Health Tech Innovation in the real world
Max G. Ostermeier, CEO and Founder of Implandata Ophthalmic Products, took centre stage today at the Malta Med-Tech World Summit to deliver a keynote titled “Health Tech Innovation in the Real World.” Ostermeier delved into the stark realities and data-driven insights surrounding health tech startups and the challenges they encounter.
Start-Up Survival Rates
Ostermeier presented stark survival rate statistics concerning startups, starting with the harsh reality that about 90% of startups fail However, the daunting nature of the endeavour becomes particularly apparent among digital health startups, where an astonishing 98% fail. Albeit 90% of startups persist through the initial year, a staggering 70% of companies succumb to failure within the first five years.
Causes of Start-Up Failures
Ostermeier then turned to the underlying causes contributing to the high attrition rate among startups. He delineated the principal reasons:
- Lack of Product/Market Fit (34%)
- Marketing Problems (22%)
- Team Problems (18%)
- Finance Problems (16%)
- Tech, Legal, and Operations Issues (10%)
The causes of failure outlined underscore the challenges founders face in their journey when navigating the hurdles of starting up.
Cost to market of medical devices
A central element of Ostermeier’s keynote involved a dissection of the journey medical device startups undertake to bring innovations to market, with a particular emphasis on the United States. The average time to market for these medical devices spans from 3 to 7 years.
The development of a 510k product, from conceptualization to market entry, entails an average expenditure of $31 million, with $24 million earmarked for regulatory and FDA-related activities.
For PMA products, the cost surges significantly, averaging $94 million from concept to market, with a substantial allocation of $75 million directed towards regulatory and FDA-related obligations.
Ostermeier’s data-driven insights offered a sobering reality check, highlighting the crucial role of thorough planning and financial backing.
Critical questions to ask
The keynote brought to the fore a series of critical questions that every founder should ask before embarking on their journey. Is the startup concept rooted in the resolution of a genuine problem, or is it merely an appealing idea? Are all stakeholders aligned with the vision of the startup? Has the best team been assembled? Are there pragmatic strategies for optimal market access? What financial avenues will be pursued to sustain the enterprise?
Practical Strategies for Success
Ostermeier concluded his address by sharing a number of pragmatic strategies to equip startup founders in their quest for success. He started off by suggesting early engagement of stakeholders in the product development process to garner indispensable insights. At this early stage, scrutiny of product integration within the existing healthcare ecosystem would help to ensure seamless alignment.
Ostermeier concluded his speech by emphasising the importance of strategic identification of the most promising markets, accounting for factors such as time-to-market, cost-effectiveness, and return on investment.
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