In our previous two columns, we described two key concepts for Phase Zero of new product development—Concept 1: Understanding the Customer’s Job and Concept 2: De-Risking Technology. In this article, we conclude the discussion regarding Phase Zero with Concept 3: Defining the Product Strategy. How you define your product strategy depends on multiple factors, such as the competitive landscape, maturity of your market, whether the product is disruptive, etc. In this context, product strategy refers to something analogous to a business plan presented to investors. However, instead of investors, senior management is receiving the presentation. The proposal should capture all of the typical elements of a traditional business plan but in a concise format for this product concept. Following are examples of questions to be addressed in a product strategy:

• Does the technology work?
• How much risk is involved with the proposed new product?
• Will the product win against competitors?
• What is the market size?
• Have we identified the right leadership and team for success?

Project Risk Analysis

High-level assessments should be conducted for all types of project risks, including safety considerations, marketing challenges, and manufacturing concerns. Are there any development aspects, such as sterilization strategy that will be difficult to define? Are there other technical risks, although not new, which are new for the team? Will the new product be clinically effective? Will the benefits of using it outweigh the costs of switching to a new product? Will safety risks to patients be outweighed by the benefits of the new product? Is there enough funding or money to develop the product? Are the right people identified to develop the technology?

Intellectual Property Assessment

Whether the product incorporates new or existing technologies, the team must assess existing patents related to the technology. A Freedom to Operate (FTO) analysis is essential to confirm the product concept does not infringe on existing intellectual property. Does the new product have defensible barriers in the intellectual property (IP) landscape? What technologies, procedures, logistics, or manufacturing processes are needed for the product concept and to avoid infringing on existing IP? We have found creative brainstorming methods conducted in a secluded or even off-site area to be an effective way to do this. Apart from individual technologies, the team must identify potential interdependencies within the product concept and assess if they could be subject to intellectual property protection or if existing IP already covers them. The complexity of this process may vary based on the product and competitive landscape. If issues arise, the team must seek alternatives or explore licensing options to avoid potential legal disputes. Neglecting any of these aspects can spell failure for the product.

Regulatory Strategy

Just as critical as assessing IP is determining the best regulatory pathway for product approval within the target market’s regulatory body. In the United States, a straightforward pathway—such as FDA 510(k)—is much shorter and cheaper than pathways such as de novo or PMA (pre-market approval). The latter can significantly extend development timelines and costs, potentially making the project unviable. We will discuss regulatory strategy in more detail in the next Design Viewpoint column.

Launch Strategy

With truly innovative products, perhaps first in kind and even in the absence of direct competition, there is an urgency to get the product into the market for multiple reasons (e.g., generating income, potentially being first, and getting customer feedback). The last reason should be the first reason. It may be that you have nailed understanding the customer’s job, but do not know if there will be market uptake because there is no existing product market. Then, the market strategy would be to go “lean” into the market, using a very small sales force and keeping business costs low until you know there will be market uptake (see “The Lean Startup” by Eric Reis). As the challenge identified as “No Hole in One” in the June Design Viewpoint column, the first product may not be optimal and the business should be prepared to refine it after the initial launch. Trying to launch with the “perfect product” may be counterproductive. Launching sooner with a good product and then revising it based on customer feedback may be advantageous.

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READ THE JUNE DESIGN VIEWPOINT COLUMN: General Challenges of Medical Product Complexity

In this case, it is imperative to get your product to market as fast as you can. This is not accomplished by adding lots of developers or inventing time accelerators. Rather, you must cut down the specifications you elicited from your customer to the bare minimum—a minimum viable product. This is an involved process requiring lots of open communication and objectivity; it can also sometimes be a painful experience. Without this focus and understanding, the team can become disconnected from the problem and greatly delay the time to market. In one situation, we had been asked to work with a cross-functional team that was late in the development of its first medtech product. They were late in the sense they were supposed to be close to submitting for clearance, and late in the sense they were more than a couple of years behind schedule. Further, the technology was incomplete (see Concept 2: De-Risking Technology). Essentially, there were too many deliverables for a first-release product. We led the team through a prioritization process from several hundred items down to a handful of deliverables and a pathway where we could visualize an endpoint. We bucketed those items not in the first release to be worked on for subsequent releases. This, and solving the technical issues, enabled the team to get the product submitted for clearance and, soon after, successfully released to the market.

Completing Phase Zero

By the end of Phase Zero, the small team should be able to write a concise business plan or initiation plan that summarizes the estimated cost, time, and risks to fully develop the proposed new product. Business management should review this plan to determine whether to proceed with funding and development. If it is deemed too expensive, it may be that straightforward changes could be made to the technology or market fit to lower development costs. Conversely, it could be decided not to fund the project further (avoiding much greater costs of shutting down the project at a later point). If the company decides to proceed with development, it now has the knowledge required to plan the full development of the new product. The next steps produce the following key outputs:

• Product development plan: A plan covering all activities needed to bring the new product to market, with enough detail to support the allocation of all the necessary resources (within the company and from partners/service providers).
• Regulatory strategy
• Reimbursement strategy
• Clinical testing strategy
• High-level schedule with key dependencies
• Product architecture
• System hazard analysis: Summary of safety risks and key mitigations

Summary of Phase Zero

Phase Zero is a period of invention, exploration, and discovery that outlines the parameters of your product. Those parameters, in turn, dictate the nature of your product development process (or whether development should proceed at all). Phase Zero is the time before development starts to take risks and evaluate the approach with the “new” product ideas. In the next column, our guest author will describe how to develop an optimized regulatory strategy. They will explain how the regulatory strategy plays a key role in the overall product strategy and determines many aspects of the entire development project.

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MORE FROM THESE AUTHORS: Scouting Your Customers and De-Risking Your Medical Technology

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Russ Singleton, principal consultant with Russ Singleton Consulting LLC, is based in California. He has extensive experience in VP R&D, general management, and C-suite roles in the semiconductor equipment and medtech sectors. He holds a Ph.D. and M.S. in electrical engineering from the University of Illinois and a bachelor of engineering from the Pratt Institute. Aaron Joseph, principal consultant with Sunstone Pilot, is a biomedical engineer based in Waltham, Mass. With over 20 years of experience across a broad range of medical devices from surgical robotics to medical imaging to IOT and SaMD products, he helps clients efficiently tackle risk management and design controls for new product development.