If you’re too young for the cultural reference, Opportunity Knocks was an early TV talent show. With its selection of second rate comedians and third rate singers it set a pretty low standard, yet today’s talent shows seem to struggle even to match that.
Opportunity Knocks also sums up an interesting conversation I had following my previous post, in which I warned digital health companies to be very careful before committing to a pilot with the NHS. One key point I made was don’t do free pilots unless you understand and are comfortable with the cost and the opportunity cost and in the absence of money you can extract some other value from the pilot.
A company I know is considering a free pilot and wanted a second opinion on their thinking, so we talked about the value to them and the opportunity cost.
The main benefit of this pilot will be the chance to develop a relationship with a key clinician and her team. Relationships are critical and this could easily be a compelling reason to complete a pilot, but you do need to do your homework.
I helped them to think more deeply about how the relationship would eventually generate value for their business and about whether it is the right relationship. In particular, I asked “Why is this the best person to work with on the pilot? Why is she better – in terms of future value to your business – than one of the other similar clinicians across the UK?”
They hadn’t considered this, they just happened to have been introduced to her and the pilot idea had emerged from initial conversations. I pointed out that the time and money they were going to invest in the pilot would be similar whoever they worked with so, if the value was going to be in the relationship, they should certainly be trying to identify and target the most valuable relationship to build. Which clinician is most likely to lend credibility? Or has the closest aligned academic and research objectives and so is most likely to go the extra mile to help the pilot succeed? Or is geographically closest to simplify logistics? It may well turn out that the person they are already talking to is the best for them, but at least now they are thinking about it commercially and not simply taking the first option.
Like many early stage companies, their core focus is product development. When I first asked them about opportunity cost, they told me exactly what percentage of their remaining cash they expected the pilot to consume and said they were entirely comfortable with losing that part of their development runaway in return for the expected relationship boost.
I challenged them to think more broadly about other ways in which their company could use that money which might be more valuable. Could they get their first sales person on board? Or spend time researching whether other international markets might be better launch pads for their business than the UK? Answer, probably not – but there might be other opportunities. Until we discussed it their focus on product development blinkered them to other opportunity costs.
We then talked about time. Like many of us they don’t have enough hours in the day to do everything they could or should do on a professional or personal basis. Running the pilot will create further pressure and every minute they spend at the pilot site or travelling there and back is a minute they are never going to get back again. With some of those minutes they could be doing different work which might be more valuable to their business long term. With some of those minutes they have opportunities to do personal things which will almost certainly be more valuable to them individually in the long term; going for a walk, playing sport, sitting in a local café and relaxing for once, spending time with their families. Never undervalue personal opportunity cost.
I don’t know yet whether they will pursue the pilot, but hopefully I’ve given them some ideas to help them make a fully informed decision.
I’ll finish with another cultural reference. According to the novel by James M Cain, The Postman Always Rings Twice. Perhaps, but when opportunity knocks it only knocks once so be careful not to miss it – whether it’s an opportunity for a game changing pilot for your company or an opportunity to spend some more time with your loved ones.