Strategies to Pivot Current Products to New Market Sucess (with a Little Bit of Luck)
Often success in business is the result of diligent study of the current marketplace to optimize key differentiating characteristics to grow within an arena in which you are already competitive. But sometimes breakthrough achievement is best pursued through branching out and focusing in a new domain. At the 2018 BioForward Wisconsin BioHealth Summit, Amanda Baltz, Nicolas Paris, and Garrett Peterson got together to discuss new technologies, new markets, and how their organizations pivoted into new business lines:
Q: While moving into a new business arena is obviously a leap of faith in many ways, it should be based upon the leveraging of a core strength within your organization. Have you seen this to be true for your organization?
GP: At Yahara Software, our Transportation Division spent years creating a scalable, reliable and secure systems integration platform. Then, three years ago one of our long-standing Life Science partners approached us with a project funded by the Gates Foundation to collect public health clinical data. We were able to see parallels in the systems and data structures needed between this project and our existing technology and started collecting within 4 months of signing the contract. I believe the key was our critical evaluation of the baseline technology underpinning the original offering, asking ourselves the question: “Does this have potential value to help in a different domain?”
AS: At Spaulding Medical we did a Nextgen phase 1 study of cardiac safety and during that study we realized there was a need for a portable reliable, reproducible ECG. Based upon the demand we saw, we created our current product line and spun that out of the parent company. Today Spaulding Clinical products are used in clinical research and healthcare systems.
NP: Gilson was originally formed to commercialize EEG technology emanating from the UW. We began by building instruments during WWII that focused on brainwave detection. Through our work with customers, we were introduced to our current focus of measurement equipment within laboratories. People now know us as a pipette manufacturer, but we have been pivoting lately to provide more emphasis in general laboratory metrology as well.
Q: What parts of your strategic plan were most impactful in your eventual success
NP: When moving to a new area, you must start with a strategic direction. Look around you and figure out where you want to go, then change one variable at a time until you get there. You must focus on three areas, your technology, your customer base, and your business. I suggest you start with changes to one area and from there branch out to the other two. We looked at scientists and saw that they were performing calibrations manually and then writing down the information and then typing it into their metrology validations. We asked, can we have the pipettes or other instruments record the calibration information, so they don’t have to? We are discovering that within our current customer base and product lines we could engage within a whole new domain!
AS: For us we were responding to our client needs to improve data quality by providing a way of collecting ECG information inside our studies and for patient care in the same way. By watching and listening to our clients, we realized that there wasn’t practical product on the market at the time that could be used for both purposes. Based upon this, we developed a hand-held device that we deployed in 2011. Those same original patrons used the early beta version and gave us lots of market feedback. Partnerships with current clients like that is a great way to get a feel for the market. The key is to identify where your clients are struggling to drive change and use that for inspiration. Even if what they need is outside your current offering domains, ask yourself if it is within your capability to provide it nonetheless.
Q: What unexpected challenges did you face while spinning up the new initiative?
AS: We found that our clients wanted to purchase the instrument, they didn’t just want to use it in the trials we were running, they wanted to use it in their clinics. The resources and team needed to manufacture a medical instrument is very different than the clinical trials business. How do we market this? It’s a different story so we needed a separate team and separate focus. There was lots of R&D. It was confusing to investors and customers, they wanted to know whether we were a research organization or a product organization. Your customers dictate your business lines so it’s important not to confuse them as you develop new business lines. To avoid this confusion, we realized we had to separate the businesses, a process we completed in 2018. So far, that has proven to be exactly the right thing to do to address our marketplace.
Q: How did you know the new direction was a success?
NP: Measuring your progress against goals is essential to tell you if you are going in the right direction. However, you must realize that realistically you are never going to meet exact targets you set for organization. You set goals then you change them as you adapt to the realities you discover along the way. You have to be able change your goals in an orderly fashion? You should always be able to say what changed (and why) as you proceed on your path. It is very important not to get caught up in channels that don’t work. Don’t be afraid to fail, instead do the prep work you need to make sure your failures happen quickly are as inexpensive as possible and provide you the information you need to adjust and ultimately succeed in the long run.
AS: And of course, there is some amount of luck. We spent 25+ years building cardiac technology and then saw a need for a new device. When the markets call, and you are prepared and ready to answer, many see that as serendipity. However, it is still the result of working hard and being smart in your preparations along the way.