Every technical and scientific entrepreneur dreams of the day when they discover a disruptive technology that will change the world. Maybe you are even one of the lucky few for whom this has happened. But a lengthening list of great inventors learned the hard lessons of actually growing a company. Today, I talk about one such challenge in growing a disruptive technology industry – stem cell therapies in international markets.
Here?s a challenge for the stem cell market: The majority of stem cell research and service companies are based in the United States. There are local ecosystems in states like California and Massachusetts built specifically to support the growth of stem cell technologies. Yet, the majority of stem cell market growth is in other regions of the world, particularly in Asia. American stem cell companies face a choice. They can pour millions of dollars into an FDA approval process. They can try to counter negative press on less ethical stem cell therapy providers tainting industry reputation. They can compete in a market where there are twice as many competitors today as there were one year ago. Or they can diversify into international stem cell markets.
International markets mean facing the unknown: unfamiliar healthcare regulations, hidden costs, and foreign business cultures. There are many risks, so here are two strategies that can help growing technology companies, including those in the stem cell market, to mitigate some of the business risks and go after opportunities.
Leap Frog the Market with Strategic Partnerships
One of the fundamental shifts in international entrepreneurship in the last 20 years is to gain competitive advantage from strategic partnership in international markets rather than just leverage internally-derived advantages. What I mean is this: if your company doesn’t have experience in the Indian market but the potential there is great, you can partner with an Indian company to gain access to new markets. Also, that same Indian company may have a compatible technology which compliments your company’s offering well, allowing you to sell their product in your market too. There may also be access to government grants, which may help to offset some R&D costs. Partnerships need to be carefully selected and vetted, but provide smaller companies with greater advantages internationally. In the case of stem cell companies, they already know how to create partnerships with medical research centers. There may be some interesting partnership opportunities in and around existing research partners.
Focus on Your Best Niches
Oftentimes technology companies have a core competency that could be applied in any one of numerous markets. To make the most of a competitive advantage, a company needs to figure out which market niches to apply their time, energy and limited budget. For instance, I have spoken with a stem cell company founder who had a core technology (treatment for a common disease) that could be applied across human, horse, dog, and any other species market. On top of that, it could be sold into any number of geographic markets. Instead of offering products that have extremely different sales channels and marketing requirements, he needed to focus his company on one or two related niches that could help generate revenue with a healthy return on investment. The market data is often available and if marketing data collection and analysis coupled with calculating cost/opportunity estimates is not in your skillset, you can hire a business consultant (shameless plug) to do the work for you. Either way, your efforts need to be focused, or else even the best company with the best product and staff will flounder and eventually fail. I would hate to have that happen to any of my readers’ companies.
For more information about how to make your company be more globally competitive, please contact me.