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Reproducing here, my column for

Last month, we talked about the various kinds of startup entrepreneurs and their approach to business. We will now examine, via case studies, the most common mistakes that start-up entrepreneurs make. Here’s the first one:

Problem:  Selling to the wrong customer

This client, hereafter referred to as Plasma had an offering in the healthcare space.

As a part of his extensive, hungry travels, Plasma’s founder, Raj, had chanced upon a technology in Scandinavia that offered a full body scan. This was commonly used as a predictive tool- information about the patient on certain conditions that may cause future problems.

Raj was aware, that a full body scan cannot be used as a substitute for standard medical checkups. It was at best a complement to a regular ‘health check-up’, to provide the doctor with a better, more complete picture of your overall health.

1. Plasma approached radiology clinics with a view to sell these machines. Most radiology clinics, are themselves run by aggressive entrepreneurs. They were clear that if a machine was available, they could buy it too.

2. Plasma then proposed to develop a protocol around the scan machines, with the help of experienced doctors and provide the machine and the protocol to hospitals as an additional service. Hospitals refused on the grounds that patients would not opt for it.

3. Raj then opened its own clinics, called “Plasma” with specialized protocols around the machine. Raj felt that his “cardiac scoring” product was a winner- he could be able to tell someone that they had a cardiac risk 10 years down the line. They advertised, called themselves “your personal health predictor” targeted the HNI, ands spoke about predicting predisposition for cardiac scoring (presence of calcium in the artery) and lung screening for cancer. There were takers. But they needed more to be able to break even on the 10 machines installed in 10 different locations.

Raj realized that unless he hit the hammer on numbers, there would only be a trickle of elite interested patients, who would be interested. A validation of this was that clinics located in upmarket residential localities had more patients. Yet, for his 10 clinics to break even, he needed better footfalls, tie-ups etc.

“There is no product that does what mine can do, said Raj, Other imaging techniques in the market cannot do what my machine can do, and are not as safe as my machine is”- pitch after pitch, healthcare professionals heard Raj out and politely told him “we will get back to you”


Raj had a good product. He was trying hard to figure out which customer really needed his product.

While there were “communities” of people engaged in active self-monitoring, and these were the first adopters of the product, the word-of mouth proliferation of the idea was taking time.  He needed a way to find more such communities.

Raj’s machines had cutting edge technology. Their radiation levels were much lower than other machines in the market. His accurate cardiac scoring had started making waves. He was prescribing healthier lifestyles.

He needed to find a hook for someone who gave him 10000 patients at one shot. Or so he thought.

Raj explored the full range of services that the scan machines offered. He had suppressed some functionalities of the machine, in order to find a focused way to market it. That way, he had to train fewer people to operate the machine.

His low dose x-ray scanning could detect musculoskeletal, endocrine, and prostate and ovarian disease as well as tumors, aneurysms, osteoporosis, hernias, and kidney and gall stones. Was he underselling his product?


What was the one category of business who would benefit most from knowing how pre-disposed an individual was to cardiac and cancer, and other very expensive treatments? Will this category demand a steady stream of scans, as opposed to sporadic needs?


Plasma needed repositioning.

Plasma’s tagline was “your personal health predictor”

Three years into existence, and with negative responses from a 63 hospitals and doctors and radiology clinics, Plasma branded itself anew as a tool for “health risk assessment”.

Plasma was able to approach insurance companies. Insurance company managers had targets of their own, “we are bleeding. We have been told to bring down claim ratio to 30% of present levels in the next two years. The problem is, we don’t have the tools to calculate risk accurately.”

While the rest of the world was looking as “plasma” as a cost, here was a sector that was looking at Plasma as a “benefit”. In all businesses, this is almost always the tipping point.

The insurance company gave Raj a list of the top 10 expenses they incur in claims. Plasma realized that its scan could add value on predicting all of them. This, in conjunction with a basic test like the blood test, could change the way insurance companies calculated the premium they would charge.

Plasma had finally found a “market need” that it could solve. With three big insurance companies under its belt, Plasma was able to bring clients into its clinics.  This further spread the word on its safe technology and protocols, and gave rise to fresh communities who were interested in self-monitoring.

Summation: A state called the “thinking trap” can be our most basic flaw

Raj was basing his assumptions on various thinking traps, the most basic one being “all or nothing”. If it’s a healthcare product, then obviously hospitals and clinics would have the need for it. Better still, patients directly. The interdependence of various industries today is well-known. The solution may lie in an ancillary or affiliate industry, that we have not given thought to at all.


If you want to shoot, shoot! Don’t talk.

good bad ugly

If you want to shoot, shoot! Don’t talk.

This line in the cult western classic, “the good, the bad and the ugly” encourages you to do what you need to do in the moment- “position your brand and service” sharply, as opposed to “talking about it”

What is the current market problem? Does your product or service solve the problem? Have you managed to make your customer see it?

In the 1990s, “fair and lovely” was a product that would “make you look better and get a better husband.”

Today, with changing times, “fair and lovely” is a product used by many women, “to feel better about themselves (self-confidence).”

From wanting a “better husband” to “wanting a better life, where family and career were both important” Fair and Lovely has positioned and re-positioned itself to be relevant.

While some of these could have been “their own realizations”, some were prompted by aggressive competition that communicated better. Learning from the customer, and learning why the customer is responding to competition, is always a good thing in business.

Positioning your product or service is “precision communicating”. Such precision communication requires homework. Truckloads of it! Such as-

  1. Observing customers when they interact with your product/service.
  1. What were they seeking, to the exception of all else?
  1. Out of the 10 attributes present in your product/service, were there some they didn’t even notice? What is the dead cost of those features?
  1. If there is an existing product in the category, is it doing better or worse than you and why?
  1. What are the established prejudices in your industry that you have to be aware of? Have you done something about it?
  1. Is your pricing compatible with the customer you feel is your TG?
  1. Is there another way to fulfil the same need, without paying the price you’re asking for?
  1. Do you learn from the customers who’ve accidentally discovered what they like about

your product?

  1. Are you using this learning to help more customers discover your product?
  1. Is your business about scale or about service? Volume or specialization? Do you need to be available at more accessible points or with more enhanced service proposition in fewer locations?

Put pen to paper and ask yourself these questions.

Positioning can be developed consciously, but oftentimes develops through trial and error and the natural evolution of a business. Understanding your business’ positioning is vital, and is the baseline for strong marketing strategies and execution, and in the end will determine the success or failure of your business.

Whether you are a small corporation or large, your product talks to your customer. Guiding this conversation is the key. The words and creative concepts you use, create an image in the mind of the consumer, which is pre-coloured by 4 billion years of evolution. Make sure you contribute to creating the right image.