INSTRUMENTS

Selling a single line of instrumentation, robots, or medical imaging equipment rarely generates significant or steady recurring revenues for a small company. Charging a high price for an instrument shifts the buying decision from the end users (scientists or physicians) to the relatively unreceptive administrators who must approve significant expenditures and can tie up the purchase in bureaucracy.

A more attractive alternative may be the Razor Blade model; sell or lease the instrument cheaply but charge for disposables. Even then, healthcare providers and researchers alike are loath to install a new piece of equipment in their facility or switch to a new way of doing something. Consequently, if sales of disposables generate most of the profits, it may make sense to manufacture disposables that better utilize the capabilities of equipment customers already have.