Defining your business model is one of the most important decisions of any healthcare start-up. To define a business model means knowing “by heart” (1) who has the money in their pocket, and (2) how are you going to get it in your pocket. The first question defines your customer and the pain that he feels. The second question tries to make sure you can obtain revenues that are higher than your costs. It is as simple as that.
A business model should be defined in ten words or less. If you can’t describe it in ten words or less, you don’t have a business model (i.e. if you have designed a new endoscope, a business model could be as simple as we want to give away the endoscope and charge for the consumables). In healthcare, money usually is in the pockets of the administration, hospital CEOs, healthcare professionals, or the patients. The more precisely you can define your customer, the better. Starting with a clear and small niche (segment) is usually perfect. You can always make it larger in the future, encompassing other segments as you grow. I never saw a healthcare start-up willing to sell everything to everyone become successful.
Innovation is important for any healthcare start-up, but I would not recommend to mess around trying to invent an innovative business model. Smart people have already invented every business model that makes sense. This is not to say that it is impossible to come up with a new and successful business model that no one has ever tried, but in my opinion this is very unlikely (and dangerous). Try to keep the way you are going to get your client’s money into your pocket in an already successful and understood way.
I love the way Guy Kawasaki defines what a business model is, you can find more on this in his book "The art of the start".
Monday, March 24, 2008
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1 comments:
Great post. Do not miss this text from Kawasaki:
"7. Don't be paranoid.
If you have an idea, share it, talk about it, solicit feedback about it. Don't hold it close to your chest. Build partnerships and alliances. License it.
This is because, as I said, it's not the uniqueness of the idea that's the key. It's the uniqueness of your ability to implement it.
If you have a good idea, assume that five other people are working on the same thing. If you have a great idea, assume that ten other people are working on it.
I've never met a paranoid entrepreneur who was successful. The successful ones share their ideas, share their equity, share their dreams, and bare their souls."
Nothing more real than it!
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