If all a startup medtech company needed to succeed were a clever invention, a smart plan and competent execution, the odds of a big payday would be far better than they are today. But life is a non-linear, unpredictable adventure, and so is the development of new medical technologies. Whether we humans want to admit it or not, luck is an omnipresent factor in determining winners and losers in med tech innovation.
Luck (at least the good kind) is defined as “success apparently brought by chance rather than through one’s own actions.” Our personal stories are filled with chance events that helped us land a job, meet a mate, or get out of a self-inflicted jam. In the emerging medtech world, luck often takes one of three forms, as illustrated by stories from some of our veteran medtech compatriots:
A start-up company executive we’ve been working with met his future angel investor on a plane; it turns out that said investor has a deep connection to the disease area relevant to the company’s technology. I’m willing to bet that every successful medtech start-up has at least one fortune-changing tale of a chance meeting. This fairy godperson type of luck can also take the form of a reasonable, experienced FDA reviewer, but the odds of the in-flight scenario may be better.
You wouldn’t think a fortunate timing story would start with the big tsunami of 2011 in Japan. For 3-D Matrix, an MIT-founded drug delivery and regenerative medicine company in the final stages of an IPO in Japan right in the thick of it, the economic fallout seemed like bad luck at the time. But the natural disaster delayed the IPO to the following fall, when the Tsunami bolstered the economy and currency to decade highs. 3-D Matrix’s shares are now valued at over 10X the IPO price and have been the best performing in the biotech/medtech sector since then. More commonly in medtech, companies benefit from catastrophes such as influenza outbreaks, or famous people famously struck by a health problem addressed by a new device.
Boston Scientific’s Taxus drug-eluting stent, one of the most successful medical devices in history, was launched at a time when its arch-rival’s product, the J&J Cypher stent, was suffering supply problems. As a superior product with strong data entering an undersupplied marketplace, Taxus quickly capture significant share from J&J. Sometimes bungling competitors can sour an entire market (that would be bad luck), but in this case demand was strong and going unsatisfied – a perfect situation for a new entrant.
But luck is never really all luck, is it?
Case #1 – chance plane meeting. This particular entrepreneur is not only passionate about his product, but has his medical technology’s story down and ready for airing at a moment’s notice in a compelling and concise manner. And he clearly forgoes heavy drinking on planes, always keeping an eye out for networking opportunities.
Case #2 – tsunami-delayed IPO. According to 3-D Matrix co-founder Zen Chu the company was able to hang on for a better-timed IPO with smart rainy day planning and quick reflexes. “We had enough capital to weather the storm and 18 month aftermath, and we were able to throttle down when we needed to,” reminisced Zen. Thoughtful planning with strategic partners and capital sources allowed the company to survive unforeseen events and capitalize on better market timing.
Case #3 – competitor supply problem.
Boston Scientific’s then CEO, Jim Tobin, is adamant that BSC’s success was no lucky break. BSC became aware of J&J’s supply chain problems and customer frustrations, and aggressively invested in manufacturing capacity and a top-notch sales force. “We put our company in the perfect position to exploit J&J’s weaknesses,” said Tobin.
In the end, good luck happens to those who are seeking it, can recognize it when it happens, and know how to make the most of it. Or as med tech start-up veteran Amar Sawhney said when I posed this philosophical topic to him, “Life presents you with situations. Some may seem lucky on the surface, while others seem tough. The tenacity to turn a tough situation in their favor is what distinguishes successful entrepreneurs.”