When Product Innovation Isn't Enough

Christine Flanagan
June 1, 2009

At the BIF-2 Summit U.S. Representative Jim Langevin took the stage in his iBot wheelchair to introduce lengendary inventor Dean Kamen. It's a moment from that 2-day event that really stuck with me. The iBot allowed Langevin to do things he previously only imagined - from stair climbing to rolling over curbs to raising himself eye-to-eye with a standing world. The power of the product innovation was touching and inspiring. It's potential to help so many individuals move freely into areas previously out of reach seemed limitless.

That was three years ago.

Today, the iBOT wheelchair is dead.

"Despite significant longterm investment by the company and acceptance of the iBOT mobility system," said iBOT manufacturer and J&J subsidiary Independence Technology, "demand has not proven sufficient to create a sustainable market. A challenging reimbursement environment for innovative assistive technologies has been a factor in limiting demand."

According to press reports, many experts blame its failure on a hefty price tag (close to $24K) and the the refusal of insurance companies to reimburse. "To a certain extent, there are breakthroughs we just can't afford," said University of Michican business professor Erik Gordon in one article.

Unfortunately, as marvelous a product innovation as the iBOT wheelchair is, it's no business model innovation. And that's why it failed. Without taking into account the entire value network it was selling into and solving some gnarly problems along the way, the company couldn't achieve a sustainable financial model.

Later today, the Business Innovation Factory will be hosting a lunch with Harvard Business School professor Clayton Christensen. We'll be talking about what it takes to create disruptive innovation in healthcare.

“When there are interdependencies among the elements of the disruptive value network – meaning that one cannot occur less others do – the speed of disruption is significantly accelerated if an integrated entity wraps its arms around all the elements in order to orchestrate the changes.” Clayton Christensen, The Innovator’s Prescription

Perhaps more distressing than the failure of the iBOT is that the company is probably not alone. Without systemic reform of our healthcare system, piecemeal insertions of even the best new technologies into the existing value network simply can't work.

(Photo props: Brian Jepson on Flickr)