably already have the instinct that asystematic approach, methodology of whatever sort theychoose will be much better than the absence of one and we have amethasology and we work with you now, thousands of executives and once in awhile, quite frankly or nine point strategy, checklist or a tech marketmodel, O people look at that. You know and let's say, we've beet a few peoplego. You know what I'm not sure I believe fully in your model, and Iasked them what bottle O craer. Do you you go well, we don't have one ohey howabout this and the Aptece of something better? How about do this? One, whichwe use two hundred and twenty five times? Okay, funny you describe phenomenon for R audience, but it's youknow even something that I've experienced as well. You know where Ihad at health innovator. They have an idea right. They see a problem in thesystem, they've been in the system for a long time. They decided that they'regoing to develop a solution. So the first thing that they approach us withis they want someone to build a website and create a logo right and I'm like well how out we start withstrategy before we get to the website right and there. After one conversation, itwas a parent that that was not my customer well and the background or on this. Thereason that Dr Roxy and I are on this podcast is not the reason she reachedout to me and the reason I said yes was. We are very aligned on this idea,that's fundamentally about what you just described, which is of those ninepoints. Target Mark Focus, compelling Reson to buy TCERA position andmessaging, which includes website, is the eighth one on the list. We getplenty of emails from companies saying we're starting a new company, we'restarting in a product line, we're struggling with our position andmessaging. Could you help us work on the logo and the messaging? And we sayyou know those are all interesting things to do. Hav You already addressedthe other seven areas above that including your strategy and thet. Youknow what they say. It is a you know. Those other ones are really hard. Youthought we start with product positioning first right right and thisgthe fact o the game show gone. You know the Buzzer that goes ar can't proceed if you ove youretargeting and what problem you're, solving and youere wasting your moneyon websites and messaging etcetera, and that's why you and I are pretty closelyaligned on that. I think yeah yea, so we've kind of given a number ofexamples, but just in case you have some other ones. You know getting yourperspective on why you think some health innovators fail and why somesucceed? Okay got it. The R word comes up here, which is regulatory,oftentimes, H, n. We see regulatory as the enemy because imposing requirementson an industry that may not always want them. The truth of the matter issometimes regulatory requiremis, actually B, adoption as early a doptorsmay buy without regulatory requirements, but the main market place says wow.This new FDA regulation is coming into place, O January first, two thousandand twenty. We need to get ready for it, and so the short answer is regulatory.O can be your friend if you have the right position in mind in terms of howthis really helps you meet and and Adheres Tho regatary requirement in thefuture. But the biggest issue was a phrase that you used a few minutes ago,which is innovators, whether in big...

...companies or in small companies and newventures, if they're thinking inside out, which is if they're starting withthe product heresthey're already in trouble, if youcan start with the problem and work your way into what the product would bewould be a much better and more healthy way to think about it. I'll give youmoo example here this updated our crossing the chasmbook last year and we didn't really want to, but the dean of theengegeneering school Stanford came to us two years ago and said I'm stillusing version to of your croshing. The Chasm Book. Big tamples are getting alittle bit older, you know, can, can you come out with a new one, so peopleunder the age of thirty would recognize the name of the techaisi. Ok a so wereally wrote the book added Hem new ones in you know apple and Google and sales forse and awhole host of things, but the one that we left in there was our very firstclient, and this actually relates to to medicine and and drug therapies. Okay,company called Docuumetam, which, which was launched more than fifteen yearsago, was a spinoff out of a xerox labs that took analog information paper. Didthey based data and moved it into digital form? You remember, and some ofus are old tos remember thes. Some people are predicting all the digitaloffice. Sorry, the paperless office was going to occur boy, one thousandninehundred and eighty five Wen wavin, maybe if onethusand nine hundred andninety by night, we're still not quite paperless yetright right, but thisdocument ancint software, which was hundreds of thousands of dollars inprice, would promise to take a workflow, that's currently paper based and makeit digital, hmm much more efficient, much more effective, so documentam theCEO came to us. His name was Jeff Miller. This is more than fifteen yearsago. Instead, no, we have a problem. We've identified, seventy two possibleuse cases, meaning so do possible setes that could benefit from going fromanalog paper to digital. You can imagine what those are law, ferms, yeah,Ivat institutions, schools, you name: it: hospitals, healthcare facilities, state and local.Seventy two yeah- and he says we know we have a problem because we only haveseventy two employees in our company and with seventy two possible segments.That's a bad ratio Yep, but with our methodology we took them from theseventy two down to fifty in the scoring and rating ranking. That wasthe easy part down to thirty three down to twelve and then down to the finalthree and the top segment we called the beachhead. Segond for crossing was one specific segment. Here's what it was.It was the top forty PHARMACEUCA companies who are seeking FD approvefor new drug therapies are trying to accelerate the prival process throughtheir clakopra process that that's, how focused we are and and the targetcustomer segment was the VP of government regulatory affairs who's.Measured on how fast can you get FTA approval, their jobs line for thatbrilliant, and it turns out that it's a relatively modest segment, but it wasthe top. Forty was Glaxzo fizer to Kata, you named them yeah and they all havethe same problem and the work flows that we identified was. It was cost emabout a million dollars a day in delayed approval of FDA drug, becausethe patent of course is expiring before the approval for launch is actuallygiven, though generics come out, as you all know, EP quickly, and it cuts byabout a million dollars a day, the cost of a potential revenue growth. So ourclient documentum focused on that is the first segment put eighty percent oftheir sales effort into that one and one thirty six out of the top fortyfarmac companies within eighteen months. Thirty, six out of forty pretty goodbadding average. I mean it just goes to show you how being hypertargeted right is so critical. You think you're taking a risk when onedoes that you're actually reducing and then the second segment was medicaldevice companies who have the same problem and we're actually talking tothe farmer companies about this...

...solution. Arones WIRH, the law, firmswho are then helping the others. So you get the idea and then it exploded intoa three billion dollar business. They did all the harder work. We providedsome workshops to do the scoring and rating, but the real part is done bythe client and e eventually got bought by by EMC and then later by Dell, andso now it's a large multi billion dollar business AA, large mother Shet,but started off with one segment focus wow and the funny anecdote on this, DrRoxy Is Jeff Miller was asked later. I in a Wallsreet Journal interview: Hey,wasn't that kind of risky to go from seventy two possible stegments to one,but you know what that was risky. You know what was more risky, neverfocusing right and doing the fom, and so I think this is very intuitive forsome of your viewers on the podcast but actually executing on. That is quitehard. So that's a just one of the system atics. So that's! That's anexample that I hope is fairly vivid for people in the in the call here today.Yeah. I think it's great. I think it's a great example. So in general,healthcare as a whole is a laggard. You know the industry is really typicallylate to implementing best practices around business and marketing, and youknow the system has been designed historically to where you could bewildly successful and not practice anything that we've learned in school,no, no right, and so what I think is so fascinating is that you don't work justin healthcare. You work across all industries, so help our listenersunderstand. Is there one or two things that you've discovered that we haven'ttalked about? Yet that other industries are doing that healthcare could benefit from that might not be on their radar. Okay, God it yeah.So a couple things around that one is most of our workers B to b. We do somebtcy work, but a lot of the health care work that you're describing and thatyou work with, as well as business to business. What we see is two differentplanets. We just de not tebuild Industrieis, where it's much easier toPu, arket yea to regulated industries, so things like, for example, financial,which is SEC or security exchange, commission, regulated or medical, whichthea related, of course in the US. What W we see is that sometimes health caremakes an excuse, and, Oh, it's so complex and we have regulatory pressure.Our answer would be is if you can really focus and identify. It may notbe seventy two segments, but it might be twelve and get that down to the toptwo or three. The lessons we've learned from vast large companies and fromsmall ones and the large companies are companies like n Dixon. You know bd orThormo Fisher or Naguan, life sciences or others. Those are all focused on.Can we start with one specific workflow in mind and that discipline actuallyCano Stiken valley, you know fifteen or twenty years ago, and we think we'played a small part in having that occur. There's a misunderstanding thatSilken valley and other tech, cubs in Boston or Chicago or New York and otherplaces that this is basically that a're always like managing and getting intohigh risk situations, and the opposite is true. Right, most great, most greatcompanies, even Silken Valleys, started with a modest amount of risk and asmart level of focus and I'll close on this one, which is the most successfulcompany on the planet, and this is where healthcare Coul also learn from,has an incredibly complex supply Chan. It's called Amazon you've all heard ofit a million times Amazon in their first six years of life, follow the Fword very carefully to focus word what they do. They sold one product or sixEESES. What was it was books and they try to notsolve world hunger. Theyfocus on one area built out the entire supply chain. How many healthcarecompanies would be as disciplined as that to actually focus on one key onthe piano on one particular product category and solve that one firstbefore they jump into all the others.

Absolutely words of wisdom right there,listeners hops in some of the great innovationsthat some of your viewers and listeners are working on the next. You know sixmonths, twelve months and eighteen months, and you know if there's youknow a reason to put a systemmatic approcion place. I think the book thatyou've written or a crushing a chasm book or my linked inside has somevideos on it. Whatever resources somebody finds useful, use the and tryto really have an outside in perspective, and not the pod outperspective, it's the most dangerous thing you can get stuck in yeah yeah.Absolutely so that's really great. The last question I have for you today, andI think I told you this Michael before we started recording we could go on for hours and daysbecause I love this stuff. I know you do as well and there's so much we cantalk about, but we definitely have to wrap it up and get back to other thingstoday. So the last question I want to leave you with is you know, with thisexplosion of innovation taking place and healthcare? There's there's athere's, a lot of innovators who are trying to sell their wares or theirsolutions to the same people, l right so Coi, CIOS product managers. I meaneverybody's inundated within the health system in the health plan providerswith all those innovations. So what would be an example one or two of howyou would suggest that some of these health care, innevators wilrise abovethe noise? Okay, God yeah, so healthcare innovators when you'rethinking about what types of markets to go after stop thinking about loo,meaning we're going to go out to the Mao Clintic or we're going to have togo after this large health oranization and focus more within the companiesthat you're going after at different job tidee levels. So it could be theCIO it could be the people in charge of customer satisfaction and patientquality. It could be the CEO and small companies if you say well, anybody withit with a sea level is the right parket. That's too bland do broad, and so apiece of advice would be is to get much go to the trade conferences. Read theblog, follow the people in different job titles and by the way linked in youknow, I'm not giving a plug for any reason than I believe it. Ca Do greatsearches on Lindon by Jo title, an by industry to find out really who thetarget is, and it could have eobe that in a large health network that one jobtitle like CEO may not be the one with the problem. Yeah with a Pictlit incharge of health and and customer satisfaction levels might be thepainpoint problem to go after, and so it's put almost like a heat map out tosay: Where is the flare where's, the heat where's, the flame, coming up? That's all about customer insight andcustomer development and not about product, insider product developmentand so you're right. We could go on with this, for you know several morehours, but hopefully this gives people at least an encapsulated view. Thatsays a lot of what you're doing right now. SAPRENEURS is right, but theinstincts you have about your early, false, positive successs in the earlymarket. Those don't translate into may market success. So it's almost asthough you want to do a different mode in man market and that's really whatour books are about, and that's what wee talking about her today. Absolutelythank you so much for sharing your wisdom with our listeners today andwith me. I certainly appreciate it. It's been a great discussion. How canpeople get Ahold of you if they want to connect with you later and then how canthey get a copy of your book? So a lot of people that come across have readyour book a decade ago. So how can they get the new version? So they've got thecurrent examples. Got It great, so a couple things one is: If you want areally short snippit, I think Dr Roxey, that my office had sent you six oreight slides. If people just fin, keep it vrety simple and just ask for those,if you dn't mind saying those to people that are reaching up to you, thatd begreat. The best way to reach me is on my linton page. We've got some videosand some other kind of blog examples of...

...really the key errors that people made.INOVATION andventure and new brickfrou solution sets so feel free to invite meon Mink Din, I'm happy to accept, and then our book is available. Ond Azonpeople are Os availe. You know we just get out in the new version and that'son Amazon and people can buy it there. I think there's an audio version to forthose that are not readers but are stuck in traffic over a multi hourcommute yeah, but in any case you know. I think what you and I have talkedabout today, a Sidh from books and blogs, and videos is there's afundamentally false set of assumptions about how great products go at themarket and the reality is a systematic approach. Not a wheeling dealing highrisk approach is a much smarter way to you know play out the next one to twoyears before you really get to the mad marketplace. Absolutely couldn't agreemore well. Thank you. So much for joining us on the show. Today, thanksDotr Roxy was a pleasure. What's the difference between waunchingand commercializing, a health care Novation, many people will watch a newproduct. Few will commercialize it to learn the difference between latnchand commercialization and to watch past episodes of the show head to our videoshow page at Dr Roxycom. Thank so much for watching and listening to the showyou can subscribe to the latest episodes on your favorite podcast, APPlike apple podcasts and spotify, or subscribe to the video episodes on ourYoutube Channel, no matter the platform just search Coyq with Dr Roxy untilnext time. LET'S RAISE OUR COIQ.

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