Isolde Kraft of Siiquent targets the market of organizations conducting large-scale gene-based diagnosis, like hospitals and large diagnostic labs. Meanwhile, Emaanuel Geiger of Teomik targets institutions running gene-based studies, like research labs and universities.
Kraft’s business model mimics the “razor blade model,” they generate revenue by selling the equipment and supplies required to maintain gene-based instruments. This aligns with price sensitivity of their market of hospitals and diagnostic labs along with those institution’s reimbursement process for consumable goods, whereby hospitals and labs can actually generate revenue via reimbursement by purchasing these goods. Maintenance and regulatory support also meet specific needs of their market
On the other hand, Geiger’s model is based on selling the gene-based technology itself. Their market of research labs and universities isn’t price sensitive and instead focused on quality and reputation. They are able to keep significant margins by selling patented technology and a high price.
A single revenue structure is much more efficient organizationally, it decreases the operational cost of constant changes to the business structure and allows investment into a consistent strategy that can be used to navigate the marketplace. Yet, it makes reacting to new information and needs a very slow process. Conversely, a flexible structure allows an organization to adapt to a changing market and evolving needs of customers.However, without a clear revenue model as a starting point, selecting customer segments and developing an actionable, widely understood strategy becomes impossible.
To ensure a fair merger, I would first analyze the current and projected revenue generated by each existing channel. I would then prioritize whichever model and revenue structure we could expect to contribute most to the long term revenue for the company. Next, I would investigate remaining models to see if they infringe in any way on the prioritized model. I’d propose maintaining any additional models that don’t infringe on the primary model or add undue cost to maintain.
