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Single Product, Single Company

Posted Feb 25, 2014

 

One of the reasons start-ups are successful is a single-minded focus on one problem. It is difficult to maintain the focus to achieve success if you are attempting to apply an innovative technology to solve multiple problems. One successful product can divert resources from the others, or, on the flip side, one failure can drag down the company. Often, a single focus is also more attractive to investors, who may be passionate about a particular problem, and who have often experienced disappointing results from elegant solutions that could not be matched to problems.

So you have identified the problem, and you have a novel solution. What comes next? There is no easy path from an idea to a successful company. It takes years of focus and hard work, and one of the first things you should look at is market size. Market size will tell you if you can build a company around your solution, or if you simply have a product that should be licensed.

If, for example, you have a breakthrough treatment for type 2 diabetes or obesity, you could potentially have a multi-billion dollar product if you are successful. It clearly makes sense to establish a company. If, on the other hand, you have developed an incremental improvement to an existing product, it may make sense to treat this as a product that you license. You must be able to realistically look at the market size for your solution, and make an informed decision about how to move forward.

Although a single product company provides many advantages when establishing a company, the risks are high. A manufacturing, clinical or regulatory problem could spell the end of your company. There are, however, many large, successful companies that started this way: Medtronic, Boston Scientific and Johnson and Johnson all come to mind. These companies were very successful with their single products for a long time, until they developed enough critical mass to diversify. However, for a start-up, it’s important to remember that the more you diversify, the higher your monthly expenses are likely to be, and the harder it will be to maintain focus.

Our advice to Entrepreneurs is to start small, but think big. If you have a solution that could transform clinical outcomes, we’d love to help you get it off the ground. Visit the Entrepreneurs section of our web site to submit your proposal. 

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