It’s not unusual for IVD or life science tools companies to have a scientific founder with an R&D background that continues to lead the company once it reaches the commercial stage. This scenario can work well if the founder recognizes the need to supplement their experience and view with market-focused expertise.
Companies that have a versatile platform technology are fortunate in that they have multiple potential market applications where they might have a strong value proposition.
Every market has specific landscape, dynamics and competition. It is critical to assess these elements prior to investing much in conducting R&D activities on a product where you don’t understand its product-market fit. If you don’t, then the company runs the risk of burning significant capital pursuing an application where your product doesn’t meet the market requirements.
The example below covers a situation where a company spent wasted three years conducting R&D feasibility on an assay that did not meet critical requirements. The good news is that this situation is avoidable.
Background
Company Technology and Focus
I worked with a client that had a versatile technology platform which could be used for multiple IVD and life science research applications. The company focused primarily on the infectious disease diagnostics market, where they were very knowledgeable. The scientific founder still ran the company, despite it having been in business for over 15 years.
Oncology Assay Idea
The founder believed that the company’s technology would be well suited for a certain diagnostic application within the oncology testing market. So, he compiled a list of the biomarkers that he thought the assay should target. He then had a conversation with one of his academic medical center contacts, who said that they thought there would be a need for that assay (though their AMC did not offer that type of testing).
Oncology Assay Feasibility Work
At this point, the founder directed the company’s R&D to initiate feasibility work on developing the oncology assay.
The R&D team then worked on this project for three years.
When I Became Involved
Focus Was on Commercialization Planning
The company was assessing how they should commercialize the oncology assay. They were trying to formulate their proposed go-to-market plan.
Questions Raised on the Oncology Assay’s Product-Market Fit
I asked to review the market and competitive landscape assessment for the oncology assay in development. The assessment consisted of the activities summarized above under Oncology Assay Idea. Unfortunately, there hadn’t been much of an assessment performed at all.
Market and Competitive Landscape Assessment Performed
I conducted a comprehensive analysis of the target market, competitors, unmet needs and other relevant considerations. In addition, structured expert interviews were performed to get a better understanding of the critical assay requirements.
The assessment findings demonstrated that the oncology assay in development did not meet several critical requirements, primarily due to technology platform limitations.
Recommendation Provided
I recommended that the project be put on hold given the assessment findings. The company agreed.
Lesson Learned
Perform Market and Competitive Landscape Assessment Early
Conduct a thorough market and competitive landscape assessment for your target application early – and first ideally. If that’s not possible, do it in parallel with starting initial R&D feasibility work.
Conduct Expert Interviews
When done well, structured one-on-one interviews with experts and key stakeholders provide critical insight. In addition, the discussion format allows for digging deep into important aspects that can impact the company’s strategic decisions.
Determine Product Requirements
The company needs to have clearly defined product requirements. This is typically provided by Marketing for R&D to execute on during their feasibility work.
Realistically Assess R&D Feasibility Project Timeline and Cost
Given the empiric nature of R&D feasibility projects, it’s not uncommon for them to continue significantly longer than was initially anticipated. I’m confident that this company did not expect their oncology assay work to take three years, or cost what it did.
Seriously Consider the Opportunity Cost
Every company has R&D resource limitations, no matter how large. When you choose to allocate people to an R&D feasibility project such as in this example, the company no longer has that capacity available for other projects.
Time is one of the most precious assets. At the end of the day, if you delay development of products that are core to your business in favor of conducting R&D feasibility for a non-core application, then you run the risk of your core business falling behind.
Need Help?
We conduct Market and Competitive Landscape Assessments, as well as full Commercialization Plans for life science tools and IVD companies.
If you need help with yours, please reach out to me at david@bournestrategic.com.
