Best-Path EMT is a service offered by HEI that provides emerging medical device companies rapid review and analysis of their business plans, technology concepts, and competition. It aims to strengthen business plans, demonstrate technical feasibility, identify opportunities for differentiation, and improve understanding of the competitive landscape. Best-Path EMT can help startups reduce risks, avoid costly mistakes, and improve their chances of obtaining funding. It leverages HEI's experience to provide an outside perspective and ensure companies are developing the right product for the market.
1. Best-Path EMT
Emerging Medical Technology
HEI Advanced Medical Operations
DRAFT 10/3/2007
Executive Summary
There is an old saying in the venture capital business: VCs invest in five things – the
people, the people, the people, the product and the market. Additionally, it’s not just the
people who start the company – it’s the resources they can bring to bear at critical
junctures to take the company to the next level.
Best-Path EMT can increase a startup’s access to some of the brightest medical device
design talent at the very start of their business plan development where mistakes and
missteps are the most costly and the most difficult to correct. Best-Path EMT is designed
to enable emerging medical device companies to analyze, evaluate, and extend their
business plan in days rather than through months of painful trial and error.
Best-Path EMT allows emerging medical device companies to instantly draw on the
wealth of human and technical resources available at one of the premiere medical
outsourcing companies to:
1. Demonstrate that the concept has the technical feasibility to enable it to serve a
large, rapidly growing opportunity.
2. Help to identify elements that are truly differentiable in a sustainable way.
3. Provide a strong understanding of the competition including both the direct
competition as well as other forces competing for the same dollars.
Some venture capital firms have estimated that less than a third of venture-funded
projects ever come close to achieving the numbers in their original business plan. Best-
Path EMT brings focus to the medical device startup business plan and eliminates
common pitfalls. The result is dramatically reducing the probability that a critical element
has been missed that would significantly impact the company’s ability to meet its plan.
With HEI’s Best-Path EMT you have confidence not only that you’re making the product
right but that you’re making the right product.
Overview of Best-Path EMT
Best-Path EMT is primarily focused on medical device startups in the Due Diligence or
Funding Phase. It can be combined with a complete Best-Path program or utilized as a
standalone program. Best-Path EMT is a rapid business plan review, technology analysis,
and competitive review that leverages the over 30 years of experience at HEI in
delivering complex electro-mechanical medical instrumentation products to market. Best-
Path EMT provides the confidence that not only is the idea “great” but this great idea can
HEI, Inc. Advanced Medical Operations, 4801 N. 63rd Street, Boulder, CO 80301
720-622-4100 Fax: 303-530-8291
2. be realized in a manner that provides a sustainable differentiation. Think of Best-Path
EMT as insurance for the medical device business plan.
Each Best-Path EMT program is customized for the client. For companies at the early
stage of business plan development, the program can dramatically speed up this process
by identifying those areas that require additional research prior to seeking funding. These
companies also benefit by ensuring that the scope of their concept represents a
compelling need in the marketplace. Companies who are actively seeking funding utilize
the program to provide a laser-like focus to the business plan and to incorporate feedback
they have received from the venture capitalists and prospective customers they have
already spoken with. Companies that have received funding utilize the program to
accelerate the development of product requirements and to identify critical development
issues early in the design process. Best-Path EMT programs range from several days to
several weeks depending on the needs of the client.
The complete Best-Path program delivers a structured methodology for developing the
strategies and associated documentation to put clients on the road to a product launch that
meets user and FDA requirements, at the target cost, and within a predictable schedule.
Best-Path minimizes the risk for medical instrumentation companies ensuring the best
possible confidence to proceed to formal product design and market deployment strategy.
A complete Best-Path program can be as short as a week or can take several months
depending on the needs of the client.
Going from Best-Path EMT to a complete Best-Path program provides a seamless means
of ensuring the most rapid time to market.
Business Plan Analysis
Best-Path EMT is not a consulting program. What we have seen over and over again is
that when you put highly motivated, talented, technical people together to discuss state of
the art technology, new and exciting concepts and insights emerge. Best-Path EMT
provides a framework that encourages this dialog to our clients’ advantage.
Entrepreneurs often are unable to clearly explain the opportunity represented by their new
technology and the resulting business plan often fails to achieve the objective of telling
the company’s story in a clear fashion. This can be a chief reason that a company has
difficulty in obtaining funding. Best-Path EMT begins by asking the client to describe the
benefits the technology provides the customer in a sentence or two. Quite often
developing this “elevator sales pitch” is extremely difficult for entrepreneurs but is key to
a successful business plan.
It is also common that clients do not have an understanding of how to properly segment a
market in a way that allows the company to dominate or nearly dominate a well identified
segment or sub-segment. For example, a technology may have applicability to a number
of cardiac indications but focusing on a congenital cardiac defect with the potential to
provide a product that dominates this sub-market can often be the preferred path.
HEI, Inc. Advanced Medical Operations, 4801 N. 63rd Street, Boulder, CO 80301
720-622-4100 Fax: 303-530-8291
3. On the other hand, technologists sometimes are unable to recognize the broader potential
for a technology. Best-Path EMT assists in broadening the scope of possibilities by
drawing on the wealth of experiences available within HEI. HEI is constantly presented
with new product designs and is uniquely qualified to help broaden the client’s view of
other technology applications. In one instance, a client was targeting a product to the
measurement of mental acuity. By working with HEI, it was immediately recognized that
the technology had significantly more potential in much larger markets than what the
client had previously recognized. It was simply a case of not seeing the forest for the
trees.
Technical Feasibility
There are also numerous stories where a handful of brilliant scientists and engineers
disappear into a basement and emerge months later with an absolutely revolutionary
medical device concept that should take the market by storm. Unfortunately no one on
this team has ever commercialized technology before and is unaware of all of the
potential pitfalls and requirements imposed by not only the market but by the highly
regulated environment in which these products operate.
The focus of Best-Path EMT is to dramatically raise the confidence of the technical
feasibility of the concept by focusing the concept on must haves rather than not nice to
haves in such a way that the “customer’s business pain” is clearly identified
Best-Path EMT works with the client to begin the process of:
• Developing a comprehensive list of product requirements
• Identifying Must Haves rather than not Nice to Haves
• Identifying design unknowns
• Identifying required prototyping
• Developing a critical requirements list
• Developing a risk control measures list
We ask questions like “what is the technical risk, how do we solve it and how do we
declare victory” or “if we can’t solve the problem what is our risk mitigation”? Once we
have clearly defined objectives and goals for the known technical risks, we document the
things that are not known about the design. We ask questions like “is there a temperature
constraint on the assay that we do not understand” or “will the cost model affect the
outcome of a particular solution”? We document questions like these in order to give a
more balanced perspective to the solution, e.g., does it meet the user, financial model,
timeline and appropriate level of risk for our client? It is often useful to define physical or
empirical models to answer the questions. There may be laboratory experiments that need
to be run or simulations or calculations that need to be performed to provide data back to
the questions being asked.
As part of the process of discussing the technical feasibility of a concept, Best-Path EMT
works to ferret out development concerns that the client might not normally see until
HEI, Inc. Advanced Medical Operations, 4801 N. 63rd Street, Boulder, CO 80301
720-622-4100 Fax: 303-530-8291
4. many months into product design. In one instance, a client had proposed a hardware
product that would collect data for transmission over the Internet for analysis. It had not
occurred to the client that the proposed architecture could raise serious HIPAA (Health
Insurance Portability and Accountability Act) concerns. During these discussions, it was
a simple matter to change the proposed architecture to address these concerns. If the
client had gone forward with the original architecture, the HIPAA concerns might not
have been recognized for many months and correcting the architecture could have been
extremely expensive. This small realization could well have made the difference begin
success and failure for our client.
Identify sustainable differentiable elements
Differentiation is an integrated set of actions designed to produce or deliver goods or
services that customers perceive as being different in ways that are important to them.
The key to successfully marketing a new medical device concept is differentiation. For
companies seeking venture capital, it is crucial to make sure the company is addressing
not just a need, but a compelling need. One way to know if the need is compelling is
when potential customers tell you “I’d switch our budget priorities to buy your product!”
In this case, they are saying that they’d do without things they already need to have your
product. This is the home run of differentiation and is what all companies should strive
for.
Best-Path EMT provides the framework to help the client identify truly differentiable and
compelling features of their concept. In many instances we find that clients have become
focused on a “gee whiz” aspect of the concept which, while technically interesting,
simply is not a compelling differentiator. This is often a difficult pill to swallow but
focusing on the actual benefits delivered by the product is key to a successful business
plan.
We also find that clients do not recognize the value in leveraging existing technology.
For instance, many products contain some sort of microcontroller-based analysis engine.
Rather than reinvent this wheel, the client may find it more beneficial to leverage a
standard design such as HEI’s Medical Design Framework that provides:
• A Processor Family and Development Environment
• Software Modules
• Connectivity Modules
• DSP Modules
Since HEI has such a broad understanding of current products in the medical device
market, it is common for capabilities that a client feels are less important to actually be
recognized as novel and the basis for significant differentiation. These “I don’t think
anyone has done that before!” moments often lead to spirited discussions that can have a
significant positive impact on how the company positions its technology.
Understanding the competition
HEI, Inc. Advanced Medical Operations, 4801 N. 63rd Street, Boulder, CO 80301
720-622-4100 Fax: 303-530-8291
5. One of the most fundamental elements of any successful startup is its ability to serve a
segment of customers better than its competitors. However, many business plans are
weak in understanding the competition. Additionally many define the competition much
too narrowly. Understanding the real world issues of competition is critical to the
business plan.
Many companies also fail to recognize that their competition is not just other medical
device companies. In fact, the competition is anything or anyone that competes for
precious budget dollars and the staff needed to evaluate, recommend, and utilize the
product.
The Best-Path EMT process encourages a dialog about who the client believes is the
likely competition and how their concept can win in the market. Often the client has
awareness of direct competition and lacks the broad view of the medical device market
that HEI has. Additionally, since HEI is constantly seeing designs from numerous other
startups, we have an excellent view of emerging trends of which the client may not be
aware.
Conclusion
Startups benefit with Best-Path EMT by bringing forward in time key analyses of the
business plan, technical feasibility of the concept, differentiation, and competition. Issues
and concerns are raised and solved much earlier in the process saving both time and
money for the startup.
Best-Path EMT also allows the startup the opportunity to have a larger view of the
technology and the market by leveraging HEI’s over 30 years of experience in the field.
In some instances, this leads to recognizing that the technology has broader applicability
than originally anticipated which can provide a stronger case for funding.
Best-Path EMT can be combined with an entire Best-Path program. Best-Path begins with
a formal analysis of the technical challenges that may lie in the project and prove them
out before proceeding with more product requirements, product risk analysis and product
architecture definition. Best-Path then leads the client through the process inside of the
FDA QSR guidelines. These activities include the formal gathering and documenting of
the product requirements, analyzing and documenting the product risk to patient and
operator, creating a high level system architecture that documents the engineering
discipline specific interfaces, analyzing the product from the user’s perspective and
creating storybooks that describe the user interaction.
Best-Path EMT and Best-Path work together to give you confidence that not only is the
product right but that you’re making the right product for the market.
HEI, Inc. Advanced Medical Operations, 4801 N. 63rd Street, Boulder, CO 80301
720-622-4100 Fax: 303-530-8291
6. One of the most fundamental elements of any successful startup is its ability to serve a
segment of customers better than its competitors. However, many business plans are
weak in understanding the competition. Additionally many define the competition much
too narrowly. Understanding the real world issues of competition is critical to the
business plan.
Many companies also fail to recognize that their competition is not just other medical
device companies. In fact, the competition is anything or anyone that competes for
precious budget dollars and the staff needed to evaluate, recommend, and utilize the
product.
The Best-Path EMT process encourages a dialog about who the client believes is the
likely competition and how their concept can win in the market. Often the client has
awareness of direct competition and lacks the broad view of the medical device market
that HEI has. Additionally, since HEI is constantly seeing designs from numerous other
startups, we have an excellent view of emerging trends of which the client may not be
aware.
Conclusion
Startups benefit with Best-Path EMT by bringing forward in time key analyses of the
business plan, technical feasibility of the concept, differentiation, and competition. Issues
and concerns are raised and solved much earlier in the process saving both time and
money for the startup.
Best-Path EMT also allows the startup the opportunity to have a larger view of the
technology and the market by leveraging HEI’s over 30 years of experience in the field.
In some instances, this leads to recognizing that the technology has broader applicability
than originally anticipated which can provide a stronger case for funding.
Best-Path EMT can be combined with an entire Best-Path program. Best-Path begins with
a formal analysis of the technical challenges that may lie in the project and prove them
out before proceeding with more product requirements, product risk analysis and product
architecture definition. Best-Path then leads the client through the process inside of the
FDA QSR guidelines. These activities include the formal gathering and documenting of
the product requirements, analyzing and documenting the product risk to patient and
operator, creating a high level system architecture that documents the engineering
discipline specific interfaces, analyzing the product from the user’s perspective and
creating storybooks that describe the user interaction.
Best-Path EMT and Best-Path work together to give you confidence that not only is the
product right but that you’re making the right product for the market.
HEI, Inc. Advanced Medical Operations, 4801 N. 63rd Street, Boulder, CO 80301
720-622-4100 Fax: 303-530-8291