4.4 Business Models

Chapter 4.4
Additional Resources

As described in Chapter 4.4, choosing an optimal business model is as important as choosing the right technology to take forward in the biodesign innovation process.  The steps below have been excerpted from the chapter and are presented with active web links to assist innovators in getting started.

Understand Characteristics of Different Business Models
  1. What to Cover – Develop an in-depth understanding of each type of business model. Determine which characteristics are the most important (i.e., those that truly define each model). These are the characteristics that will be most important to consider when selecting a business model in the next step.
  2. Where to Look – Unlike many other steps in the biodesign innovation process, there are not many comprehensive references that can be used to assist in understanding various business models. Internet searches and business texts can be a good source of information regarding the general concept of business models. When seeking medtech specific information, seek the counsel of other innovators, entrepreneurs, and advisors with experience in the field. Venture capitalists can also be a good source of information based on their experience in evaluating the business models of different device companies.

Choose a Business Model
  1. What to Cover – Look at the most important characteristics or criteria for each business model and compare these requirements to the innovation under development, as well as the underlying need. Immediately eliminate those business models that are an obvious mismatch with the given innovation and need (e.g., do not pursue a business model that relies on strong IP protection if such coverage is impossible to achieve). Then, perform more detailed analysis and research among the remaining business models until the best choice can be made.
  2. Where to Look – See the guidelines in Figure 4.4.4 and Figure 4.4.5 in the book for a list of critical business model elements to help with this important decision and general rules of-thumb to validate each approach. Again, seek the counsel of other entrepreneurs, advisors, and venture capitalists before deciding on which business model to adopt.

Validate the Preferred Business Model and Identify Risks
  1. What to Cover – Perform a secondary analysis of the chosen business model to identify any “fatal flaws” that may be associated with the approach. Seek input from experts to validate that the chosen model represents the best possible approach. Identify any “soft spots” in the model and develop plans for minimizing, eliminating, and/or managing these risks.
  2. Where to Look – Leverage personal networks to help validate the intended approach. Utilize standard risk management constructs to begin thinking about and minimizing risks.

Determine What New Expertise Will Be Required to Operationalize the Model
  1. What to Cover – Assess the current skills sets and expertise that the innovator and any other members of the team currently possess. Evaluate these competencies against the critical competencies necessary to implement and execute the chosen business model. Initiate a search to identify individuals with the skills and experience that make them suitable for hire, to consult, or advise the company as a member of the board.
  2. Where to Look – Involve all members of the team in assessing its skills and competencies and identifying needs. Refer back to 1.1 Strategic Focus for information about strengths and weaknesses. Again, leverage personal networks to make contact with candidates with the right skills and experiences to assist.

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