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Archive for 26 septiembre 2012

Last year an official at the Ministry of Health from the UK, addressing a conference on business developments in technology for disabled and older people said, “I see more pilots in this gathering than in British Airways”. And yes, he hit the nail on the head. For some reason, most developments financed under the AALJP, or for that matter under any other EU program directed at ameliorating the living conditions of older people, have foundered and have never gotten off the ground.

Why is it that most of those ideas that have been found valuable, not only by their promoters but also by the EU agencies in charge of selecting them, have not made it to the market? Why haven’t they become success stories?

The obvious answer can be found in their faulty business models. Answering the typical questions of “What is the real need?”, “How big is the need?” or “Why should this particular product or service come on the market” do not serve our purpose of achieving a successful business model.

“What is the real need?” and “How big is the need?” focuses obviously on needs, and let me say that one thing is “need” and a very different thing is “demand”. People are ready to pay for their demands, whether these correspond to their needs or not. In the marketplace only products or services that meet a demand will have a chance of success, regardless of the real needs of the population to which the product or service is directed.

“Why should it come to the market?” surreptitiously means that there is already a product or service, and we will look to the market for the possible demand. It is a top-bottom driven question. Our investigation should be bottom-up driven. What we should be doing is to ask first what the market demands are and, only then, investigate how to meet the demand with a product or service.

There is a second problem. Most of us assume that the public purse is going to foot the bill of a product or service directed at the older population. This is based on the belief that we can demonstrate that, for society as a whole, our solution is cost effective. What we really mean is that our product or service will save health care services, social care services, families and individuals huge amounts of money and/or time.

But really, who is going to pay? The health care service, the private health insurer, the municipality in charge of social care, the family, the individual, an NGO, who? Because the truth of the matter is that each of the previous possible payers has an independent budget. Why should, for instance, a health care service foot the entire bill for something that is going to save money for the social care services of a municipality that may even be governed by a different political party?

Out of the previous list of possible payers, there is only one that is going to benefit in full from our product or service: the individual. He or she is the only one paying the bills anyway, through direct payment, indirectly via taxes that finance public services, or by premiums that pay for private insurance care schemes.

There is another group that could benefit from a product or service designed to meet the needs of older and disabled people. It is the vast array of providers that cater for them. We are referring to shops, restaurants, entertainment, transportation, and the like. This group, mostly SMEs, could profit by establishing a special bond with the world’s ageing population.

The point is that, given that individuals are the end users of our services and products, we have to be brave and recognise that they will have to pay for it directly or indirectly. If, on top of that, a broad base of providers can benefit from the result of our investigation, we will have the support of other actors interested in paying for their use. Put together the interest and demands of those two big target groups and you will have a success story. That will be the moment to address a simple question “How much would you pay for this?” Needs and cost for the end users and providers, kept in balance, should be at the core of our development strategy and of our business model.

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