All companies want to be market leaders. For incumbents, the perceived cost and risks of changing a successfully established business can outweigh the apparent benefits of innovation.
By contrast, smaller and younger companies, with no existing business to defend, have every incentive to innovate and disrupt. Benefiting from a highly focused purpose and a passion to create something new and different, startups are free to apply unconstrained thinking to innovate novel solutions and pioneering technologies.
The kidney dialysis sector is a model study for the David vs. Goliath story. Dialysis—whether it is administered in the clinic or at the patient’s home—is a life-sustaining therapy for patients with kidney failure.
Although dialysis does not cure kidney disease, it provides a replacement for lost kidney function by filtering out toxins and removing excess fluid from patients.
Hemodialysis, by far the most common form of dialysis, involves filtering the blood, typically three times weekly through a four-hour treatment session at a dialysis clinic in a process most patients will endure for the rest of their lives.
This care delivery model has three shortcomings. Firstly, it is burdensome on patients’ schedules. Secondly, clinical dialysis is a very expensive, labor-intensive therapy, and, thirdly, outcomes are suboptimal, as dialysis three times a week for four hours is a poor substitute for the continuous function of a healthy kidney.
Dialysis has been available to patients with kidney disease for decades and has evolved into a static market dominated by a small group of market leaders. During this time, innovation has been slow, with the practice of dialysis hardly changing over the past 20 years compared to other medical fields.
Despite the lack of innovation in this sector, there is one area where patients have benefited from the initiatives of a few, small visionary companies who have developed advanced home dialysis solutions providing tools that allow more patients to receive dialysis in the home.
New entrants into the dialysis market, like Quanta, understand the competitive challenges facing them. To succeed, we must establish strongly differentiated market positioning with compelling value propositions for providers, physicians and their patients.
Kidney patients want a different and improved experience: one that gives them greater autonomy when it comes to receiving treatment and the flexibility to choose where to undergo dialysis, either in the clinic or at home. Of course, changing entrenched practice takes more than wishful thinking and promise.
In Quanta’s case, we have successfully attracted the best engineers and experts across a range of specialties to create a novel hemodialysis system that uniquely combines high performance, a small form factor and simplicity of use into a single device.
It’s a familiar market dynamic: Emerging upstarts trying to establish their market position alongside incumbent market leaders, often by focusing on neglected “niche” segments in a staid industry. These innovative Davids—operating on a shoestring budget but animated by an unwavering commitment to their purpose—strive to secure their place in a field of Goliaths. Patients have everything to gain.
John Milad is CEO of Quanta Dialysis Technologies, where he was both a founding board member and an original investor through NBGI Ventures.