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Sunday
Apr022006

Are Medical Spas A Disruptive Medical Business?

Are Medical Spas are a disruptive business that have the possibility of transforming the current medical delivery system?

I would argue that they have the possibility of doing just that.

From Venture Voice: The New York Times just published a story called Death by Smiley Face: When Rivals Disdain Profit. It describes what has been referred to as disruptive businesses -- a company that can grow while shrinking margins in its industry. In other words, a disruptive business can expand by making one dollar for every several dollars it takes from its antiquated competitors. The Times attributes the motive behind this business model to be altruistic, we naively thought it was just a great entrepreneurial opportunity.

Their primary example is Craig Newmark, the founder of Craigslist. It's hard not to agree with The Times on this one. Craig probably has not made as much money as he could have with Craigslist without hurting user experience to the point that it would decrease traffic. If there was a one line AdWords-style ad in there, would you stop using it? This seems to be a good example.

It also cites FireFox as an example. FireFox is definitely not profit-driven as it's managed by the not-for-profit Mozilla Foundation. This is a pretty good example, but it only gets a couple lines in the article. It's also not strictly a disruptive business. Microsoft gives out Internet Explorer for free in part to drive traffic by default to its media properties. FireFox gets money from Google to drive users to its search site. Seems to be more of just an alternative.

I'm not making the Gekkoian greed is good argument. I'm not even saying that these entrepreneurs are enamoured with Ayn Rand. I'm just saying that disruption and integrity often make for good business in the long run, and to ascribe any other motive is the challenge of the author.

Medical spas are based around technology rather than individual physician skill level.

 The current method of deliver of medicine by individual physicians is hugely inefficient. Physicians take a huge investment of time and resources to produce; medical school, residency, yada,yada,yada. The end result is a highly trained doc. But the skill set is variable and depends on the physicians training, attitude, mental stability, and whatever else.

Technology is scalable and replicable. Technology will work without rest, exactly the same in any location, and can be expanded immediately to fill a need.

Medicine is moving towards technology because market dynamics demand it. Technology enables one physician to supervise/treat multiple patients at once using physician extender. That brings efficiency to the market and that means it will happen. The challenge as an individual physician is understanding that there is a radical change taking place that will benefit a few adapters and challenge the majority of providers.

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