Yes, there are Monopolies in Orthopedics, and they are fantastic!
A few savvy orthopedic companies create a new category or new procedure, that result in zero competition. These are real Monopoly businesses and they typically don’t last long. The copy-cats and fast-followers react, or an acquirer buys them and ruins it.
For your career, you want to find a Monopoly early, join them and ride the wave.
The benefits of working in a Monopoly business.
In a Monopoly business, you will be the only solution in your new category.
- Surgeons will seek out and find you (pull versus push).
- Your Sales/Marketing team will have a tail wind.
- Distribution partners will beg to carry your product.
- You will dictate pricing (there Is no comparable) without negotiation.
- You will have the leverage in all negotiations.
- Life is good.
What are some examples of real Monopolies?
- Kyphon (kyphoplasty)
- MAKO (MAKOplasty, first useable TJR robot)
- SpineTech (the first cage)
- Ellipse Technologies (remote control implants like MAGEC)
- Active Implants (total meniscus replacement to delay TKA)
- Trice Medical (dynamic joint diagnosis in Drs office)
- Active Protective (Tango, smart airbag belt to prevent hip FXs)
- OrthoSpace (biodegradable balloon protects cuff tears)
- Treace Medical Concepts (brand monopoly in bunions called Lapiplasty)
These guys literally had ZERO competition in the early years.
ADVICE:
You want to build a Monopoly business.
You want to work for a Monopoly.
You want to sell for a Monopoly.
The pain of working in the non-Monopoly businesss
On the pain side are commodity businesses. Today there are around 250 spine startups. Every single week, a spine startup will die or get acquired, then next week a new spine startup one will be born. The majority of these 250 spine companies are selling “me too” spine devices – pedicle screws, cages, rods, cross-links, plates, etc.
The message here is to avoid commodity markets like “spine hardware” as they have many built-in challenges.
- Pricing competition
- Thin implant margins
- Higher cost of sales
- No leverage in contract negotiations
- 10 sales reps calling on the same spine surgeon selling roughly the same products.
- Life is a grind.