Medical devices and disruptive technology: Boston Scientific
When Medi-Tech, the company now known as Boston Scientific first started out, it was little more than a basement workshop. The original founder, Itzhak Bentov, was a brilliant inventor who spoke 11 languages and, with little practical training in electrical engineering, built medical devices in his spare time.
In 1967, Bentov built the world’s first steerable catheter and John Abele, Boston Scientific’s founder, took note. Abele had been looking for a promising start-up, and joined the company with the option to buy Bentov out.
At the time that Bentov invented the core technology behind the steerable catheter, the medical-device industry existed mainly in garages and basements. Surgeons invented and refined devices for their own needs, and these instruments rarely made it to the general market.
Medical devices were a completely unregulated class of products. IMost surgeons were resistant to the emergence of new medical devices, fearing new technologies could eliminate the need for their expertise. As surgeons dominated the medical hierarchy, medical-device companies faced an uphill battle in selling standardized devices to the health-care market.
Medi-Tech was thus faced with the dual challenge of overcoming market resistance to their product and generating sufficient revenue to continue operations until their technology caught on.
How Boston Scientific won over market resistance
Management at Boston Scientific elected to begin an ambitious relationship-building campaign with surgeons around the world. The company targeted innovative surgeons who were interested in using the steerable catheter platform to as a basis for building their own instruments. Through a relationship with one surgeon came the development of a catheter-based instrument for the non-surgical retrieval of retained gallstones, which became Medi-Tech’s flagship product. Medi-Tech then kicked-off a bold public relations campaign that included live demonstrations of the product, establishing Medi-Tech as an educational innovator.
In the meantime, management worked to develop and sell “cash cow” products that could fund growth and allow for further research and development to refine their steerable catheters for other applications. The company invented and sold a depilatory cream used to prepare patients for surgeries, and also marketed detailed cardiac and pulmonary models used by medical students to train for various procedures. These products sold well and Medi-Tech was able to continue to drive product development in their catheter business.
With a partner, Abele tendered an offer to purchase Medi-Tech in 1979. The pair dreamed of building a company that improved health care by championing less-invasive medicine. They were less focused on near-term profits and more interested in pursuing opportunities that would leverage the long-term potential of the steerable catheter as a breakthrough medical-device platform. They named the new company Boston Scientific.
Boston Scientific proceeded to develop an array of catheter-based products for a variety of medical specialties. One of the company’s most significant advances was the discovery of a superior material for the construction of the balloons used with steerable catheters for the treatment of vascular disease. Once they had perfected an offering for the peripheral vascular disease market, management hoped that the company would be ready to transition with more complex products to the much larger cardiac market.
Through a series of strategic acquisitions and a focus on innovative product development, Boston Scientific became one of the world’s leading medical-device companies. It continues to bring life-saving, less-invasive technologies to the medical market.
Key takeaways from Boston Scientific’s story include:
- Accelerate discovery by staying attuned to end-users. Many of Boston Scientific’s successful products are the result of a sentence that began with, “I wish I could….” By paying close attention to the wants of current surgeons, as well as to what instruments surgeons were developing for their own use, Boston Scientific succeeded in gaining unique insight into the functional and design needs of surgeons, radiologists and physicians, winning over influential champions in their market.
- Defeat adoption-resistance through education and relationship-building. Facing a market hostile to new products, Boston Scientific fought hard to overcome resistance to the adoption of new medical devices. Management singled out well-qualified experts to act as their sales agents, conducted extensive worldwide product tours, attended medical conferences with large experiential displays and built relationships with influential and innovative surgeons. The company also rode the wave of increasing public interest in less-invasive medical procedures and took advantage of several public relations coups for steerable catheter technology.
- Build revenues while building core products. Boston Scientific supported research and development operations on its core technology by selling high-margin “cash-cow” products on the side. These much simpler products with lasting market value gave Boston Scientific the financial resources to stay afloat while developing the products that would ultimately become the company’s core business.
Rodengen, Jeffrey L. (2001). The Ship in the Balloon—The Story of Boston Scientific and the Development of Less-Invasive Medicine. Write Stuff Enterprises Inc. Florida.