If they have clear logic, even pricey models can build trust, says David Wells, CFO of medical device company Endra Life Sciences.
When David Wells was a senior business analyst at Logistix, a turnkey manufacturer in Silicon Valley, a client was confused by the company’s pricing methodology. To address the problem, Wells and a colleague built a model that the client agreed set prices at a fair and accurate level. But there was a catch; within months, the model would lead to a spike in revenue for the company at the expense of the client.
“When I saw what was happening,” said Wells, now CFO of Endra Life Sciences in Ann Arbor, Michigan, “I went to the customer and I said, ‘Listen, we’re going to end up making a fortune, and that’s not what anybody intended.’ And they said, ‘We love the model. We’re fine with it. Keep it going.'”
Today, Wells’ focus is on helping Endra, a pre-revenue medical device company, keep to its go-to-market strategy as it steers through the downturn.
“The clinical trials have been slowed and that’s unfortunate, but there’s nothing we can do,” he said.
The company’s product is a 3D photo-acoustic imager that uses sound waves to help identify how much fat is in a patient’s liver. The system gives clinicians a way to monitor changes in a patient’s fat levels without the high cost of an MRI or the invasiveness of a biopsy.
Source: CFO Dive (2020)