Lay A Solid Foundation: 10 Reasons Why Startups Fail...And How Not To Be One Of Them
By ROB FERGUSON
Partner
[January 27, 2025] – Building a solid foundation doesn’t just apply to construction, bridge-building, or developing personal and professional value systems, it most assuredly applies to the healthcare marketplace. Especially when you’re seeking to launch what you believe to be the next great innovation.
For every successful healthcare launch, there are countless tales of shattered dreams; products that seemed to be can’t-miss blockbusters in the development stage but never got out of the gate. In most instances, this can be attributed to one thing: Not doing your up-front homework, or doing it haphazardly.
Specifically, I’m talking about the critically important process of gathering and validating quality data; fresh input that comes directly from those who use such products and know which ones work, which ones don’t, and the type of product the user dreams of using one day. This is what I mean by laying a solid foundation.
Drilling down further, your key to success is gathering Voice-of-Customer input, feedback and perspectives. Perhaps more than anything else in your planned journey to commercialization, building a solid foundation is your make-or-break step. Do it carefully and effectively and your chances of success increase. Bypass this time-consuming, challenging and often misdirected task and you may as well punch your Fast-Pass ticket to commoditization or, worse, the scrap heap.
When I say quality data, I’m talking about fresh data, not data from the year before Covid, or from the post-pandemic recovery years. It does you no good to base your efforts on what once was versus what’s happening in the here and now. I’ve heard stories of well-intentioned people using Google or AI searches for what they call research and data-gathering. That won’t cut it.
Ask the same question three different ways and Google will give you three different answers. Which one is correct? Maybe they’re all accurate to some degree but don’t necessarily tell the whole story. Use AI and you’ll be instantly flooded with info … based on historical references, not what’s happening today.
Conducting this type of research and data-gathering is something we take very, very seriously at Excelerant. And you should, too. We have an extensive network of healthcare professionals across all specialties that we query on behalf of our clients who believe they, too, have the next great innovation but aren’t sure where to start.
We go to the source and gather their perspective. We learn about competitors’ products [their current offerings, as well as what’s in product development]. We conduct a large enough sampling to be able to identify trends and surface learnings so you can make better, more strategic and informed decisions as you journey down the road to commercialization and meaningful profitability.
Is it daunting? Yes, quite frankly, it can be. But it’s a must-do, not a drive-by consideration. Bypass your market research and you will likely be derailed for any [or many] of the following 10 reasons …
1. Filling a Void that Doesn’t Exist
Sometimes, the simple act of creating something new can blind you to whether there’s really a need for your presumed innovation. Selling successfully can be simplified to three factors:
- You have a need.
- I have what you need.
- Let’s agree on a fair price.
Take any of those factors away and your dream goes away. Rein your early zeal in a bit and do your pre-launch market research thoroughly to determine if you’re reading the tea leaves correctly. Is there really a need? Are you sure? Be brutally honest with yourself. Otherwise, you’ll be wasting valuable time, effort and money. Speaking of money …
2. Inadequate Start-Up Capital
While an initial infusion of funding can seem like a large and healthy number, you will quickly burn through that stash if you don’t watch your nickels and dimes, and if you don’t think twice [or three times] before spending. Closely tracking your financial outlays and being mindful of what must be spent versus what could be spent will extend your initial funding and demonstrate to second-issue investors that you’re operating wisely in the early going.
3. It’s a Jungle Out There!
Assessing the competitive marketplace is critically important. You need to realistically understand the gauntlet you’ll be running. By and large, you can count on competition, and plenty of it. If your product is truly a breakthrough innovation, you may be the only player in that space … but only for a while. It won’t take long for competitors to pop up here, there and everywhere.
The best way for you to stand out and stand above the rest is to highlight your product’s unique value proposition. That’s another matter we at Excelerant consider to be of utmost importance. In the world of consumer goods, marketers are always promoting what makes their product different, better and special. You must do the same or you’ll be lumped in as a commodity item versus a have-to-have above all others. Speaking of marketing …
4. Willy-Nilly Is Not a Strategy
A haphazard approach to central messaging won’t work. You need a message that breaks through the clutter, elevates your product, and captures a prospect’s attention. A central message based on your research and analysis of the marketplace.
And if you’ve done your due diligence and homed in on a unique and compelling message, are you feeding it to the proper targets? For example, if you’ve got the greatest pickleball paddle ever produced but I’m a golfer, it really doesn’t matter to me. “But thanks anyway” is not the response you’re seeking.
It cannot be overstated how important it is to develop a well-thought-out marketing plan with key messaging and laser-targeted prospects before launching your campaign. It’s equally important to track progress on a weekly, monthly and quarterly basis so you can immediately correct when and where necessary.
5. Accept Constructive Criticism
Nobody likes to hear, “Your baby’s ugly” … but it may be true. When you’re being given the gift [yes, “gift”] of honest feedback from an end-user, listen, take note, and take action. Their words may sting a bit but they are nuggets of gold if you put your ego aside, take them to heart, and incorporate their suggestions. Refining and re-refining is a way of life for companies and products with staying power. Digging in your heels, ignoring the feedback, and staying the course won’t be good in the long run. [Just ask Blockbuster Video.]
6. “Regs & Legs”
Nobody likes to be told what to do but in the world of commerce [especially anything healthcare-related] there are myriad regulations and legalities that must be strictly adhered to. These range from federal, state and municipal laws, as well as your own proactive steps to protect your intellectual property.
Skipping over these necessary tasks – laborious and tedious as they may be – will, with 100% certainty, come back and bite you in the backside. That includes fines, penalties, compensatory damages, or profit lost to a copy-cat who took advantage of your corner-cutting and is now selling your innovation legally and more successfully than you are. Know the ins-and-outs of compliance and regulations, monitor matters regularly, and take necessary legal steps to protect what’s rightfully yours.
7. ‘The Price Is Right’ Is More Than a TV Show
As we stated earlier, a well-thought-out marketing plan is a make-or-break issue. Same is true for your pricing strategy. If you’re unwilling to do your up-front, in-depth research, including competitive pricing and tactics, you’re more than likely going to price yourself out of consideration … or leave a heap of cash on the table. Neither scenario is appealing to anybody.
You must grasp the subtleties and nuances of an ever-ebbing-and-flowing marketplace if you’re going to secure a competitive edge. Again, that’s why your foundation must be based on current, quality data that has been mined, aggregated, and analyzed for clues to success.
Further, landing on the right price for your product must include disciplined cost-containment since out-of-control spending will erode your revenue and profit. Like marketing, you must constantly track your activity and make adjustments and refinements to pricing where and when needed. Delaying even a day too long will undoubtedly cost you business. The price must always be right.
8. Great Sport, Lousy Team
Success in business is a fun game to play, no matter the industry. Healthcare is no exception. But to pluck a person who’s had great success in one industry doesn’t always ensure he or she will enjoy that same level of success on your chosen playing field. [Ask John Sculley who left a golden career at PepsiCo to join Apple and had Steve Jobs, Apple’s founder and one of history’s most brilliant innovators, ousted by the Board and was eventually run off himself.] Building the right team matters!
Inexperienced team members led by unqualified managers is a sure way to end up last in the standings. Poor decision-making becomes the norm and company culture will suffer. Avoid this by crafting a team of carefully selected and highly qualified individuals to do what they do best. Foster a culture of mentorship and mutual support, and be sure the various skill sets complement each other. A strong lineup has a much better chance to rack up many more wins than losses. And isn’t that the point?
9. “Uh-oh … something’s not right.”
Rushing to market with full knowledge your innovation has issues is another Fast-Pass to failure. As the great cowboy philosopher Will Rogers once said, “You never get a second chance to make a first impression.” Launching an innovation with known flaws, or one that delivers a cumbersome user experience, will likely hamstring any likelihood of success. Again, upfront research surfaces such issues and allows you the opportunity to correct issues and be a star out of the gate, not a stumbler. It is always better to delay your launch and get matters right before presenting your innovation to the world. [Just ask any company who ever had a product recalled or scrapped altogether.]
10. Brace for Success … and Even More Success
I can’t get the old TV scene from I Love Lucy out of my mind. Lucille Ball works a conveyor belt in a candy factory and, as product demand grows, the speed of the conveyor belt increases and, before long, Lucy is madly stuffing chocolates in her mouth, her pockets, even her bra just to keep up. Eventually, the line becomes one big mess. Ahhh, welcome to the wonderful world of scalability.
While you can’t automatically assume you’ll be successful – even after starting with a foundation of quality, timely data -- forward-thinking people also know they must be prepared for success when it does occur. And when it accelerates. You must build your operation with scalability as a top priority. “Back-Ordered” or “Out-of-Stock” situations due to a lack of scalability and flexibility will push you down the rabbit-hole of “unreliable”. When a provider has an immediate need and that need can’t be immediately met, a customer simply turns to the next option. And you’ll be out of luck … likely for a long time.
Final Thoughts …
The journey to market commercialization is tedious and demanding, and often fraught with peril. In many ways, it is also algebraic in nature because certain steps must be taken in a certain order or you’ll never solve the equation. And that solution is spelled S-U-C-C-E-S-S. Otherwise, why bother?
It all begins with the right foundation.
It’s OK to admit you don’t know what you don’t know. You may be a product development whiz but that doesn’t mean you’re an expert at understanding the market, assessing the competitive landscape, identifying your unique value proposition, developing effective marketing plans, crafting sales strategies and tactics, knowing the most appropriate sales targets [and what makes them tick], etc. No one person knows everything and everyone … that’s our job.
At Excelerant, our team of highly diverse and deeply experienced professionals are able to deliver expertise in all stages of product commercialization. We can fill those knowledge gaps for you. We know who to call with the right questions to get an accurate read on the current market.
Plus, we know the key players at Group Purchasing Organizations [GPO], Integrated Delivery Networks [IDN], and Regional Purchasing Coalitions [RPC]. We have trusted relationships with all these people and when we make an introduction or recommendation on someone’s behalf, they listen. Let us help you make that journey to market commercialization a tremendous success.
ABOUT ROB FERGUSON
With more than 30 years’ experience in Neurology, Sleep, Cardiac and Physical Medicine, Rob possesses a comprehensive understanding of how the healthcare industry operates. He has worked in management, sales, operations and marketing and led successful commercialization of new diagnostic products in North America, South America and Europe. Beyond his knowledge of traditional healthcare, Rob keenly understands next-generation areas of patient treatment such as Hospital in Home [HiH], Remote Patient Monitoring [RPM] and Software as Sales [SaS]. Rob is also adept at assessing early-stage preparedness and payor reimbursement pathways, and will identify proper CPT® codes for your product or service. This analytical approach amplifies your company’s value proposition and ensures your product or service meets all necessary requirements. Rob is a skilled negotiator of contracts with Group Purchasing Organizations [GPO] and Integrated Delivery Networks [IDN], and understands government schedules for strategic planning, product development and business acquisition.
__________________________
ABOUT EXCELERANT CONSULTING
Excelerant Consulting is the go-to organization for med-tech companies that need to position products and services successfully for value analysis committees, contract acquisition, and sales modeling and execution to commercialize the launch of medical devices or services with Group Purchasing Organizations [GPO], Integrated Delivery Networks [IDN], or Regional Purchasing Coalitions [RPC]. Our clients rely on us to enhance their product positioning, navigate corporate contracting opportunities, and provide sales support to accelerate sales growth.
For more info, contact Excelerant Consulting at info@excelerantconsulting.com