Crossing the Chasm and Lean Startups: Meet Digital Health

Crossing the Chasm and The Lean Startup are two classic, go - to books for digipreneurs.

Geoffrey Moore made the point that getting buy-in from innovators and technology enthusiasts is different from getting traction with the pragmatic early majority and the even more conservative late majority, both of which comprise 2/3 of the market. Ries stressed creating a minimally viable product and discovering early "prosumers" interested in further developing and refining the product.

Enter digital health. Not only are Health IT digipreneurs confronted with these product-market fit challenges, but they also must deal with the unique health regulatory, legal, social , security, intellectual property, confidentiality, privacy, professional, reimbursement and political issues that burden sick care.

The fact is that, customer discovery is a useful technique but finding and marketing to innovators and early adaptors is a substantial and costly challenge.

Healthcare is different from consumer markets or consumer Internet sites. As a result, getting widespread adoption and penetration of your digital health product or service requires a strategy and tactics that overcomes the unique barriers. Recent skepticism about whether wearables and smart watches can reduce costs and improve health are evidence of that.

But you need a different strategy once you get past 13% adoption

Some people mischaracterize their shiny new objects as "disruptive". Often, they are not.

Here are the 7 Deadly Sins when trying to cross the chasm.

1. Target Customer?Mix-up: if you’re in the Early Market and ready to move beyond it – don’t just ask your current customers what they want or need. Instead, gain insight from Mainstream customers who have not yet adopted – since they are your target in the coming 12 to 24 months and beyond. We’ve seen companies suffer $1 billion losses due to this avoidable mistake.
2. Compelling Reason?Confusion: the catalyst for driving adoption by mainstream customers is to understand the target customer’s “Compelling Reason to Buy.” Do not confuse that with “Compelling Reason to Sell.” The latter is your problem, and the customer doesn’t care about that.
3. Whole Product?Perfectionism: if you’re waiting until you have the perfect product before you launch into the main marketplace – surrender now. To successfully cross the chasm, we advise clients to focus on initially delivering MVP (Minimum Viable Whole Product). That’s the least complex solution that fulfills the target customers’ compelling reason to buy. Stop thinking about “what else to add in,” and consider subtracting features to simplify the buy / install / use process.
4. Overdoing?Sales Training: just because you are excited about your new product or service doesn’t mean everyone must be trained on it. If you truly have a new breakthrough product (i.e. a disruptive innovation), then experience tells us that less than 15% of your sales team will account for 80% or more of first-year sales – so don’t train everyone right away. Instead, double-down on training and incentives for a small “Tiger Team” of sales pros who have the right mix of consultative skills, motivation, and energy – and limit the rest to “awareness training” in that first year after launch. Avoids wasted training time and money.
5. Pricing?Misstep: the road is littered with businesses that thought cutting price by 15% to 20% would help them cross the chasm. Sadly, price elasticity is muted at this stage of the market. Yes, you need a reasonable price, but reducing it further will likely not cause unit sales growth – it will just damage margins. Instead consider reducing adoption risk for these pragmatist buyers by offering a performance guarantee or an attractive low-risk financing package.
6. Weak?Messaging: for a B2B message to be effective, it needs to be well articulated in 75 words or less. Preferably way less. And be cautious of thinking in terms of “unique selling propositions.” Unique could imply weird or different. Instead, communicate a superior selling proposition. Software companies in particular struggle with this, as many use a plethora of terms that end in “ility” and “ivity” (agility, manageability, productivity, connectivity) – yet miss the mark in communicating how their solution is truly superior to that of competitors.
7. Lastly, the?Vision Thing: it’s great, yes even essential, to have a longer-term vision for your business. But don’t confuse that vision with today’s imperative – to identify and deploy a compelling solution for specific customer pain points. And aim for revenue growth rates of 30-40% in those customer segments. That’s the fuel that will propel you forward onto a scalable and profitable path in the years ahead.

Here are 5 ways to get beyond early adaptors.

When it comes to digital health, finding the fit and changing patient behavior is as important as crossing the chasm.

Otherwise, you will be standing on the precipice of the near side gap without a way to get to the other side.

Arlen Meyers, MD, MBA is the President and CEO of the Society of Physician Entrepreneurs