Vincent Crabtree

Managing Expectations in Medical Device Development

Around 10 years ago, I set up a company with the entrepreneurial Professor from my PhD.  After recruiting an MBA as chief executive and performing very many pitches, we eventually secured seed funding then series A funding to develop a novel medical device technology.  The development was a new application of an existing technology and had never been applied before to that particular patient group, so there were significant development unknowns.  However, we had a proof of principle prototype, positive clinical data from almost 100 patients, and a business case that sounded reasonable so felt we were on the verge of commercial success!

However, during my time with the company, the same issues kept appearing up with our investors – expectations management and development timescales.  This was entirely our own fault, as, when we were pitching to the investors, our opening line was ‘We have a proof of principle prototype: all we have to do is miniaturize!’  With hindsight, this was a mistake – to paraphrase Rumsfeld, we didn’t know what we didn’t know, which led to several issues.

Too many Changes to Proof of Principle Prototype.  To try and save time, management didn’t want to develop a range of incrementally improved prototypes.  The proof of principle was a ‘Works like’ prototype, which needed optimization in several areas for an actual product, but we didn’t fully understand the critical parameters.

However, cost was something we understood well, so multiple simultaneous design cost optimizations were performed to improve the business model.  This eventually resulted in an underperforming first generation miniaturized product, requiring subsequent redevelopment.

Over Optimistic Development Timescales.  Medical Device product development takes time.  During my reports to management, I would say the best and worst case development timescales.  In most cases it was the best case timescale that management actually heard, which then gets rolled into operational plans and presented to the board.  As the project inevitably overran, this caused difficult conversations with investors.  If only I had listened to Scottie advising Geordie in StarTrek: NextGen – Relics:

Geordi: I told the Captain I’d have this analysis done in an hour.

Scotty: How long will it really take?

Geordi: An hour!

Scotty: Oh, you didn’t tell him how long it would really take, did ya?

Geordi: Well, of course I did.

Scotty: Oh, laddie. You’ve got a lot to learn if you want people to think of you as a miracle worker.

Things to do differently

If I had Scottie as an advisor, then expectations might have been managed a little better.  An experienced advisory board would have been able to poke holes in an overly optimistic development plan.  As an entrepreneur, the advisory board also insulates you (somewhat) between your investors, as founders need all the backup they can get.

As this was not a better mousetrap project (where all critical parameters have been already well established), we should have performed a detailed design review with experienced medical device developers, then decided what could be optimized based on acceptable risk.

In retrospect we should have spent less effort and tooling on cost reducing our disposable component and learned from the market more quickly and for far less money.  A formal product definition framework would have forced us to ask that question explicitly.  Also a better defined project gate structure would also have allowed us to eliminate the largest risks earlier than we did.  Clear stage gates would have provided good communication anchors for management and investor discussions, as well as permitting staged investment.

As this was a project to develop unproven technology, the first market entry release focus could have been a loss leader whereby the performance is demonstrated and the technology benefits shown to key opinion leaders.  Once the technology started to become established, a cost reduction exercise would have been performed after a few years for Version 2.0 of the device, bringing later but more substantial profitability.

Image: © Can Stock Photo / everythingpossible

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