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Creating Exponential Value, Part I: How Far Should You Take Your Idea?
Posted in Surgeon as Entrepreneur | Dec 2011 | Comments (0)
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Our series of articles for the physician inventor continues with a three-part look into the business side of developing and commercializing your ideas. Part One, presented here, introduces a few common situations that you may face when choosing a course of action for your idea. These hypothetical scenarios seek to answer the all-important question, “How far should I take my idea on my own?” Part Two will address ways to value your idea from a strictly financial perspective, giving you some tools for estimating, communicating and supporting the value of your idea. Finally, Part Three will walk through the real life example of a surgeon idea that was developed, tested and sold to an orthopaedic device company, also known as an original equipment manufacturer or OEM.
- Part I: How Far Should You Take Your Idea?
- Part II: How to Value Your Idea?
- Part III: The Financial Rewards (A Case Study)
While ideas can have huge potential, it is the manifestation into a functioning prototype, the testing, the protection, the clear path to commercialization and the communication of that idea that realizes the most potential.
Stating Your Objective
Recognizing that you may not be seasoned at developing and selling new product ideas on your own, realize that the road ahead is full of potential pitfalls. Conceiving the idea is just the first step. What comes next is a challenge, no matter how much experience you may have. One of the most important questions to ask early on is, “How far do I want to go with this?” A closely-related question would be, “How much of my own money and time am I willing to risk for this idea?” In order to answer these questions, it is important to first identify your main objective. Usually, this will fall into one of the following categories:
- You are an aspiring medical device company business owner and want to commercialize and distribute the device or system on your own.
- You like the idea of building value in the idea before selling it off to a medical device company, but you do not want to commercialize it on your own. The thought of maintaining control over the design, using the device in your own practice and the financial rewards of building exponential value are enough to entice you to spend your own money, sweat and tears in order to see it through development and regulatory clearance.
- You recognize that there are many ideas out there to be developed, and you want to work on several of them. Perhaps selling off the idea early on in the process is the best option.
The main difference among these categories is your level of commitment to seeing the project through to completion and, of course, the amount of risk you are willing to stomach. While there is nothing like starting your own company, this option creates significant work, not to mention significant risk. The rewards are high, but the price may be high, too. On the other end of the spectrum is the notion of selling off an idea once you conceive it and maybe apply for patent protection. The cost is low, the risk is low and much of the time, the payoff is as well. Obviously there is no universal right or wrong answer here. The right answer is the one that best suits your particular situation.
This article addresses options b) and c); that is, you’d like to see your idea commercialized, but you’re not about to go creating a company in order to do it.