For the current class of large strategics.
Technology creates new opportunities in healthcare.
It is up to us to decide which to use and how to incorporate.
During this unprecedented digital transition in medtech, from a financial model as well as a technological expertise perspective, structured deals / build to buys will be one of the critical pathways to success.
The majority of the current strategics are not natively designed to drive technologies in surgical robotics, image guided therapies, and AI driven diagnostic and intraoperative advisement platforms.
By design, the current construct of multi-billion dollar organizations in medtech have a centralized power base that is appropriately designed to hit quarterly numbers and meet the economic expectations of the financial markets, navigate a strict FDA landscape, while still serving patients.
The centralized decision making from HQ of the past served the system well. In an analog medtech world, the unconnected medical device world determined the corporate SOP’s and technology development cycles up until today.
In the rapidly emerging connected world of techmed, that centralized structural organization tends to resist rapid change in defense of what got us here and quarterly numbers to meet shareholder value.
There is a pressure in the Executive ranks that requires new solutions, new voices, and acceptance of the challenges and threats that are eroding market positions as these digitally driven demands pick up speed.
The large strategics can no longer expect to be the exclusive producer of products that the markets want to buy. They also cannot likely count on the legacy M&A model as it becomes too expensive, has proven to be unprofitable, requires too long of a development cycle and integration challenges, and most importantly does not bring the future core competencies required to keep topgrading these digitally connected solutions if the tribal knowledge is not embedded in the organization.
Some of the strategics are copying the competition, which by design always has you behind. And second place in digital is not like second place in a catheter, it is usually fatal to be a #2 player in a digital / data competition.
We will see a new wave of investment vehicles, lean subject matter design organizations, and economic models that provide a longer tail to drive retention and ongoing development of digitally connected platforms that will be off-balance sheet expansions of the strategics.
A new medtech ecosystem is in its early days.
