How to Validate Your Healthcare Innovations in 3 Simple Steps
Ireland is a hotbed for medical innovations: From Pfizer to Boston Scientific, many major pharmaceutical and medical companies are setting up operations in the Republic. The healthcare industry is constantly innovating, and it spends heaps on research and development. However, there are opportunities to streamline these processes and minimise the risk taken on by businesses in the healthcare sector.
Healthcare innovation onboards a lot of risks, from the regulatory and compliance side to feasibility studies. The last thing you want after all your hard work is a customer who isn’t interested. Validating your assumptions from the outset, and every step of the way afterwards, can help focus your process and avoid future failures.
What is healthcare validation?
To start, validation is a process of confirming assumptions regarding desirability, feasibility or viability. At each stage, you should be validating your assumptions to de-risk your project and inform future decisions.
In healthcare, validation is especially important as the field is intensely regulated and medical innovation is an expensive risk to take. Critical assumptions which have not been validated, such as assumptions on the target customer or your competitors, can swiftly endanger the success of your project. Assumption validation will also put your company in a stronger position when sourcing funding, as it puts evidence behind your hypotheses and looks beyond the innovation’s feasibility towards the innovation’s market viability.
Validating feasibility assumptions
Feasibility studies are the cornerstone of healthcare innovation. Experimentation around new services and products has historically centred on whether they will work effectively and safely, and building from there.
Clinical trials are an example of these assumption validations, at high cost and high risk, but with great results in terms of de-risking if successful.
Validating desirability assumptions
Less obvious is the need to constantly assess desirability. Companies providing healthcare solutions are also developing the communication and marketing of these solutions to their target audience. From early on, the customers need to influence design, so that innovations suit customers’ wants and needs.
Some clients have found the shift towards continual, early experimentation difficult, with the need to validate clear but the route to validation murky. Assessing the desirability alongside (and before) the feasibility and viability will ensure that your innovation stands taller under strain and difficulties later on.
Steps to healthcare validation
The following guide is a simplistic overview of a complicated process that, though difficult to master, will pay off massively in the long run. Your business plan will be stronger, your positioning for raising capital more attractive and your innovation more focused.
Testing your problem needs a solution
This step is all about making sure that your solution benefits the user, not the company. Your innovation may be effective, efficient and safe, but if no customer is interested then your time, effort and money have all been for nought.
Testing assumptions about your user from the offset will guide your innovation into their laps. To effectively develop and market a product, you must understand the customer journey. This will benefit the patient and their experience with your innovation, as well as your project team and business as they continue to develop the innovation.
Early-stage research should look to validate the problem space and the value proposition of your solution. But how do you put assumption validations in place?
Running smoke tests is one way to put your company on the right track. Social media is your friend when running initial assumption validation experiments. Setting up multiple ad campaigns with different value propositions that you can provide (even before the feasibility has been validated).
Using social media to track CTR (click-through rate) will allow you to understand which value proposition is most attractive to a large set of the B2C population. Using LinkedIn will allow you to focus a little more on B2B customers, especially when combined with a call to action that allows you to track conversions. These tests are a great way to gather specific information to guide your decisions on value proposition, as well as get general insights into your audience and therefore validate assumptions on consumer personas.
Running generative sessions is another option for gathering information on customer behaviours and problem spaces. Sitting with potential future users and gathering insights on the problem (and make sure to focus on the problem, not your solution) will allow you to analyse their responses and create a picture of the context of the issue. These are great jumping-off points to ensure that you’re heading in the right direction.
Validating specific customer interests and priorities
Healthcare is a tricky industry to conduct market research in, due to the specificity of your customers and the difficulty of accessing them. However, with B2B experimentation, you can gain access to reliable qualitative data.
With customer interviews (coupled with a value-adding resource), you can ask questions about the motivations of B2B customers, gathering behavioural insights and even build relationships with future potential clients.
Feature sorting cards are an option for understanding user priorities. Though simple, the results offer both specific insights and a general overview of your customers’ needs. Using online tools allows you to sort these cards into different groups.
Creating a landing page for a campaign can also allow you to track the conversion rate, clicks and even a heat map for the areas of a landing page that interest customers the most. If you add a short explainer video to this page, showing how the product or service would be used, you’ll have a more focused and informed audience and therefore a better sense of their genuine interest. Monitoring how many watched the video all the way through is another way to gauge interest.
Managing compliance and regulatory bodies
The medical field is also rife with ethical and legal complications. Some target audiences are sensitive and the benefits of in-market experimentation may not be aligned with your ideal customer. Understanding the limits of your audience and your experimentation from the beginning can help reduce hassle and difficulty.
It’s best to involve the compliance and regulatory teams early on, so you can ensure that your assumption validation is completed in a savoury and effective way. This may mean compromising on your initial plans, by marketing to B2B customers instead of B2C or running unbranded campaigns to avoid aligning your brand and its credibility with an experimental campaign.
Most importantly, you shouldn’t mislead your target audience; providing a direct resource for your potential customers builds a relationship between you, as well as creating an exchange of value.
Which experiment should I use?
Your in-market experiments will differ depending on the stage of the process. In the beginning, a broader, more generative experiment will serve your purposes better, getting more specific to your solution as you continue developing.
There are evaluative and generative options, the former evaluating a specific hypothesis and the latter gathering general insights. Online tools are your friend when it comes to assumption validation; marketing analytics are an obvious example, but also platforms like Instapage and Trello, which can help track other aspects of these campaigns.
It’s important to look at the pros and cons of each experiment, the tools available to make analysis easier, the ways to measure outcomes (through CTR, conversions, or direct responses) and the target audience.
Reducing the cost of healthcare innovations
Early assumption validation can save you money in the long run. By de-risking the success of your projects, you become more attractive to angel investors, funding bodies and venture capitalists. It also structures the progress of your innovation by putting the customer at the centre of your development process. Regularly testing assumptions can avoid a waterfall validation release at the end of a long, expensive journey. Instead, look at confirming your hypotheses at each step, or pivoting away.
There are other ways to reduce your expenditure; R&D tax credits are a Revenue-backed incentive that can get you up to 30% of eligible research and development (R&D) expenditure back. The credit is used to reduce a company’s Corporation Tax (CT) or can be received as a cash credit paid in three equal instalments over 33 months.
If your company is engaging in activities that contain technical or scientific uncertainties and are making advances in science and technology, then you are likely eligible for R&D tax credits. You can mainly claim on staff costs, agency workers, clinical trial volunteer costs, software and consumable items.
Get in touch to find out more
If you are developing an innovative product, service or process in healthcare, there are plenty of supports available. At Tax Cloud, we can help you secure and maximise your entitlement for R&D tax credits. We also work closely with grant funding specialists for Irish MedTech companies. Get in touch by calling us on +353 1 566 2001, or use our contact form to get professional advice from our friendly staff.
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