www.medtechchallenge.com

•Understand business models and go to market strategies•Understand exit strategies

a plan for the successful operation of a business, identifying sources of revenue, the intended customer base, products

Take a stab at your Business Model Canvas

Basic Types of Business Models

MANUFACTURER

Distributor

Retailer

Franchise

But, you need a bit more granularity than that…

The LICENSING MODELSign over rights to commercialisation to another party

The Add-On ModelCompetitively priced core offering

Numerous extras that drive up the final price

The Advertising ModelOffer advertisers access to highly targeted consumer niches (often in the absence of selling their goods or services)

The AFFILIATE MODELSomeone who helps sell a product in return for commission, even if they never actually take ownership (or even handle) the product

The BAIT AND HOOK MODELDisproportionate amounts of the value are captured on components, refills, etc.

Switching costs results in monopolistic pricing

The FREEMIUM MODELGive away something for free in return for your personal details so they can then market to you so you will buy from them in the future

The LOW COST MODELDrive significant volumes of customers by charging a very low price

The LOSS LEADER MODELYou lose money selling at that price, but it enables a different lucrative opportunity

The PREMIUM MODELYou charge so much for it (either vanity or necessity drivers) that your profit margins are astronomical and cover the fact that your customer base is quite limited

The PAY AS YOU GO MODELActual usage is metered and you pay on the basis of what you consume

The RECURRING REVENUE MODELSecure the customer on a long term contract so that they are consuming your product or service well into the future

The DEMAND AGGREGATION MODELAssemble all the sellers and buyers for some stuff in the same virtual location

The PERSON-TO-person exchangesConnect one person that has something someone else wants with the person who wants it

The ONE-OFF EXPERIENCE MODELNowism offering unique experiences to customers at a given place during a specific event

Social media + offline event organisers, pop-up stores, online retailers

DisruptionIt is happening everywhere• Education ► TED Ed• Finance ► Bitcoin, ApplePay• Technology ► Nest•Media ► Spotify, Netflix• Telco ► WhatsApp•Medical ► Automata• Travel ► Airbnb

AND TECHNOLOGY ROADMAPS TOO

A go-to-market strategy (GTM strategy) is an action plan that specifies how a company will reach customers and achieve competitive advantage. The purpose of a GTM strategy is to provide a blueprint for delivering a product or service to the end customer, taking into account such factors as pricing and distribution.

…to sell

Go-To-Market Strategy1. Define market value proposition2. Identify primary target market3. Review existing market channels4. Create detailed channel approach

Basic building blocks

Business SummaryProduct StrategyChannel StrategyMarketing StrategyCustomer experienceTechnical requirementsEvaluationTimeline & Execution

Strategic objectiveso Create awareness, first customerso Maximize market shareo Defend market share (against competitors)o Maximum profitability

Technology roadmapsA planning process for a specific product or service to identify

o Technical processeso Technology gapso Opportunities & riskso Critical requirements, targetso Technology alternativeso Milestones for meeting those targets

Basic building blocks

Business & technical assetsCost/complexity driversProduct hypothesisProduct requirementsProduct planningTimelineRisk & mitigation strategies

Market Segment Est. Revenue Market Trends Target Customers Customer Needs Technology Reqs.

Market Segment

#1

$25M

Market Segment

#2

Low cost competitors

J&J

Cook Medical

Next-gen product to maintain market shareNew market

Novel surface coatingPowerful ICT platform

cancer

wound care

Your product is a bunch of hypotheses that need to be validated• Start by listing the higher level ones and refine as you go along

What product would you need to build for which market segment?

Start to define your user requirements/product features and priority level for product launch versus subsequent generations

Start to define your engineering requirements

Version 1.0 – Product Launch

User Requirements Product Features Priority Level

Small device envelope Portable

Minimal training Simple user interface

Cost Reduction Modular components

Low

High

Medium

Take a stab at your Product Requirements list

Version 1.0 – Product Launch

User Requirements Product Features Priority Level

Small device envelope Portable

Minimal training Simple user interface

Cost Reduction Modular components

Low

High

Medium

1.0 Product Planning

Task Deliverables Inputs Owner Approval Start End1.1 Business Case Tech Roadmap Market Analysis Exec Mgmt Board Nov’13 Feb’141.2 Funding $50k grant Proposal Prod Dev Exec Mgmt Dec’13 Feb’14

2.0 Product Design

Task Deliverables Inputs Owner Approval Start End2.1 Suppliers Select supplier(s) RFP Prod Dev Exec Mgmt Dec’13 Jan’142.2 Functional specs Fnctnl design specs Prod Req Doc Prod Dev Exec Mgmt Jan’14 Feb’142.3 Prototype Fnctnl prototype Prod Req Doc Prod Dev Exec Mgmt Feb’14 Jun’142.4 Documentation Doc Plan2.5 Quality Q&A Plan2.5 Development Dev & Manuf Plan3.0 Product DevelopmentTask Deliverables Inputs Owner Approval Start End3.1 Product Build PRD, MRD, Specs3.2 User Materials3.3 Cost Analysis Dev costs3.4 Pricing Cost structures3.5 Profitability Expected rev/costs

4.0 Product Testing

Task Deliverables Inputs Owner Approval Start End4.1 Alpha Testing QA Test Plan4.2 QA Testing Doc Beta Plan4.3 Beta Testing Final Prod Acceptance

5.0 Product TrainingTask Deliverables Inputs Owner Approval Start End5.1 Internal5.2 Channel

6.0 Product Promotion

Task Deliverables Inputs Owner Approval Start End6.1 Availability Prod Release @ conf.6.2 Press Kit6.3 Analysis6.5 Demos6.6 Presentations6.7 Conferences

7.0 Product Packing & Distribution

Task Deliverables Inputs Owner Approval Start End7.1 Packaging7.2 Distribution

JANUARY MARCH MAY JULY SEPTEMBER NOVEMBER

FEBRUARY APRIL JUNE AUGUST OCTOBER DECEMBER

Year 1

Year 2

Year 3

Year 4• Xxxxx• Xxxxx• xxxxx

• Xxxxx• Xxxxx• xxxxx

• Xxxxx• Xxxxx• xxxxx

• Xxxxx• Xxxxx• xxxxx

High level example1. Product that is the focus

of the roadmap2. Critical system

requirements & their targets

3. Major technology areas4. Technology drivers &

their targets

Energy-efficient vehicle

MPG, reliability, safety, cost

Targets: 100mgp by 2017 & 150mpg by 2025

Materials, engine controls, sensors, modeling, simulation

High level example5. Technology alternatives6. Recommend technology

to pursue7. Create the technology

roadmap report

Technology alternatives that can satisfy these targets identified with estimated timeline for how it will mature with respect to the technology driver targets. Identify decision points for when it will be dropped from further consideration.

An exit strategy is a contingency plan that is executed by an investor, trader, venture capitalist or business owner to liquidate a position in a financial asset or dispose of tangible business assets once certain predetermined criteria for either has been met or exceeded

Merger & Acquisition (M&A)• Win-win for bordering companies with complementary skills, assets,

resources• Large company can more quickly grow revenue or access customers

than create new products organically

Initial public offering (IPO)• Offering sale of stock in the business on public markets (like the ASX)

Sell to another person• Offering sale of stock in the business on public markets (like the ASX)

Sell to Your Employees• An employee stock option plan can direct payroll into a trust to

purchase investments, like company stock

Milking the cow• Distribute profits as dividends to investors• Pay off investors• Hire someone else to run it

Liquidation & close• Close the business doors and liquidate assets

Exit Tips• Most of the time, companies are sold, not

bought, and require an active sales process

• Deals can unravel if they drag on – cold feet phenomenon• Every step should have a deadline

• Establish trust and open communication –friction is the enemy• Clean house before the visitors arrive

Exit Tips• Don’t get greedy – holding out for all increases

your chances of getting none

• Plan for the exit early – the end game should be part of your overall operating strategy

• Negotiate tough but fair – remember that you may be working for the acquirer when the dust settles

Strategy for your exit strategy• Deal Strategy – who? When? How? Why?• Positioning & Pitch – making them want you• Packaging & Valuation – the whole nine yards• Process Management – Set meetings, generate momentum,

manage communications• Execution – get heat on the deal

What is your exit strategy?

•Getting the business model right is critical• Investors want to know exactly how you’ll make money

so they can understand how they will make money•Go to market strategies and technology roadmaps are

critical living documents•Knowing the exit strategy upfront helps you make better

decisions the entire journey

• Refine your business model canvas

• Refine your business model figure

Dr. Laura FaulconerCOO

laura@stcaustralia.org0413 467 201