If your company is on the bleeding edge of disruptive innovation, history suggests that the odds are against you long term and that you need to seek an early liquidity exit.
Historically, first-movers with exciting new technologies struggle. They often struggle to find product-market-fit, struggle with surgeon adoption, struggle with medical training, and struggle with costs and scaling the business, etc.
The pioneers who first break through the technology barrier frequently face ALL of the market development challenges at the same time. By contrast, fast-followers who take the time to watch and learn, then refine the value proposition and business model tend to reap most of the rewards. Years later, a follower company figures everything out and captures the majority of the disruptive innovation value.
| Disruption | The First-Mover | The Follower (Bigger Rewards) | |
|---|---|---|---|
| Robotics | Robodoc robot total hip surgery (1992) | MAKO (2006) | |
| Spine Cages | SpineTech BAK cage (1995) | Sofamor Danek (2000s) | |
| Artificial Discs | Waldemar Link Charité disc (2004) | Zimmer Spine (2010s) | |
| AR | Augmedics xvision AR spine system (2019) | Medtronic Mazor X Stealth (2020s) | |
| AI | Proprio and Carlsmed AI (2020s) | ??? |
For example, SpineTech was the first with spine cages, but Sofamor Danek captured most of the rewards. Similarly, Robodoc was an early player in robotics, but MAKO ultimately captured the rewards.
Looking forward to the next disruptive innovation, it’s clearly AI.
AI is destined create a significant shift in orthopedic medicine. Those who win in the first phase of AI development may not be the ones leading by the end.
Therefore, I urge disruptive first-mover companies to monetize their innovations or take money off the table as quickly as possible because the future is unpredictable. The more disruptive the technology, the greater the uncertainty and potential for change.