Case Study - Heartstream

Client Situation.

In 1994 Heartstream was only a burgeoning idea conceived by a small group of engineers from Eli Lilly who believed that there was a better way to build and deploy defibrillation technology to save more lives. They believed that defibrillators could be built more compactly, with more advanced and automated technology, and that they could be deployed for use by everyday, non-medical people (AED or Automatic Electronic Defibrillators). However, they had no data to support their hypotheses or insights about how to reach their potential market.

Challenges.

  1. Heartstream was a new upstart, with no reputation, no completed products, no sales, and with a desire to create a completely new market.

  2. The market for defibrillators had long been limited to trained professionals and those organizations that could afford the high equipment costs. Exploring new markets for Heartstream meant exploring a new market for anyone who might choose to sell similar products.

  3. Defibrillators were unknown to most people. The additional challenge of educating the market before even gauging their reaction to the product was a dominant theme.

  4. The research would have to be based on cold-call interviews. No baseline market existed.

Lighthouse Role.

Ultimately, Lighthouse developed a market research study and provided strategic market analysis to solve Heartstream's needs. The following steps were taken:

  1. Conducted initial secondary research. Lighthouse began by collecting publicly available information relevant to Heartstream's product and market. A regulatory analysis, market trend assessment, and potential market sectors study were completed. This offered the client a framework through which to better understand the challenge ahead of them as well as a shortlist of issues and areas to watch and manage, before and after entering the market.

  2. Interviewed subject matter experts. Lighthouse sought the expertise of others on the topic, both in understanding the current and the potential market. This included interviews with trade associations, regulators, potential competitors, and companies with complimentary products or sales channels.

  3. Conducted customer interviews. Finally, Lighthouse went straight to the source and interviewed potential customers for the product. Emphasis was placed on large corporations with in-house medical resources, companies with strong profiles for potential use of the technology, professionals using the current technology, and insurance companies.

Successes.

Lighthouse delivered the following value to its client:

  1. Knowledge of a market that the client had only speculated on prior to Lighthouse's work.

  2. Direct access to customers through the interviews that Lighthouse conducted. These interviews established a base of prospective clients pursued by the company at a later date.

  3. Exposure and Public Relations by educating the market on the concept of AEDs through Lighthouse's research.

  4. Hard and compelling data to drive product development and fund raising.

Heartstream adapted both its product development and its market strategy based in great part on the research Lighthouse provided. Heartstream was further able to use this market knowledge and the recommendations Lighthouse provided to shape a successful bid for venture capital. After raising several rounds of capital, the company was later successfully sold. In November 2003, a study was released showing that the deployment of AED (automated electronic defibrillators) into the corporate and industrial markets had doubled the number of lives saved since its introduction by Heartstream. This was further confirmation of the Lighthouse recommendations.

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