Medical Device Link.

Originally Published June 2000

BUSINESS PLANNING & TECHNOLOGY DEVELOPMENT

Getting to Endgame

Executive conferences can be just the thing for locating new partners or sources of capital—but to be successful, company presenters have to be prepared to play.

You have a great product idea and the entrepreneurial spirit needed to start or grow a business. You're convinced that your product is marketable. You've convinced others that it is. Those who weren't convinced offered suggestions, some of which you may have taken. Moving ahead, you produced a working prototype. Now what? Whom do you talk to? Where do you go?

For many leaders in medical technology start-ups, the next step is to present the company and its prototype at an executive-level conference. Commonly sponsored by market research or investment banking firms, such conferences offer venues where ventures can meet capitalists to cut deals and make things happen. Throughout the year, there are executive conferences dedicated to prospecting potential partners, mergers and acquisitions, and new investment financing strategies.

Executive conferences aren't merely a clever way of cutting down on airport time. Company executives can accomplish a variety of objectives at such conferences. By drawing together a large number of industry leaders in one place at one time, executive conferences make it possible for companies to reassure investors, identify sources of venture capital, or make contacts for strategic partnerships and alliances. But making the most out of such meetings is another story. To be successful, company presenters have to know what to expect, and must show up prepared to react to all of the possibilities that a conference can offer.

The Players

First of all, you need to know who's going to be there. These conferences commonly attract a wide range of strategic decision makers from medical technology companies, including directors, presidents, chief executive officers, chief financial officers, business development professionals, and strategic planning professionals. Many of these company leaders have their own agendas and objectives, and figuring out how each might benefit your company can be a major undertaking. In general, attendees will fall into one of the following five categories:

• Investors looking for opportunities.
• Companies looking for strategic partnerships.
• Companies looking for strategic mergers and acquisitions.
• Potential partners.
• Companies with new technologies looking for investors.

With such a range of networking opportunities and contacts available, company leaders can usually locate the types of resources that their company really needs—whether those happen to be investment capital, manufacturing partners, or a buyer. The next trick is to figure out how to get the desirable attendees at the conference to respond to your company's proposals.

Round One

The point of presenting at an executive conference is to pitch your company's strengths to qualified prospects. The first step toward doing this is to secure a time slot to make a presentation at an appropriate forum. This can usually be accomplished by directly calling or e-mailing the conference producer. Invariably, the number of time slots will be limited, and they are usually filled on a first-come, first-served basis. If necessary, secure the time slot months in advance. They fill up quickly, so if the conference producer offers a time slot, the company should grab it—quickly.

A company that has secured its time slot will be given a certain amount of time to deliver its pitch. Usually, each company is allotted about 15 minutes. This may not seem like enough time to present a company's entire dream, but it's all that's available. Have no fear. It's more than enough time.

Your company may have prospected before at other meetings, but without positive results. You presented product literature (with terrific pictures!), outlined your business plan, provided your development timeline, pricing, and delivery schedules—and maybe even gave out a CD-ROM about your company. The attendees may have liked your enthusiasm, respected your ideas, and agreed that your product was viable. But they just didn't think that you were the right company.

Don't give up. There are a few tricks of the trade that presenting executives need to know to make the magic happen. You'll need to know what was lacking from your earlier presentation, and you'll need to learn what to say—and what not to say—to get the most out of such executive meetings (see sidebar, below).

Putting the Right Pieces in Place

For some companies, selecting the right presenter for an executive-level conference can be a harrowing decision. One logical choice might be the person who knows the company's technology best, which is usually the person who developed it. Another choice might be the executive in charge of developing the business structure that will support development of the product. Although it may sometimes occur that the product developer and the business executive are the same person, this is not often the case for medical technology companies. Investors know that innovators with the ability to conceptualize new products rarely possess the other skills necessary to develop a business structure to support those products.

Although companies should always be represented at conferences by a member of their executive ranks, ultimately the decision about who should represent the company and its product should be based on the company's objectives in attending the conference in the first place. A company that is seeking mezzanine funding has very different objectives from one that is seeking the interest of a manufacturing partner, and each company's choice of presenter should differ accordingly. But in every case, the presenter must be someone who can inform and motivate—someone capable of remaining completely focused and delivering the company's ideas smoothly while under intense pressure (see sidebar, below).

Those attending executive-level conferences want to develop relationships with companies that can offer a win-win proposition—but such companies will need convincing. For this reason, the shape of a presentation at such a conference is crucial. The presentation must be carefully thought out, the transitions from topic to topic must be smooth, and the content must be objective and analytical.

Actually, delivering such a presentation is a lot like playing chess. The company's presentation is a planned strategic attack where every move counts. But to be considered worthy players, companies need to demonstrate that they have all their pieces in the right positions. At a minimum, conference attendees who are interested in doing business with your company will be expecting to hear the following five types of information (see sidebar, below).

Product and Market Viability. What investors are looking for here is proof that the company's device is marketable. The company must explain how its device works and who will benefit from it. This is the time for the company to prove to attendees that the product is marketable and that there is a market for it. This is also the time to show off all the applied research the company has done to substantiate its marketing research: the product description, market analyses, purchaser surveys, lists of prospective buyers, beta test results, and so on. Be sure to make the results visually appealing; no one has ever complained that a company's pictures, graphs, or charts were too pretty. Other important criteria that a company can use to demonstrate the effectiveness of its marketing program include the following.

Measurability. The measurability criterion projects the degree to which the size of a product's market can be measured. In this context, the company must identify and define the sector of the marketplace its product is intended to penetrate. It must also demonstrate how its product's "bigger and better" or "new and improved" characteristics will enable it to capture a measurable share of that market. Segmentation data to support this aspect of a product's market viability might include demographic, geographic, and psychological profiling.

Accessibility. The accessibility criterion of a company's marketing efforts measures its capability to effectively market and deliver the product to the defined market segment.

Profitability. The profitability criterion indicates whether the defined market sector is large enough to be worthwhile. This is the place for the company to explain why there is money to be made in marketing its product, using hard market information and analyses and emphasizing its own competitive strengths.

Stability. The stability report needs to show that the product will be marketable in the future. Once again, the company should make use of relevant demographic and geographic projections to demonstrate stability over a defined period of time, or to indicate potential changes in product marketability over time.

Executive Capability and Reliability. This phrase refers to the abilities of the company's management team. This information should not be merely a rehearsal of the company's history or of its executives' backgrounds. Instead, the company should emphasize its track record of success. Whenever possible, all of the following five areas should be addressed as indicators of the company's executive leadership skills.

Management. The company should affirm that its team has the ability and fortitude to carry projects through from inception to completion. Use examples to demonstrate that the team has the creativity required to conceive of awesome objectives and the management skills necessary to deliver the product—on schedule and within budget.

Sales. Show them the money. This is a good place to let conference attendees know that the company's executives have the business savvy needed to identify and complete favorable transactions.

R&D. The company should stress the abilities of its product designers and engineers to employ the latest design resources and to develop products that create added value.

Production. Conference attendees will expect the company to demonstrate that it can efficiently design and produce a quality product at the lowest possible cost. The company should have appropriate cost projections close at hand.

Marketing. In the eyes of conference attendees, a company that doesn't have marketing doesn't have a product. This is the place for the company to demonstrate demand for its product and to confirm the ingenuity of its management team in creating, uncovering, or exploiting profitable opportunities.

Investor Motivation and Performance. A company's stakeholders include every person who has given time or money to help the company get where it is. One major function of executive-level conferences is to reassure such stakeholders—especially in the lean times, when a company's burn rate can often seem to exceed its potential for profitability. For these attendees, the company's presenter needs to affirm that the company's plan will ultimately be successful. The presentation should also be specific about how the company will reward its continuing stakeholders.

In other words, this is the pep-talk part of the company's pitch. It is the place where the company can emphasize its experience, capability, and determination, and describe its goals, business plans, and development strategies. By the time this pep talk is delivered here, the company's chief executives will probably have delivered it so many times before friends and family that it sounds rehearsed. It should. The pep talk should stimulate interest in the company's ideas and make the audience remember them. It should emphasize the company's strong points, including its capitalization, investors, and personnel. And it should show off the leadership capabilities of the presenter.

Exit Strategy. This term refers to the big picture for everyone involved in the company. When a company is seeking investors, staff, sales, and companies to support and grow its business, it's important to communicate how those stakeholders will be let out. Stakeholders need to know, for example, whether the company intends to make the transition from a privately held company to a publicly held one. Will the company allow itself to be bought out? Or is the plan to simply go out of business one day?

Although these are difficult questions, the company owes it to stakeholders to consider them in advance. The company's exit strategy will affect everyone—suppliers, customers, shareholders, investors, contract manufacturers, and company personnel—and all of them will need to know the company's strategy for the future so that they can plan their own. A company whose exit strategy is not thought out or presented clearly is unlikely to attract many new stakeholders.

Risk and Reward Analysis. The decision to enter into a merger, acquisition, or strategic alliance is one that can weigh heavily on company executives. Accordingly, companies that entertain such proposals weigh their risks and rewards rigorously. At executive conferences, company presenters must offer clear definitions of their firms' investment or partnership possibilities. What the audience is looking for is a concise description of the rewards that can be achieved and, more importantly, the risks associated with reaching those rewards.

Of course, this concept is true for both parties. Presenters must also be listeners, and they should carefully evaluate the potential for risks and rewards offered by other conference attendees.

Simply stated, potential associates have a need to understand what they are getting into. Presenters should cut to the chase and relate the hard facts. This is not the time to engage in banter or present graphs or charts. Attendees want to know what they can possibly gain—and what they might lose—by doing business with the company. If the presenter can effectively communicate to the audience that the potential gains outweigh the potential losses, then the battle is half won.

Checkmate?

The information that company leaders provide to attendees at executive conferences constitutes the essential game pieces needed to play the board. Properly presented, this information will set the company well on its way to cutting a deal. But if you can muster only four out of five, forget it. In today's competitive market, with so many companies and ideas chasing funding, players at executive conferences are unlikely to pay much attention to a company that can't put all of its pieces on the board. Game over.

A company that has managed to put all of its pieces together can continue playing with a reasonable expectation of success, but company executives should also keep in mind that their deal-making doesn't end at the conclusion of the conference. Even with all of its pieces in place, a company has really only demonstrated that it should be considered a worthy player. After other firms express interest in the company, the next step is to seal the deal—a task that will challenge executives to be assertive and engage their ability to think critically (see sidebar, below).

Being ready to play at the conference is the first step that a company should take toward achieving its goals. But if the game seems won there, remember that the next game is played on a different board.

Erika D. Brown is the marketing and public relations manager for the Internet and conference division of Frost & Sullivan (New York City).

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