Medtech companies are often eager to tell investors how many new products they launch per year. Some companies boast of numbers in the dozens or even hundreds—and some companies believe the high volume is evidence of innovation. However, most new product launches fail to deliver on expectations. This problem made me think: Are all product launches equal, or are some more important than others? And if they’re not equal, why do we treat them as if they are?

Launches are an exciting accomplishment for any company. They represent revenue growth potential and are the culmination of a significant amount of work across the entire organization in designing, developing, building, securing approval for, and commercializing the product. However, just launching a product does not result in revenue. In our experience, launching “right” and on time is what matters. The difference between the right launch and the wrong launch will significantly impact the sales trajectory of a new product. For example, the inability to launch on time can be costly. In our research, for a product with a peak sales forecast of $100 million, a two-month delay in launch equates to $17 million in lost revenue over the lifetime of the product. For the same product, launching six months earlier can result in up to ~$50 million in additional revenue.

In a recent ZS survey, only 20% of hospital executives said that newly launched medical technologies represent significant advancements. Customers are saying that not all new products are equal; therefore, we need to determine which products will be viewed as innovative and deploy a differentiated approach for those products. The situation becomes even more daunting when launching new products globally. The market dynamics vary across countries in terms of customer needs, buying processes, competitive landscape, etc. Therefore, the opportunity for a new product and the strategy to capture that opportunity is not uniform.


Prioritizing product launches can offer many benefits. Customers get more valuable products, as these products make it to market and aren’t overwhelmed by all the “noise” from the products that don’t matter. Sales reps can focus on products with stronger value propositions, promoting a smaller portfolio with less distraction from minor products that have minimal revenue opportunity. Finally, commercial leaders can allocate scarce resources to product launches that have significant potential to capture market share and drive revenue growth.  

1. How compelling is the new product’s value proposition from the customer's perspective? In a previous post, we wrote about our view on how the industry should evolve from feature innovation to value innovation. Here, we argue that the innovation process should begin with a solid understanding of customer needs, areas for differentiation and evidence. Then, the value proposition is defined before the new product is developed. However, new products will vary based on the strength of their value propositions, and how they evolve between concept and commercialization. Market dynamics may change during development—such as increased competition, a more difficult reimbursement environment or new regulations—strengthening or weakening the initial value proposition.


Medtech companies should consider these questions:

  • Have we defined the customer broadly enough (clinicians, administrators, payers, etc.) and do we understand their needs?
  • How important are the needs we are addressing in the eyes of the customer?
  • How well do we address those needs relative to alternative products?
  • How well does evidence support this?

The answers to these questions should be defined from the perspective of the customer and across key global markets. It’s easy to convince ourselves that the needs that a new product addresses are critically important, or that the level of differentiation is high, especially given the level of organizational effort put into developing a new product. However, all that matters is what the customer values. External validation of the value proposition is critical. And companies must look beyond key opinion leaders who typically provide feedback on new products. While their insight is valuable, they aren’t the ones making decisions about investing in new products across customers, and they have different priorities than the average customer.


Investing in high-quality primary market research may seem expensive. However, it can make the difference between success and failure of a new product. “High-quality” research doesn’t mean simply asking customers what they think and checking a box. Using new advanced techniques that simulate real life decision-making can provide more insight than traditional market research alone. Unfortunately, many medtech companies still rely on dated market research methodologies, either because of insufficient budgets or lack of awareness. This can lead to a false sense of confidence based on incomplete data.


2. How large is the realistic, addressable market opportunity for this product? Many new and exciting market categories have emerged in recent years, such as robotic surgery and transcatheter aortic valve replacement (TAVR). The question to ask is what market opportunity exists today if you are the first to market versus if you are the fifth to market? Later entrants to the market may face barriers—such as contracts/tenders, clinician training/certification and unique reimbursement codes—set up by companies that got there first. Even a more compelling value proposition may not be enough to overcome these barriers. The answer to this question likely will vary across the globe and must be assessed based on the dynamics within each specific market. In some cases, you can buy syndicated data or reports. However, the syndicated data in medtech is at best incomplete and, at worst, nonexistent. Since new products often create new markets, local teams may not have first-hand experience. Primary research becomes critical.

Answering the two questions above can enable a medtech company to both prioritize launches and determine the right approach for each launch.

  • Prioritize and invest (stronger value proposition, larger addressable market opportunity): Medtech companies should focus their energy and resources on these products. Unfortunately, there aren’t too many products that fall into this category. Therefore, it’s essential to identify them and treat them differently than products in the other three groups.
  • Carefully invest (stronger value proposition; smaller addressable market opportunity): In this category, it’s essential not to convince yourself that the value proposition is enough to warrant disproportionate focus. Instead, ask yourself, Is there a way to expand the addressable market? For example, real-world studies may generate evidence to grow the addressable patient pool. Or in capital equipment markets, you could seek ways to accelerate the product replacement cycle. However, if none of these opportunities exist, be wary. Customer segmentation is critical to target investments where the value proposition resonates vs. everywhere. Avoid distracting the broader market and tying up local commercial organizational focus.
  • Evaluate focus (weaker value proposition, large addressable market opportunity): Strategies for these products should be tailored based on whether the value proposition can be improved or whether to pursue market niches. If you can strengthen the value proposition, the initial launch should focus on evidence development in a very controlled launch approach. Early on, identify and prioritize customer sites that would collaborate on generating evidence. Define key performance indicators (KPIs) for the launch that go beyond revenue. If the value proposition cannot be improved, determine whether market niches exist where the value proposition is considered strong. Launch KPIs, especially those relating to market size, must be adjusted. If the addressable market size in a country suddenly decreases from $100 million to $50 million, the revenue forecast should also decrease.
  • Consider what to deprioritize (weaker value proposition; smaller addressable market opportunity): Unfortunately, many new products fall into this category (some call them “portfolio fillers”). We believe that companies should challenge the assumption that these products should launch. Often, after the great effort expended in product development, organizational inertia takes hold. If these launches are not identified, then the company risks diverting precious resources and attention away from the others. It might still make sense to launch a new product in this category: for example, it may have a lower cost of goods sold as compared to others in the portfolio, offering an opportunity to either be more price-competitive or increase gross margins. If this is the case, the launch process should focus more on “commercial release” versus the additional efforts described above.

Rigorously stratifying new products by the relative strength of their value proposition and their market potential can enable a medtech company to allocate resources effectively and deploy the right launch strategies market by market. In most cases, a company will have new products in more than one category. And it’s likely that precious few are in the coveted “prioritize and invest” bucket: The key is understanding which products are and which ones fall elsewhere, and then delineating the approach accordingly. And being willing to challenge whether some products should launch at all can free up resources for better opportunities. Not all new products are created equally, so we should not treat them in an equal way.