Many physician entrepreneurs are offered opportunities to participate in new ventures, either as advisers, cofounders, investors or as part of the management team, but they don’t know what to do next. We all only have 24 hrs in the day, so prioritizing your time and commitments consistent with your personal and professional goals is a priority. But, when faced with a potential business opportunity in biomedicine or bioscience, how should you evaluate and manage your personal research, development and commercialization portfolio and involvement? I’d suggest you do an initial opportunity risk evaluation and mitigation (REM) analysis before taking the next steps.
The process involves four steps.
First, identify the key areas of risk presented by the opportunity . They include:
1. Market risks
2. Intellectual property risks
3. Business model risks
4. Execution risks
5. External environmental risks
6. Legal and Regulatory risks
7. Technical feasibility risks, including IT security risks
9. Financial risks
10. Currency exchange risks
11. Reimbursement risks
12. Geopolitical risks
13. Supply chain management risks
14. Business model risk
15. Macroeconomic risk
Second, once you have identified the risks, then create a mitigation strategy for those that are potential deal killers. For example, is the regulatory approval pathway solid? Will you get paid by third party payers for your product or service? Is your idea patentable and do you have freedom to operate? Is there a technology out there that will put yours along side pay phones and 8-track players?
Third, calculate the potential return on the opportunity using primary and secondary sources to determine the present and future market size, market growth and revenue potential.
Finally, make a determination whether the return justifies the risk and score the opportunity as 1)no, pass on the opportunity since the rewards don’t justify the potential risks, 2) maybe,see whether you need to develop and deploy mitigation strategies that are realistic to justify your participation, or 3) yes,get involved and explore next steps and due diligence. In other words, kill your ideas in the early stages understanding why, fix your idea and explain how or go forward with your idea and decide when.
Most doctors know REM as a stage of sleep where there is rapid eye movement. Physician entrepreneurs know it as risk evaluation and mitigation and never go into the process with their eyes closed.
Arlen Meyers, MD, MBA is the President and CEO of the Society of Physician Entrepreneurs