Entrepreneurs in growing emerging companies are challenged to incorporate value into their product offering; with value defined as the customer’s perception of their unmet need.
As exemplified in No Man's Land, the adolescent growth stage when companies are too big to be small and too small to be big, alignment of a product’s features and benefits with the customer’s perception of value is a dynamic proposition. It is constantly influenced and 
redefined by factors outside the control of the entrepreneur. An emerging company must proactively and continually monitor the competitive landscape from the customer viewpoint to anticipate the opportunity for innovation--and then be nimble enough to be first to market with a differentiating innovation.
No Man’s Land Challenges
As a company grows, the challenges associated with market alignment are influenced by many factors including:
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Organization growth and dissemination of decision making authority
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Breadth and segmentation of the product offering
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Redefinition of the customer’s value drivers
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Technological innovation
For the entrepreneur of an emerging company in the medical device industry, the challenge of Market Alignment is complicated by the role of the regulatory authorities as an intermediary between the company and the customer. In the United States, all new medical devices, from tongue depressors to implantable defibrillators, require the review and approval to market of the Food & Drug Administration (FDA). The Federal Food, Drug & Cosmetic Act calls for a premarket approval (PMA) process, which requires the FDA to determine the safety and effectiveness of the proposed device.
Class III Devices
For the more sophisticated and higher risk medical devices (Class III), which applies to most surgical implants, the PMA process typically involves a series of preclinical and clinical trials, the protocols for which are ultimately sanctioned by the FDA. The results are subject to review and discussion with the FDA as a basis for authorization to initiate the next round of trials.
If the cumulative body of data from these trials indicates that the proposed device has satisfies the statutory requirement for “reasonable assurance of safety and effectiveness,” the FDA will then typically require that this data be reviewed by a panel of experts. If a majority vote in favor of approval to market, the FDA may ultimately grant approval to market the device--predicated on agreement about the label regarding Indications for Use, Warnings, Contraindications and other instructions for proper handling, storage and disposal. This process can often take 6-10 years from initial contact with the FDA through PMA approval.
Market Alignment and the Regulatory Process
The results of this regulatory process can have a significant impact on Market Alignment. Take for example a situation where the customer’s unmet need and perceived value is for a surgical implant appropriate for use in patients with certain preexisting conditions. If the FDA has not agreed that the device is appropriate for use under these circumstances, the company cannot promote the product for such uses. Should this result in the customer not being aligned on the device’s value and opting for a competitive alternative, the company’s best recourse is further, time-consuming clinical study to try to expand the Indication for Use. In the meantime, Market Alignment is a cause for the entrepreneur and company to remain mired in No Man’s Land.
Market Alignment: How Much Can an Entrepreneur Control?
The medical devices entrepreneur faces distinct challenges dealing with a slow moving Federal agency. But the principle at stake is not that different than with other businesses. Market Alignment is not a static attribute of a company or product. It changes as fast as competitive products emerge and consumer perception of need shifts. Innovators in all industries who are trying to get across No Man’s Land must do what they can to maintain Market Alignment. But they should recognize that many factors that drive Alignment are ultimately beyond their power to control.
Bob Hickey has a diverse background in general management roles ranging from start-ups to large corporations. Learn more or contact Bob here.
For more expert advice from Newport partners, see our ebook, "5 Steps to Survive No Man's Land."
image credit: marqui.com
