Spring 2008 BABSON - MBA 1

FOSSA 3 Causes to an Unsuccessful Venture

Spring 2008 BABSON - MBA 2

1 - Customer Acceptance

• We completely underestimated the time needed and resources to be deployed for urologists to accept this new concept

• Urologists are extremely risk-adverse and slow adopters– They wanted extensive clinical trials demonstrating

the benefits of the SRS over modalities– This translated into huge unforecasted costs and long

time delays prior to commercialization

Spring 2008 BABSON - MBA 3

2 - Market Re-Segmentation

• There was a disconnect between Fossa strategy and urologists perception of the place of the device in stone removal:– Fossa was attempting to take away a portion of the

ESWL market (i.e. ultrasound treatment)– Because the concept was new, urologists were trying

to establish a separate “clinical niche” for the product in a subset of patients

Spring 2008 BABSON - MBA 4

3 - Distribution

• Fossa was not able to attract regional distributors– Company was too “small” , perceived as too “risky”– Sales process was too long and required too much time

spent in the Operating Room

• Fossa unsuccessfully tried a direct sales approach in limited territories– Extremely costly; huge drain on Cash Flow

• Fossa could never raise enough Capital to build a decent Sales organization