Obtaining Strategic Partnerships
Top 7 items to address to win a larger partner for growth opportunities.
As we know growth comes in many forms for SME (small and medium enterprises) in medtech. This includes organic (growing your core markets) and inorganic (through acquisitions).
One of the potential accelerators of organic growth are larger industry strategics given they are typically slower at innovation. In the right situations, this means you may have an opportunity to partner with a larger industry giant for revenue enhancement.
For this month’s discussion, we’d like to focus on the top 7 topics to address to attract and win a strategic customer/partner:
1. Strategic fit – Analyze your market segment and assess who may have the best channel that can be leveraged to jump-start your marketshare for your products/solutions. If you find a company with the right channel, there is an immediate reason for a conversation that could lead to a mutually beneficial outcome.
2. Market opportunity – Before approaching a larger potential collaboration partner, assess the total available market (TAM). The bigger the TAM, the better your prospects for an interested strategic to help you win.
3. IP – While every entity (large and small) is concerned with intellectual property (IP), bigger companies are especially wary as they tend to get sued more often than smaller organizations – simply due to their deeper pockets. Therefore, a small company may launch a product that’s borderline from an IP status and not get sued. However, a larger company in the same situation will almost assuredly get a lawsuit immediately upon product launch. Anything you can do to help them feel comfortable with the IP status will be helpful to getting a deal done.
4. Regulatory clearance (or pathway to it) – An obvious consideration in our industry. Enough said on that topic.
5. Clinical evidence – Experienced marketers (and larger strategics very experienced in commercialization) understand clinical evidence to demonstrate a product that solves an unmet need is extremely bankable. The more clinical efficacy (along with human factors) and usability you can demonstrate, the smoother the sailing!
6. Scalability/Adoption – As stated above, the bigger strategics are experts in commercialization execution and will jump on a product fitting their channel that has demonstrated salability and scalability!
7. Timing matters – If a larger potential partner has just consummated a deal with a similar product (or launched their own), it may not be the best time. However, if one of their competitors has launched an interesting solution in the same space and the strategic has no current solution, you may have a fast-track to a winning partnership.
In summary, as we often state Value = Strategic Fit + Timing and that’s true in both M&A and in commercialization partnerships!
ABOUT THE AUTHORS: CCEO Florence Joffroy-Black is a long-time MedTech M&A and marketing expert. She can be reached at florencejblack@medworldadvisors.com. Managing Director Dave Sheppard is a former medical OEM Fortune 500 executive and an experienced MedTech M&A professional. He can be reached at davesheppard@medworldadvisors.com. Value = Strategic Fit + Timing® is a registered trademark of MedWorld Advisors.
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