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What are effective ways to validate a hardware product prior to building the actual prototype?

I am looking at converting a current clinical medical device into an at-home consumer product and am wondering how I can demonstrate initial traction/demand. The current clinical device has been used my more than 100K customers at an extremely high price point (to which we intend to offer a huge discount), so I know there is demand for the service. What I am trying to figure out is the following:
1) What type of pricing will the market support
2) Will people actually buy this device to administer on their own
3) Will people successfully use the device in the home environment

I do not want to do a crowdfunding campaign for this due to the three month time sink, requirement to fulfill and cost to run a successful campaign (ie. for those that don't know - to run a large campaign you need to build an email list, pay for PR or put in a ton of leg work, do some growth hacking and online targeting, create a video and content). I think there must be some easier ways to generate the type of information above without doing the full crowdfunding campaign. I was thinking that launch page attempting to get people to signup for a newsletter could be a good start for 1+2 (ie. maybe A/B testing on the page to gauge feature sets, pricing, etc.). For 3, I think you might need a focus group to test the actual product and process (ie. product could be a foam model with printed wireframes initially to keep costs down). I also have access to the clinical device, have tested it myself and have spoken to a large number of current users and clinic managers, so I think some of the demand info is pretty relevant. I would love to talk through this issue to see what other techniques are out there and if I am on the right track. Thanks!

3 Replies

Karl Schulmeisters
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Karl Schulmeisters Entrepreneur
CTO ClearRoadmap

First - go to our website https://ClearRoadmap.com and request our free Ideas To Market guide and register and download our free mHealth Innovator's guide. These were both written by an Entrepreneur In Residence at the FDA's CDRH (Center's for Device and Radiological Health) division.

This will give you an idea of what regulatory and reimbursement steps you will need to take to get your product to market EVEN IF you make no attempt to get clinical certification. That in turn will give you a better idea as to what your costs will be.

Now as to your newsletter idea. Google "mHealth Newsletter" - you get over 225,000 results. So why would someone come to YOUR website and sign up for YOUR newsletter? Much less why would they give you something quite valuable (their time) to do A/B comparison testing?

IOW I don't think that will give you much information.

#3 ignores one of the key things that so many mHealth innovators - particularly ones coming from the IT side of the world - miss (and our ClearRoadmap app helps you through this process, but that bit is not a free download :-) ) Namely reimbursement.

If you want people to use a medical device, they will want to be reimbursed for it. And even if the FDA doesn't regulate it as a medical device (though it sounds like it well might in your case) CMS - Centers for Medicare Services - is a separate regulatory body. And unless you start working on identifying what reimbursement codes might apply from the earliest outset, its going to be hard to sell the device.

Go take a look at this blog post from the aforementioned Entrepreneur In Residence http://www.cg-hg.com/Blog/Post/16/Reimbursement-is-the-elephant-in-the-room,-not-FDA-or-CE-Mark-

Even if you are not regulated (sounds dubious if you are starting from a Clinical Device) by the FDA if your consumer device is not reimbursable by insurance (and insurance carriers look to CMS for coding precedent and consistency) - then your uptake will be reduced: MDs will be less likely to recommend it and consumers less likely to buy it.

Furthermore - the fact that you have access to the device is a detriment. Because now its pretty clear that you are a "poisoned source" for innovation around any intellectual property associated with the device. That means that you will need to write up a functional spec that clearly leaves out an IP the existing device has - hand that spec off to a designer you can demonstrate is independent - and build the solution to that Spec.

And you will only be able to have limited input into the changes to that design since you have tainted yourself with the potential IP of the competing product.

So I think you really need to sit down and re-think your whole approach. I think you are on a track for a set of expensive lawsuits: one from the FDA for you failing to comply with regulatory frameworks and one from the mfg of the clinical device.

Karl Schulmeisters
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Karl Schulmeisters Entrepreneur
CTO ClearRoadmap
Robert Bent
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Robert Bent Entrepreneur
Founder - INVI Energy
Thanks for taking the time to write Karl. I am partnered with the manufacturer of the clinical device so I don't see any issue with IP infringement. Also, I have already planned a pre-submission meeting with the FDA and am well versed in the regulatory and compliance requirements. My question was about demand signalling and testing the product idea prior to building a prototype. Also, I don't expect to get reimbursements as this is a cosmetic device - there is also evidence that the current customer base is paying $4,000 per treatment set without reimbursement, so I don't think this is a concern.
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