Part 1 – the Value Proposition
I often get asked by doctors and healthcare professionals what makes a healthcare start-up successful. You won’t be surprised to hear that there isn’t a simple answer but there are a number of steps that you can go through methodically that will dramatically improve your chances of success.
Step 1 – don’t invest too much time and money on your product
Many of the healthcare start-ups I meet are struggling in one or more operational areas. From designing and building a product that customers actually want, to branding and communications and finally, marketing and customer acquisition.
One of the most common problems I encounter is when almost the entire focus and investment with the start-up has been around building the product. The founder(s) will often have a very clear vision and idea of what they’re building before market & customer research has taken place to validate if there’s an actual need or demand for that product in the first place. This can often lead to the creation of a product or business that isn’t needed or wanted by prospective customers and therefore valuable time, energy and money are wasted.
Step 2 – get users to test an MVP version of your product early on
Understanding the market for your start-up or product is therefore an essential starting point, as is testing an early Minimal Viable Product (MVP) with your target customers.
Getting your target audience using your product or service to generate early market feedback can be invaluable in helping shape your product or start-up in the future. You may have to accept that some of your strong assumptions are incorrect, or at the very least refinements that could be a game changer for the level of success.
So, where do you start and how can you avoid the obvious pitfalls to ensure you don’t spend valuable time, money and effort on the wrong areas?
Step 3 – use a Value Proposition canvas
Let’s start with the Value Proposition. This is a step that often gets skipped but it’s vital to the success of any healthcare start-up.
What the Value Proposition enables you to do is establish if there’s a good product/market fit for your healthcare start-up before you even start building the product. You might have a brilliant idea for an app or platform and a great developer in Eastern Europe who can build it, but you need to build a product that your customers of the future actually want and need. And, most importantly, will be willing to pay for at some point in the future.
The Value Proposition Canvas is a tool which can help ensure that a product or service is positioned around what the customer values and needs. The Value Proposition Canvas was initially developed by Dr Alexander Osterwalder as a framework to ensure that there is a fit between the product and market.
In our experience, this simple, yet powerful exercise can be the difference in achieving success, and acts as the foundation for the business strategy.
If you’re in the middle or thinking about launching a healthcare start-up, give us a call first. We provide a free 60-min business or start-up ‘health check’ and will give you some pointers and guidance that could be invaluable.