A Quick Start Guide to Medtech Market Penetration
Understanding how to position your product for specific audiences can make all the difference in the medtech market. Here are some key strategies to help you reach and grow your target market.
Leverage partners with established distribution channels: Form partnerships with established entities that already have robust distribution channels for easier access to end users. These partnerships can also open up alternative revenue streams, such as integrating your technology into their existing product lines or earning usage-based fees, providing both active and passive income opportunities.
Balance commercialization with clinical validation: Don't rush to market. Prioritize clinical trials, ensure proper reimbursement strategies, and verify the responsible use of your device to avoid harming credibility.
Create an ecosystem around your product: Explore unconventional sales strategies like online marketplaces and app stores to create additional value for users, and to generate new revenue streams.
Look for ways to enhance efficiencies: Develop solutions that minimize in-person visits, streamline processes, and shorten hospital stays to ease the burden on healthcare professionals and encourage adoption.
Seek mutually beneficial partnerships: Find early adopters willing to collaborate on defining success and gather valuable feedback. Determine your core strengths and focus on them, while partnering with companies that excel in areas where you lack expertise.
Team Up With the Big Players
Marissa Fayer, CEO of DeepLook Medical, has been leading medical device businesses for over two decades. She’s the founder of HERhealthEQ, a non-profit advancing global women's health, an entrepreneur-in-residence at Graybella Capital and Goddess Gaia Ventures. She also consults many Top 500 healthcare companies and innovative start-ups, including Pfizer, Boehringer Ingelheim, Nuvasive, and the National Institute of Health (NIH) at Fayer Consulting. Today, at DeepLook, Marissa and her team are improving diagnostic accuracy for radiologists with their AI-powered software to provide accurate, efficient, and personalized care.
Marissa has been in medtech long enough to know that the odds for a small technology company making inroads into hospitals are slim. That’s why DeepLook has decided against hiring direct sales representatives. Instead, what they do is partner up with entities that have established distribution channels, leveraging the market presence and resources of these large companies to get into hospitals. “Partners like Bayer Healthcare, a billion-dollar company, or Barco, which owns 90% of the medical monitoring business, they can make those calls and get us in more efficiently as an additional product,” Marissa explains. “That's how we get into radiologists' hands."
This has been a proven strategy for DeepLook. For example, during the COVID-19 period, when healthcare focus shifted away from cancer, DeepLook secured four commercial contracts with major companies and integrated their technology into existing product lines.
These partnerships provide alternative revenue streams that are different from the regular screening and diagnostic tools offered by DeepLook. For instance, the company’s partners might enroll people in their trials and use DeepLook’s software. “We're a utility there, and every time we get used, we get paid. Some of it is passive income, and it works,” says Marissa.
To mirror Marissa’s approach, look for established companies with robust distribution channels. See how you can add value to their processes, and explore ways to form mutually beneficial partnerships. Such collaboration can accelerate your market penetration and potentially open up unconventional yet surprisingly efficient revenue streams.
Balance Commercial Efforts and Clinical Validation
Trent Reutiman, CEO of Mercator MedSystems, has worked in the development of minimally invasive interventional products for 25 years. At his last venture, Mercator MedSystems, Trent led the development of the Bullfrog Micro-Infusion Device, an FDA-cleared and CE-marked technology that delivers targeted therapeutics during catheter-based interventions.
Trent takes a prudent stance with market penetration. Rushing to the market prematurely, especially if your device faces complex clinical trial work and you don’t have a reimbursement strategy, will potentially do more harm than good—it may waste your resources and harm your credibility. “Even if the product is commercially available, without adequate reimbursement, its use may not align with the best clinical practices, resulting in suboptimal data and outcomes,” Trent explains.
To avoid these pitfalls, Trent advises measuring commercial usage carefully. Bullfrog is a really powerful device, but it comes with great responsibility. Recognizing this, Mercator restricts sales of Bullfrog—they don’t sell it to parties that aren’t positioned to use it appropriately. Their target audience is clinicians who understand how to optimally use the device, who also happen to be frequently involved in clinical studies. This ensures the Bullfrog’s potential isn’t wasted, and its credibility isn’t harmed.
“We have distributors that have been chasing us down for ten years, saying 'Just give us your device.' It might sound great, but there really isn't much upside to getting ahead of yourself commercially," Trent explains. For him, taking every offer that comes your way will likely lead you to a development plateau—a stagnant phase where neither revenue nor clinical data for your device advances.
To take a page out of Trent’s book, instead of leaping at every chance, remain disciplined and patient in the face of opportunities. Carefully calculate the risks and gains and balance commercial efforts with clinical initiatives. Plus, ensure meaningful reimbursement before going all in. As Trent advises, "Step on the gas when appropriate, but don't just step on the gas for the sake of stepping on the gas."
Boost Value Proposition Through an Ecosystem
Joe DeVivo, CEO of Butterfly Network, has steered startups and billion-dollar companies, successfully acquired and integrated eight companies, and turned around four struggling businesses. At Butterfly, Joe and his team are developing hand-held ultrasound devices that make the technology more accessible and affordable.
Medical device companies traditionally rely on relationships and salespeople to train, contract, and sell to hospitals, doctors, and procurement groups. But Butterfly pursued a different path when they first commercialized. Instead of the default approach, they opened up a direct dialogue with practitioners and launched their ultrasound probes online. This strategy proved to be successful in building a strong foundation. Joe claims, “We have sold more than any other company. We have the largest install base around the world.” Today, Butterfly's ultrasound device is sold in 18 different countries online in local languages.
However, eCommerce revenue isn’t the whole picture. Understanding the potential of their device, the company created an app store-like network called Butterfly Garden, where third-party developers can create and sell applications to Butterfly device users. This has opened up numerous partnerships and created additional revenue streams. Developers pay for access to Butterfly’s software development kit, and Butterfly gets a percentage of each app sold. This ecosystem, which delivers new applications every few months, strengthens Butterfly’s value proposition to customers.
For Butterfly, being able to build a marketplace was the result of focusing on direct online sales early on. To follow Joe’s footsteps when it comes to market penetration, don’t be afraid to explore unconventional commercial strategies that synergize with your product's strengths.
Reduce End-User Workload
Dr. Bill Hunter, CEO of Canary Medical, is a former practicing physician, a seasoned entrepreneur, and an innovator with a portfolio of over 200 patents to his name. Bill has been at the forefront of developing groundbreaking devices like the TAXUS drug-eluting stent and paclitaxel-eluting balloons. At Canary Medical, he’s leading the charge in smart, implantable medical devices that provide real-time data on patient recovery and health.
One of the most pressing issues Bill sees in today's healthcare system is the crushing workload that providers face. "We don't have enough human beings to do the work that needs to be done," he notes.
To address this need, Bill recommends focusing on how to reduce hospital stays through technology. “If your technology converts an in-hospital to an out-of-hospital procedure, or it allows earlier discharge or in some way, shape, or form shortens that episode of care within the hospital, that's really, really important,” he explains.
Secondly, Bill shares, "You have to reduce the workflow in practice, period." In the past, the odds of a new therapy being adopted were heavily tilted towards those with superior clinical results, without much regard to the additional workload they put on the practitioners’ shoulders. However, today, healthcare professionals are increasingly facing burnout and early retirement due to excessive workloads. To make sure an already-busy practitioner reaches for your device, you need to come up with minimally invasive solutions that promote faster patient recovery and patient discharge.
Overall, Bill reminds us that seamless adoption and a broad market reach hinges on your device’s ability to streamline processes by fitting into the existing workflow of practitioners, reducing in-person visits, and minimizing the time healthcare professionals spend on tasks. To ensure these, pay as much attention to your offering’s efficiency and user-friendliness as you do to its clinical efficacy.
Orchestrate Mutual Benefits
Before taking the helm at Reimagine Care as the CEO, Dan Nardi played a key role in scaling Livongo from a small startup to a successful IPO and honed his vision of value-based care at Carrum Health as its COO. He now leads the development of virtual solutions at Reimagine to move cancer care to the comfort of homes.
Dan offers two key pieces of advice for expanding market reach effectively. First, find early adopters willing to try your solution. Working closely with them allows you to “collectively establish what a ‘win’ is before a full commercial launch. Identifying the right client partners who are open to innovation and willing to invest time and resources into your product is crucial to get off the ground. As Dan puts it, "It can sit there and look great on paper, but when the rubber hits the road, you'll have to be able to prove it."
Second, Dan is a big proponent of mutually beneficial partnerships. For him, there’s no point in spreading yourself thin trying to develop every aspect internally. When it comes to forming partnerships, Dan advises identifying the areas where your core strengths lie, as well as where others excel better than you do, and partnering up with them. The goal is to foster a collaborative environment rather than a client-vendor dynamic and channel resources to what truly sets your company apart. That’s how you build a business at scale. “If your partner isn’t able to be successful and make money, your whole strategy falls apart,” Dan notes.
To borrow a page from Dan's playbook, seek out clients willing to try your solution early on. Work closely with them to define and prove success before a full commercial launch. This establishes credibility and provides valuable feedback. Then, identify your core strengths and partner up with others who excel in complementary areas. Create collaborative, mutually beneficial relationships to build a scalable business model that can help ensure long-term success.