Grant,
I am not responding to your comments about rumors. I know nothing about these and prefer to rely on Mr Jacobs to manage the communications. That being said, I think that the prospect of business partnership is to be expected. Let me explain...
You have hit on a very important aspect of the medical device industry group that is worth delving into. Product is and is not everything - the product and relationships and distribution channels make the business. Business partnership is essential. Some comments based on my experience...
Obviously quality devices like pacemakers, dialysis machines, MRI/Xray/Ultrasound equipment, vascular devices, etc., etc., etc., all have to meet a need at the level where an institution, organization and a medical professional will use it because it will meet or exceed the need of the patient and the med professional.
This is where the relationship-side comes in. Traditionally, the medical professional has had the bulk of the say about the choice of equipment to purchase because they are closest to the "need". Marketing, sales and distribution forces were heavily directed to the medical professional. This has meant establishing the broad and deep network of relationships you will find in the big companies. Next time you are at the doctor/dentist office or hospital, ask about the sales reps that call on them... drug companies, device & equipment companies, etc. Some of these relationships are well groomed in specialty areas like heart surgery where the vendor rep is more like your partner in business and considered a critical part of your success. You will surely find real collegial friendships here. Its hard if not impossible to break into some of these markets just because of that. However, I think we could all agree that patient fluid management is not as specialized as cardiac surgery.
In recent years, medical service institutions and organizations have shifted their paradigm to see devices, equipment (and the pharmecuticals) as more of a commodity than as a specialty item. The resulting emphasis change has stimulated the medical service organizations to work harder to buy at bulk rates with predictable inventory adjustments. This shift has caused some movement of marketing (sales and distribution) to the organizational level where "purchasing and contract" expertise can be applied. If the medical professional needs a device, the organization does the purchasing. Supposedly, this controls quality, inventory and expenses and lets the medical professional focus on their work. COMPETITION IS EXTREME to be a PREFERRED product or provider.
All this said, the issue of sales and distribution network is of paramount importance. The pharmecutical & device sales force may in some cases still visit practice by medical practice to promote their standard and unique goods. The game has gotten more complex as device manufactures need to maintain key medical professional relationships with doctors, nurses, research professionals and then include organizational administrators, purchasing, inventory management and finally accounts payable. This requires a well entrenched sales force and distribution network as well as the customer service administration competencies to manage the zillion accounts.
In addition, this established network needs to be the eyes, ears and nose of the organization. Customers will sometimes place orders well in advance, while other times they come suddenly as need arises. As a provider, it pays to be able to help your customer with their inventory management. This takes a depth of information management capabilities. You need to be able to delight your customers!!
The sales and distributon network is your information channel! Product complaints and problems need to be surfaced, addressed and resolved in an extremely fast, realtime process. Often times quality of life or loss of life is at stake. Failure to show a real sense of urgency and the ability to do product problem identification and resolution can end up having your product scrutinized by the press (anyone recall the Tylenol scare back in the early 80's) or end up removed from use by the FDA or other regulatory orgs. Recovery from a problem is typically far more costly than prevention & excellent problem resolution. There are many, many examples of this...
So, bottomline... all medical product companies need a sales and distribution network. They also need the competencies in place to handle the complexity of requirements, orders and feedback that comes from that network. The expertise exists and is well entrenched today ... examples to name just a handful: Merck, Squibb, Johnson & Johnson, Medtronic, Pfiser, 3M, Boston Scientific, St Jude, Siemens, etc....(go visit some of their websites). Partnerships are the norm! As a new player, the cost and practicality of building your own network and competencies is unrealistic. All small (especially startup) companies in this industry need business partnership(s) to pull off marketing, manufacturing, sales, distribution and administration in todays world. To play this game around the globe may require many business partnerships.
I do not know specifics about the IV related products that the F.A.S.T.1 will challenge. But, you can be sure that the market share of today's providers will not change significantly or in any sustained way without an attempt to salvage what is currently today's IV product producer's. Who knows, these players may be the business partners of the future!
I really like the field test marketing strategy that Pyng is using. As they drop pebbles making waves of interest & commitment through the training and demos, the cumulating ground-swell will turn to a tsunami - we expect! BIG PARTNER(S) will be needed to manage the tsunami aspect of marketing, sales, manufacturing, distribution and administration.
Hopefully, you can see the complexity of all this and that this is the huge challenge before Mr. Jacobs and the Pyng Management Team over the coming months, years. I, for one, support this team in keeping their eye on the ball and working hard at this challenge. I have invested to become a co-owner of the organization that is driving this product & effort. I believe they are doing great work that will save lives. As a shareholder, I believe in regular accountability checks of financials and progress toward goals. However, I do not believe it is good to distract our management team from doing everything they can to achieve their mission.
Remember this is but one individual's insight and opinion.... sorry for the length!!
I like that "The best is yet to come!"!
Patrick |
