Originally Published MX January/February
2002
ADVERTISING, DISTRIBUTION, & SALES
Leveraging PR
to Support Medtech Start-Ups
Blended into planning at the right time and in the right way, good PR can help catapult a company from start-up to stardom.
Sandy Bodner and Steven Immergut
While
mature companies, large and small, may have different ends in mind, the foremost
PR goals for medtech start-ups are usually survival-related. The two standard
goals for such companies are to raise essential capital and to attract potential
R&D and marketing partners. In a best-case scenario, good PR can make a
significant contribution to achieving both these goals. It can catapult an unknown
company into the public eye—and provide validation for an early-stage technology
—in a virtual instant.
For medtech start-ups, the public relations ingredient serves as catalyst of
the marketing mix. But PR works best when introduced at the proper time in the
right way. This article discusses how and when PR can best help a medical technology
start-up company, and explores nuances of the field that companies may encounter.
Along the way, this article considers what types of rational expectations start-up
companies should have for their PR programs, and what PR planning can (and shouldn't)
do on its own.
Great PR Gambits
Most medical technology
veterans know at least one fantastic start-up PR story. The good stories encourage
repetition, so the great gambits are well known. The prime tales go something
like the following.
A start-up is desperate to close a new round of financing. It has $1.8 million
in the bank and a burn rate of $300,000 per month. Its technology is genuinely
exciting, but if something doesn't snap in its favor, the venture will be history
within six months. Then the white knight appears. It's not a venture capitalist
or an R&D partner; it's a news article in the Wall Street Journal, Business
Week, or a similarly credible publication. Within 30 days, the company closes
$20 million in financing.
This scenario, drawn from real-world composites, sends a simple, unmistakable
message: PR is important. What can be easily forgotten amid such big-money stories
and popular understanding of PR as mere "spin doctoring" or "image
management," is the fact that behind every good PR story there is an agent
hard at work.
At the moment of impact, the PR planning component is normally invisible. Good
PR—whether it is expressed as forging key relationships, garnering high-profile
media coverage, flawlessly executing an IPO, or coordinating a smooth and compelling
CEO presentation—requires many different elements to form a cohesive and
moving story. But few people outside the field understand the effort it takes
to generate great results. This aura of mystery is further complicated by a
wide absence of consensus on how to measure results.
The forces that drive successful PR collaborations with well-managed medical
technology start-up companies are timing, teamwork, and know-how. By looking
closely at these driving forces, this article examines how they can be combined
to create a successful outcome.
Timing
For a start-up
company that must balance limited funds against pre-FDA approval milestones
and the need to enhance corporate reputation, the question of when to bring
in a PR team can be a tough one. But if the company takes a quick inventory
of its intellectual assets (talent, peer-reviewed science, etc.) and finds that
the proverbial cupboard is almost bare, then it's not ready for PR. If
PR is to be an effective catalyst, certain assets are minimum requirements,
as described in the following sections.
Phase I. A first step toward determining whether a start-up company is
ready to adopt a PR plan is to take stock of the company's assets. Following
are five prerequisites or milestones that should be achieved before undertaking
a PR plan. For optimal results, a firm should not proceed to Phase II until
all five assets are firmly in place.
- Business Plan. To move out of the starting gate, the company's plan must demonstrate its ability to attract followers.
- Start-Up Management Team. The average skeleton crew for a start-up is two to four people. A strong track record and credibility are essential qualities.
- Top-Flight Clinicians to Form a Scientific Advisory Board. An advisory group of professionals is much more likely to tell a management team what it needs to hear (but perhaps doesn't want to know) than a single individual operating in a part-time consulting capacity.
- Initial Round of Financing. Financing is validation-plus.
- Technology with Demonstrated Proof-of-Concept. The final, most important checkpoint is positive preliminary data.
Phase II. When a start-up is ready to begin building its reputation, it must clearly communicate its mission to stakeholders and key target audiences. Scanning each of the communications elements identified below, medtech executives should consider how all of these initiatives can work together. A carefully orchestrated program that leverages these six components cohesively can help a start-up realize its commercial goals.
- Corporate and Brand Identity. The firm must clearly articulate the market need, identify a point of competitive differentiation, and be relevant to its target audience on a level that meets both rational and emotional needs.
- Web Site. For a start-up, the Web site is the point of entry for audiences seeking information, including potential partners, investors, and even prospective employees. A polished Web site can set the tone for building a corporate reputation and forging relationships with key stakeholders.
- Media Strategy. The media are frequently the main vehicle for delivering a PR message. Yet many start-ups fall victim to seeking exposure via a "press release du jour" strategy. A solid media strategy puts impact ahead of exposure merely for the sake of being known. It is easier, but perhaps less meaningful, to issue press releases for every new hire, for example, than to develop a well-conceived comprehensive media strategy pegged to clinical milestones and linked to an overarching objective.
- Spokespeople. Once the company's message has been developed, who will deliver it? For start-ups, access to the founder or CEO as a primary corporate spokesperson is essential for building a corporate reputation. Other key internal spokespeople to recruit and train include the directors of R&D and medical affairs. Independent spokespeople—a foundation of third-party validation—include lead clinical investigators and patient and professional advocacy leaders.
- Road Shows. An experienced PR professional can help polish a presentation for investors or prospective partners. Such training is intended to help presenters understand when top-line messages are being communicated clearly.
- Corporate Communications Kit. A fundamental portfolio of information should include a company overview, technology backgrounder, an interview with a clinical authority, clinical abstracts, photographs or illustrations, and biographies of the management team and scientific advisory board.
Teamwork
The right way to
introduce public relations in a start-up company is to ensure that communications
directors and outsourced PR representatives are integrated members of the planning
team. Great PR campaigns are not born in a void; like other elements of the
mix, successful outcomes depend on careful preparation and planning.
As an agent driving public opinion, PR thrives on access, immediate response,
and cooperative planning; these are cornerstones of the business. Fully integrating
the PR team is the best way to help its members understand the company's
priorities and to monitor the PR program's progress. Executing a campaign
successfully relies upon regular communication, facilitating access to top management
and clinical investigators, and including the team in key strategic planning
meetings.
Know-How
Successful PR campaigns
almost always involve some kind of third-party validation that helps the medtech
start-up reach its ultimate goals (e.g., raising money, attracting partners,
conditioning the market, addressing unmet clinical needs, updating clinical
guidelines). At the end of the day, however, every start-up needs to have something
to show for the money it spends on PR. Consequently, the optimum PR vehicles
will almost always be forced to prove themselves again and again by breaking
through the clutter to reach multiple stakeholder groups, including investors,
physicians, media, and patient and professional advocates.
A quick look at the example of one start-up reveals some of the key elements
of an effective awareness campaign. Deliverables included a set of press materials
that were simple yet comprehensive enough to cross-pollinate all of the start-up's
key target audiences. The press kit included background information about the
company and its technology, an interview with the founder, and an elegant photograph
of the company's highly unusual DNA diagnostic platform.
There was sufficient information in the package to provide content for the company's
Web site, which served its purpose quite well. After a story about the firm's
"gee-whiz" technology appeared in a national business magazine, potential
partners from all over the world contacted the company—many via the Internet.
Within two months, the firm closed an additional $7 million in financing.
This example suggests how the communications strategy was executed, why it became
successful, and what constituted success. The campaign helped the company raise
money and generate partnership interest. It also generated powerful third-party
validation from the magazine that ran the story and the experts who were quoted.
This kind of validation is not exclusive to the media. A company's technology
and business acumen can also receive effective validation by attaining private
equity or venture-capital financing, or by an R&D partnership or contract
with a well-known corporation.
Rational Expectations for Success
All winning PR
programs have at least three qualities in common: strategic insight, creativity,
and delivery. These are the earthbound elements of the PR trade that must be
provided with no surprises—on budget, on time, as promised. This is what
a start-up company is buying from a PR agency. If there is an extra intangible,
indefinable something such a company is seeking from an agency, it's the chemistry
they create together, and perhaps a mutual sense of trust.
However, the effectiveness of a PR campaign is ultimately measured by whether
it helps to validate the company's credibility and enhance its corporate or
brand value and reputation. Any measurement of success must always be based
on a set of rational expectations. Companies can help to ensure that their campaigns
achieve measurable success by avoiding the pitfalls discussed below.
Too Much of a Good Thing. Some public relations campaigns become hugely
successful, taking on a life of their own that may exceed even their creators'
expectations. Such campaigns can eventually come to be considered too much of
a good thing. In some instances, "too much" is not really an issue
of proportion; it applies to overemphasis of a mass audience at the expense
of a specialist audience that acts as the gatekeeper for the technology.
Here's a classic example of a strong campaign going too far. A start-up leverages
sustained media coverage to drive awareness of its technology among the general
public. The exposure helps increase the company's stock price and creates a
rapid demand for the technology among early adopters. Everything seems fine,
until sales suddenly hit a ceiling that the company cannot penetrate.
What went wrong? Going directly to the consumer can be an extremely attractive
PR approach; it can help a new technology climb the acceptance curve and positively
affect a company's stock price. However, such an approach can also alienate
the gatekeepers—the specialists at top hospitals who, not coincidentally,
are also the leaders of medical societies whose support is critical to amending
practice guidelines. Genuine success for a medtech start-up means gaining acceptance
without alienating clinical gatekeepers along the way.
Misdirected Media Strategy. Seemingly unaware of the astounding number of
press releases issued every day, many companies implement media-relations programs
that treat information like a commodity. The major electronic databases that
companies pay to distribute such announcements do their job so well that hundreds
of releases are filed every day. However, reporters at several media outlets,
including USA Today, have stopped giving out their fax numbers because press
releases have turned their fax machines into rivers. Who reads all these press
releases?
Many such communications aren't really press releases at all. The information
may be more appropriate and meaningful if delivered in a more personalized style,
perhaps as letters or announcements sent directly to stakeholders. By contrast,
press releases should be reserved for announcements that are literally of interest
to the press—such as the achievement of milestones related to clinical
studies or information adding to knowledge of a therapeutic category.
Conclusion
In an industry
of new, disruptive technologies that may require changes in practice patterns,
reimbursement models, and new CPT codes, which of these challenges can PR impact?
The short answer is that PR can impact parts of each challenge by helping the
start-up develop and deliver the right messages to the appropriate audiences.
PR is a way for a start-up medtech company to sort, combine, and recombine messages—all
in a manner consistent with the company's core positioning. It acts as a catalyst
for action, combining many ingredients and turning them into a cohesive whole.
It enables start-up companies to discuss many different elements of their business,
thereby creating a cohesive package that preserves the integrity of each component.
As a mechanism for action, PR can either turn into something greater than—or
less than—all of the elements it is meant to combine. By carefully managing
their use of PR techniques, start-up companies can ensure that they achieve
the greater potential.
Sandy Bodner
is vice president for professional relations at Lehman Millet Inc. (Boston).
Steven Immergut, MPH, is managing partner and director of client services at
Health!Quest Public Relations (Metuchen, NJ). Lehman Millet and Health!Quest
Public Relations are Health!Quest Global Communications Partners companies.
Illustration by Tim Webb/Laughing Stock.
Copyright ©2002 MX
