Navigating Product Adoption Pitfalls
Ted Newill is an expert in medical device sales and marketing. In this episode we examine why some technologies are adopted while others are not - even if there is clinical proof that they should be. We explore issues impacting long-term adoption in the pre-product release, product release, and post-release phases along with how people react to change. We discuss a number of issues that can make or break the success of a product, including product life cycle, regulatory and clinical strategy, buyer types, physician education, pricing and reimbursement. We also offer tips on what should be done to increase a product's probability of success.
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Episode Transcript
This transcript was generated using an automated transcription service and is minimally edited. Please forgive the mistakes contained within it.
Patrick Kothe 00:31
Welcome. I'm excited to bring you this episode because the topic is something I think we all wonder about. And we're going to be exploring it when my guest Ted Newill. Ted's a friend with a wealth of knowledge in medical device sales and marketing. So today, we're going to dig deep into a question that my last guest, Dr. Wouter van Furth, who's a neurosurgeon from the Netherlands. And the question he asked is, why are some technologies adopted, while others are not? Even if there's great clinical evidence that says they should be adopted? So if you haven't listened to that episode, I suggest you do because Dr. van Furth provides some great insights into the mind of the physician when he or she is contemplating a change in either a product or a technique. Ted and I are going to approach the question by looking at four areas and the activities within those four areas. Pre product release, at product release, post release, and then some issues related to how people react to change. Now Ted goes into a number of issues that can make or break the success of a product, and any offers tips on what we should be doing to increase the probability of success. Ted has over 30 years of experience as a successful medical device marketing, sales and operations exec. He's worked in startups and emerging growth companies with new concept technologies as well as existing technologies. Some of the companies he's contributed to our American Hospital supply, Maculogix, KeraVision, Heidelberg engineering and Reichert technologies. Some of you may also recognize his voice, as he's the host of the medical device success podcast, which is an extension of his consulting practice. And we're going to hear more about that a little bit later. Here's our conversation. Ted, thank you so much for joining us on mastering medical advice today.
Ted Newill 02:43
You are welcome. And it's a pleasure to be here. Pat.
Patrick Kothe 02:46
Great, Ted to get us started. How did you come to medical device and what keeps you here?
Ted Newill 02:54
Well, it's an interesting story, because I was in grad school at the Thunderbird School of International Management, which is based down in the Phoenix Arizona area. And I was in the recruitment stage or the where you work with the the office there that helps you get your job as you get close to graduation. And I had no thought about being a salesperson, no thought at all. And I had already applied to American Hospital supply, which at that time American Hospital supply for listeners, if you know what American Hospital supply is, that's a dead giveaway on your age.
Patrick Kothe 03:35
Or in my case, if you worked at American house,
Ted Newill 03:39
which is my case, too. But it was at that time, really one of the largest life science organizations in the world about a $3 billion company. I had thrown my resume at them through the recruiting service at the school. And I had not come up on the interview list. My feelings were hurt a little bit because they interviewed almost everybody. And then my roommate said they had a practice at the interview center, that you could throw your resume across again. And you might get in and and he had done that. And he'd gotten an interview. And he said, Just Just try it one more time. And so I did, I went to the center, and I threw my resume across the counter and said I'd like to see if there's any spare interview slots for American Hospital supply. And a day later, they had put me on and when I interviewed the guy, he said, Well, yeah, be thankful. This is my lunch period. I'm interviewing you like I was like he was doing me a favor. But I did make it through. Other than that I had no clue about what the medical device business was. I had always been interested in biology, zoology, the sciences and so on. And then when I got recruited into a very small company, that was a division of American Hospital supply, so it was a $30 million company. That was part of a $3 billion company. And it was a somewhat recent acquisition by American Hospital supply into their I don't know what they called it at that point in time. But Edwards, for example, was part of this group within American Hospital. I think what was your company that you work for
Patrick Kothe 05:16
American American critical care? Well, they were part of it, too. They were part of it, too. And we actually had a joint venture with Edwards on the swan ganz catheter. That's how I got my started in device side of things is, is through American through that joint venture.
Ted Newill 05:29
Right. So that's how it happened. And I got a job at a it was then called American hire shulte. It was still run by at that time, Rudy shulte, who is the founder of the company, and it gets in your blood, you know, these devices, you're helping people, you're working with doctors, you know, we were spending some time in the operating room. And as many of the listeners know, that are involved in this, it just gets in your blood and that's what happened to me.
Patrick Kothe 05:55
So you spent a lot of time the majority of your career, I think in the Optima up from Go ahead. You say it ophthalmology, ophthalmology. Thank you. Spent a lot of a lot of your career in there. What's been exciting about that segment?
Ted Newill 06:11
Well, let's go back I spent probably half of my career in silicone implants. So that was plastic surgery, urology neurosurgery. Actually, it started with primarily neurosurgery was when I started. So higher, Sheltie made silicon implants for all these areas, neurosurgery, urology, plastic surgery, and some general surgery. So that's where it started. And I was in that type of implant work for a lot of my career, or up till 1996. And then I shifted over to ophthalmology. And then I've spent most of the rest of my career in ophthalmology is a fascinating business up homology is, it's hard to believe that there's such a huge industry based on these two little orbs that are called your eyes. And there's so much technology that is specifically made for the eye, that it is very, very fascinating. And the eyes are so important to our lives. That's the other thing. So it's very gratifying business to be in. And within ophthalmology of all these sub specialties, which makes it fascinating to see, it's really hard to keep up with all the developments. There's just so many developments, drugs, gene therapy, implants, surgical instruments, diagnostics, keeps it very exciting.
Patrick Kothe 07:27
So, Ted, you started off in sales, and you've really become an expert in marketing, what's what what was the transition, like going from sales to marketing?
Ted Newill 07:37
Well, I probably still say I'm something of an expert on the sales side, because in consulting and in the community that I have, we spend a lot of time on sales issues, especially as COVID brought that to bear, right, we had to change a lot of things in the selling process. But what happened in marketing is, and we're going to talk about this is going to, it's going to be a good segue into our conversation because I became a marketer, by as a promotion from sales. I didn't have any marketing training, I had a marketing 101 course in college. in grad school, I didn't take a marketing course, I was just promoted into marketing and typical to the medtech medical device culture. Marketing, in many respects, was a service group to the sales organization. You know, make them brochures, get them tradeshow, exhibit setup, do the training, and so on. Helping the product development cycle. That's an important part of marketing. But it wasn't classic marketing, like you will find at Procter and Gamble, put Colgate palmolive Kimberly Clark, a lot of times you see people get promoted into these roles. An engineer gets promoted into marketing, they become a product manager then become a marketer. But that's how I moved into marketing early on, then it was back to sales, and it was sales and marketing. But my first exposure to real marketing was at a company that failed a great team, great technology, but it still failed. And I hired a real marketer, because we had a real marketer on our board. And he insisted that we hire a real market and I hired a guy from Kimberly Clark, and watched him go to work, and was amazed and realized how little I knew.
Patrick Kothe 09:25
Well, we're going to spend a little bit of time on your company and your podcast at towards the end of this. Because what you're really providing the community is you're providing some expertise, and some actionable things within marketing and sales of medical devices. So we're gonna spend a little bit of time there. But I think it's it's gonna be an interesting conversation because you've straddled the sales and marketing line as I have, and kind of move move back and forth between the two. And the question that we're going to answer today has to do with the left Last episode that we had, and that is, why do some medical devices take off, and others don't? Even when we know or when it's known that there's good, good quality clinical data behind a product, but one takes off and one doesn't. So what what's the reasons behind that? And the reason why I wanted to have this conversation with you, Ted is you've you straddle both sides of things, but you've looked at it from from a more holistic standpoint, if you're looking at it, just from a sales standpoint, you know, there's there's certain issues there. But when you're in marketing, you also kind of look at it from the total, as you said, lifecycle of the product, and all of the issues associated with it. So let's dig in. So what we're going to do in handling that question is we're going to look at it in four phases. It's going to be the pre market phase, once we do a launch, the post, launch phase, and then some other issues that we'll we'll talk about. So let's start off with that pre market phase. And some of the issues that are going on there that affect adoption, right from the start. So how would you What would you like to talk about first, Ted, what is one of the key things for in that pre market phase, that can really affect how your product is going to be received long term?
Ted Newill 11:20
Sure. And just before we get into that pre market phase, one thing I'm going to say, for the listeners is, and this is about both you and me, we've both experienced successes in market and product adoption, and we've both experienced failures. And so it's like, sometimes I'll joke with people and say, if I took my shirt off, you can see the scars on my back. I think it's important to understand, you know, where you've succeeded, where you failed and reflect on that. I think that's a good experience to have both a success and you know, some failures. Absolutely. But if we go back to your question, which is where we are, if we're in the pre marketing, I think we're some companies end up in trouble, pre approval, is that they haven't really thought through the development of the design of the product. So let's say, as in many cases, it's a startup. So you have a technologist of some kind, maybe it's an engineer, that has been witnessing things in the medical field and thinks he or she has a really great idea to solve a particular problem. Or you have a doctor frequently, it's a doctor could be a nurse, that has a great idea to solve a problem. And it's at this stage where the first problems can occur in terms of defining the product and really understanding the need that it's going to satisfy. And making sure that it's something that other people share that this pain point is something that other people share. One thing that I think both of us have seen, is you have, let's see a doctor with a great idea. And actually, if we go back to your interview with Dr. Walter van Firth, he sort of mentioned this. For any listeners that didn't hear that episode, you got to listen to this episode with Dr. van Firth. He's a neurosurgeon. But he had an idea. It was a it's actually a good idea. It was based on some really common sense parameters, he developed a product, and the product really didn't take off. And part of it could have been because he relied on the input of some close associates. And of course, people that are your friends are going to tell you, hey, that's a great idea. Or it could be your clinical investigators, if you if you have a product where you have to do some clinical work to get your approval, clinicians that participate in clinical studies, they're sort of an unusual breed of themselves. And I sometimes liken them to astronauts, they can overcome anything. And they do and they participate in clinical trials, and they do a good job. And they make this new technology seem great. And like it should be adopted by everybody. And they speak at meetings and they publish some papers. And you get this false sense of security that we've got it made here. You know, we've got the papers, we've got the key opinion leaders that are excited about the product. But what they haven't done, which is something that you harp on a lot, Pat, is they haven't really thoroughly investigated the voice of the customer. And a good example is is you at the company are at right now you guys went out and talked to 600 emergency room physicians. And so have you really talked to the people in the trenches that are going to have to use this product Have you invited them into the conversation as you're developing it. And even before you get to clinical trials? Have you really talked to all these people to make sure that you understand that this pain point is real and that you've got a chance of solving it. And taking a product, you know, further on into clinicals into approval. So that's one area.
Patrick Kothe 15:06
I think, you know, that voice of the customer is really interesting, Ted, because it's not only the clinicians that you need to talk to, it's everyone in there because as we start getting into why things don't work out all the time, if you're dealing with a clinician, and a clinician likes your product, or likes the idea for your product, but you've got scrub people that are in there, you've got nurses that are in there, you've got, you've got supply chain, people that are in there, the pricing, or Imbert and all of these other issues, if you haven't talked to those people, because they're part of your customer base as well, if you haven't done your homework there, that's a real place where you can also get really tied up.
Ted Newill 15:46
You're exactly right. And I think I shared with you the story the other day, where we had a new concept product that was being installed in the practice for for a trial, it was a diagnostic product, and one of the technicians that would have to operate this product walked by the room looked in. And her initial reaction when this when she asked the sales rep what this product was, and he told her, all she said was one word, no. And she turned around and walked away. And which meant that she didn't want to be bothered with another piece of technology. So either he communicated something incorrectly, or the whole approach to the practice had not been done correctly, which goes back to your point, there should have been better communication, better preparation of the practice. So people understood the value of the product, why we were doing the trial, but technicians and ophthalmology technicians, if they don't like a product, if they can't integrate it into the patient flow successfully, if they're gonna have to work longer hours, because that product is there, you can run into a lot of friction. And even though the doctor may like the idea, and like the product and like, like the information he gets from it, he could decide not to use it.
Patrick Kothe 16:56
I think you also bring up a real good point and has what type of physician is that because, you know, we know that we've got pioneer people who want to push the envelope on things, we got early adopters, we got you know, the majority, late majority. So we've got different customer groups that are in there. And if you're only talking to the pioneers, that's all the feedback you're going to get. So you really need to expand out in that voice of the customer to all types of customers.
Ted Newill 17:21
Exactly. I think you're exactly right. Because typically the people that hear about your product that want to get involved in the product, or that you may reach out to, if you look at the product lifecycle, they are the innovators or the early adopters. And they will make up their mind no matter what and in fact, in a in a practice situation where it has to be integrated, or let's say a surgical situation or hospital, they may be a force factor that makes everybody adopted, it's not the best way to have a product adapt adopted, but they may have that personality of force that makes makes it gets get adopted, that might not help you the rest of the doctors and the rest of the nurses and get your sales up any higher. So that that would still be a mistake, I go back to the point that you made that you have to get not only the voice of the the ultimate decision maker that really wants to use it, and that could be a doctor or could be a nurse, but you want to get the support and and the input from all of their support structure, the other influencers, the other stakeholders, I should say.
Patrick Kothe 18:24
So there's a ton in that voice of the customer segment, we're not going to go any further in there, we got a whole lot to get into. But that is a really bedrock principle that you need to nail in order to have a successful product. Let's move on to something else. Now 10. Regulatory is is also an interesting area when you start getting into it. And it's when you're when you're starting to think about what the product is, what the product is more than the the physical attributes of the product. It's also what claims you can make about the product. And sometimes we launch with limited claims. And sometimes we launch with extended claims. So let's talk a little bit about, well how you're thinking about your product in terms of the product claims, and then how that can affect what the uptake of your product will be.
Ted Newill 19:14
Okay, so some people frequently talk about MVP, minimally viable product. And that can depend on the claims that you can go out for now, this is sort of a tricky place to work because let's say you have three prime Primary Claims that you can launch the product with because the clinical studies support those claims. And that's what you filed your paperwork with the FDA, whether it's a 510 K or had to be a PMA product. And those claims are supported in your filing and they're supported by the FDA, whether it's a clearance or an approval, if you have these claims, but there's other areas that the product can reach into and that's probably already showing up because doctors are who they are. They're scientists and They've already started using the product in other ways, and showing its value in other places. Well, you could expand that if you have proof sources that support it. So but it's a little bit tricky how you do that and how you talk to a doctor about that and how they might use it off, label on so on and so forth, it's best to try to stick to the claims that you have, and and support those. Even if you think there's some other stuff in the future that your product can do. If there's other problems that it can solve, or other surgical communities or medical communities it can move into, I would stick to the knitting of what you have your approval for. And really set yourself up for success there. As you prepare to gather the information to help you extend your claims, via the regulatory process.
Patrick Kothe 20:58
And I think part of this really is what is your regulatory strategy on that particular product? Because you can you think, okay, I want to get out there with a certain base baseline claim, and then expand that out. Or you can say, we're going to encompass much more in our clinical trial to be able to have broad claims when we launch, each one of those strategic decisions can have impact on the long term success of your product. Because if you come in with lower claims, then you've got a different product, and then you extend it out well. Now, what's that timeframe associated with extending that out? So you're making some choices on your product uptake? Right from the point where you're strategically saying, what claims Am I going after in this clinical trial?
Ted Newill 21:46
Right, and not to go back into preclearance, but one of the things I should have mentioned is another mistake that a lot of companies make is they don't do a healthcare economics type of study or research about the product and the market, it's going to go into this is somewhat related to voice of the customer. But health healthcare economics research will actually retrospectively go back through the literature, and also help identify and confirm that there's a pain point just from what people have written in the literature. And sometimes, when you do one of these studies, you'll find other applications for the technology, that might be a stronger case for clinical studies than what your what you thought the application or the indication should be. And there's actually been stories where a company that launched with one type of got clearance for one type of application and was struggling, when they did the healthcare analysis after the fact and found that where they really should be, they were able to turn it around. So that's another important thing. And this sort of leads into what we're just talking about. Now, the regulatory side and what your clinical strategy, you know, can be based on several things voice the customer and also good healthcare, economics type of research.
Patrick Kothe 23:09
So in that healthcare economics research also kind of leads into reimbursement. Correct. So and, and designing that clinical trial with reimbursement in mind as well,
Ted Newill 23:18
right? Because you have to know where the money is gonna come from early on, you know, if you invent a product and get it all developed, and everybody agrees, that's a great product, but it doesn't fit into the economics of a hospital system, or patient care. It may not go anywhere. So you're right. That's another important consideration, both in the pre cleared stage. And then as you move toward product launch,
Patrick Kothe 23:46
let's move on now. And let's talk about the at the point where you have your product, ready for sale. So you've been either approved or cleared with your product, and you're getting ready to launch. What are some of the keys is areas there that can affect whether a product is going to be adopted or not.
Ted Newill 24:09
One really basic thing is, do you have a ticket to sell the product in the hospital systems, those would be some type of relationship contract relationships, whether their ideas or their GPOs or whatever, that that work has to be done well in advance of your product launch. So that one your sales and marketing people you know can pull the trigger and start going out and talking to people. They know that they have the capability of selling into a hospital system because it's part of a contract of some kind. So I think that's one thing is to make sure you have a ticket to sell now in ophthalmology and maybe plastic surgery, maybe dermatology, you might be selling directly to doctors and or their practices. So that can be a bit different. But on the hospital system side, make sure you Have the runway to take off from in terms of contracts, and so on and so forth. There's, there's tricks and ways to work around that. And if you're a small company, you may need a really good consultant and there are some out there that can find ways to work around. And to change your message a little bit. So that the value analysis people look at your product differently than they look at similar products that they already have a contract for that might one of the big boys like, you know, it could be Johnson and Johnson or bow shalom or Medtronic may have dominated that particular system on so somebody can help you find a way around that. And you really need to investigate that.
Patrick Kothe 25:42
Let's talk about a little bit about the distribution side of things. Because you've talked about, you know, having that ticket and that I call it a license to hunt, you have got a license to hunt you with the regulatory clearance in there. And as you said, being able to go into a hospital system, a hospital and having that clearance to be able to talk to decision makers that are in there. But on the education side and the distribution side, what are some of the key things that you're looking at when you're dealing with a product launch.
Ted Newill 26:10
So you have to have an infrastructure set up to be able to support the launch. And this should have actually been set up way before the launch. And it has to be a good healthy combination of marketing infrastructure, and then eventually the sales infrastructure. And traditionally, in small and medium size med tech and medical device companies. A problem that we have, which I mentioned before, is we're very weak on the marketing side. So I can look at a website and in 10 seconds, I can tell you that it's not set up for marketing automation. Before you even get into launch, you need to have your CRM in place, you need to have your website set up so that it can help identify prospective customers, track them and score them and move that information over to the CRM. So the sales team can respond to it. So this is part of the infrastructure that you have to have in place to launch and this is another mistake that people make is they're going to rely only on the sales team. And that's very traditional, small, medium size med tech company. Strategy is give it to the salespeople and the marketing people or just support people that create brochures. That's not the way it works in this new world. The science of of a product is the product lifecycle. So the the first sales you're going to get are going to be innovators and early adopters, maybe a few early majority, but not many. And so you want to be identifying these people, you can actually be identifying them prior to your launch. If you've done some education work, and some information work. You can do it, it's legal, even if you haven't had clearance, there's legal things you can do to create interest, trade momentum, to attract people to a website, capture their identifying information, and then move it over to the CRM. So there's things that you can do, and then when you get to launch, you have that bolus of most likely innovators and early adopters that you can now reach out to, and the sales team can take that forward. So I think one mistake I see is that, you know, people don't have that infrastructure set up, and they're sort of starting cold. And that's not a great way to start anything. And then they have all the training and everything set up as well, too. Because I know in a minute, we're gonna get into why don't what's the nature of a customer? And why don't they change, and there's a lot of things we can put in place to help somebody change their behavior. But you know, as you get launched, you know, we're in the behavior changing business. And that's a tough one.
Patrick Kothe 28:57
I think, you know, one of the things that you point out is, this is resources, your Do you have adequate resources to do a proud a proper product launch. And in many instances, when you're a startup company, you're racing and racing and racing to get to the starting line, and choanal. So that's where we're at right now, with em device lab, my company, what we've been doing is getting to the starting line, and then you are a little bit flat footed, because there's so much activity to get to get to that point. And then you say, okay, we're done with that, wait a second. Now I'm behind on the marketing and sales side of things. And it's it a lot of it has to do with Are you adequately resourced or not? Because you would love to be able to have all your your sales and marketing activities lined up 612 months prior to launch and start to build that momentum. But in many instances in the startup world, you don't have adequate resources in order to do that. So having resources as a startup and as a large company, are you doing it correctly? is another major point.
Ted Newill 30:02
Yeah, I agree that you and you have to conserve these resources, you know, so you can get through this first part of the product lifecycle in terms of revenues, and, and so on. But back to the concept of resources, especially when it comes to CRM, and marketing, automation, and so on. This isn't that expensive. There's a myth that this is expensive and complicated. Depends on how complicated you want to make it. But there's some basic stuff you can do that isn't, and you can hire consultants, both in the United States and from all around the world that can help you with this. And that can be pretty inexpensive. I interviewed a CEO of this company that was in it's in Europe that has an ophthalmic instrument. It is not a big company. It is a small revenue company. And they incorporated CRM, and they incorporated learning management systems. And he sort of told me in amazement, you know, we're not going to be going and doing installs anymore. Well, the money they saved on doing installs, and all those travel expenses, easily more than paid for the learning management system that they employed. So learning management systems are a great thing that you can add to your website and to help customers out and make sure that the product is adopted correctly and best practices are used in its application.
Patrick Kothe 31:20
So 10 pricing is is always something that, you know, that's part of the marketing mix, and different strategies on launch pricing versus long term pricing. How would you think that pricing fits into this discussion on long term success of a product?
Ted Newill 31:39
Well, it's super critical. And if we go back to another CEO, I recently talked to mark Scott koski, from egap TMS, they had their clearance for the high intensity frequency ultrasound product is called focus one, they had that, that clearance for that in 2018. And I said, so what's what's taken you, you know, you had clearance, what have you, what do people do? Well, they got clearance. And then they got CMS approval. But even if you have CMS approval, it still doesn't mean all the carriers are going cureat. So they have pre launch, they really haven't formally launched it. So they have the product and a lot of key institutions. So they have their centers of excellence setup, which is a great strategy for going forward. But in the meantime, they've been working very hard with some consultants and so on, to make sure that they have the carriers behind the product on a reimbursement standpoint. Now they're going to be ready to launch now they were will hire their sales team. Up until now, they've been hiring marketing people, and they've been working with consultants to get this path cleared for them. And that's another part of the revenue path. So it's very important.
Patrick Kothe 32:56
So you just teed it up, let's let's talk about the soft launch versus the hard launch. What is the soft launch?
Ted Newill 33:03
Well, I would say, a mistake that people can frequently make, in believing that I've got the greatest thing since sliced bread, and I'm ready to launch it nationwide. And I'm gonna go to this next big trade show. And we're going to have banners and we're going to have a complete sales team out there and all this advertising prior to it. And they think they're going to go nationwide with something that's relatively new. So that's another thing we probably we might want to do is divide this up between a new concept product and a product that is improving something that's already a standard of care that a doc that's already within the realm of a doctor's procedure. And we talked about this a little bit yesterday. In fact, you talked to Dr. van Furth about this too, and your interview with him. The soft launch presumes that there can be a lot of room for improvement, despite all the work that you've done to this point and getting ready for the launch.
Patrick Kothe 34:02
When you say room when you say room for improvement, what specifically you're talking about the product, the marketing message, the materials, what are we talking about,
Ted Newill 34:09
it can be all of the above. And it can also be the training and how you get that product integrated into practice and make a practice and or a hospital and make sure it flows correctly. Remember, you might be a smaller company and it goes back to conserving your resources. Can you support this kind of a bunch of problems that rise up nationwide? Or would you prefer to take three or four or six places that you tell them, we're launching only with you, you're going to be a center of excellence but we need your feedback. We really want your cooperation to understand how we can improve our training, how we can improve our messaging, the materials, you give you the binder, the training binder, the brochures, the videos and so on. They know that they're part of this and you go in and you work very closely with them. You get the product really adopted across the board and Their system now and you take all that learning and you go back and you debrief and you say, there's a bunch of stuff we need to do to do better. There, we completely missed this particular stakeholder in the influence chain, for this product in this hospital, we need to make sure we have a program that includes them the train some and the message, there's a little different, because like is one executive told me the other day, you know, you've got the, the actual user, and what they're concerned about, then you have the tech support for that user and everything that they're concerned about. And then you have the hospital system itself, and what they're concerned about, you know, have you addressed all these things, I think you'll discover if you do this, if you do a soft launch, you're going to find a number of things that you need to prove, improve, excuse me, because if you go back, if you do a hard launch, you make all these mistakes. And the word gets out that there's this problem and that problem, and it didn't work in such and such a hospital system, because these people weren't included and they shot it down, you will get stuck in mud. And you don't want that to happen.
Patrick Kothe 36:06
The other thing is if you make a mistake, in a smaller group, it's less than much less expensive than when you make it in a large group and your launch and you've hired all your sales people. And you're not effective with that, then you've got to retool, and leave all those people hanging out there while you're retooling. That's a really expensive lesson to learn. The other thing is, during this phase, you can also be putting your key performance indicators in place. So you can see, you know, what is what's the uptake? What's the gestation time for a sale, how many people within a particular account are trained, how many people are gonna adopt, because that that goes into your growth model, because when you go to launch, then you know, okay, I know that I'm going to put a salesperson in here. And this is the gestation time, this is when I can expect results. Therefore, you can know you know, what type of investment you need to make and what type of growth plan you need to have going forward,
Ted Newill 37:00
you want in the areas of friction that they that you run into. And, you know, you can make plans to overcome that friction going forward. You're absolutely right.
Patrick Kothe 37:09
So we talked a little bit about about the reimbursement side of things, I think we should we should spend a little bit more more time there.
Ted Newill 37:18
Yeah, so reimbursement is a really tricky place in in a various communities and so on. And even if something gets a CMS approval, the different regional CMS carrier or Medicare carriers can treat something differently. And if one of them decides that they're going to apply certain parameters to this procedure, this product, whatever it might be, to restrict it, then another carrier, they watch each other, the other carrier sees that and says, well, that justifies me applying the same restrictions, then it happens nationwide. So I think this is where it goes back to, you have to be very careful about your CMS approval. And how you approach these Medicare carriers to make them really understand the value of the product, the value to the product, in terms of the overall health care economy, so that they really buy into it. And they support it. Because they are then the groundwork for the private carriers. Because you'll frequently see CMS approved something but a private carrier will still considered experimental. The best people to use for this are typically consultants, there are some great consultants out there that can help they know all the players. And they can help you walk through the you know, each carrier has an approval committee, and they can help you walk through these different committees. And then you also need some of the same information. You know, so this is reimbursement. But the hospital systems want to know about this to their value analysis committees. They want to know this stuff to reimbursements a critical thing and it can take you some time to get it and you can be deceived. If you suddenly get a CMS recognition. And you say up, you know, we've got CMS approval, and now you're suck. And there's this new type of CMS approval for breakthrough products, which gives you, I think, four years of CMS reimbursement coverage, but you can't waste that time. So if you're a revolutionary product that provides a super significant health benefit, and you've been given this sort of breakthrough status and this privilege for CMS reimbursement, you have to make sure that you're gathering the data you're doing the things you need, so that when you come out of that four year period, you can you'll have the coverage continue and you'll have all the private carriers behind you.
Patrick Kothe 39:59
Okay, Wrapping up that that Vax segment to is, you know, the healthcare economic study that you did a front covers both the revenue coming in as well as the expense going out. So it's it's what's happening with that particular therapy? What is the actual cost of that therapy? Are you lessening the complication rates? hospital length of stay going down or up? And then how much reimbursement Are you getting for that. So it's what the revenue is, what the cost is, and what the net is to that particular hospital group, that clinical trial that's being set up a way at the beginning that we talked about earlier, and give you the data to be able to walk into the VAT committee and say, here's the revenue, you can expect, here's the expense, you can expect, here's the clinical performance, you can expect the now you've got a full package, if you don't have that full package. There's a real pitfall for you, in terms of adoption.
Ted Newill 41:00
That's a great point. And I would say that when you see a lot of new technologies, especially that are coming out of small, medium sized companies and or startups, it's easy to ignore the data that you need to collect to help justify the product on its on its performance in terms that affect revenues, affect care, which event eventually affects revenues, and so on. A lot of the time the mistake companies make is they apply it only to the success of the procedure, and its safety and efficacy, surgical efficacy or perhaps immediate patient result efficacy, but they don't take it further into, well, it reduced the hospital stay on average by two days. Or it reduced infection rates by X percent, and so on and so forth. So you're right.
Patrick Kothe 41:53
So let's move on to post launch. So Ben launched, gone through this soft launch. Now you're in a hard launch now a year, two years out, post the introduction of your product, what are the some of the issues that we're dealing with there in terms of adoption,
Ted Newill 42:10
I would say that if you're a couple years out of your soft and hard launch, and you're toiling away in the marketplace, you probably haven't moved into the early majority of the market, you're probably at the tail end of the early adopters. And it seems like things are going well. You're you're having year over year growth. And it could be 10 20% growth a year. And then in med tech, that would be a signal of a certain amount of success. Have you reached the point of revenues and momentum or run rate, I should say that you forecasted when you were telling your investors how great this product was going to be? And how Richard was going to make everybody or if you're a product development at a more mature company, the presentations you made to justify all this development work? Have you reached that? Possibly not. But you're getting close to what Geoffrey Moore many people know who he is he wrote the book Crossing the Chasm, you're getting close to this chasm. And the mistake that can happen there is that the message and the type of work you do with innovators and early adopters is going to be fairly different than what you do with early majority. And if you think you can just slide from the early adopters, right into early majority, you've got confidence he can can increase the size of the Salesforce, increase your marketing budget for the product, because now you're going for the hockey stick part of the curve for sales because you feel like you've gotten through that first part. But if you haven't addressed that difference, that's where people get in trouble. And I've seen a couple companies die right there.
Patrick Kothe 43:59
So Ted, what does that mean? Is that a change in in strategy and your marketing message at that point to it to address those people?
Ted Newill 44:09
Yes, because innovators and early adopters and it depends a little bit on the marketplace, every markets a little different, like optometry is very different for ophthalmology in the way they adopted products. So it could be different cardiology versus neurology or neurosurgery, orthopedics. It could be a little bit different in these different markets. So you have to understand how your market works. But what it could be is that typically innovators, early adopters are really independent thinkers. And they can take a certain amount of information and make a decision off of it. And they don't always need a bunch of other people telling them how great a product is before they use it. They'll don't make the decision. They can see it they have the imagination and the creativity to see the advantage of the product and say to themselves This is a great idea, it's going to help my patients it's going to help my practice and my in my hospital system, I'm going to push to start using it. You have these that type of personality, the early majority, or some another word for them is the pragmatist. Well, there you go, it's pretty defining. They want more information, they may want brochures that they have a lot more scientific or clinical backup, to give them the confidence to make this change. So they may need more scientific information they may need may need more presentations from key opinion leaders. And they may need a different kind of training to give them the confidence to make a change to this new technology, you know, med tech type of technology, new instrument, new procedure, and they may need a different level of support that you haven't had to provide to the innovators and early adopters. So it could require another stab at voice of the customer. And in fact, we did a webinar the other day, we were talking about the whole concept of voice of the customer. And there were some people that were proposing, you should be doing voice of the customer, like every six months, at a minimum every year. But if you're getting ready to move into that next stage, you might really need to investigate what do these people need to help them make a decision to adopt your product? Or technology?
Patrick Kothe 46:26
Well, that's really a great point. And to me, it comes back to the resource thing. And the strategy again, because what you're describing is if they need additional clinical data, because you got approval based on a limited amount of clinical data, it may have been the definitive regulatory study, but it may not have been the definitive market study. So if you have not started marketing clinicals, or to expand those clinical trials, in order to provide more proof sources, for those later adopters. You're kind of hamstrung yourself, again, because those clinical trials take time and money in order to to pull off. And if you haven't started those, now, it's going to be another year two years before you can you can get to get to those proof sources.
Ted Newill 47:20
Yes, you're exactly right. They should have been working on it. And the couple years that they've been growing their business through the innovators and early adopters. And then also when you get to the the place, that could be the chasm for you, that is a great place, perhaps, you know, several months before that, or even a half year before that, if you've got a really good if let's let's say you're a startup or a small company, and you've got a number of investors, it could be private equity, could be family, you know, money or something like that. But you want their support to raise another round of money to help finance that extra clinical work. And also finance the infrastructure you need to expand your business and to provide the resources that this next phase of, of market assimilation is going to require. Really well manage startups that are run by venture firms that are very experienced in med tech medical devices and stuff frequently see this coming. And they should know, to provide that advice to the CEO and to the C suite and so on and help make sure this is happening. And also to conserve resources until you get to that time. Mature companies. This is where they frequently make a mistake. They have done so well with the products that they've had for years. And maybe they've got some they've had some successes with some products that we call an improvement over over the current standard of care, but it's part of the standard of care. So it's it's not, let's say new concept. It's not new concept. But it's definitely improvement, they might be able to get more money for it keeps them leading edge. Now they have a new concept product. And they're all excited about it and they launch it. But they're overconfident because they've always done so well, with all the products that they've had. Now they're launching something that's really new, it's really somewhat revolutionary, and they think it's going to take off. And it doesn't.
Patrick Kothe 49:20
I think one of the other things that you discuss was if you're a single product company, and you're bringing this technology out all the focus is on that particular product. But if you're a multi product company, and you're a couple of years into a product introduction, well now we're dealing with some other issues, you know, the shiny object syndrome for the sales reps, it's okay, I already launched that one. Now we got another new one coming out. And now I'm going to put my emphasis behind that and how can that slow the adoption of the first technology?
Ted Newill 49:54
That's true, and so that goes back to a good compensation program to make sure that the Sales team is focused on what they should be focused on and rewarded appropriately. And that typically helps correct a problem like that plus messaging from the company from management, then from the sales leaders and from the Marketing Leaders and so on.
Patrick Kothe 50:16
So, let's move on a little bit, Ted, because there's some other issues that are independent of the product itself. And they're, they have more to do with human nature. And some of the some of the reasons why we change and don't change. When we introduce something new,
Ted Newill 50:36
almost no matter what it is, if a doctor has to in surgery has to twist his hand a little bit differently, one way or the other, or pick up a different instrument that's designed a little differently. You're asking to change behavior, that's a big source of friction. So changing behavior is is one place, because doctors can almost be superstitious about the way they treat a patient, whether it's in the office, or whether it's in the operating room, or whether it's bedside, they have a routine that they've gone through before that they've used for years, or a certain period of time, they're used to it, they're comfortable with the results, they know what to look for, after they have applied the treatment or taking care of the patient. So they sort of know what that looked like after to see you know, what kind of success are having. These are hard habits to break. I mean, when I was a first a sales, sales rep for hire shulte, selling hydrocephalic shots, you go into practice with six neurosurgeons and two neurosurgeons use one kind of product to use a different and to use mine, could you get a neurosurgeon to change a hydrocephalic shot, it was really difficult, because you're talking about brain surgery here, right? changing behavior, changing habits, changing the way they think about something is really, really difficult. So I'd say that's when we can talk about these in a second. But the other is doctors are busy. And especially right now, they spend more time in their practice, because they've got some additional procedures, they have to follow in terms of sanitation, personal protective gear, and so on. And all their staff has to follow this. And there's a little bit of a rebound in elective surgeries right now. So they're trying to make up for lost ground last year. And they're really busy. So that's the other problem that you have, even if you have a great product, you need to find the time to communicate with the doctor about the product, or your marketing team does or both of you. And if he does show interest and wants to make a change, then you have to find time to train he or she, these people are really, really busy. And when I get back to changing behavior, then you're also talking about risk, you have the whole risk evaluation the document, by the way, that risk concept, when you look at the product lifecycle goes goes up. So the innovators and early adopters are willing to take risk more the early majority of the pragmatics they, they're less less willing to take risk.
Patrick Kothe 53:04
I think you've talked about an evolutionary product versus a revolutionary product and the risk associated and the benefit associated with it, because we're really talking about risk benefit analysis here, you know, is the is the juice worth worth the squeeze? So is the risk that they're going to be taking? Is it going to upset some things leading to whatever negative could be could be a negative outcome could be an issue with a patient could be time that they don't have with their staff time that they would need to adopt a new technology that they can't spend with their family. So there's a lot of costs associated with this not just a risk of patient outcome. There's a lot of other outcomes that they're evaluating too. So it really has to be what is the benefit that I'm actually getting to this? And what is the cost associated with making any change?
Ted Newill 53:58
Right, right. Yeah, and, again, going back to the product lifecycle, you know, innovators and early adopters, even if they are busy, they will find time to learn about something new, an early majority doctor or, you know, senior nurse or whatever, they may not be as motivated to find that time until you have so much information. It's just so clear that this change would be so clearly beneficial to them that they they can't resist, you know, taking it and that's just that's just typical. But if you go back to Dr. van Firth again, you know, he went from open brain cases to endoscopic, what a huge leap. He's an early adopter. He's not an innovator. He admitted that but he did take a lot of time to get this thing down. He actually went through two training courses instead of one.
Patrick Kothe 54:51
Well, Ted, thank you so much for leading us through this discussion. I really appreciate and as listeners can hear Ted is got a lot of great information, and a lot of great insights into medical devices and specifically very strong insights into the sales and marketing of medical devices. Ted, let's spend a couple of minutes talking about medical device success, and your business and podcast.
Ted Newill 55:19
Okay, so the businesses, I'm a solo practitioner, I might even call me a general contractor, in terms of medical device consulting. And what I've learned over this past couple years of consulting, actually, especially since I started the podcast, is how specialized some of these services are, that could be very helpful to med tech companies. And that's why I like the idea of being a general contractor, I know about all these things that people should be doing. And I generally know how they should be implemented. But then I also know the people that should do the implementing. And some agencies now are so specialized, there's agencies on micro marketing, which is really digital marketing, versus that they're not doing PR, they're not doing print advertising, they're not helping with a print brochure, their entire focus is digital marketing. So the specialization of agencies is out there. And people need to know that and understand that, they might need help from a couple different places than one. So that's something I learned. And that's what medical device successes with solo practitioner, general contractor, smart enough to note, I know I can help people with strategic planning, tactical planning, moderating webinars, conducting webinars, all that kind of stuff, key key opinion leader management, I do all that directly. But when it comes to certain other things, we'll we'll go find a specialist. So that's the, that's my consulting work. Then the podcast, you know, back in 2019, I was thinking about doing a podcast, I thought I had a lot to share, set it all up, thought I was ready to pull the trigger in March and then COVID came and it changed the whole message, which was how do we survive? Has med tech survive in a COVID? world? And what is it gonna look post COVID. So we spent a lot of time on that. That's when you and I met, which is awesome. And now you've got your podcast, which is really terrific. I enjoy listening to it. And then the community that I have is called med tech leaders. And it's a small community that I'm nurturing right now, with the intent of having more interaction between the members. That is not necessarily brand building or marketing of each other, but really helping each other out with problems and solutions, and so on. So LinkedIn, which is a terrific, you know, tool for everybody. It's still mostly about brand building. And it's not necessarily the easiest place to communicate with other people and get resolutions to issues or share ideas and share problems.
Patrick Kothe 57:54
Well, I can tell you that I've been a listener from day one of Ted's podcast, and I would encourage every single one of you out there to subscribe to Ted's podcast, medical device access. Not only is he got interesting guests on there, but there's real actionable things that you can take out of it. As he said, You know, he started off with, you know, what can we do and COVID. And there were some terrific things early on. And they're still relevant today about how do you get to customers in today's new environment, because it's different the day of walking in and spending time in the hospital has changed, whether it's ever going to get back to what it was, who knows. But certainly we can utilize a lot of the lessons that we've learned about how to be more resourceful and getting to our customers. I think that's really one of the one of the main things that I've taken taken out of it and, and a whole lot of this Salesforce automation, better marketing. I think that's one of the other real messages that I'm getting out of out of medical device success. Ted, is there anything else that you'd like to say to the listeners about either today's today's interview or about where we are with medical device, sales and marketing?
Ted Newill 59:16
I would say a couple things I would say that I already hinted on, which is about how weak med tech is especially small medium sized companies in terms of marketing. The big companies like Medtronic, they go hire people from Colgate palmolive. They hire people from Procter and Gamble. They get people that are real malt, or Coca Cola, they get real marketers on their teams. If you're in small and medium size med tech, think about investing in people that are real marketers that may not know anything about med tech, but they really know digital marketing inside and out. Maybe that's where I'd make my first investment would be a digital marketer. You could start with a digital consultancy before hiring your own person we need more demand generation tools to help balance out this old culture of just going with the sales team. We need more demand generation to bring people into the funnel further and hand them over to the sales team, make prospects aware of and interested in your product. So that's one thing. The second thing I would say, really based on what you and I were talking about today, is don't be overconfident about your new technology that you're so excited about. Be careful, really listen to the customers listen to the marketplace, I don't want you to doubt yourself, you have to have the determination to go forward. But almost every week, I talked to a company that has a new idea or a new product, or they're in the process of clinical trials. And they have these crazy assumptions of how much they're going to sell right out of the block, or what their pricing can be. And I'm just amazed. And it all comes from what I call ivory tower thinking. So don't get caught in the ivory tower. Make sure you're talking to all kinds of customers, especially people you don't know that well. And get their feedback about where you are, what you're developing what you're thinking of offering, just to make sure that you understand where your product can go.
Patrick Kothe 1:01:21
A big thank you to Ted for joining me on today's discussion. As you heard, Ted is able to sift through some really complex issues and organize them. So they become much more manageable. A few of my takeaways, first product lifecycle. I can't stress this enough that people need to understand what the product life cycle cycle actually is. And then where you are with your particular product within that life cycle. As Ted described, the different buyers that we've got, the marketing messages are different depending on where you are within that product life cycle, to have a good understanding of what of what your product is and where you are in it lifecycle can lead you into what activities that you need to do to support the product adoption within the particular customer segment that you're going after. At that point in time, it's also going to help you to make sure that you have the resources to to tackle those issues when you get there. And also to be able to prepare for the next set of customers that you're going to be speaking with. So if you have the resources built into your plan, that you can have the whatever materials or clinicals, or whatever messaging that you're going to need to get to when you know that you're crossing in, done with the with most of the pioneers non crossing into the next phase of customers, then you're able to maintain the momentum of your of your product launch. So really important to understand that that product lifecycle. Second, and it kind of ties back to the first Don't be fooled by your early success. Now success is great. And don't get me wrong, we all like to see a product launch come out and and really have some momentum. But if that momentum is based on your pioneer customers, and you're not able to cross that chasm, well, now you've got a problem. So don't be fooled by that. Make sure that you've got information that's ready, and marketing messages that are ready for the next group of customers. And make sure that you understand what their buying criteria are, so that you can maintain that momentum as you move into that next set of customers. And that soft launch is really important. It's really something that most good companies are going to do they're going to understand things like is the product exactly what I want it to be is the marketing message exactly honed in on the type of customers that we're going after, and is the training appropriate for those customers. So make sure that that you understand where you are in that lifecycle. Don't be fooled by the early success, and make sure that you're prepared when that next group of customers starts to come in. That's what's going to meet maintain your momentum. The last thing is there's so many potential issues. When we're answering this question. Ted and I covered most of the key ones within here, but there are many more issues. Make sure that you understand the issues with your product, your customer and your market. And the time that you're coming into that timing is also important. Because if you do understand these things, it becomes easier to manage that product lifecycle and manage your product going further. So think through where you are today and what trajectory you're on with your product. Then apply Some of the topics that we discussed, and then try and anticipate what the future can be. Thank you for listening. Make sure you get episodes downloaded to your device automatically by liking or subscribing to the mastering medical device, podcast and Apple podcasts, Spotify, or wherever you get your podcast. Also, please spread the word and tell a friend or two to listen to the mastering medical device podcast as interviews like today's can help you become a more effective medical device leader. Work hard. Be kind
