Why is Developing a Commercialization Plan for Healthcare Innovations so Hard?

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So many healthcare entrepreneurs assume that developing new innovations that customers need or want will automatically result in market success. However, this is far from what research indicates.

The reality is that commercialization is a complex process with many inter-woven factors and decisions that affect success. To put it simply: it’s hard.

Apart from missing the complex nuances of the process, there are three key issues that help explain why so many innovators struggle to develop an effective commercialization plan:

  1. Many healthcare leaders think more about developing a go-to-market plan as opposed to the entire commercialization process. (Learn about the difference between launching and commercializing in our recent blog post.)
  2. Most innovators don’t have a proven, repeatable commercialization framework that ensures all the right strategies and decisions are being made — and at the right time.
  3. Many innovators fail to acknowledge the strategic differences between commercializing a radical vs. an incremental innovation — one of the many CoI insights that are often hidden in plain sight.

Models continue to evolve to guide innovators along the commercialization path. The probability of commercial success is maximized by different commercialization strategies depending on ovation is in the diffusion process and the type of innovation. where the innovation is in the diffusion process and the type of innovation.

There is an integrated commercialization framework that allows us to clearly identify the three key interrelated sub-strategies of the process: early adoption, adoption network, and mainstream adoption — as well as the eight strategic and tactical concepts that relate to these sub-strategies.

These sub-strategies act as frameworks with distinct goals, guiding the way for innovators to have a more clear, focused, and organized path to market success.

Let’s take a closer look at each of these sub-strategies, their associated concepts, and how they can give innovators a more strategic — and straightforward — perspective as they make key decisions throughout the commercialization process.

A New Approach to Commercializing Healthcare Innovations

For many health innovators, there’s often a simple commercialization goal in mind: market success.

Of course, market success is the ultimate goal for any innovation. However, this broad, generalized mindset can actually hinder an innovator’s chances of generating sales revenue or maximizing ROI.

That’s because this mindset often leads to creating a commercialization plan that focuses on a few independent concepts or views the entire process through a single lens — instead of breaking it down into strategic, incremental milestones, stages, and strategies that affect and build on one another.

The Framework’s Evolution

The first research into commercialization starting taking root in the late 1980s. However, it was mostly through an organizational lens. It wasn’t until around 2012 that researchers really started exploring commercialization as it applies to bringing a new innovation to market. And, for years research and models examined commercialization strategies and decisions independent from each other.

Today, we know that the most successful innovators achieve market success based on a framework that involves three distinct sub-strategies of commercialization. And, within each of these sub-strategies, there are eight time-and-context-sensitive concepts that guide each decision.

The Three Sub-Strategies of Successful Commercialization 

Let’s briefly discuss each sub-strategy and which of the eight commercialization concepts they entail. Here are the eight concepts:

  1. Timing
  2. Product configuration
  3. Targeting
  4. Communication
  5. Partnerships & alliances
  6. Positioning
  7. Distribution
  8. Pricing

Early adoption: Stimulating the diffusion of the innovation in the early market, in a way that encourages consumers to build a positive attitude toward it. LDNAM-412 - blog - Why Is Developing a Commercialization Plan for Healthcare Innovations so Hard-Spot 01

  • Timing: The early market is most sensitive to the technical and sophisticated product features. Therefore, making sure that the product is completely developed and perfectly working at launch is far more important than anticipating the timing of market entry at this stage.

  • Product configuration: Releasing a minimum viable product (MVP) to collect valuable feedback is important, but make certain a limited number of functionalities are working perfectly and designed to emphasize the technical advantage and sophistication of the innovation.

  • Targeting: Identify one or more segments of the market that will be more likely to adopt the innovation early and make sure to carefully understand their characteristics and underlying motivations for buying.

  • Communication: Emphasize the technical content of the innovation, which is typically the most important attribute in the eyes of the early market, rather than emphasizing its relationship to a renowned family brand.

Adoption network: Obtaining support from critical players in the adoption network, necessary for enabling the diffusion of the innovation in the mainstream market.

  • Partnerships & alliances: Not only do links to external firms help create legitimacy and credibility, but more importantly, the types of inter-organizational relationships the company establishes is the single most important dimension for stimulating the support from players in the adoption network.

  • Positioning: A confused positioning of the innovation — especially a lack of clarity about its compatibility with existing products and systems — will hinder support from players in the adoption network.

Mainstream adoption: Stimulating the diffusion of the innovation in the mainstream market.

  • Positioning: The innovation should be clearly positioned, and the advantages of critical attributes over competitors and substitute products ought to be clearly communicated at this stage.

  • Distribution: In order to stimulate the diffusion of the innovation in the mainstream market, it is critical that distribution partners perform an intense customer education function. Drive adoption by choosing the right distribution channels, like big box retailers, e-commerce, or more specialized channels like health systems or specialty pharmacies.

  • Communication: It may seem obvious, but stay away from promoting functionalities that are not available in the basic configuration of the innovation. If you do, this will have a negative effect.

  • Product configuration: Make sure you have the most complete configuration of the innovation ready and available when commercializing in the mainstream market. This is fundamental.

  • Pricing: There are tons of new reimbursement and innovative pricing models to consider in healthcare. Many firms who commercialize a high-tech innovation adopt a skimming pricing strategy. Either way, be sure to lower the price before it diffuses among the mainstream market as they are highly price-sensitive.

It’s important to note that some concepts are applied to multiple sub-strategies but with different goals in mind. For example, a brand should emphasize the highly technical and sophisticated features during the early adoption strategy. Whereas, when diffusing the innovation throughout the mainstream market, communication should emphasize the company/family brand portfolio.

Navigating Radical vs. Incremental Innovations

To add another layer of complexity to the commercialization process, there are different approaches to consider for a radical vs. an incremental innovationLDNAM-412 - blog - Why Is Developing a Commercialization Plan for Healthcare Innovations so Hard-Spot 02 (1)

A quick definition:

  • Radical: These innovations are “revolutionary,” introducing a new status quo in their industry or niche. They aim to drastically change consumers’ behavior and consumption patterns. These are often tech products and services.

Incremental: These innovations typically “build off of” the features or functions of existing products or services. Generally speaking, incremental innovations are more familiar and applicable to the market’s current behavior and consumption patterns.

For example, consider a new startup looking to commercialize its radical healthcare tech solution. It’s critical to gain support from a unique category of early adopters — the kinds of individuals and entities that embrace radical change. (Spoiler alert: miles of red tape and liability mean that these early adopters are tough to find in healthcare!)

Healthcare innovators will want to apply this approach throughout the adoption network and mainstream adoption sub-strategies as well. Why? Because the market for radical innovations is, indeed, radically different.

First, assess the "radicalness" and the discontinuity of the innovation. Then, identify the commercialization strategies that are most critical for that type of innovation. Finally, you’ll want to identify the coherent set o-f commercialization decisions that are likely to maximize the effectiveness of each critical strategy.

Supporting Healthcare Innovators Every Step of the Way

Sometimes, it seems like there are a million approaches that innovators can, and should, take to reach market success and maximize ROI.

In a world of uncertainty, one thing is certain: commercializing a healthcare innovation is a wild ride — with all the peaks and valleys that come with it.

At Legacy DNA, we’re not just marketers. We’re commercialization experts. We’ve studied the complexities of bringing new innovations to healthcare, and we know how to help brands overcome the pitfalls of commercialization.


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