“It used to be that medical device startups would develop a product by focusing on design, they’d get some IP with the product and it would be gobbled up by a big player,” explained Brett Naglreiter, who runs a consultancy firm to help develop and incubate medical device technologies.
But that technology-first model doesn’t work anymore.
The risks are higher; the chance of getting a potentially groundbreaking idea to market seems more remote. “You have greater emphasis on manufacturability, reimbursement, how the technology fits in the healthcare environment – all of these things need to be considered much earlier in the process than before, and startups need more breadth of expertise,” said Naglreiter.
Investors are looking for “Cinderella” startups: Well-funded, intriguing technologies that everyone wants to back – after they’ve proven that they’ve been able to mitigate the risks. As healthcare needs shift, it becomes clear that the startups that get noticed today are much more sophisticated, need to be much more well-funded, and – to be frank – a lot more mature than they used to be.