Dodging Healthcare Product Development Failures, Part 1—Risk Assessment Trumps Design Devotion
September 25th, 2014
Posted by Niall Sweeney
A new healthcare product is an exciting thing. It could alter people’s lives, perhaps change the world, and maybe even earn some money. But what comes as a surprise to most people is how few of the many new product ideas actually make it to market.
There are a number of reasons why most products don’t survive; the development process is complicated and often counter-intuitive. However, in my experience, there are a few pitfalls that commonly trap product developers, but also ways to sidestep those pitfalls. This is by no means a comprehensive list, because every product is different and many things can trip up development. Often a project can be clicking on five cylinders and you need just one more to make it work. In this three-part post, we’ll look at common ways to kick start that extra cylinder.
Pitfall: Replacing product development with product design
In most cases, a product is developed because of a hunch, some assumptions of opportunity, and a vision of its design. Too often, developers fall into the trap of focusing exclusively on the design challenge. The thought being, all that’s needed after design is to see if the product will sell. People become enamored with the prototype, it becomes more a tool to engineer the final product and less a tool to figure out if it really solves a problem worth solving. It sounds silly in hindsight, but it’s very easy to get swept up in the early excitement, the drive to get the product into production and to forgo the discipline of genuinely checking assumptions.
Solution: Focus on risk assessment
Recognize that the challenge here is risk assessment rather than product design. Issues like distribution, reimbursement, value propositions and competitive alternatives, prices, economic feasibility and regulatory clearance need to be addressed before the design goes too far. You should identify which of your assumptions about the product’s success are the riskiest, and find ways to remove those risks. For example, a little research determining whether the product would be reimbursed is likely in order before any design dollars are spent – and, ultimately, this indeed could guide the design direction.
One popular tool for risk assessment is the phase gate. This method institutes a series of “phase gate reviews,” during which your product’s viability is assessed using a standard set of questions. Between phases, you’ll then need to find the answers to those questions and decide whether your product needs to change, proceed or end. Phase gate methods tend to be used by larger companies, but startup companies and other organizations that fund development through venture capital can use their funding rounds as a proxy for phase gate reviews.
An investor pitch can effectively serve as a phase gate because you are forced to review the viability of your product from an outsider’s perspective, and the decision to fund or proceed is contingent upon satisfactorily answering phase gate-like questions and demonstrating viability.
Phase gates require you to simultaneously be a tireless promoter of the product and its most clear-eyed critic. This can be mentally exhausting. You know phase gates are working when the team feels stressed. If the facts discovered during your phase reviews don’t justify continuing with a project that everybody has personally invested in, then that project could very well be cancelled. However, it is far better to experience the stress of a review early and deal with the facts rather than blithely proceeding down a wrong path.
In subsequent posts, we’ll review other elements needed for successful product development, and how to avoid the traps along the way. These elements will include clear insights on your product, and how to make teamwork actually work for you.
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