Lean Launchpad Tucson - Distribution Channels
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The document outlines an agenda for an entrepreneurship class that will cover topics like value propositions, customers, distribution channels, and revenue models over a series of weekly meetings from May to July. It also includes discussion questions about customer problems, product-market fit, and distribution channel strategies. Key takeaways are determining how customers want to purchase or access products and services, the different types of distribution channels, and how channel partners are motivated and compensated.
![ PET is a non-invasive medical diagnostic
technique for cardiac, brain, and tumor imaging
GFP technology makes new (unknown) and
known (but clinically inaccessible) [18F]-labeled
radiotracers readily available
Fast, multiplatform, high efficiency synthesis of
these fleeting, precious agents.
Initial target indications: pediatric neuroblastoma,
Parkinson’s disease.
53](https://image.slidesharecdn.com/6-distributionchannels-120630175702-phpapp01/85/Lean-Launchpad-Tucson-Distribution-Channels-53-320.jpg)
Lean Launchpad Tucson - Distribution Channels
- 1. Aaron Eden Created by Steve Blank
- 2. » 5/12 – What to Expect » 5/19 – First Pitches » 5/26 – Experiment Day » 6/2 –Value Propositions » 6/9 – Customers, Users, Payers » 6/16 – Distribution Channels (Justin) » 6/23 – Customer Relationships » 6/30 – Revenue Models » 7/7 – Partners » 7/14 – Key Resources & Costs » 7/21 – Lessons Learned Presentations
- 3. » Team Presentations » Distribution Channels » Mentoring
- 4. » What were your hypotheses about users and customers? Did you learn anything different? » Did anything change about Value Proposition? » What do customers say their problems are? How do they solve this problem(s) today? Does your value proposition solve it? How? » What was it about your product that made customers interested? excited? » If B-B, who’s: decision maker, size of budget, what are they spending it on today, how will this buying decision be made?
- 10. Channels 10
- 11. Test Hypotheses: Channels 11
- 12. Two Critical Channel Questions How do you want to sell your product? Is subtle, but more important than the first: How does your customer want to buy your product? 12
- 13. How Do You Want Your Product To Get To Your Customer? Yourself Someone else Retail Wholesale Bundled with other goods or services 13
- 14. How Does Your Customer Want to Buy Your Product From Your Channel? Same Day Delivered and installed Downloaded Bundled with other products As a service 14 …
- 15. Web Channels 15
- 16. Physical Channels 16
- 17. Types of Channels Direct Indirect Licensing • OEM • VAR • Reseller • Distributor 17
- 18. The Channel as a Customer » Some products are embedded in others (OEM) » Some products are resold by others (VARs) » Some products are distributed by others » Who’s the customer? 18
- 19. Distribution Complexity Global Systems Systems Integrators WANs Evangelists Mainframes Direct Sales Marketing Complexity Minis LANs VARs PC Servers Desktop PCs Retail Printers Keyboards Service Web, Telesales Technicians Toner 19 Solution Complexity
- 20. How Are Channels Compensated? » Commission » Percentage of sales price » Discounted pre-purchase 20
- 21. How Are Channels Motivated or Incented? » Money! What makes them the most? » Training » Marketing to the channel » SPIF 21
- 22. Channel Economics: “Direct” Sales List Revenue Price End Consumer Discounts Cost of Goods EU Profit + SG&A + R&D (Supply Chain) 22 Source: Mark Leslie, Stanford GSB
- 23. Channel Economics: Resellers List Revenue Price End Consumer Discounts Cost of Goods EU Profit + SG&A + R&D Reseller (Supply Chain) 23 Source: Mark Leslie, Stanford GSB
- 24. Channel Economics: Distributors/Resellers List Revenue Price End Consumer Distributor Discounts Cost of Goods Profit + SG&A + EU Reseller (Supply Chain) R&D 24 Source: Mark Leslie, Stanford GSB
- 25. Channel Economics: OEM or IP Licensing List Your Revenue Price Cost of Distributor Distributor Discounts Master Goods Profit + SG&A + EU Reseller (Supply R&D Chain) Cost of Goods Profit + SG&A Reseller (Supply + R&D Chain) Your Product Becomes Your Customer’s Cost of Goods 25 Source: Mark Leslie, Stanford GSB
- 26. Example: Book Publishing National Publisher Printer Wholesaler Retailer Customer Distributor 26
- 27. Book Publishing National Publisher Distributor Retailer Customer Wholesaler •Percent of Retail 35% 15% 10% 40% $7.00 $3.00 $2.00 $8.00 $20.00 • You get - 35% of retail - the distributor gets 10% - the wholesaler gets 15% - the retailer gets 40% - less any discount they offer the customer 27
- 28. Book Publishing Economics National Publisher Wholesaler Retailer Customer Distributor Allowances Wholesale costs Bills Markup Credit guarantees Payment guarantees Payment guarantees Return rights Credits 28 Payments
- 29. Book Publishing Delivery National Publisher Printer Wholesaler Retailer Distributor Prepare film Receive (content) Schedules Print Determine Merchandise orders allocations titles Bundle counts Film Deliver Sell orders magazines Establish Prepare Print and identity galleys ship Create magazines demand Acknowledge 29 returns
- 30. Nature of Products Impact Channel: Physical or Virtual? » Access to customers changes dramatically » Logistics related to product complexity » People as products 30
- 31. Bits vs. Atoms Channel Web Physical Bits Product Physical 31
- 32. Product and Channel Are Bits Channel Web Physical Rapid Agile and Customer Development Fastest to acquire early Bits customers and scale Product Physical 32
- 33. Web 2.0 – Product/Channel Are Bits Channel Web Physical Google Twitter Facebook Bits Zynga Cloud Services Product Physical 33
- 34. Product Is Bits, but Channel Is People Channel Web Physical Rapid Agile and Rapid Agile and Customer Development Customer development Fastest to acquire early Traditional sales channel Bits customers and scale May require installation Product Physical 34
- 35. Traditional Enterprise Software Channel Web Physical Google Microsoft Twitter SAP Facebook Oracle Bits Zynga Cloud Services Product Physical 35
- 36. Physical Products Sold Over the Web Channel Web Physical Rapid Agile and Rapid Agile and Customer Customer development development Bits Fastest to acquire early Traditional sales customers and scale channel May require installation Product Rapid Customer development Logistics, shipping and Physical manufacturing critical Customer service 36
- 37. Killing Traditional Storefronts Channel Web Physical Google Microsoft Twitter SAP Facebook Oracle Bits Zynga Cloud Services Product Zappos Amazon Cafepress Physical Netflix Consumer electronics 37
- 38. The Factories May Be in China Channel Web Physical Rapid Agile and Rapid Agile and Customer development Customer development Fastest to acquire early Traditional sales channel Bits customers and scale May require installation Product Rapid Customer Longer customer development feedback cycle Logistics, shipping and May require large capital Physical manufacturing critical requirements for scale Customer service 38
- 39. We Still Make Things that Need Salespeople Channel Web Physical Google Microsoft Twitter SAP Facebook Oracle Bits Zynga Cloud Services Product Zappos Cars Amazon Solar panels Cafepress Wind turbines Physical Netflix Bookstores Consumer electronics Consumer electronics 39
- 40. Homework » Talk to 10-15 potential channel partners + (Salesmen, OEM’s distributors, etc.) » What were your hypotheses about who/what your channel would be? Did you learn anything different? » Did anything change about Value Proposition? » Update your Google Group with Business Model Canvas » Draw your channel diagram » Summarized in a 5 Minute Presentation » Read » Startup Owner’s Manual pages :227-256, 332-342 40
- 41. Appendix 41
- 42. implantable drug infusion pumps with remote physician control for chronic pain patients at home “the right dose at the right time and place” 42 Christian Gutierrez (EL), Ellis Meng (PI), Carol Christopher (IM), Tuan Hoang (FE)
- 43. Chronic Pain v3 FS Team Training Patients Faster relief KOLs Trade shows Formulary Acceptance Clinical data Efficient patient Foundations management and Clinicians FDA Dosing flexibility Support Advocacy Groups Access to high-value Institutions OEMs therapies and pharmacoeconomics Hospitals IP Payors Wireless Proprietary Developers Reduce length of Pain clinics knowledge hospital stays and Human Resources pharmacoeconomics Product Dev Costs Unit sales Manufacturing Costs Support Services Marketing Costs FDA/Clinical Trials 43
- 44. Chronic Pain v4 FS Team Trade shows Training Faster relief Patients KOLs Formulary Acceptance Clinical data FDA Efficient patient Foundations management and Clinicians CMS (Medicare) Dosing flexibility Support Advocacy Groups Access to high-value Institutions OEMs therapies and pharmacoeconomics Hospitals IP Wireless Payors Developers Proprietary pharmacoeconomics Pain clinics knowledge Electronic health Human Resources record providers Product Dev Costs Unit sales Manufacturing Costs Support Services Marketing Costs FDA/Clinical Trials Bundled kits Electronic records 44
- 45. Getting Out Clinicians » Dr. Stan Louie, Drug Formulation Expert (USC Pharmacy) » Dr. Giovanni Cucchiaro, Anesthesiologist (CHLA) Institutions/patients » Dr. Diana Hull, Physician (Group Health in Washington state, formerly at Kaiser California) » Thomas Hsu, Insurance Specialist (Network Medical Management; a California ICA) » Two chronic pain patients ˃ Pump user and creator of support forum ˃ User of oral narcotics and patches Regulatory » Dr. Frances Richmond (Director Regulatory Science Program, USC) Entrepreneurs/ » Richard Hull (formerly at company selling Lapband) 45 Industry
- 46. Product Flow/Channel Electronic Partners/ Health Fluid Synchrony OEMS Records Electronic Support Pump + Bundled Records Services Controller Kits Hospitals (Anesthesiologists Patients Neurosurgeons) Pain Clinic (Anesthesiologists Neurosurgeons) 46
- 47. Channels (Direct) Hospitals • Direct to institutions • Some formularies involved in purchase decisions Pain Clinics • Some doctors make purchase decision directly • Device company/Doctor relationship is key • Heavily influenced by : • Clinical study results • Regulatory approval • Reimbursement 47
- 48. Patient Care Flow (Now) Partners/ Fluid Synchrony OEMS Support Pump + Bundled Services Controller Kits Hospitals Surgery/Rx/ (Anesthesiologists Patient Discharged reprogramming Neurosurgeons) Pain Clinic Trial period/ Scheduled (Anesthesiologists Home setting follow-up Neurosurgeons) 48 Weeks/months Key factors: Reimbursement , state regulations
- 49. Patient Care Flow (Proposed) Electronic Partners/ Health Fluid Synchrony OEMS Records Electronic Support Pump + Bundled Records Services Controller Kits Actionable feedback to doctors/institutions E-prescription / closing loop Hospitals Surgery/Rx/ (Anesthesiologists Patient Discharged reprogramming Neurosurgeons) Pain Clinic Trial period/ Scheduled (Anesthesiologists Home setting follow-up Neurosurgeons) 49 Weeks/months Days Key factors: Reimbursement , state regulations
- 50. Regulatory Considerations PMA 510K Trial size 100’s of patients 20-100 Costs Up to $100,000 per patient $10-50 MM $1-10 MM Time ~ 3-4 yrs + post ~ 2-3 yrs approval follow-on • PMA approval with grouping of FDA approved drugs. • Clinical trials results used to obtain CMS (Medicare) approval • 510K restricts technology to predicate devices • Can be more difficult to market against incumbents • European CE mark is easier to attain (safety and performance only) 50
- 51. Take-Aways • Channel is direct in this existing market • Channel for e-health is more complex and evolving • State-to-state regulations can impact incentives • Can pose problems as electronic records systems vary across the country Next Steps • Understand costs associated with reaching doctors/institutions directly • Understand structure of e-health channel • Develop regulatory pathway (timelines and cost profile) 51
- 52. Advanced Chemistry for Pharmaceutical Progress Team: Kiel Neumann (EL) Stephen DiMagno (PI) Allan Green (Mentor) 52
- 53. PET is a non-invasive medical diagnostic technique for cardiac, brain, and tumor imaging GFP technology makes new (unknown) and known (but clinically inaccessible) [18F]-labeled radiotracers readily available Fast, multiplatform, high efficiency synthesis of these fleeting, precious agents. Initial target indications: pediatric neuroblastoma, Parkinson’s disease. 53
- 54. The Business Model Canvas SOPs for precursors Technical Assistance cGMP manufacturer and drugs (Image Atlas) Radiopharmacies Accessibility (RCY) Radiopharmacies Recruit clinical sites FDA regulatory support Nuclear Medicine and Purity In vivo animal studies Radiology departments Speed Equipment producers Develop regulatory PET/SPECT plan for pre IND Multiplatform Technical assistance Prescribing physicians meeting Sensitivity (nca) ID cGMP CRO Pharmaceutical Specific compounds Radiologist who perform Fund-raising development studies companies Direct sales of precursor General IP methodology for PoP data adding fluorine to Drug developers R&D and clinical studies IP lead compounds of presented in journals and PoP data interest meetings Regulatory plan Sales of precursor Radiologists Understanding of the through global finished regulatory process pharmaceutical distributor Sales of intermediates Contract cGMP precursor manufacture Salary, Rents Technology license 54 Clinical trials Product license (royalty)
- 55. 1) Radiologists and Nuclear Medicine Physicians 2) Radiopharmacy companies (Cardinal Health, Siemens, GE Healthcare, IBA, AAA) 3) Equipment manufacturers (GE, Philips, IBA, Advion) 4) cGMP manufacturers 1) Pharmaceutical companies 2) Radiologists and Nuclear Medicine Physicians 55
- 56. - Face to face with attending Radiologist at Stanford University - Face to face with radiopharmacist at UCSF - Conference call with Nuclear Radiologist at Memorial Sloan Kettering - Conference call with president of medium size drug company with PET product at the FDA - Telephone conference with cGMP facility 56
- 57. - Immediate need for our product - Currently used SPECT product for neuroblastoma is limited by absence of correlative CT data - Our lead PET agent would provide more information on existing imaging equipment base - Two customers offered to participate in clinical trials - Potential for further development of other tracers identified in interviews - Actual need for the general procedure - Allow access to previously unknown tracers 57
- 58. Face to Face meeting with president of small radiopharmaceutical company Face to face with a clinician at Memorial Sloan-Kettering Face to face with Global Production Manager of Molecular imaging for one of world’s largest radiopharmaceutical companies OncoKinib collaboration between Geurbet, OncoDesign, and Ariana pharmaceuticals Face to face meeting with head of R & D and International Production Manager from Linz, Austria Eckert and Zeigler – German PET modular synthesis provider Face to face meeting with Executive Director and CEO of Scott Tech Center in Omaha, NE Introductory teleconference to CEO of Innovation Accelerator 58
- 59. Significant Interest in our technology Radiopharmacies want GMP product No interest in GMP reagent preparation Third-party manufacturers would use our developed synthetic pathways Internal competition with one world radiopharmaceutical leader Best to approach one of other two world leaders Scott Tech Center Willing to offer free advice on startup strategy Provided introduction to Innovation Accelerator Offered introduction to Director of Venture Technology of one of world’s leading radiopharmaceutical companies 59
- 60. The Business Model Canvas Technical Assistance cGMP manufacturer SOPs for precursors (Image Atlas) Radiopharmacies Radiopharmacies and drugs Accessibility (RCY) FDA regulatory support Nuclear Medicine and Recruit clinical sites Purity Equipment producers Radiology In vivo animal studies departments Develop regulatory Speed PET/SPECT Prescribing physicians plan for pre IND meeting Multiplatform Technical assistance Sensitivity (nca) Radiologist who perform ID cGMP CRO Pharmaceutical Specific compounds studies Fund-raising development companies General methodology for Direct sales of precursor IP adding fluorine to Drug developers PoP data lead compounds of R&D and clinical studies interest presented in journals and IP meetings Radiologists PoP data Regulatory plan Sales of precursor Understanding of the through global finished regulatory process pharmaceutical distributor Sales of intermediates Contract cGMP precursor manufacture Salary, Rents 60 Technology license Clinical trials Product license (royalty)
- 61. • F-dopa iodonium intermediate • F-dopamine iodonium intermediate We provide accessibility Reagents •ABX Could license precursor •Eckert & Ziegler synthesis for •GE MX module for TracerLab GMP Cassette or •Siemens Explora incorporation in Components modules •TracerLab/ GE Require GMP precursor (or •Eckert & Ziegler •Siemens Explora cassette) to develop our GMP Compliant Synthesizer •Neoprobe •Synthra product with their synthesizer •Siemens PETNet •GE Amersham Only want GMP PET •Cardinal Health •AAA precursor in modules 61 Radiopharmacy distributor •Iason without development
- 62. Conference call with top 40 Fortune 500 chemical distribution company Open to cGMP production of our potentially proprietary precursors Interested in developing a general “plug-and-play” cassette Would allow implementation of our methodology and precursors for any radiochemistry module Important for FDA compliant production of any drug used in patient diagnostics Face to face meeting with Director of Business Development of a leading drug discovery outsourcing company Discussed preclinical studies and contract manufacturing of proprietary intermediates - Face to face with former Director of Chemistry of major pharmaceutical company - Significant interest in general methodology application to proprietary compound syntheses 62
- 63. » Initially seeking to market method technology -too diffuse, but many opportunities (i.e. product-driven opportunities more than general technology-driven) » Need to identify specific imaging product opportunities » Validated hypothesis for immediate need of tracers » Raised question on identity of lead compound pipeline for Parkinson’s disease » Recruited two potential partners for clinical trials 63
- 64. Approximately 2.2 million procedures in the US. Drug costs range from $700 (on-patent) to ~$150 (generic FDG) US sales of radiopharmaceuticals for PET and SPECT $1.2 billion US sales expected to grow to $6 billion by 2018 Global numbers approximately 2x 64 Source: Bio-Tech Systems Report #330; data for 2010.
- 65. 2500 installed PET scanners PET radiopharmacies cover the entire US market Radiopharmacies have an interest in proprietary agents as a basis of competition in their market. 65
- 66. Neuroblastoma Parkinson’s Disease Prevalence: about 6000 US cases DatSCAN sales in Europe ~$100 M about 1000 new cases per year The world's highest recorded Subjects receive 3-6 images/year prevalence of Parkinson's Disease of to follow response to therapeutic protocols any region is in Nebraska, with 329.3 people per 100,000 population World market at U.S. x 2 gives potential of 40,000-70,000 scans/year US – 600,000 patients 1 scan per year @ $500 = $300 M Drug costs $500/per gives ~$20 - $35 M 66
Editor's Notes
- #5: 25