After the Spark: Three Essential Steps in Early Innovation
In my role with the Office for Technology Development at UT Southwestern Medical Center, I am fortunate to witness the innovative potential of clinical faculty. Health care providers are fully immersed in the complex and challenging workflow of direct patient care and experience the daily roadblocks, inefficiencies, and frustrations of modern health care. Because of this exposure, they are in a unique position to ideate and develop high-value innovative products and solutions.
While there is no single primer for evaluating a new idea, a basic conceptual framework can be very helpful in the early stages. Importantly, investing time and energy upfront to establish the commercial viability of an idea can save the major frustration of having to abandon the project later on. One should always consider protecting any intellectual property arising from the idea at the outset, which is generally pursued by the local technology transfer office through a patent or copyright.
Step 1 – The Business Plan
What is the problem your idea solves? A new product or service born out of a genuine clinical problem is a promising beginning of successful innovation. One must clearly identify the specific problem that is being addressed and how this new solution is unique compared to what already exists. The process of searching for what is currently in the marketplace or already patented, known as "prior art," can start with simple web-based searches but is often formally done by the technology transfer office.
How will the new idea generate revenue? This is a fundamental question that is at the core of the commercial viability of an idea. Who is the intended customer along the health care chain – the patient, pharmaceutical or medical device company, insurance company, health care provider, or health system? In answering this question, one must research the market size and understand how customers currently address this problem. What is the current size of the market in terms of both dollar value and number of customers? Is there an opportunity for growth? Who are the competitors and what is the competitive advantage of the new idea? Some business plans organize these answers in the form of a SWOT analysis that identifies strengths, weaknesses, opportunities and threats.
Step 2 – Identify Needs
Time, knowledge, resources and funding are all needed to move any good idea forward. It is expected that most clinicians will need assistance in all of these domains given they are already busy with patient care and administrative duties. One approach is to consider progress in a stepwise fashion with the initial goal of creating a basic functioning prototype, may that be a digital application or medical device. What are the basic costs and capital needs to move forward? Given that profitability leads to sustainability, it is essential to ensure that the costs needed to develop and ultimately manufacture the product are not prohibitive. Approximately how much time will development require? Who are the main stakeholders and team members needed to make this happen? This major second step requires a hard accounting of the time, funding and resources one currently has and what is needed to realistically advance the project. While this step can be daunting, identifying the needs upfront is instrumental to the overall decision.
Step 3 – Construct a Timeline and Metrics for Success
At a high level, the "exit" or the endpoint leading to return on the money invested for many successful innovations are license agreements. A license agreement allows the inventor to receive cash (or stock) in return for allowing another party to use their invention. Licenses allow inventors to benefit by leveraging the interests and practices of established companies without having to create a fully operational business themselves. Another endpoint is starting a new company that will embark on the longer-term path of developing the product for sale to the end customer. With this general trajectory in mind, creating a basic timeline of goals with metrics of success is helpful practically but also stimulates important self-reflection. What is the long-term goal? What does success look like? How much time is one willing to commit, either before or after some level of accomplishment is achieved?
A local technology transfer office, innovation center, or accelerator can all be very helpful in offering support services, networking and funding opportunities needed to begin the challenging but exhilarating process of innovation and entrepreneurship. Creating high-value products and services can powerfully improve the delivery and quality of health care, the experience of providers, and most importantly, the lives of many patients on a societal level in an economically sustainable way.
This article was authored by Kartik Agusala, MD, FACC, member of ACC's Health Care Innovation Section Leadership Council.