Dominique's Desk; Business model strategies
Christina Hernandez Sherwood, eMed Editor, MedCity News
Entrepreneurs need to be creative and innovative not only with their product or service, but also with how they think about their business model. In life science and digital health, understanding one's value proposition is key. But it's not always obvious - especially considering to whom the value proposition is most compelling. For this exercise, I find Alex Osterwalder's Value Proposition Canvas particularly helpful.
Let's walk through a fictitious example together. Entrepreneur Sally has developed a cure for Shiny Object Syndrome, a condition that makes it very difficult to focus on the task at hand. The prevalence of Shiny Object Syndrome is high, with more than 50 percent of entrepreneurs afflicted by the condition at various levels of severity. But who is Sally's customer for her cure, FocusX? Primary care physicians? Payers? Entrepreneurs? Employers? The question Sally must answer is: To whom is the value proposition most compelling?
After talking to these customer groups, Sally realizes that few believe Shiny Object Syndrome is a real problem. That makes the value of FocusX difficult to quantify. Discouraged at first, Sally decides to develop a robust methodology to measure productivity in the workplace and quantify the associated revenue gains. She decides to offer FocusX to employers – free of charge – in exchange for 10 percent of the productivity gains. With a business model structure that is very attractive to employers, several large employers sign up immediately.
Hopefully this silly example is helpful as you begin to develop new approaches for harvesting the value you're creating as a life science or digital health entrepreneur. If you want to learn more about business models and the associated concepts, take a look at these short animated videos.