Reinventing the Pharmacy of the Future 

Challenge

A compound pharmaceutical startup was referred to GrowthLab via a local university’s business program. The founders were technical experts but needed help articulating their business model, their market, and their go-to-market strategy to convince investors that they had a large enough market to build a viable, venture-backed company. They raised funding, produced prototypes, and sold 20 units. Now, they were looking to go-to-market and raise additional funding to outsource manufacturing, fund sales, working capital, and marketing. GrowthLab was brought on to help with articulating their mission, vision, and strategy effectively to investors and capital providers. 

Solution

We worked with the company's two founders, while they transitioned their project from the university accelerator to the mainstream market. Together, we spent numerous hours with the founders in front of a whiteboard, helping articulate their product, market, go-to-market strategy, and capital needs over the next 5 years. 

Their market is very defined but the total addressable market (TAM) was often looked at by investors as being too small. GrowthLab helped the founders identify ways to expand revenue within the TAM, as well as rethink the value exchange with customers by focusing more on driving revenue through volume based methods rather than focusing on equipment purchase. The company’s revenue model initially focused on the sale of equipment followed by sale of disposables required to run the machinery. Within a constrained market like compounding, equipment sales hit a plateau relatively quickly. By considering a licensing model, the company's capital needs increased (the equipment stays on their balance sheet), but their customer lifetime value (LTV) increased significantly. In addition, GrowthLab helped the founding team explore what they ended up calling a “virtual pharmacy” by building a central web-enabled manner of capturing prescriptions and sending them to partner pharmacies. 

We used whiteboards, excel models, and a lot of market research when working with this company. Using our 10 step approach to business modeling, we were able to define what their product is, and what other ways they could monetize that product.

Results

The founding team was confident in their ability to drive a venture-backed business from startup to scaling within the compounding industry, by changing the value exchange with the customer, as well as identifying new products/ markets to expand into. The company is continuously growing and focused on using their fundraised capital to further penetrate their target markets.

Check out how GrowthLab has helped another Health company!

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice.