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Due
Diligence
Client: Heartstream
In 1994 Heartstream was only a burgeoning idea conceived by a
small group of engineers from Eli Lilly who believed that there
was a better way to build and deploy defibrillation technology
to save more lives. They believed that defibrillators could be
built more compactly, with more advanced and automated technology,
and that they could be deployed for use by everyday, non-medical
people (AED or Automatic Electronic Defibrillators). However,
they had no data to support their hypotheses or insights about
how to reach their potential market.
- Heartstream was a new upstart, with no reputation, no completed
products, no sales, and with a desire to create a completely
new market.
- The market for defibrillators had long been limited to trained
professionals and those organizations that could afford the
high equipment costs. Exploring new markets for Heartstream
meant exploring a new market for anyone who might choose to
sell similar products.
- Defibrillators were unknown to most people. The additional
challenge of educating the market before even gauging their
reaction to the product was a dominant theme.
- The research would have to be based on cold-call interviews.
No baseline market existed.
Ultimately, Lighthouse developed a market research study and
provided strategic market analysis to solve Heartstream's needs.
The following steps were taken:
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Lighthouse began by collecting publicly available information
relevant to Heartstream's product and market. A regulatory analysis,
market trend assessment, and potential market sectors study
were completed. This offered the client a framework through
which to better understand the challenge ahead of them as well
as a shortlist of issues and areas to watch and manage, before
and after entering the market.
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Lighthouse sought the expertise of others on the topic, both
in understanding the current and the potential market. This
included interviews with trade associations, regulators, potential
competitors, and companies with complimentary products or sales
channels.
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Finally, Lighthouse went straight to the source and interviewed
potential customers for the product. Emphasis was placed on
large corporations with in-house medical resources, companies
with strong profiles for potential use of the technology, professionals
using the current technology, and insurance companies.
Lighthouse delivered the following value to its client:
- Knowledge of a market that the client had only speculated
on prior to Lighthouse's work.
- Direct access to customers through the interviews that Lighthouse
conducted. These interviews established a base of prospective
clients pursued by the company at a later date.
- Exposure and Public Relations by educating the market on the
concept of AEDs through Lighthouse's research.
- Hard and compelling data to drive product development and
fund raising.
Heartstream adapted both its product development and its market
strategy based in great part on the research Lighthouse provided.
Heartstream was further able to use this market knowledge and
the recommendations Lighthouse provided to shape a successful
bid for venture capital. After raising several rounds of capital,
the company was later successfully sold. In November 2003, a study
was released showing that the deployment of AED (automated electronic
defibrillators) into the corporate and industrial markets had
doubled the number of lives saved since its introduction by Heartstream.
This was further confirmation of the Lighthouse recommendations.
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Case Studies:
Due Diligence...
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