Channels

UCSF Diagnostics Cohort

Fall 2013

Todd Morrill

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Remember how we will fit DX into the BMC?

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But to simplify your discovery process…

week 4/5

week 2/3

This week you presented your understanding of:

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Value Propositions (syllabus)

Critical for product-market fit Some validation frominterviews

Customer Segments (syllabus)

Critical for product-market fit Some validation with interviews

Ecosystem diagram (additional for Dx)

The ecosystem affects almost all relationships for the business

Initial guesses

Reimbursement (additional for Dx)

Reimbursement decisions grossly affect your Customer Segments and further development of the BMC

Preliminary hypotheses

Next week you will present :

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Value Propositions (syllabus)

Critical for product-market fit More validation frominterviews

Customer Segments (syllabus)

Critical for product-market fit More validation frominterviews

Channels How your product reaches your customer

Some validation from interviews

Ecosystem diagram (additional for Dx)

The ecosystem affects almost all relationships for the business

Flow directions and units ($, data, restrictions, etc.)

Reimbursement (additional for Dx)

Reimbursement decisions grossly affect your Customer Segments and further development of the BMC

Preliminary hypotheses, any new data you have collected.

© 2012 Steve Blank6

Where do you buy?

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Purchase Best source Also ok Not so good Never

Clothing Boutique onUnion St.

Gilt.com Chain store in the mall

Gas station, restaurant

Gasoline Gas station Freeway rest stop area

Costco Internet

Fast food Specialized restaurant

Franchisedfood chain

Safeway Macy’s

Groceries Safeway Local food exchange

Internet Your neighbor

Air ticket Kayak.com Airline website Costco Travel Street vendor

Highereducation

Research university

Private medical foundation

Communitycollege

Vocationalinstitute

You make choices every day about where and from whom you will buy.

So will your customers

From whom do your Customers want to get the product?

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Yourself

Through someone else (Abbott, Roche, etc.)

At a lab (Quest, your CLIA lab, specialty reference laboratory)

At a drugstore

Bundled with other goods or services (panel testing)

On-line

On their cell phone

Channels in Dx

• “Direct” sales to a laboratory• Hospital labs

• Quest / Labcorp

• CLIA labs

• $350,000+ per supported salesperson (T&E, field tech support, etc.) and can be as much as $500,000

• “Direct” sales as a laboratory– Building a CLIA lab

– Still need salespeople!

• Distributors (esp. outside the US) will take 35%+ margin

Reimbursement• Retail requires many intermediaries• Direct to consumer (?)

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Remember from week 1:

• Roche

• Siemens

• Danaher

• Abbott

• ThermoFisher

• Becton Dickinson

• Johnson & Johnson

• Alere

• Sysmex

• bioMerieux

• Bio-Rad

• Idexx

• Digene/Qiagen

• Genomic Health

• OraSure

• Myriad Genetics

• GE

• Hologic

• Complete Genomics

• Illumina

• Asuragen

• Sequenom

Largest Dx Companies Smaller Dx Companies

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• Established platforms

• Routine analyses

• Sell to laboratories

• Large sales force

• Niche markets

• Complex analyses

• Focused sales

• Technology superiority

• Novel platforms

This industry does not have many flexible

channels

• Novel technology

• Technological superiority

• Niche markets

• Channel innovation?

• (so what is the bad news?)

TechnologyInnovators

EntrepreneurialInnovators

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PlatformExecutors

Channel Innovation

Retail (!)Direct to Consumer – DTC

Companion DxWalMart

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Channel: Physical Channel: Virtual

Product:

PhysicalConcrete from Al’s Cement

Food from Safeway

Amazon.comNetflix DVDs

Product:

Virtual

Insurance policy from HalLean Launchpad course

Angry Birds phone appEbooks

Physical and Virtual Channels:

IMPORTANT OPPORTUNTIES

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Channel: Physical Channel: Virtual

Product:

PhysicalConcrete from Al’s Cement

Food from Safeway

Amazon.comNetflix DVDs

Food from Safeway.com

Product:

Virtual

Insurance policy from HalLean Launchpad course

Disneyland eTicket from Safeway

Angry Birds phone appEbooks

On-line movie viewing from Safeway.com

Physical and Virtual Channels:

IMPORTANT OPPORTUNTIES (someday)

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Safeway is trying to reach you through MULTIPLE channels.Why?

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Physical and Virtual Channels:

IMPORTANT OPPORTUNTIES (someday)

Channel: Physical Channel: Virtual

Product:

Physical

IVD assay kitCLIA lab test

Laboratory Developed Test (LDT)

• Usage monitoring and consumables replacement• On-line purchase of DTC

diagnostics• Health status testing

Product:

VirtualKiosk for testing using proprietary

algorithmsMobile app for with health

status algorithm

Don’t be afraid to consider novel channel approaches.Be aware of the realities of the industry.

Customer interviews?

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Next week you will present :

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Value Propositions (syllabus)

Critical for product-market fit More validation frominterviews

Customer Segments (syllabus)

Critical for product-market fit More validation frominterviews

Channels How your product reaches your customer

Some validation from interviews

Ecosystem diagram (additional for Dx)

The ecosystem affects almost all relationships for the business

Flow directions and units ($, data, restrictions, etc.)

Reimbursement (additional for Dx)

Reimbursement decisions grossly affect your Customer Segments and further development of the BMC

Preliminary hypotheses, any new data you have collected.

Buck says:

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Get me sum‘emKustama Intviyus!

Tuenny audadoot.