The Razor or the Blade
Both Isolde, head of Siiquent, and Emanuel, head of Teomik, target the gene-based diagnosis/studies market from different angles: the “stuff” and the “machine.”
Isolde targets hospitals and big diagnostic labs; as she put it in the article, her unit makes its money on the ‘blades’– the DNA-sequencing “stuff” that machines use. Due to budget restraints of these hospitals and labs, Siiquent’s business model doesn’t attempt to earn high margins but rather prices their consumables for less than the reimbursements their market (hospitals and labs) get in order to be financially beneficial to their consumers.
Emanuel, head of Teomik, targets big research labs and educational institutions, making money on selling the “machines”– patented research equipment that whisper promises of scientific journal glory, seducing big-spending institutes instead of scaring them away with their high prices. Teomik’s business model reflects that, earning high margins they need.
Their different business models worked for them; but what happens when they come together?
The Razor and the Blade
The pros of a single revenue model include reducing cost, combining their sales and operations. Another pro is that their different markets may not be so different. Siiquent’s diagnostic labs were willing to bring the big bucks to specialize tests; this was a double edged blade. These labs could now buy lower-priced “stuff” from Teomik who didn’t care where the “stuff” came from. Herein lies the peril: when no longer sold separately, who is to be the money maker? The razor (Teomik) or the blade (Siiquent)?
Though it appears that these two companies are fundamentally opposed– one making money on the compound, the other on the equipment– Isolde and Emanuel share the same belief in the pros of operating in a flexible manner. It allows them to adapt and respond to consumers (for better or worse) while also honoring their employees that don’t want to sell services.
What now?
If I was in charge of mediating this discussion, I would approach it by addressing both of their 1) priorities, 2) concerns, and 3) goals. By addressing priorities, I could identify the non-negotiables for both sides, hoping to find areas where they may be able to compromise if one factor is a higher priority for one head over the other. By then addressing concerns, this tackles the flipside, identifying the biggest problems/pain points; this may also help facilitate compromise by evaluating factors that concern one over the other. However, now we come to the point of most contention– the goals that may be viewed as being in direct opposition– making money on the equipment versus the compound. At this point, I would evaluate the extent to which each of their goals involve undermining the goals of the other, asking for data. For example, how much monetary return does Teomik get by promoting cheaper compounds? How could this be achieved in a different way? Or how can Siiquent appear more appealing than the cheaper compounds such that Teomik can promote them?
