Hidden in plain sight: Where medical device companies are finding their next $150M

The manufacturing technology arms race in medical devices has hit a ceiling as advanced capabilities that once distinguished market leaders are now standard across the industry. After all, with 60% of manufacturers now using 3D printing, and artificial intelligence (AI) workflows compressing timelines by up to 40%, it’s hard to claim these capabilities as competitive advantages.

Yet despite these technologies hitting a tipping point, overall business growth remains elusive. Pricing pressure mounts while the competitive landscape makes price increases untenable. Device makers risk being relegated to commodity producers in the middle of the value chain.

Some companies, however, are finding a path to growth but it’s not through better manufacturing or new technology in their devices. It’s recognizing that their customers' problems and priorities have changed faster and in different ways than expected and adapting their traditional medical device business in response.

Commoditization in heart catheterization

© Natanael Melchor, Unsplash

An industry leader in coronary device manufacturing with a renowned history for developing and introducing new technologies struggled as they watched competitors match every innovation within 18 months. Pricing eroded. Differentiation vanished.

Historically, the company would have doubled down on R&D spending and added new technologies to their devices. But they recognized that the shift in market dynamics and competitive capabilities wasn’t simply an evolution. It was the emergence of a ‘new normal.’

The shift toward minimally invasive procedures created more cath labs competing for patients. Transcatheter heart valves continue gaining traction over open surgery, intensifying competition among facilities. Meanwhile, 45% of healthcare institutions reported higher procurement prices even as reimbursement tightened. Hospitals face capital constraints that make them risk-averse to major equipment investments. The convergence of these pressures meant hospitals needed operational solutions, not just clinical ones.

So the company started over by first understanding the challenges facing all players in the heart catheterization ecosystem. Over the course of a few months, they interviewed 52 stakeholders across 10 countries, including surgeons, nurses, cath lab directors, hospital administrators, finance managers, even public and private insurers.

The challenges, frustrations, and needs they heard were new and different from anything they’d heard before. Hospital executives talked about losing patients to competitors. Operations managers described volume dropping 10%. Administrators struggled with staffing shortages and reimbursement complexity.

Not one stakeholder mentioned needing better cardiovascular devices.

Beyond the user

The interviews revealed two critical blind spots in the company’s strategy: (1) it had only ever spent time talking to surgeons, ignoring all other ecosystem stakeholders, and (2) it had only ever sought feedback on devices, never seeking to understand the full breadth of stakeholder challenges and needs. 

Hospital CEOs worry about competitive differentiation. Finance managers struggle with reimbursement optimization. HR directors face chronic staffing shortages. Procurement teams can't make sense of vendor pricing structures.

These problems span geographies. A Brazilian hospital administrator described losing referrals to competitors. An Indonesian CEO reported running at 50% capacity despite month-long appointment backlogs. A U.S. cath lab manager talked about 30-minute turnover times between procedures because physicians wouldn't follow scheduling protocols.

From insights to advantaged growth

The research reframed how the company thought about their growth opportunities. Like its competitors, they competed on the bases of features and functions. But its customers were more focused on differentiation, referral networks, and operational efficiency. Problems that had little to do with device performance.

Luckily, the company was already positioned to solve these problems. It had staff embedded in every major cath lab. It trained physicians on procedures and understood workflow dynamics competitors only glimpsed through sales calls. It collected outcomes data across hundreds of facilities while rivals saw only their own installation base. It could provide value-added services that solved customer problems and couldn’t be copied by competitors.

Within six months, the company launched its first service offering. Within two years, services revenue exceeded $150M that was higher-margin, recurring, and largely insulated from device commoditization. More importantly, services customers increased their device purchases by 23%.

The services didn't replace manufacturing or device innovation. They solved the problems manufacturing couldn't.

© Johny Georgiadis, Unsplash

A replicable result

The approach and its results can be achieved by other manufacturers by taking the following steps:

Expand the interview pool. Talk to economic buyers, not just users. Include administrators, finance managers, operational staff. Interview across market types – developed, emerging, and emerged economies often reveal different problem sets.

Ask about business challenges, not product preferences. The questions that matter: What's changing in your business? Where are you losing money? What operational problems consume disproportionate time or resources?

Quantify problem frequency. High-frequency problems affecting multiple stakeholder types across geographies signal larger opportunities than severe but isolated issues.

Filter for adjacencies. Once you’ve identified important, widely held, and deeply unsatisfied problems, then you turn inward to the existing capabilities that give you advantage. Companies already embedded in customer facilities, training users, or collecting workflow data have natural advantages competitors can't easily replicate.

Test economics. Healthcare providers increasingly favor service-based models over capital purchases. Solutions that create recurring revenue while making core products stickier justify investment even at lower margins than device sales.

Conclusion

The coronary device company didn't abandon manufacturing innovation. It simply stopped assuming manufacturing was the only path to growth.

Value has become the byword for success, intelligence the new competitive advantage. The question for device makers isn't only whether their technology is good enough. It's also whether they're solving problems technology can't address.

About the author: Robyn M. Bolton is founder & CEO of MileZero, where she helps medical device companies turn uncertainty into competitive advantage and growth, and the author of Unlocking Innovation: A Leader's Guide for Turning Bold Ideas into Tangible Results (2025). She can be reached at robyn@milezero.com.