Health Innovators
Health Innovators

Episode · 2 years 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 kind video program about health innovators, early adoptors and influencers and their stories about writing the roller coaster of healthcare innovation. I'm your host, Dr Roxy, founder of Legacy DNA marketing group, and it's time to raise our COIQ. Welcome back to IQ listeners. On today's episode I have with me Michael ECKART. He is the managing director for the Chasm Institute, and this episode is going to be slightly different. We are going to be dive in a lot deeper than we have maybe in the past around the commercialization strategy that health innovators use and the different stages of that process and the strategy that's developed. So, Michael, welcome to the show. Great thanks, Dr Roxy. Hey, great to be here and heard a lot of great things about the people in your audience and all the healthcare and medical focus that you all have. So they'll be here and looking for to the JAT great. So one of the things that I like to do is to just kind of kick off for listeners who don't know who you are and aren't familiar with your background, is to have you just start off the conversation by sharing a little bit about what you do and and you know little bit about your background. Sure, yeah, happy to do that. So yeah, name is Michael Leckhard. I've been working in disruptive innovations and going to market with new commercialization strategies. It's actually flown by very quickly, actually closer to twenty years, and the soul folks has really been helping both new ventures that are fundamentally new startups, but also within larger company, you know the Phillips the world, the Betton Dickinsons and so forth on healthcare and others, to really take innovation in a way that speeds things to market in an effective way, and so we call tools around that. We've written some books. If some of your listeners are viewers might have heard of our crossing the chasm book came out more than fifteen years ago. We're have to record it sold about three million copies in that time period, which is a lot. By the way. Harry Potter sold three million books on like Tuesday afternoon right his boom time. So but we think they've gotten in the right hands of entrepreneurs and MEDTECH and healthcare in it and other areas, and so that's really been our focus space here in silk and valley and, you know, working worldwide but really love the work and see the impact of it on a regular basis, which is great. Yeah, so you and I've had some really rich discussion around the diffusion of innovation theory and so, just to kind of go a little bit deeper, what do you mean by the Chasm? Got It. What does it mean to cross the chasm? Yeah, so crossing the chasm the name of the book. But more importantly, the concept is, as you Dr Rocks, you're asking about it. It's really how do you get from the early, you know, enthusiastic, visionary, risk taking customers, which only represents about five, five to eight percent of the overall market in most technology based businesses, to what we call the mainstream market, the real market, the place where there's pragmatists, conservatives, people under regulatory requirements, much of that in healthcare and others, and really taking early breakthrough solutions that can't just remain breakthrough but actually have become pragmatic. We call whole products to solve real workflows, real pain points, real physical and and workflow based product lines and problems. So that's really where we go with this. And the chasm is the delay between the early market actually adopting a something and later. So you hear a lot of buzzwords IOT and AI and distributed computing and things in Medtech and in healthcare. A lot of that noise is about early market things, but that doesn't necessarily mean that main market place customers are actually buying and use it right and so what our books do is really build a set of predictive models that allow you to take the excitement from the early market, which is not enough to fuel adoption of our customers actually get it...

...across. And that's what we've done for about, oh, we just counted up the other day, about two hundred and twenty five companies in the last fifteen years. Is help them cross this chasm into the main market place. I think that's fantastic. You know, our listeners probably heard me talk about this stat very, very often that over ninety percent of innovations that are brought to market fail to reach any adequate level of profit ability or customer adoption. So you know, the work that you do, the work that we do, is so needed in the market place. So it's great to see how you've been able to help hundreds of companies be more successful. Yeah, it really is very rewarding. I mean it's work that I've been doing and people sometimes ask a Michael, after a while, you and your castmant to don't you get bored working us? Thank problems all the time? My answer is every week, literally, Dr Roxy, we learned new applications for what we did. We did not start out in healthcare and METTECH. We start off an item, yes, software and computing, almost twenty years ago, and then in the past fifteen years, things like medical device ads and things like patient money equipment and things like FDA software requirement for a trump new drug trial results, all those kind of drove adoption the other into other areas and back. You and I had a conversation a few weeks ago about the Christensen who's a hard business scope professor who I know you've done a lot of reading and took a course there as well, and my MBA is actually from Harvard, and that's many years ago. But ever since then I've been focused on how do you take a fundamentally breakthrough, a new solution. We call those, of course, disruptive innovations, and bring those to market. That's really the secret sauce, as we should call it, and it turns out that there's actually nine ways to fail in doing that. We can talk about that little bit later in the pod. Yeah, but it turns out that those nine ways, only one of those has to do with product. There's so much obsession around Oh my God, is the product ready, and of course that's a key question, but there's eight other indicators of failure or success when you go to market. And so that's really the learning that we've had, both in our books but, more importantly, in the workshops and the podcasts and everything else that we've done. So I think you and I are pretty closely a line that there's still some good work to be done in this area. Absolutely, absolutely, and enough work to go around, that's for sure. So so for our listeners who don't know some of the concepts that just really roll off our term. How would you describe the difference between bringing a innovation, to a high tech innovation, to market versus other market solutions? Yeah, but some of the distinctions great. Well, and as you, as we all know who's on this podcast, there's buzz words floating around in the ether way too much, including words like disruption, innovation. Those are all you know, if I hear those one more time, I sometimes feel like that. And and we have a very specific definition of what we call disruptive innovation versus what we call incremental innovation or what we call sustaining innovation. They're both valid. Yep, they're very different in terms of WHO's ready to buy and use those. And by disruptive innovation, this is something that you and I hadn't talked about a few weeks ago. But disruptive, we actually have three specific definition factors that cause your product or solution to be disruptive or not so. Disruptions used in many, many, you know, ill conceived ways. You know, I'm my stomach feeling a little funny. I must have had a disruptive breakfast this morning, or or my fatherin law was once again disruptive at the holiday. Those are all interesting uses. But our definition is software hardware solutions are disruptive if two out of these three indicators, or a yes or a strong yes. One of those is, is there a change in behavior required by the customers in that target segment? Yeah, change the behavior? Do they have to do something differently or think differently? Secondly, is there a change in skill required by the customers who are going to use this product. And then third expert change in process or workflow required, the...

...change in behavior, changing skill and changing workflow. And what we've seen the two hundred and twenty five examples of the company who work with is that if two of of those three are a yes or a strong yes, then you're not going to the mainstream market place. Try Away. The mark will deny you that opportunity because it's not ready to adopt. An example would be artificial intelligence. M Ai has been in the early market for decades and it's finally crossing. It's finally crossing into areas voice recognition and cyber security and there's some healthcare applications to that are being talked about but not yet fully baked for the main market place. Other things like devices. Think of an apple phone with extended, better battery life. That's not a disruptive innovation, that's a sustaining in advation. Now the engineers at apple working on the battery life might have been working very hard and had some technology breakthrough. For the customer, for you and me, would be hey, cool. The batteries now fifty percent longer lasting. No change in behavior, no change in skill, no changeing workflow for me. So that goes right to what we call main street, main market place. And so those companies that confuse those two get so excited about disruptive ones thinking they can adopt those into the main market place immediately. They get rejected and then to do all the wrong things. They retrain the sales for us again, they cut price, they do all these things. Now those will work. We need to do something different. That's crossing the chasm with focused, targeted segment approaches, and that's really what part of our conversation is about here today. Yeah, yeah, absolutely, and you know a lot of companies that I've worked with talk about targeting strategy, but in the in a different context. So the lens that they're looking through is maybe, especially in healthcare, is the difference between a user versus a buyer, right, versus someone who's going to prescribe it. Right. They have a tendency to segment based upon rolls or use cases and in really often forget that this whole you know, diffusion of innovation theory, right, and the Lens of really reshaping the messaging and the product offering for where they are in that continuum. Exactly. Yeah, that's a great way to summarize this important point that we're describing here, because it turns out this diffusion of innovation or this life cycle I mentioned, five to eight percent of customers are the nonnormal customers. They're early adopters. They might not be physicians actually treating patients, they might be in research institutes, they might be a universities have different set of pressures than somebody actually doing a normal set of diagnostics on a patient. At this point, the main market place is then divided into we call the early practice or early cautionary customers. That's about thirty percent of the market. MMM. The next remainder of that is about forty percent, which are conservatives, which do not want to buy until I've seen ten other clinics or physicians or other people in their city. Not In Japan, they're in Toledo, Ohio, but in Ohio actually defining that, using it and recommending it. And so this is what makes the world so interesting but also so frustrating to a founder. Some of these people might be on the podcast, or executives and large companies who say we are so excited about this breakthrough and the problem is you, as the vendor, is more excited about the breakthrough than the customers. About excited about it? Yeah, specially when you think about what you just mentioned a minute ago, which is there's the patient, there's the caregivers, there's the payers, there's institutions, that's regulators. That's a very complete ecosystem to go into. Sure. Yeah. So I'll give you an example that happened not too long ago. was working with the client and they were in the early phase, right, and they were piloting their their solution and they were really excited. They had a pretty big local hospital system that said yes, they would participate in the study and they finish the work and they had great results to promote. So they thought that that was just a home...

...run, like straight past go collecting their two hundred dollars, right. I mean they just thought that they were destined for success. And so they go to this other hospital system that's literally right down the road and they the you know, through the dialog they tell them, well, we need to do a pilot study first, and they said, oh well, I'm so glad you want to do that, because in fact we've done that and here's the data of what we did at the hospital system down the road and they said, well, know, we have a different patient population. Yeah, it's the same community. How do you have a different population? Same highway off ramp but different community. Right, yeah, and that's what makes this complex, both with how you work with some of your clients and what we've seen a cosimastitude, is that the only references that customers are what we call relevant references, and relevance is not something we, the better could define showing the customer themselves. And so it turns out that Mentech and healthcare and perhaps even things like pharmaceutical each one of those three has a different set person points to go after. So, with your permission, I'm going to use the F word a few times during this session. And don't worry, don't worry. The word is folk us. Yeah, the other word, and it says, as you're crossing the chasm. We've now got these couple hundred examples that if you try to go broad 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 sales force, you can cut price. None of those things will get you across what the F wort prins up is? Can you focus on a specific set of well, and you mentioned the word a few minutes ago, it's really about the abuse case or the workflow in a segment, in a specific geography. That really focuses and drives things through. And so if you want a little bit later in the in the discussion here, I can give you a vivid example of how healthcare actually relates into this as an example. But I will preambulist with is the idea that if you're more excited about your product in the market is excited about the product, then you're in the chasm. Yeah, you're you're getting maybe pilot programs, you're lucky, but no true adoption, no use, etc. It's really just early market success, which is interesting but not indicative of future success. Well, in a lot of times I see companies that they end up, you know, burning through their entire eighteen month, you know, runway because they are pitching an early adoption, early solution to the mainstream market and there's you're describing, no arm twisting, no pricing, nothing is going to persuade them to buy at that stage. Well, in fact, you know, if you'd like. I'd be happy to just put very briefly two examples out there, I think, to resonate what you're coming up with and describing. One is a nonhealthcare example and one is a healthcare and medical example. The nonhealthcare one is we started working with Google about three years ago. They bought a company called nest. You Know Nest. Nest does the third stats that you can control with your smartphone and nest had a very successful early stage of early market. They sold tens of millions of dot food nest devices, and this is basically you self installing this thermostat in your home so you can manage your air conditioning in Florida or you're heating a Minnesota without being there right so remote. And now they're moving into, you know, security cameras, other things too, of course. Yeah, but the thermostat example was they sold tens of millions in the early market. Who got excited and bought 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 to get into here in the podcast, but a whole product, is what's the total solution needed to solve the customers pain pointer problem. Yeah, and it's workflow. They had it for the early market. They had the Wi fi capabilities, they had the install they even had a screwdriver and the brackets and screws in the...

...box with the Thermostat to allow you to assemble it. And and Ye. Now, if you are I or one of your viewers in the podcast are a early adopter, you'd say to yourself, they've thought of everything. Look at this screwdriver, etcetera. This is awesome. Why, on Saturday afternoon I'm going to spend some time put this up, get it to run, and my life will be better as a result. I'll be the first one in my neighborhood with this you and I can brag about it a little bit too. Exactly it, guess I've got in my house that you don't yet have. Right, right, that first mover for early customers a big deal to a times now, even though this is a bet to see, example in the case of nest, what they failed to recognize is that most normal people don't want to spend a Saturday installing their own thermist out of their house. Most normal people have and people laugh when I say this. They actually have a life, a life outside of technology, rather be spending time with their family or painting or golf or something. Yep, so that five to eight percent. What nested was misread that, and this is public information, or else I wouldn't be sharing with you. They misread that and thought that that was an indicator of the entire market needs. So now they launch into the main market place with this given true success and they early mark and they fail. HMM. And the reason they fail is the whole product failed to include something that normal customers wanted in their whole product. What was that? Installation? Deployment by somebody other than themselves? YEA, they wanted somebody in a white band to drive up to the house with a leather belt on. Typically you know somebody in their forty or S. have've done this a million times and they're going to come in install it for you. And Nest didn't have that solution. That's a great example. So the example would be they have a hundred percent whole product for the early market and they had an eighty percent complete solution for the main market place. As a result, they hit that chasm without having the right solution in place. So that's that's it's a nonhealthcare example, but it is vivid that sometimes it's not about the product, it's about the suppluse, this deployment, the install all those things required that complete the solution for the customer and otherwise they're not going to buy. Right. Right. Yeah, thence in terms of how people sometimes misunderstand the idea about how you actually win in the early market versus the main market place. Or Yeah, absolutely. So. You kind of touched on this earlier and I want to have you answered this question for our listeners. From your perspective, why is having a decision making framework important? Where are the benefits of using a model that's grounded in theory versus instincts and past experience? Yep, great, okay, so past experience is valuable. Don't throw that one over the you know, under the bus. But on the other hand, the past experience we seep from large companies where they come from Johnson Johnson or from Dr Dickinson or from other companies in healthcare. They come from large companies and start a new venture either within that large company or on their own. Yep, and all the rules of engagement on what it takes to win and mature markets is the opposite of what it takes to win in early markets, and so the experience is the wrong experience, unforced. Yeah, the other people I should mention is if you're really a lucky person and every time you go to Vegas you win and everything you've touched his turn to gold, then you don't need frameworks or tools. You can just go out there and launch a product. You've probably got about a three percent chance of winning. But if you're a lucky person, go for it right, right. The other if you're the other ninety seven percent of really smart people who want to hedge their bets and manage risk, then whether it's our books or some methodology needs to be used to build what we call a systematic approach to going to market. And so I'm putting a little bit tongue in cheek here that, Hey, don't underestimate luck. It's part of every strategy where. But if it's eighty percent of your strategy, then you're screwed. Whatever. Yeah, if it's ten percent of your strategy, great, and so, to answer your question directly, what we've done is take the luck factor out and the gut feel...

...out and say we've actually put clicks in place for nine key variables that you can score and ring and rank and look at different segments and decide which ones do you go after? Yeah, no, the F word focus on. which ones do you hit the pause button on because they're not ready to adopt? and which ones do you actually cross off? MMM, I remember back to my Harvard Business School days. One of my professor said if you haven't crossed anything off lately on your target market approach, then you don't have a strategy. You have a hope, you have a wish, you have vision, but you need to say notice and things too. I'll give you the other example. But your your point is a really good one. That's a vivid nature of why is a systematic framework helpful? It gets all the smart people on the right page and the right direction across R and D, marketing, executive management, support, product, etc. That's really the goal. Yeah, yeah, that in yet unity for a team, especially, I mean really at any stage of the business life cycle. But that unity is just critical for success. Right, like you would describe earlier. You know, a company with a better product can be superseded by a company that is all working together and in a single direction. The other thing that I think you touch on is setting priorities. So focused and priorities and so you know every organization has limited human capital, limited resources, limited funds, and so you know, having a framework kind of helps you decide what you're going to spend your resources on and which you're going 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 RND and development but product management, extected management, everybody on the same page. And so when I ask, sometimes I'll ask a client, you know, who are you focused on? They go, Oh, we're very focused where you focus on? We're focused on financial situations. Who are they? Well, all insurers and banks and credit unions of all sizes. It's like you're doing spray and pray. You're not focused right. or in healthcare it could be. Well, we're going after hospital systems. Yeah, that's a thing. Yeah, large ones, mediums, smalls. which country, in the US or in the UK? Are they small private hospitals or large public institutions? Those all have very different buying scenarios and so our level of detail gets to the job title and the type of segment, and it may be the purchasing officers in small to midsize private healthcare networks in the US. That's the level of granularity you got to get to, as opposed to spray and pray at Horizontal Yeah, yeah, absolutely so. In your kind of touching on this a little bit. But you know what happens? You know, for for those folks that don't have a framework or a model that they're following, what happens when they overlook one of those decisions? Yeah, overlook one of those strategies. Right. So I did my homework on targeting and I did my homework on pricing and maybe even the product, but I really didn't flesh out this whole partnership and alliant strategy, right. Yeah. Well, and even though we're not working off of slides here, let me just list out the nine criteria and people don't need to commit these two memory. You know, there might be some slides that can from Dr Roxy after the podcast. If you like that. We provider, you can go to my linkedin page, whatever you want to do. But what this really does is say there's nine criteria and factors for failure if you do them wrong or ignore them. That the nine factors for success, if you get them right. The first one you mentioned a few moments ago, which is what is the target market? Focus you're going after, not healthcare institutions worldwide. That's sprand prey. That's for rest to be for a failure. Yeah, by the way, I should mention of the two hundred and twenty five examples of US helping companies cross the chasm and software and hardware and technology services, we have zero examples, not three, but zero examples of going horizontal and broad and willing in the main market place. We've got two hundred...

...twenty five examples of vertical, focused, segment systematic approach, much like what you're saying and and what I think you believe in totally yourself. In fact, I know, and you didn't ask me to say this, I know you're coming out with a book here in the near term. Yeah, I think it very much echoes and reinforces what we're talking about here as well, which is great. Thank you very they compliment each other very well, they do. Yeah, their book ends to the same idea. The nine factors. One is are you targeting properly? Too, is what we call compelling reason to buy, and compelling reason to buy is not just is it worth it is the price point right, it's is it's solving a near term problem. I have where the regulatory pressure, patient pressure, workflow problems. And if you have to explain to the target segment that they have a problem and they don't reckon and and they don't recognize they have the problem, go find a different segment. Oh my Gosh, can you repeat that? We see that way too much, which an executive at a founder goes. You know, we have a new breakthrough in, you know, in Orthodontia or in hearing aid solutions or in medical monitor equipment and hospitals for heart patients. The only problem is we have to educate the market on the problem because they don't get it. Right answer would be that no, you don't get it, that they don't get it and they're not going to get it. Go find a segment that he actually cares. Oh my goodness, absolutely. Again, this is one of those instances where so much, I mean I've seen companies fail because they aren't willing to look at it from the lens of their customer. Right. Just going to continue to pound everyone in that market to convince them that they have a problem right. Are Not a money before they get to the people that know they have that problem. Well, and you know, if there is no one in the market who recognizes the problem, then it's a good idea to find some other hobby or location market. But the reality is the sad thing is, I think you and I talked about this, Dr Roxy, in our call a few weeks ago, is that there's so much waste in the system. We're great entrepreneurs and great corporate executives are going after markets and not gaining traction because they're focused on the wrong set of pain points where customers don't get educated. They don't need to. It's the real reaction should be. What took you so long? Of course, I'm ready to adopt this. Please come forward. So those the first two is target market, segment and compelling reason to buy. The third one is whole product, and again we won't go through these in great detail, but it's what's the total solution needed, like for a nest, it's installation which was missing. Fourth is really who are the partners and allies who actually will support your whole product? Partners are people you pay to work with you to complete both boy allies, our journalists and bloggers, and industry experts, who you don't pay, but you better have them on your side. Yeah, at least neutral. The next one is your sales channel. How do you actually go to market? Is it a direct sales force? Is it bars? Is A third party experts? Is it some other version? And the remaining ones really drive down into things like pricing and price model, into your competition and who you're competing against, into positioning and messaging. And finally, and much more important than anything else you can think of, but that point is it's not the ninth most important one, but it's if we win in this segment, how do we move into other segments as well? HMM, so every product line. We had the liberty of working with Phillips back in the day on their aeed device, and while I can't and they that's the automatic external defibrillator, which is now a worldwide phenomenon. Phillips has sold three million of these or more, I can tell you that. That's scoring, rating and ranking they utilized with our help. They did all the hard work. We just provide them with the analytics and the scoring. Got Them to one precise segment that drove the first fiftyzero out of seventyzero AD devices on the planet.

And it wasn't hospitals and it wasn't Jim's and it wasn't schools. It was airlines, right, right, airliners 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 go into too many details there just because I don't want to doubles too much. But that drove it into the full set of what we'll call tornado strategy later. Hmmm, yeah, Yep, Game Changer, game changer. Absolutely. Yeah, absolutely. And the irony is I think that anybody listening to your series of podcast whether prior ones or follow ones, ones that this or this one, if they're listening and watching, they probably already have the instinct that a systematic approach, a methodology of whatever sort they choose, will be much better than the absence of one. And we have a methodology and we work with thousands of executives and once in a while, quite frankly, our nine point strategy checklist or our tech market model. People look at that, you know, and let's say we've got a few people who go, you know what, I'm not sure I believe fully in your model, and I asked them what model prayer? You Go, well, we don't have one. Hey, how about this and the absence of something better, how about do this one, which we use two it in twenty five times. Okay, we are funny. You describe a phenomenon for our audience, but it's, you know, even something that I've experienced as well. You know, where head and health innovator. They have an idea, they see a problem in the system, they've been in the system for a long time. They decided that they're going to develop a solution. So the first thing that they approach us with is they want someone to build a website and create a logo, right, and I'm like, well, how about we start with strategy before we get to the website? Right? And the after one conversation it was a parent that that is not my customer. Well, and and as a background or on this, the reason that Dr Roxy and I are on this podcast is not the reason she reached out 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 nine points, target, mark, focus, compelling reason to buy through position and messaging, which includes website, is the eighth one on the list. We get plenty of emails from companies saying we're starting a new company, we're starting a new product line, we're struggling with our position and messaging. Could you help us work on the logo and the messaging? And we say, you know, those are all interesting things to do. Have you already addressed the other seven areas above that, including your strategy and that? You know what they say, it is it. You know, those other ones are really hard, but we start with product positioning first, right, right, and this gets us back to the game. Show gone, you know, the Buzzer that goes are can't proceed if you have targeting and what problem you're solving? Then you're wasting your money on websites and messaging, etc. And that's why you and I are pretty close the aligned on that, I think. Yeah, so we've kind of given a number of examples, but just in case, you have some other ones, you know, getting your perspective on why you think some health innovators fail and why some succeed. Okay, got it. The our word comes up here, which is regulatory. Oftentimes we see regulatory as the enemy because it's imposing requirements on an industry that may not always want them. The truth of the matter is sometimes regulatory requirements actually adoption, because early adopters may buy without regulatory requirements, but the main market place says, wow, this new FDA regulation is coming into place on January first, two thousand and twenty. We need to get ready for it. And so the short answer is regulatory can be your friend if you have the right position in mind in terms of how this really helps you meet and an adhere to the regulatory requirements in the future. 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 new ventures. If they're thinking...

...inside out, which is if they're starting with the product, they're already in trouble. If you can start with the problem and work your way into what the product would be, would be a much better and more healthy way to think about it. I'll give you more example here. This updated our crossing the chasm book last year and we didn't really want to, but the dean of the Engineering School Stanford came to us two years ago and say I'm still using version two of your cross in the chasm book, but the examples are getting a little bit older. You know, can can you come out with a new one so people under the age of thirty would recognize the name of the teasing. Look, we rewrote the book, added the new ones in, you know, apple and Google and sales force and a whole host of things. But the one that we left in there was our very first client, and this actually relates to to medicine and and drug therapies. Okay, company called documentum which, which was launched more than fifteen years ago, was a spinoff out of a Zerox labs that took analog information paper didn't based data and moved it into digital form. If you remember, and some of us are old to remember this, some people are predicting all the digital office, sorry, the paperless office, was going to occur by one thousand nine hundred and eighty five. What wait, bit maybe in by one thou nine hundred and ninety by night. We're still not quite paperless yet. Right, right. But this document ear and software, which was hundreds of thousands of dollars in price. Would promise to take a workflow that's currently paper based and make a digital hmmm, much more efficient, much more effective. So document them. The CEO came to us as name was Jeff Miller. This is more than fifteen years ago. Instead, we have a problem. We've identified seventy two possible use cases, meaning, so you do possible secments that could benefit from going from analog paper to digital. You can imagine what those are. Law Firms, yeah, private institutions, schools, Um you name it, hospitals, healthcare facilities, state and local. Seventy two. And he says we know we have a problem because we only have seventy two employees in our company and with seventy two possible segments, that's a bad ratio. Yep, with our methodology we took them from the seventy two down two D fifty in the scoring and rating ranking. That was the easy part. Down to thirty three, down to twelve and then down to the final three. MM. And the top segment, we called the beachhead segment for crossing, was one specific segment. Here's what it was. It was the top forty PHARMACUICA companies who are seeking FD approval for new drug therapies and are trying to accelerate the approval process through their cliquodroy process. That that's how focus we are. And the NY target customer segment was the VP of government regulatory affairs, who's measured on how fast can you get FDA approval? Their jobs line for that. Brilliant. And it turns out that it's a relatively modest segment, but it was the top forty. Was glack, so, fisor to K that, you name them. Yeah, and they all had the same problem and the work flows that we identified was it was costing them about a million dollars a day in delayed approval of FDA drug because the patent, of course, is expiring for the approval for launch is actually given, though generics come out, as you all know. Yeah, quickly, and it cuts by about a million dollars a day the cost of a potential revenue growth. So our client documentum focused on that is the first segment put any percent of their sales effort into that one and one. Thirty six out of the top forty farmer companies within eighteen months. Thirty six out of forty. Pretty good batting. Average. I mean it just goes to show you how being hyper targeted right is is so critical. You think you're taking a risk when one does that, you're actually reducing and then the second segment was medical device companies, who have the same problem and we're actually talking to the farmer companies about this solution.

HMM. Ones were the law firms who were then helping the others. So you get the idea. And then it exploded into a three billion dollar business. They did all the hard work. We provided some workshops to do the scoring and rating, but the real hard is done by the client and eventually got bought by by EMC and then later by Dell, and so now it's a large, multibillion dollar business, a large mothership, but started off with one segment focus. Wow, and the funny anecdote on this, Dr Roxy, is Jeff Miller was asked later in a Wall Street Journal interview. Hey, what'sn't that kind of risky to go from seventy two possible segments to one? But you know what, that was risky. It was more risky never focusing right and doing them. And so I think this is very intuitive for some of your viewers on the podcast but actually executing on that is quite hard. So that's the Desi one of the systematically. So that's that's an example. I hope it's fairly vivid for people in the in the call here today. No, I think it's great. I think it's a great example. So in general, healthcare as a whole is a lagguared. You know, the industry is really typically late to implementing best practices around business and marketing and you know, the system has been designed historically to where you could be wildly successful and not practice anything that we've learned in school. No, right, and so what I think is so fascinating is that you don't work just in healthcare, you work across all industries. So help our listeners understand. Is there one or two things that you've discovered that we haven't talked about yet, that other industries are doing that healthcare could benefit from that might not be on their radar? Okay, got it. Yeah, so a couple things around that. One is most of our work is be to be. We do some BBC work, but a lot of the healthcare work that you're describing and that you work with, as well as business to business. What we see is two different planets. We see not industries where it's much easier to market. Yep, see regulated industries, so things like, for example, financial, which is SEC or Security Exchange Commission regulated, or medical, which is game related. Of course, in the US what we see is that sometimes healthcare makes an excuse at Oh it's so complex and we have regulatory pressure. Our answer would be is, if you can really focus and identified, it may not be seventy two segments, but it might be twelve, and get that down to the top two or three. The lessons we've learned from vast large companies and from small ones. And the large companies are companies like Bendtson, you know, bed or Thermo Fisher or adult life sciences or others. Those are all focused on. Can we start with one specific workflow in mind, and that discipline actually camp of Silken Valley, you know, fifteen or twenty years ago, and we think we've played a small part in having that occur. There's a misunderstanding that Silicon Valley and other tech hubs in Boston or Chicago or New York and other places that this is basically they're always like managing and getting into high risk situations and the opposite is true. Most great most great companies, even Silken Valley, started with a modest amount of risk and a smart level of focus. And I'll close on this one, which is the most successful company on the planet, and this is where healthcare can also learned from, has an incredibly complex supply chain. It's called Amazon. You've all heard of it a million times. Amazon and their first six years of life follow the F word very carefully, the focus word. What they do? They sold one product with six users. What was it? Was Books, and they try to not solve world hunger. They focus on one area built out the entire supply chain. How many healthcare companies would be as disciplined as that to actually focus on one key, on the piano, on one particular product category and solve that one first before they jump into all the others?...

Absolutely words of wisdom right there, listeners, helps in and some of the great innovations that some of your viewers and listeners are working on. The next you know, six months, twelve months and eighteen months, and you know, if there's you know, a reason to put a systematic approaching place, I think the book that you've written or a cross in the chasm book or my Linkedin side has some videos on it. Whatever resources somebody finds useful, use them and try to really have an outside in perspective and not the product out perspective. 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, and I think I told you this, Michael, before we started recording. We could go on for hours and days because I love this stuff. I know you do as well, and there's so much we can talk about, but we definitely have to wrap it up and get back to other things today. So the last question I want to leave you with is, you know, with this explosion of innovation taking place in healthcare, there's there's a there's a lot of innovators who are trying to sell their wares or their solutions to the same people, right, so Coi, CEIOS, product managers, I mean, everybody's inundated within the health system and the health plan riders with all those innovations. So what would be an example, one or two, of how you would suggest that some of these healthcare innovators rise above the noise? Okay, got it. Yeah, so healthcare innovators. When you're thinking about what types of markets to go after, stop thinking about local, meaning we're going to go after the Mayo Click or we're going to have to go to after this large health organization and focus more within the companies that you're going after at different job tide levels. So it could be the CIO, it could be the people in charge of customer satisfaction and patient quality, it could be the CEO and small companies. If you say, well, anybody with a with a sea level is the right target, that's too bland broad and so a piece of advice would be is to get much the go to the trade conferences, you read the blogs, follow the people in different job titles and, by the way, linkedin. You know, I'm not giving a plug for any reason other than I believe you can do great searches on Linkedin by job title and by Industry to find out really who the target is. And it could, ever, all be that in a large health network that one job title like CEO may not be the one with the problem. Yeah, but the limp in charge of health and and customer satisfaction levels might be the pain point problem to go after. So and so, if put almost like a heat map out to say where's the flare, where's the heat? Where's the flame coming up? That's all about customer insight and customer development and not about product insider product development, and so you're right. We would go on with this for, you know, several more hours, but hopefully this gives people at least done encapsulated view. That says a lot of what you're doing right now is entpreneurs is right, but the instinct you have about your early false positive success in the early market, those don't translate into main market success. So it's almost as though you want to do a different mode in main market. And that's really what our books are about and that's what we've talked about here today. Absolutely thank you so much for sharing your wisdom with our listeners today and with me. I certainly appreciate it. It's been a great discussion. How can people get a hold of you if they want to connect with you later, and then how can they get a copy of your book? So a lot of people I come across have write your book a decade ago. So how can they get the new version? So they've got the current examples. Got It great. So a couple things. One is, if you want to really short snippet, I think, Dr Roxy, that my officite sent you six or eight slides. If people just want to keep it very simple and just ask for those. If you mind saying those two people that are reaching out to you, that be great. The best way to reach me is on my linkedin page. We've got some videos and some other kind of blog examples of really the key errors...

...that people may invation and venture and new breakthrough absolution sets. So feel free to invite me on Linkedin. I'm happy to accept. And then our book is available on Amazon. People are always avail, you know. We just get out in the new version and that's on Amazon and people can buy it there. I think there's an audio version two for those that are not readers but are stuck in traffic over a multi hour commute. Yeah, but in any case, you know, I think what you and I've talked about today, aside from books and blogs and videos, is there's a fundamentally false set of assumptions about how great products go at the market and the reality is a systematic approach, not a wheeling dealing high risk approach, is a much smarter way to you know, play out the next one to two years before you really get to the marketplace. Absolutely couldn't agree more. Well, thank you so much for joining us on the show today. Thanks, Dr Roxy. Was a pleasure. What's the difference between launching and commercializing a healthcare in avation? Many people will launch a new product, few will commercialize it. To learn the difference between launch and commercialization and to watch past episodes of the show, head to our video show page at Dr Roxycom. Thanks so much for watching and listening to the show. You can subscribe to the latest episodes on your favorite podcast APP like apple podcasts and spotify, or subscribe to the video episodes on our youtube channel. No matter the platform, just search coiq with Dr Roxy. Until next time, LET'S RAISE OUR COIQ.

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