How do you change a company from being focused on R&D partners and subcontractors to one that now has to listen and cater to the needs of the customer?
The answer begins with the complete understanding of the two remaining and critical phases that now remain:
Phase 1: Series A financing to support the critical business milestones leading up to early strategic sales and commercialization
Phase 2: Series B financing leading up to and positioning the Company for a strategic exit (either an IPO or an M&A deal).
These last two stages are the most critical in value growth. Whereas the first four phases may result in a “tech value” of “$20-25 million, the last two, if properly executed, could catapult the value of the business to 10 to 20 times that amount. Start-ups with this potential are the ones that VC’s are constantly looking for!
Although I have always said that any successful start-up needs to start with a clear understanding of a customer unmet clinical need, it is the execution of the commercialization process where the rewards can be achieved many, many times over.
Transforming your start-up from a technology and product development focus to one that places customer demand and happiness at the core is easier said than done. Nothing kept me awake at night more at CryoCath than this transformational process, and nothing challenged me more.
By the time that CryoCath was ready for this process, over five years and $15 million of R&D money had been spent. We had close to 80 employees that were used to spending money, but not making it. Just generating the first customer invoice was an incredibly exciting but challenging activity! The concept of “customer service” was a new and very foreign role that required lots of teamwork and training.
We’ll look at the financing stages more in-depth in the coming weeks, but as you approach these last stages – and in fact well before then – it’s worth keeping in mind that ultimately, the customer is central to everything you do.