When that potential first big customer drops in your lap, how do you make the most of it?
For an early-stage healthcare company, it’s about balancing the time commitment against the actual ROI, said Jean-Luc Neptune (@jeanlucneptune), executive director at Blueprint Health (@bphealth).
Neptune is one of four speakers who’ll discuss the challenges of modern entrepreneurs at MedCity CONVERGE, MedCityNews.com’s summit on innovation and healthcare convergence on Sept. 1-2 in Philadelphia.
Neptune recently discussed the dynamics of early-stage companies as they get their first chance to work with some of the big companies in healthcare. Excerpts of that conversation are below.
How is the healthcare industry changing how it works with startups?
There are an increasing number of corporate partners willing to work with new digital health companies in an early-exploration stage. Some of those activities are supported by the corporations themselves, which are bringing startups in house.
So how should startups approach big corporate clients?
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
They should keep in mind this is the same as selling to their target market. Who do they want to work with? What problem are they solving? Be very clear and focus on what they do.
The challenge with an innovation program in a big company is that it threatens to pull a small company off track. The administrative burden can be huge, intra-company politics are often a problem, and operational integration can be a challenge, among many other things. It can be very distracting for a startup.
Where can things go wrong?
These large organizations don’t have same life cycle as startups do. They are much more risk averse than startups are.
Ask yourself: Is there a complicated decision-making processes? Are expectations properly set? Startups will often go in naive and not understand how to sell what they are doing. They won’t have a vision of how to turn a pilot into a sustainable business.
The greatest concern these days is putting time and energy into corporate entities, doing lots and lots of work and not getting anything out of it. Not everyone understands how to close. So they want to understand the process of figuring that out, so they don’t lose the value of what they put in it.
How do you make a corporate partnership worth your while?
The best case scenario is you get a customer right out of the gate. But you don’t have the market power and you don’t have the name. So maybe you can’t get a relationship with a client right out of the gate. Instead, you do a pilot program and make it clear that if you can do A, B and C they become recurring customers.
Less desirable than that, you enter an agreement where they won’t make a commitment at end to be a customer, but they’re willing to be a reference client and they’re willing to let you use their name in your marketing.
There’s a lot of different currencies you can get out of working with a corporate client – cash, reputation, operational experience, etc. – and you should get at least one of those things (if not all of them) in your relationship with a corporate client.
