In 1999, a young engineer named John was working at a large medical device company. He was frustrated with the slow pace of innovation and the bureaucracy of Big Ortho. He decided to start his own company to develop a new type of orthopedic device.
John knew that he would need to find a way to get his product to market quickly and cheaply. He also knew that he would need to find a way to differentiate his product from the competition.
John decided to focus on the sports medicine market. He knew the space and knew that these customers were willing to pay a premium for a new solution than saves them time and gave them more control in surgery. He also knew that they were more likely to be satisfied with a product that was developed by a small company and that he could be more responsive.
In the stealth mode, John started by developing a prototype of his product, a proof-of-concept. He then used his network of contacts to get the product in front of some trusted surgeon evaluators..
After many re-designs and market-fit iterations, John’s efforts paid off. He froze the design and flew through the 510(k) path. By working fast and smart, he was able to get his product to market in just a few quarters, without burning alot of cash or building systems that he didn’t need on the front end (employees, logos, offices, etc).
John’s company was a success. After selling $18M of product in the US through independent reps, he was able to sell his company to a larger medical device company for a significant profit, 5X sales. He was also able to achieve his dream of making a difference in the lives of patients.
The Importance of Timing
John’s story is a reminder of the importance of timing. He was able to start his company at a time when the medical device industry was ripe for innovation. He also had the good fortune to choose an unmet need in orthopedics and come up with a novel improvement quickly. He was able to leverage his network to find consultants, or people who would work for equity, to preserve cash early.
John’s story is also a reminder of the importance of perseverance. He faced many challenges along the way, including “wrong product”, wrong consultants, wrong employees, cash issues, high COGS, poor distribution reach, but he never gave up. He was able to overcome these challenges by staying focused on his goal and by working hard.