Are You Developing a Product or a Company?
TL;DR
- Most startups focus on proving the product works, but acquirers look for proof the company can scale.
- The “Commercialization Gap” appears when technical progress outpaces market, operational, and economic validation.
- Fit-to-learn development builds evidence through learning cycles, not just polished prototypes.
- Strategics evaluate readiness through strategic fit, commercial traction, manufacturability, economics, and team capability.
- Valuation increases when founders build with intent, showing clear readiness, scalability, and alignment with acquirer priorities.
What Your Commercialization Strategy Signals to Acquirers and Investors
Every MedTech startup begins with a hypothesis, an idea that could transform patient outcomes, simplify delivery of care, or improve how clinicians diagnose and treat patients. However, between that initial insight and a successful financial exit lies an important and often overlooked question.
Are you developing a product, or are you building a viable company?
It may seem like a subtle distinction. In reality, how you structure milestones, allocate capital, and define progress tells acquirers everything they need to know about whether your company will be an accretive, strategic fit or just an interesting science project that never scales.
Sophisticated investors and acquirers aren’t just buying a device. They first need confidence that the core technology performs reliably in the clinical, operational, and real-world contexts where it will be used. But what ultimately informs any strategic decision is your commercialization strategy, The narrative for how you will deliver, scale, and align with their definition of value is imperative. Building the right product matters but building a company capable of translating it into predictable, investable value matters even more.
Closing the Commercialization Gap in MedTech
For many startups, success is defined by technical milestones. The core technology has been derisked, the prototype works, verification has passed, and the clinical data looks promising. These are all important milestones, but they are more indicative of product progress, not necessarily company progress.
The most common pitfall at this stage is what we call The Commercialization Gap. This gap can be defined as the disconnect between proving that the device works and demonstrating that the company can scale based on a validated market thesis. It’s the point where technical milestones outpace the evidence needed to show market traction, operational maturity, and scalable economics.
The Commercialization Gap
A misalignment between technical validation and commercial validation. When a company has a working product but has not yet demonstrated that it can perform, scale, and succeed in the market.
Potential partners are looking for companies that have either closed this gap or have a clear, credible path to doing so. They look for evidence of manufacturability, supply chain readiness, and for early signs that the market thesis holds true. These are the factors that drive real commercial value.
Failing to address the gap, companies often reach the finish line with a functional prototype but no credible foundation for growth. Without the evidence and learning that prove scalability, they appear technically sound but commercially incomplete. This results in extended diligence, discounted valuations, and missed strategic opportunities.
How Fit to Learn Strengthens Medical Device Commercialization
The companies that close this gap are more intentional with their builds. They approach development as a series of learning cycles designed to validate the market thesis, reduce risk, and build commercial viability. This is the essence of fit to learn.
In this model, progress isn’t measured by how close the device is to its final form, but by how much learning each phase enables. Fit to learn shifts development away from a march toward a finished product and toward a disciplined method of turning uncertainty into insight from both the product and business perspectives.
Each prototype, test build, and verification activity becomes an experiment in reducing risk:
- Early prototypes should demonstrate feasibility of the core technology and clarify why the solution matters, not just whether it works.
- The initial commercial launch should validate product
–market fit, early demand, and generate feedback on real-world use. - Early manufacturing should show that you can deliver, support, and refine the product in market conditions, establishing the foundation for scalability, sustainable margins, and long-term commercial viability.
This approach signals to acquirers that your team is capable of navigating the complexity required to build a business, not just a product. It’s the difference between a startup that can build potential and one that can create sustainable value.
Lean Venture Principles for MedTech Commercialization
In lean venture terms, the goal isn’t speed alone, but the evidence-based insights that have been generated along the way. A sound development strategy integrates three priorities:
- Learn Fast: Structure experiments to test assumptions about user needs, value proposition, and market behavior.
- Build Credibility: Translate each milestone into credibility markers investors and acquirers rely on, such as validated usability, regulatory clarity, derisked scalability, and evidence of margin potential with a clear path to viability.
- Preserve Flexibility: Take an intentional approach that keeps multiple exit options open, including licensing, acquisition, further investment, or direct commercialization.
This disciplined balance of learning, credibility, and flexibility builds confidence with potential partners. It demonstrates that your team can connect technical progress to strategic outcomes by creating, proving, and scaling value.
What Acquirers Look For When Assessing MedTech Commercialization Readiness
For most MedTech startups, the most likely, and often most valuable, exit is acquisition by a large strategic. Founders must understand which strategics represent the best fit and build evidence that aligns with how those acquirers interpret value.
Strategics don’t simply evaluate a technology, they evaluate whether acquiring your company will strengthen their overall position faster, cheaper, and with less risk than building the solution themselves. That is the meta-question every acquirer must answer internally.
To justify the investment, they evaluate a number of critical factors:
- Strategic Fit:
Does this product strengthen their portfolio, fill a capability gap, or open a strategic adjacency they are already pursuing? - Commercial Validation:
Is the market thesis credible? Are there early signs that clinicians care, buyers will pay, and there is a clear path to adoption? - Technical Defensibility:
Does the technology create long-term differentiation or competitive insulation? - Operational and Manufacturing Viability:
Can the product integrate efficiently into their quality systems, supply chain, and service infrastructure?
Integration friction becomes valuation friction. - Early Economic Visibility
Is there believable evidence of margin potential, cost structure viability, and a realistic path to profitability? - Team and Execution Capability
Does the team understand commercialization, not just the technology? Do they demonstrate discipline, evidence-based decision making, and operational fluency?
A product demonstrates capability and innovation, a company demonstrates credibility, and credibility is what converts technical success into strategic value.
Why Readiness Matters More Than Technology in MedTech Acquisitions
Ultimately, acquirers invest in companies that are already showing they can perform in the real world. They look for startups that have:
- validated their market thesis
- demonstrated operational and manufacturing viability
- shown early economic clarity
- minimized integration risk
- aligned their strategy to the acquirer’s portfolio priorities
Strategics aren’t buying a device. They’re buying evidence that your business can scale, integrate, and create value within their system as quickly as possible.
Key Takeaway
Developing a medical technology needs to be a deliberate act of company building. Your development strategy is the clearest signal to acquirers and investors of your maturity, intent, and readiness.
Founders who think this way operate differently and measure progress by how quickly they learn and the traction they can demonstrate in the market, not by innovation milestones alone. They understand that valuation is not a byproduct of prototype counts, but instead a reflection of the confidence their potential partners have in what will happen next.
Ultimately, acquirers pay a premium for companies that have been building with intent all along, and whose strategy demonstrates that they are building long-term value.
Jason McGee is the Manager of Commercialization Services at StarFish Medical.
Images: Adobe Stock
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