Health care entrepreneurs learn important lesson from the Valley: Your solution is not my problem

Article Highlights

  • But achieving a scientific breakthrough doesn’t guarantee a useful application will inevitably emerge

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  • Many great ideas never go anywhere because their solution can’t be matched to a problem somebody wants to solve

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  • Digital health entrepreneurs seem especially susceptible to this

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Where do great products come from?  Are they driven by a breathtaking technology advance, that suddenly allows you to solve a range of problems in radical news ways, or do them come from listening closely to customers, figuring out exactly what they really want, and designing something exquisitely fit for purpose?

For many – especially in the academy – developing radically new science or powerful new technologies seems like the most important path to medical progress: figuring out what causes cancer, or diabetes, or Alzheimer’s disease would likely reveal important therapeutic opportunities in each of these important areas.

But achieving a scientific breakthrough or developing a cool technology doesn’t guarantee a useful application will inevitably emerge.

In many cases, disappointed innovators and entrepreneurs belatedly discover that, as VC Dave McClure often puts it (usually more colorfully), “your solution is not my problem.”

Many great ideas never go anywhere; many high-potential startups fail because their solution, while elegant, can’t be matched to a problem somebody wants to solve.

I saw this vividly nearly a decade ago, when I was asked to weigh in on a startup that created an impressive drug delivery technology, but could never figure out what medicine to actually put in the device – they couldn’t figure out the killer app, so to speak.  It was a solution in search of a problem, and it never found traction.

More recently, I saw this in the context of a new product a big data startup was trying to sell; while the technology was really mindblowing, the advantages the company was touting — such as a turnaround time of months vs days — didn’t resonate, because incumbent vendors offered similar services.   The new product probably had important differentiating features, just not the ones the company was promoting.

Digital health entrepreneurs seem especially susceptible to this, often developing elegant technological offerings without considering whether it solves a problem for which a customer is willing to pay.  Innovators banking on the imminent arrival of value-based care may be especially likely to find themselves in an awkward and uncomfortable situation.

The need to better understand customers is also an important theme of Phil Rosenzweig’s just published Left Brain Right Stuff  (my recent WSJ reviewhere).   Rosenzweig explores why CEOs generally disregard decision research, and concludes that the highly controlled conditions of experimental social science translate poorly to the real-world, high-stakes decisions senior executives confront.   The solutions in this area do not effectively speak to executives’ problems, leading the author to suggest researchers must develop a better understanding of these messy complexities if they aspire to offer more relevant solutions.

An important, perhaps inadequately appreciated example of the need for customer discovery comes from the pharmaceutical industry, where long and extremely uncertain product development cycles, combined with a rapidly changing external environment, has resulted in an abundance of clinical stage compounds that have become effectively stranded as the market has changed.  Drugs that were originally developed under one set of conditions – with the goal of making an improved hypertension drug, say, or a better diabetes drug – now seem less interesting, leading the companies that developed them to look earnestly for new potential indications; they are solutions in search of problems, and they are exceptionally common across the industry.

In response to the recurrent “your solution is not my problem” challenge, several silicon valley experts have been pushing an approach that places far more emphasis on customer need.

Ideo’s Kelley brothers, for instance, in their wonderful Creative Confidence, constantly emphasize human factors, the importance of “getting at people’s motivations and core beliefs,” and “deeply understanding human needs” – generally by going out and talking to people and figuring out what these needs are.

Similarly, entrepreneurship guru Steve Blank has urged innovators to focus on customer development, a priority he advanced in a recent course around life science entrepreneurship he organized at UCSF and meticulously documented on his website.

Intriguingly, during his course, Blank asserted that customer development represents a vital missing link in translational research, as many would-be innovators have a surprisingly poor understanding of the customers they are trying to serve (articulated nicely in this Burrill Report podcast as well).   Throughout Blank’s course, team after team of entrepreneurs were startled by what they discovered when they started to speak to customers, interactions that led many to revise their strategies dramatically.

Significantly, neither the Kelleys nor Blank are advocating customer development as a stand-alone approach, and both explicitly emphasize the value of innovative technology.  Their point is simply that if you want to be sure your technology is going to be useful to customers, you better put some effort into thinking about who your customers really are, and what they actually want.

Good advice, of course – but what do you do when the moment has passed, when you’ve already developed a promising product, a powerful technology, and safe new medicine, something you think has got to be helpful to somebody, somewhere, but have no idea where the value lies?  How do you connect product with need?

Unfortunately, that is a problem in search of a solution.

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David
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