Biomedical Innovation and Venture Creation

This report examines the Biomedical Innovation and Venture creation of a completely new start-up Biomechanical company named ABC Medicine. The report explores various business strategies, market analysis, value creation, competitive advantage, customer acquisitions, product unit economics, sales, overall economics, design & build, scaling, venture formation, and capitalization.

Running head: BIOMEDICAL INNOVATION AND VENTURE CREATION
BIOMEDICAL INNOVATION & VENTURE CREATION
Name of the Student
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1BIOMEDICAL INNOVATION AND VENTURE CREATION
Executive Summary
The mission of this report is to examine the Biomedical Innovation and Venture
creation of a completely new start-up Biomechanical company named ABC Medicine. The
target market has been chosen as Saudi Arabia. The product for the target market will be the
Diabetic diagnostic systems including cardiac monitoring and medicinal consumables. The
report examines various business strategies that include RAISON D’ETRE including Mission
Passion, Values; Market analysis including TAM, persona; VALUE CREATION including
Product Description, Problem, Quantified Value Proposition and others. Product Unit
Economics has been also analysed using COCA and LTV. The Market analysis has been
conducted, while projecting the financial estimations for next 5 to 10 years as a Biomedical
Manufacturer and seller in the market of Saudi Arabia. The product selection and promotion
strategy has been also discussed in this report.

2BIOMEDICAL INNOVATION AND VENTURE CREATION
Table of Content
1 RAISON D’ETRE...................................................................................................................6
1.1 Mission:............................................................................................................................6
1.2 Passion:............................................................................................................................6
1.3 Values:..............................................................................................................................6
1.4 Initial Assets:....................................................................................................................7
1.5 Initial Idea:.......................................................................................................................7
2 INITIAL MARKET................................................................................................................7
2.1 Beachhead Market............................................................................................................7
2.2 End User Profile...............................................................................................................8
2.3 TAM:................................................................................................................................8
2.4 Persona:............................................................................................................................8
2.5 Ten Customers:................................................................................................................9
3 VALUE CREATION..............................................................................................................9
3.1 Use Case:..........................................................................................................................9
3.2 Product Description:.......................................................................................................10
3.3. Problem.........................................................................................................................10
3.4 Quantified Value Proposition:........................................................................................11
4 COMPETITIVE ADVANTAGE..........................................................................................12
4.1 Moats:.............................................................................................................................12
4.2 Core:...............................................................................................................................13

3BIOMEDICAL INNOVATION AND VENTURE CREATION
4.3 Competitive Positioning:................................................................................................13
5 CUSTOMER ACQUISITIONS............................................................................................13
5.1 Decision Making Units:.................................................................................................13
5.2 Customer Buying Process:.............................................................................................14
5.3 Windows of Opportunity:..............................................................................................15
5.4 Possible Triggers:...........................................................................................................16
5.5 Regulatory Strategy:.......................................................................................................16
5.6 Reimbursement Strategy................................................................................................16
6 PRODUCT UNIT ECONOMICS.........................................................................................17
6.1 Business Model:.............................................................................................................17
6.2 Pricing:...........................................................................................................................17
6.3 Short Term LTV.............................................................................................................18
6.4 Short Term COCA:........................................................................................................18
6. 5 Medium Term LTV.......................................................................................................19
6.6 Medium Term COCA....................................................................................................19
6.7 Long Term LTV.............................................................................................................20
6.8 Long Term COCA..........................................................................................................20
7 SALES...................................................................................................................................21
7.1 Preferred Sales Channel:................................................................................................21
7.2 Sales Funnel:..................................................................................................................21
7.3 Short Term Mix:.............................................................................................................22

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7.4 Medium Term Mix:........................................................................................................22
7.5 Long Term Mix:.............................................................................................................22
8 OVERALL ECONOMICS....................................................................................................23
8.1 Estimated R&D Expenses:.............................................................................................23
8.2 Estimated G&A Expenses:.............................................................................................23
8.3 LTV/ COCA Ratio:........................................................................................................23
9 DESIGN & BUILD...............................................................................................................24
9.1 Key Assumptions:..........................................................................................................24
9.2 Assumptions Tests:........................................................................................................25
9.3 MVBP:...........................................................................................................................25
9.4 Tracking Metrics:...........................................................................................................26
10 SCALING...........................................................................................................................26
10.1 Product Plan for Beachhead Market:...........................................................................26
10.2 Next Market:................................................................................................................27
10.3 Product Plan Beyond Beachhead Market:....................................................................27
10.4 Follow-on TAM:..........................................................................................................27
11 VENTURE FORMATION.............................................................................................28
11.1 Stakeholders:................................................................................................................28
11.2 Define Roles & Responsibilities:.................................................................................28
11.3 Assign Roles & Responsibilities:.................................................................................29
11.4 Engagements:...............................................................................................................30

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11.5 Corporate Filings:.........................................................................................................30
11.6 Formation Agreements:................................................................................................30
12 CAPITALIZATION............................................................................................................31
12.1 Capital Need:................................................................................................................31
12.2 Use of Funds:...............................................................................................................31
12.3 Offering Type:..............................................................................................................32
12.4 Pre-Money Valuation:..................................................................................................32
12.5 Post-Money Valuation:................................................................................................33
12.6 Investor Profile:............................................................................................................33
12.7 Investor Persona:..........................................................................................................33
12.8 Ten Investors:...............................................................................................................34
References:...............................................................................................................................35

6BIOMEDICAL INNOVATION AND VENTURE CREATION
1 RAISON D’ETRE
1.1 Mission:
The ABC Company is a healthcare organization that aimed to offer the consumers
with a good variety of pharmaceutical, diagnosis as well as patient care products across the
world. The mission of the organization is to provide all the required medical equipments as
well as drugs to both the residents of Saudi Arabia along with international consumers. The
current mission of the company is to expand the business is to expand its consumer base as
well as loyalty in Saudi Arabia so that in the recent future they can enjoy an enhancement n
their revenue.
1.2 Passion:
The ABC organization was published in the year 2015 as a pharmaceutical
manufacturing as well as supplier organization. Due to the superior quality of biochemical
products offered by the company at a highly affordable range, the company is gaining
reorganization in the healthcare industry of Saudi Arabia. Considering the fact that the nation
still lacks well equipped healthcare homes as well as technologically advanced biomedical
equipments, the passion of the company is to ensure a steady increment in the healthcare
service of Saudi Arabia.
1.3 Values:
The ABC Company possesses three chief values that are helping the company to
expand its business in Saudi Arabia. These values includes, uplifting consumer satisfaction,
research based development as well as implication of innovative ideas (Acs et al., 2016).
While the incorporation of innovative ideas as well as research based product development
helps the company to ensure high quality and innovative products that provides them with

7BIOMEDICAL INNOVATION AND VENTURE CREATION
competitive advantage, the constant effort of the company to ensure maximum satisfaction of
the consumers helps the same to gain consumer loyalty.
1.4 Initial Assets:
When it comes to the initial assets of the company, it includes its extremely efficient
workforce. The ABC Company has arranged a prolonged process of selection in order to
ensure that only the best candidate is getting selected through the process. Not only this, the
organization has kept its salary scale a little higher than its competitors order to attract skilled
and experienced workers.
1.5 Initial Idea:
The initial idea off the organization is to incorporate innovative idea while developing
bio medical equipments. Off course, the management needs to invest a good amount of
financial capital for manufacturing technologically advanced products. Along with being
innovative, the organization also ensures the superior quality of their product. However, in
order to capture the market, the management of ABC company is keeping the price of their
product a little lower than its competitors.
2 INITIAL MARKET
2.1 Beachhead Market
The term beachhead market can be defined as the market which has its focus on a
narrow market space where a company can initiate its business with higher potential benefits.
In order to enhance their business in the Saudi Arabia, it is highly crucial for the management
of the ABC Company to set their beachhead market in a profitable location where the number
of consumer is high but the number of competitors is low (Shammari et al., 2016). Currently

8BIOMEDICAL INNOVATION AND VENTURE CREATION
the company has chosen Al Jawah, a village located in the south-western part of Saudi Arabia
as its beachhead market.
2.2 End User Profile
The ABC Company manufactures a good number of healthcare diagnosis as well as
care providing products. The direct consumers of tem mentioned organization includes
healthcare organizations, health clinics, rehabilitation facilities as well as medical
laboratories. However, for healthcare equipments for diabetes, the end user will include the
consumers of healthcare facilities like health Clinique and hospitals.
2.3 TAM:
The full form of TAM is Total Addressable Market and it includes the entire market
that a business is comprised of, namely, beachhead market, adjacent market and additional or
extended market. Considering the fact that the current beachhead market of the ABC
Company is Al Jawah, the adjacent market for the company will be other corresponding
region that are economically developed from the beach market (Alharbi, Atkins & Stanier,
2015). The adjacent market involves other corresponding economically developed region. In
all those regions there is a lack of biomedical manufacturers. Therefore, the corresponding
developing regions are considered as TAM.
2.4 Persona:
Persona can be defined as the sample or example of the ideal consumer profile.
Persona helps individuals to develop the consumer experience planning. When it comes to the
ABC Company, the persona can be imagined to be Mr. P.
Background
 Procurement manager of the ABC
company
Demographics
 Male
 Age: 25-34 years

9BIOMEDICAL INNOVATION AND VENTURE CREATION
 Has job experience of 12 years
 Married
 Dual HH income: 150,000 dollars
 Sub-urban
Roles
 Managing the supply chain as well as
purchasing cooperation of the ABC
Company
 Conducting business deals with
business partners
 Analysing the availability of the
suppliers for selecting the most
beneficial one
Goals
 Identify the most beneficial suppliers
for the healthcare equipments of
superior quality
 Enhancing the profitability of the
company by with the help of
appropriate equipment
2.5 Ten Customers:
The major 10 consumers of the ABC organization are as follows:
 Small to medium health clinics
 Government hospital
 Non-Government organizations
 Vet nary health care homes
 Sports organization
 Paramedics
 Pathology laboratories
 Medical research institutes
 Rehabilitation centers
 Medical research institutes
3 VALUE CREATION
3.1 Use Case:
Use case is a sales and marketing framework that allows any company to examine
their potential customer experience considering the crucial components of their sequential
perception. For ABC Medicine the most appropriate use case model can be developed
through using the Awareness, Interest, Desire and Purchase model.

10BIOMEDICAL INNOVATION AND VENTURE CREATION
3.2 Product Description:
ABC healthcare company possesses specialization in majorly 6 product zones that
includes diabetes care, cardiovascular equipments, diagnostics and nutrition, nuero-
modulaton as well as medicine. However considering the increase amount of diabetic and
cardiac diseases in Saudi Arabia, the organization has currently focused on diabetic as well as
cardiac care equipments (Alkhamis et al., 2017). Apart from that, various diabetic care
powders or medicinal consumables will be offered. Therefore the products will be
 Coronary CT Angiography
 Haematology analyser
 Freestyle Glucometer
 Flash Glucose Monitoring System
 ECG
 Thallium stress test system
 Glucose and Ketone testing system
 Diabetes care powder
 Diabetes care planning application
3.3. Problem
One of the chief issues faced by the organization in while trying to expand their
business in Saud Arabia is the lack of transportation facilities. Being a developing country,
the government of the nation is still working on developing the logistics of the nation.
Another issue that is faced by the organization is the lack of internet facilities. Considering
the fact that online marketing is a highly prospective way of enhancing the revenue, this issue
will impose adverse impact on the revenue off the organization.

11BIOMEDICAL INNOVATION AND VENTURE CREATION
Awareness
Interest
Desire
Action
Personal Presentation
Promotion
Purchasing
Communication
3.4 Quantified Value Proposition:
Quantified value proposition includes the clear statement of the process through which
the company is able to resolve the issues associated with the product as well as the target
consumers. In this case, the ABC organization needs to ensure the high quality of their
product without compromising with the cost of operation. Along with this, free after service
to the consumers for the first 5 years will also enhance the demand of the organization in the
healthcare industry of Saudi Arabia (AlShammari, Jennings & Williams, 2017).
The following use case has been developed considering a fictional customer named
Customers X. The Use case are presented in the following diagram.

12BIOMEDICAL INNOVATION AND VENTURE CREATION
Customer X
Marketing and Promotion
of Diabetic products
Presentation
and purchasing
process
Product quality
Maintenance
service and
customer relation
Feedback and Review
collection
Developing Interest
Influencing behaviour
Reconstructing experience
Evaluating Customer’s opinions
4 COMPETITIVE ADVANTAGE
4.1 Moats:
The term MOAT is defined as the strategy business that enables any organization to
enhance their competitiveness in the market. In order to compete in the healthcare industry o
f Saudi Arabia, the ABC Company needs to invest keeping in accordance to the industrial
situation of the nation. Hence the management needs to conduct efficient market research.
Secondly, their basic value research on the basis of the product development possesses the

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potential to enhance their competitive advantage in an significant manner. For instance, in
Saudi Arabia, the glucose monitoring system is highly renowned. The mention
4.2 Core:
The laboratory of ABC organization possesses three chief strategies that help the
organization to enhance their market reorganization as well as share in the healthcare industry
of the nation. The mentioned 3 strategies includes focusing on innovation, ensuring
maximum satisfaction of the workers, enhance the market share ad increase consumer base in
the targeted market.
4.3 Competitive Positioning:
Being new to the healthcare equipment manufacturing industry, the comparative
position of the organization is moderate. However, the superior quality of the products as
well as the affordable price of the same is rapidly making the organization one of the most
well-known biomedical product manufacturing organizations in Saudi Arabia (Barr, 2016).
Making the quality high without compromising the cost of the manufacturing is currently the
chief concern of the organization.
5 CUSTOMER ACQUISITIONS
5.1 Decision Making Units:
Byers
The products of the ABC
Company will be purchased
by different healthcare
company as well as
laboratories. Therefore,
giving priority to the
opinions are highly crucial.
Decision Maker
The management board
of the ABC company is the
boad of managers
Gate Keeper
Gate keepers refers to the
information collector of an
organisation. The suppliers,
distributors s well as he
business partners are the
chief gate keepers of the
ABC company
Users Initiator Influencers

14BIOMEDICAL INNOVATION AND VENTURE CREATION
Users refer the end users who
will use the product. When it
comes to the ABC company,
the users are patients as well
as healthcare receivers.
Initiators will detect the
problem or the satisfaction
level of the consumers. For
ABC company, distributors
are the initiators (Cooper,
2017).
Influencers can influence
the market to purchase or
reject any product through
regulating their
psychological factors. In this
case the local advertisers will
be the influences of the ABC
company.
5.2 Customer Buying Process:
According to the product development and distribution plan of ABC Medicine the
customer Buying process includes all the necessary attributes of pre-purchasing, purchasing
and post-purchasing phase the can define the overall experience of the customers of Saudi
Arabia. Three major aspects namely Internal Factors, Customer Experience and External
Factors can influence the buying process.

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External FactorsInternal Factors
Marketing and Promotion
of ventilation products
Optional or Alternatives
Product Quality
Post purchasing
service
Consumer relationship
Developing needs
Searching for information
Purchasing Decision Making
Post purchasing experience
Purchasing Experience
Selling process
Personal and social
influences
Expectations
Developing new
expectation and
experience
Customer Experience
5.3 Windows of Opportunity:
One of the major windows of opportunity that can be enjoyed by the ABC Company
is the lack of competitors Saudi Arabia. Considering the fact that the health care equipment
manufacturing market of Saudi Arab is not as much saturated as other developed countries,
the number of competition faced by the company is less. Hence, with the high quality product
as well as service, the organization will be able to attract the consumers easily (Enteshari &
Varshosaz, 2018). Along with this, the newly emerging internet facility will also help ABC to
conduct a direct relationship with the potential consumers in a highly cost effective way.

16BIOMEDICAL INNOVATION AND VENTURE CREATION
5.4 Possible Triggers:
The possible triggers arise from 4 major places that includes cultural stability, market
acceptance, political situation as well as financial crisis. When it comes to cultural stability,
the ABC organization posses the potential to handle their new market along with the local
community in a competent way where their ethics as well as social values will not get
hampered. Along with this, the political instability of the nation possesses the potential to
inversely affect the culture of the organization. Along with this, since the consumers of the
company are dynamic, ABC needs to be e always prepare for changing its product segments
whenever required.
5.5 Regulatory Strategy:
In order to efficiently expand their business in Saudi Arabia, the mentioned organization
needs to implement some affective regulatory strategies that will enable them to control their
workforce in an effective way.
 Monitoring employees to ensures the best manufacturing devices
 Collecting data from employees to supervise the progression of manufacturing (Freiberg,
Schwarz & Fath, 2015)
 Collecting data from the quality control team to identify the quality of the manufactured
product
 Collecting data from the risk assessment team for addressing risk factors in the company
 Monitoring manufactured product supplies from suppliers
 Monitoring the activities of distributors to distribute the product
 Gathering resources from the comminute efficiently
5.6 Reimbursement Strategy
The reimbursement strategy of the ABC organization will allow the same to secure
their sustainability of the product manufacturing cycle with the help of appropriate

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maintenances, care for the equipments, operational as well as financial procurement. The
valid strategies that will be help the organization to expand their business are as follows
 Identification of the factors that leads to the loss of the invent
 optimize the provider's network design and performance of the employees and
other stakeholders (Gaynor, Ho & Town, 2015)
 Supporting enhanced IT and business intelligence infrastructure
 Integrate with providers to repay the loss.
6 PRODUCT UNIT ECONOMICS
6.1 Business Model:
Many business models are available that can be operated by ABC Medicine namely
vertical business model, platform model, heath integrated model, reusable production model,
disposable product model and cost leadership model. Lack of direct manufacturer of
healthcare equipments has reduced the healthcare integrity in the biomedical industry of
Saudi Arabia (Ilangovan, Mahanty & Sen, 2016). Therefore, making health integrated
business model will be the most beneficial model for ABC Medicine. It will allow the
company to manufacture their products in a advanced way that can be used as a plug and play
device in a healthcare facility if it would be installed in a same platform. Therefore, it will
increase the demand of the products produced by ABC Medicine exponentially.
6.2 Pricing:
Because of complex and ever expanding distributors in Saudi Arabia the potential
customers are already receiving enough convenient products for the services. Therefore, to
empower the competitive advantages ABC Medicine need to focus on premium pricing
strategy. Using premium pricing strategy ABC Medicine could restrict the existing customers

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from using other products instead of ABC biomedical company. In this strategy, the company
will provide special price range and many other service related benefits to their loyal or
premium customers (Järvinen & Taiminen, 2016). Apart from that, It will also restrict the
upper bandwidth of production cost without compromising the quality of the products.
Therefore, the resultant price of the products will be lower compared to the other
international biomedical brands.
6.3 Short Term LTV
The LTV in other words Life Time Value defines the total contribution of a customer
in a particular business venture through maintaining loyalty. This benefit is calculated
considering the Average Gloss Margin increment, the Average Transaction amount in a
particular period and the time limit of the customer engagement. In Saudi Arabia ABC
Medical will need at least gross margin increment by 5% within next 1 year. At the same
time, the expected average transaction from the customers in one month will be 3000.
Therefore, if the average lifespan of the customer is 5 months, then the Short term LTV will
be
Average Gross Margin
(EAGM)
Average Transaction
(AMT)
Customer Lifespan
(CL)
LTV
(EAGM x AMT x CL)
5% 3000 5 750
It can be clearly seen that the short term LTV for ABC Medicine is less than half of
average transaction. Therefore, the initial LTV margin can be considered as low.
6.4 Short Term COCA:
The term COCA refers the Cost of Customer Accusation. COCA implies the expense
required to engage a customer within the purchasing procedure. ABC Medicine should

19BIOMEDICAL INNOVATION AND VENTURE CREATION
consider the increased amount of total loyal customers for COCA. Similar to the Lifetime
value, the short term COCA is also the initial target for next 1 year. It can be expected that
the investment for marketing and promotion will be 15000 and the estimated newly acquired
customer will be 30. Therefore, the Short Term COCA will be:
Investment for Marketing and promotion Newly Acquired Customers 15,000 COCA
15,000 30 30 500
6. 5 Medium Term LTV
In Saudi Arabia, the range of medium term LTV of ABC Medicine will be 1 year to 3
years. Therefore, the company will need at least gross margin increment by 6% within next 1
to 6 year. At the same time, the expected average transaction from the customers in one
month will be 3200. Therefore, if the average lifespan of the customer is 7 months, then the
Short term LTV will be
Average Gross Margin
(EAGM)
Average Transaction
(AMT)
Customer Lifespan
(CL)
LTV
(EAGM x AMT x CL)
6% 3200 7 1344
It can be clearly seen that the short term LTV for ABC Medicine is approximately
equal to the half of average transaction. Therefore, the initial LTV margin can be considered
as low.
6.6 Medium Term COCA
To calculate the medium term COCA, ABC Medicine should consider the increased
amount of total loyal customers within next 1 year to 3 years, similar to the Lifetime value. It

20BIOMEDICAL INNOVATION AND VENTURE CREATION
can be expected that in medium term promotional investment will be 12000 and the estimated
newly acquired customer will be 35. Therefore, Medium Term COCA will be
Investment for Marketing and promotion Newly Acquired Customers 12,000 COCA
12,000 35 32 375
6.7 Long Term LTV
In Saudi Arabia, the range of Long term LTV of ABC Medicine will be 3 years to 6
years. Therefore, the company will need at least gross margin increment by 7% within next 3
to 6 year. At the same time, the expected average transaction from the customers in one
month will be 3500. Therefore, if the average lifespan of the customer is 9 months, then the
Short term LTV will be
Average Gross Margin
(EAGM)
Average Transaction
(AMT)
Customer Lifespan
(CL)
LTV
(EAGM x AMT x CL)
5% 3500 9 1575
It can be clearly seen that the short term LTV for ABC Medicine is approximately
equal to the half of average transaction. Therefore, the initial LTV margin can be considered
as low.
6.8 Long Term COCA
To calculate the Long term COCA, ABC Medicine should consider the increased
amount of total loyal customers within next 3 years to 6 years, similar to the Lifetime value.
It can be expected, that long term promotional investment will be 15000 and the estimated
newly acquired customer will be 30. Therefore, the Long Term COCA will be
Investment for Marketing and promotion Newly Acquired Customers 15,000 COCA

21BIOMEDICAL INNOVATION AND VENTURE CREATION
15,000 30 30 500
7 SALES
7.1 Preferred Sales Channel:
Sales channel refers the selection of selling tools which will deliver the products to
the customers and subsequently to the users. Besides, the sales channel also refers the
marketing strategy as well, which will help to attract the customers and end users towards the
final deliverable products. For ABC Medicine, the preferred sales channel will be the satellite
based promotion, while involving the local distributers as word of mouth. On the other hand,
being a new venture ABC Medicine will not able to strategically handle the partnership with
external distributors. Hence, selling the products through direct channel will be beneficial for
short time financial and business achievements.
7.2 Sales Funnel:
Sales Funnel is a framework, which allows narrowing down the customer base
through a synchronised format, while considering the existing customers as the most
narrowed target, potential customers as the most diverged target. At the same time, for the
healthcare and biomedical industry of Saudi Arabia ABC Medicine has to take care of each
individual elements of sales funnel that includes the making the customers aware of the
product, making the product sales intriguing for customers to buy. It also involves evaluation
with solutions of other companies, followed by taking a proper decision finally followed by
purchasing the product.

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7.3 Short Term Mix:
Short term mix is the sales strategy that will be beneficial for ABC Medicine in a
short run. In other words, the short term mix will allow the company to develop their
promotional strategy for 1 year after the initial bringing out. For an internationalised
company like ABC Medicine the short term promotional mix will include the satellite
advertisement and digital advertisement (Gaynor, & Town, 2015). As digital advertisement
the company will focus on the social media based promotion through various social media
pages and blogs.
7.4 Medium Term Mix:
Medium term mix is the sales strategy that will be beneficial for ABC Medicine in a
moderate phase run. In other words, the medium term mix will allow the company to develop
their promotional strategy for 2 to 5 years after implementing the initial marketing and
promotional strategy. For an internationalised company like ABC Medicine Laboratory the
medium term promotional mix will include sponsorship based promotion (Kaftan, Kelly &
Platsch, 2017). For sponsorship the company will focus various charitable healthcare events,
such as free dental checkups, free medication, NGO based rehabilitation and others.
7.5 Long Term Mix:
Long term mix is the sales strategy that will be beneficial for ABC in a long run. In
other words, the medium term mix will allow the company to develop their promotional
strategy after 5 years following by implementing the medium term marketing and
promotional strategy. For an internationalised company like ABC Medicine the long term
promotional mix will include partnership based marketing (Khaled et al., 2015). For
partnership based marketing ABC Medicine should focus on various suppliers of raw

23BIOMEDICAL INNOVATION AND VENTURE CREATION
materials of Saudi Arabia and Middle East. This partnership approach will also enable ABC
to enhance their market knowledge about the extended market of Middle East.
8 OVERALL ECONOMICS
8.1 Estimated R&D Expenses:
Year Investment Research and Development Total asset after year ending
1st year 220,000 290,000
2nd Year 250,000 350,000
3rd Year 290,000 400,000
4th Year 350,000 420,000
5th Year 400,000 520,000
8.2 Estimated G&A Expenses:
Year Investment General Administration Total asset after year ending
1st year 32,000 290,000
2nd Year 45,000 350,000
3rd Year 52,000 400,000
4th Year 65,000 420,000
5th Year 72,000 520,000
8.3 LTV/ COCA Ratio:
The Ratio of Life Time Value and the Cost of Customer Accusation will help the
ABC Medicine to measure the feasibility of their current investment strategy and the
alignment with their current their investment in marketing and promotional activities is. In
this case, the ration of LTV and COCA will be also examined through 3 separate timelines or

24BIOMEDICAL INNOVATION AND VENTURE CREATION
phases. According to the ratio of those attributes segregated into different timeline the
feasibility study will be done.
Short Term LTV COCA 750 LTV/COCA (approx)
750 500 500 3:2
Medium Term LTV COCA 1344 LTV/COCA (approx)
1344 375 375 4:1
Long Term LTV COCA 1575 LTV/COCA (approx)
1575 500 500 3:1
As per the data analysis, the initial ratio of LTV and COCA clearly indicates that
LTV/COCA is not in optimum balance at the short-term timeline. The 3.2 ratio clearly shoes
that the investment is very less than its ideal numerical. However, for the medium term ratio
the projected ratio of LTV and COCA is 4:1. It indicates that in medium term business
development the estimated investment is very high than the ideal value. Finally, in long term
LTV/COCA ratio 3:1 clearly indicates that the estimation is balanced.
9 DESIGN & BUILD
9.1 Key Assumptions:
Some positive key aspects as well as some negative key aspects of the new market of
ABC Medicine can be assumed. Some of the negative assumptions are, higher bargaining
power of supplier, lower market reputation, lack of funds, poor logistics system and lack of
adequate investments. However, the positive assumption can be made on demand for diverse
products, increasing rate of diabetes and obese patients in Saudi Arabia, uplifted economical
situation of Saudi Arabia.

25BIOMEDICAL INNOVATION AND VENTURE CREATION
9.2 Assumptions Tests:
For a new business to succeed, many assumptions have to prove true. Testing
assumptions in a logical order gives the team the best chance of making course corrections
early — and not wasting time and money. For their new market in Middle East and more
specifically in Saudi Arabia, ABC medicine and Biomechanical manufacturing and supplier
company needs to outline a method for (1) identifying the assumptions or unknowns and (2)
resolving these assumptions on the basis of three parameters: severity, probability, and cost
of resolution.
9.3 MVBP:
A Minimum Viable Business Product or MVBP is a product with just enough features
to satisfy initial target customers. It is also helpful to collect market feedback for future
product development. The benefit of this MVBP technique is it requires less monitory
investment than the arbitrary product development. Gathering insights from an MVP is will
help to develop more potentially attractive products for the target market. In this case, ABC
medicine need to collect feedback for the market considering the customers, users and
distributers regarding the product quality and their expectations. The calibrated quantitative
measure will finally help ABC Medicine to develop their product line and the product
manufacturing cycle profitably. For testing, the chosen products will be
 Coronary CT Angiography
 Haematology analyser
 Thallium stress test system
 Flash Glucose Monitoring System
 Glucose and Ketone testing system
 Freestyle Glucometer

26BIOMEDICAL INNOVATION AND VENTURE CREATION
 Diabetes care powder
 Diabetes care planning application
 ECG
9.4 Tracking Metrics:
Criteria Weighting 2 -0.5 2 1 -0.5 Relative
Benefit
Priority
Relative measures
Business Components
Relative
ROI
Relative
Cost
Relative
Demand
Relative
Time
Relative
Risk
Coronary CT Angiography 3 2 3 4 2 14 3
Haematology analyser 3 3 1 3 2 8.5 8
Thallium stress test system 2 1 3 1 2 9.5 7
Flash Glucose Monitoring
System
3 2 4 3 2 15 1
Glucose and Ketone testing
system
2 3 2 5 2 10.5 5
Freestyle Glucometer 3 4 1 2 3 6.5 9
Diabetes care powder 3 2 2 3 2 11 4
Diabetes care planning
application
3 1 3 4 2
14.5
2
ECG 2 1 3 1 1 10 6
10 SCALING
10.1 Product Plan for Beachhead Market:
The products for beachhead market of ABC medicine will be subdivided into three
major sections as per the result of the Tracking matrix. According to ascending order the first
four products will be the initial products for this market. The long term product will be the
next 4 products and the long term product will be the rest of the products as mentioned below
Initial Product Medium term product Long term product
 Flash Glucose Monitoring
System
 Glucose and Ketone
testing system
 Thallium stress test system
 Haematology analyser

27BIOMEDICAL INNOVATION AND VENTURE CREATION
 Diabetes care planning
application
 Coronary CT
Angiography
 Diabetes care powder
 ECG
 Thallium stress test
system
 Freestyle Glucometer
 X-Ray
 Automated healthcare database
10.2 Next Market:
The initial market of ABC Medicine will be Saudi Arabia, where the next expandable
market will be the neighbour nations of Saudi Arabia such as, Lebanon, Jordon, UAE and
others. For this extended market, the product strategy will not be changed significantly.
However, ABC Medicine can introduce some new products over the initial products such as
Glucose and Ketone testing system, ECG and Thallium stress test system. The next
expansion of this new venture will not focus only on the geographical expansion, rather it
will focus on the product diversity as well through introducing other biomedical products.
10.3 Product Plan Beyond Beachhead Market:
The product plan for beyond beachhead market will includes the tertiary product
segments, which will be applicable after market testing. In this situation, the geographical
expansion of ABC Medicine will be the larger continental part of the middle east that
includes Turkey, Egypt, Libya, Oman and other nations. For these nations, the products will
be Thallium stress test system, Haematology analyser, Freestyle Glucometer, X-Ray and
Automated healthcare database.

28BIOMEDICAL INNOVATION AND VENTURE CREATION
10.4 Follow-on TAM:
The full form of TAM is Total Addressable Market and it includes the entire market
that a business is comprised of, namely, beachhead market, adjacent market and additional or
extended market. Considering the fact that the current beachhead market of the ABC
Company is Al Jawah, the adjacent market for the company will be other corresponding
region that are economically developed from the beach market (Alharbi, Atkins & Stanier,
2015). The adjacent market involves other corresponding economically developed region. In
all those regions there is a lack of biomedical manufacturers. Therefore, the corresponding
developing regions are considered as TAM.
11 VENTURE FORMATION
11.1 Stakeholders:
As a start up company ABC Medicine will have 7 stakeholders namely Director or
owner, Management, Suppliers, Employees, Customers, Community and Governments. All
these stakeholders have their individual contribution in the association and individual
position for operation. The collaborative working process and mutual value sharing within
the stakeholders can improve the sustainability and potential growth of the business
operation.
11.2 Define Roles & Responsibilities:
 The Roles of directors is to supervise the company and ensures the revenue through
the highest manufacturing
 Role if the employees are to involve themselves in the manufacturing of the
biomedical equipment in order to retain customers’ interest (Woolhandler &
Himmelstein, 2017)

29BIOMEDICAL INNOVATION AND VENTURE CREATION
 The role of the government's agents of the firm is to involve themselves in the legal
issues and advocacy that in turn assist the company to legally supply their products
 The Roles of a supplier is to supply the equipment to different distributors
 The role of the distributors is to distribute the manufactured product into different
health care brunches
 The role of the community from which it draws resources is to provide resources for
manufacturing product successfully.
 The role of hospital administrators and facilities is to use it in the different surgeries
and providing patient-centric care
11.3 Assign Roles & Responsibilities:
Role Responsibility
General Manager Supervising and managing all the departments while
leading the departmental superiors
Human Resource Recruiting and Managing workforce while keeping them
safe and healthy
Administrator Facilitating the premises with technology and fundamental
advancement (Welter et al., 2017)
Logistics Manager Supervising and maintain Inbound, Outbound and
manufacturing chain
Finance and accounts executive Accounting payroll, measuring performance, publishing
budget and estimating benefits
Sales and Marketing Manager Conducting market research, making customer
relationship, selling products, improving market share and
reputation
Legal advisor Keeping legal compliance for all aspects of the business
operations
Employees Maintaining workflow with healthy relationship and
cooperating environment in order to improve the capability
of sustainable coordination

30BIOMEDICAL INNOVATION AND VENTURE CREATION
11.4 Engagements:
Stakeholders Engagement Power Interest
Director/ owner Internal Primary Very High High
Management Internal Primary High Moderate
Suppliers External Secondary High Low
Employees Internal Primary Moderate Moderate
Customers External Primary Low High
Governments External Tertiary High Low
Community External Secondary Moderate Moderate
11.5 Corporate Filings:
Corporate filling defines the procedures of agreement and stakeholder contract
handling that help a business to evaluate their legal policies and value exchange process.
ABC Medicine should consider their suppliers relationship, consumer contract, investor’s
agreement, and partnership contracts as part of their corporate filling. Corporate filling will
be also helpful for ABC organisation for avoiding any health and safety as well as trading
compliance related issue in the biomedical market of Saudi Arabia.
11.6 Formation Agreements:
The types of agreements ABC will need can be segregated into 4 segments.
Operational agreements will involve the suppliers, distributors and administration. The
Consumer agreement will ensure the consumer rights and the refund and return policies. The
financial agreement will be formulated within the business partners, the ABC Medicine, and
the investors of the company. The employer-employee agreement is another major aspect

31BIOMEDICAL INNOVATION AND VENTURE CREATION
where the core purpose is to build legitimate relationship within employer and employees of
ABC Medicine
12 CAPITALIZATION
12.1 Capital Need:
Current and Potential Assets
Initial Revenue 1,500,000
Account Receivable or Loan 16,500,000
Investors contribution 30,000,000
TOTAL 48,000,000
Current and Potential Liabilities
Payable Accounts 15,000,000
Short term Borrowings 50,000
Additional Miscellaneous Liabilities 5,850,000
TOTAL 25,900,000
Working Capital 19,000,000
12.2 Use of Funds:
Operational components Unit Per Unit Cost Total expense
Manufacturing 12 35000 420000
Logistics and Transportation 5 18000 90000
Human Capital investment 60 5000 300000

32BIOMEDICAL INNOVATION AND VENTURE CREATION
IT and Communication 15 1500 22500
Research and Development 5 20000 100000
General and Administration 7 12000 84000
Marketing and Promotion 10 15000 150000
Miscellaneous expenditure 560000 560000
TOTAL 1726500
12.3 Offering Type:
 Coronary CT Angiography
 Haematology analyser
 Freestyle Glucometer
 Flash Glucose Monitoring System
 ECG
 Thallium stress test system
 Glucose and Ketone testing system
 Diabetes care powder
 Diabetes care planning application
12.4 Pre-Money Valuation:
Value Percent
Entrepreneur 3,000,000 66.66%
Investors 1,500,000 33.33%
Total 4,500,000 100%

33BIOMEDICAL INNOVATION AND VENTURE CREATION
12.5 Post-Money Valuation:
Value Percent
Entrepreneur 2,500,000 62.5%
Investors 1,500,000 37.5%
Total 4,000,000 100%
12.6 Investor Profile:
Considering that ABC medicine is a start-up biomedical company, in this stage
gaining the trust of strong investors will be difficult. Therefore, at the initial stage the
investor profile will be more suitable as a strong supplier. In this Investor profile section an
ideal investor profile will be assumed. Let assume that Mr. P is the operational executive of
the company named MNP finance.
12.7 Investor Persona:
Background
 Operational Director of the MNP
Finance
 Working at the MNP organization for
more than 5 years
Demographics
 Male
 Age: 30-45 years
 Dual HH income: N/A
 Urban
Roles
 To manage the organizational issues
 To conduct venture sharing
 To analyse the existing financial
offerings
Goals
 To choose a partner for business
investment
 Enhance the profitability of the
company.

34BIOMEDICAL INNOVATION AND VENTURE CREATION
 Enhance the partner’s loyalty.
12.8 Ten Investors:
The initial investors of ABC Medicine will be the financial organisation and
consultant. However, in long run the company will try to choose more businesses, which
have more exposure. The list of 10 potential investors for this biomedical company is
mentioned below.
1. Suppliers
2. Business Partners and shareholders
3. Non-Government organizations
4. Trusty boards
5. Medical research institutes
6. Rehabilitation centres
7. Global Healthcare Group
8. Distributing Networks
9. Sports organization
10. Pharmaceuticals

35BIOMEDICAL INNOVATION AND VENTURE CREATION
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