During the 20th century, people all over the world were surprised by the breakthrough in biotechnology that enables us to multiply the live being who shares exactly the same physical characteristics. Multiplication process, which we recognize as cloning, can bear a child who has physically similar to his origin by conducting non-sexual intercourse. Since then, many scientific and technological publications often generate issues regarding technical and ethics of cloning.
This is common situation because since prehistoric age issues concerning invention in science and technology always invite pros and cons. Other bio technology that drags much attention is one that relate to fertility issue. The situation occurs since many high-achievement female tends to postpone marriage until they reach above-35 years old or for marriage women, they are also likely to defer having children until they are above 40-50 of age. Unfortunately, at either situation, the probability to have children is significantly decreases due to the natural phenomenon.
Under such circumstances, the number of fertility clinics is growing faster although most of them have no approval from FDA (Food and Drug Administration) in the USA. Concerning the fertility issue, this paper will discuss the emerging company name Extend Fertility that offers attractive fertility services. There are several issues that this paper will discuss including recognitions of fertility market opportunity and exploration of its viability, development of a compelling business plan, collaborative and strategic relationships, marketing, to name a few. 2. Opportunity Finding Process
Many entrepreneurs find business opportunity from current employers, colleagues, hobby, and from business or trade journals and magazines. The situation also happens for Extend Fertility where Christy Jones, prior to the establishment of Extend Fertility, when she read Sylvia Hewlett’s book, Creating a Life: What Every Women Needs to Know about Having a Baby and a Cancer. When reading and later discussing the famous issues for women with her colleagues, Jones find that having a baby is a big challenge for today’s women since many of them aims at deferring marriage and thus having children.
Jones realize since women’s fertility reach optimal period when women are at age 27 and it declines significantly after they are above 35 of age, Jones start thinking of developing women’s eggs preservation since she knows that the big issue in fertility is about women’s eggs. Although she is not a medical school graduate, she has a good business vision that encourages her to start gathering information about egg freezing. The online search finally brings Jones to Stanford University to meet with Dr.
Barry Behr, an expert in oocyte cryopreservation. The meeting between Jones and Behr is extraordinary since each has particular interest and expertise that the combination of the two will create a big business. At one side, Christy Jones, a graduate of Harvard Business School is an excited fledgling entrepreneur while in other side; Behr is an energized medical researcher with specialization in Gynecology and Obstetrics. After having a pile of information about egg freezing and attending many conferences, Christy Jones and Dr.
Barry Behr start developing a attractive business that have a significant market value due to the demands for fertility products are vast and differentiation strategy is widely opened. Analyzing the business finding process, I find that Christy Jones uniquely combines the societal/demographic trends and the emerging technology, which further coins the term convergence. In the case of Extend Fertility, the convergence is the fact that fertility of women reaches peak when women is at 27 of age while in reality many high-achievement women tends to defer marriage and pregnancy until they reach above 35 and 41 of age respectively.
3. Development of Specific Fertility Services The next step of building superior business after developing ideas for products or services is to develop superior team. In the case of Extend Fertility, I find that Christy eagerly meet suitable persons to help her building teams. Table 1 Management teams of Extend Fertility In the first step, Jones meets with Bill Sahlman, a finance professor at HBS, which further introduce her to Bob Higgins, member of faculty at HBS and also the founder and managing general partner of Highland Capital Partners, the company that specializes in technology and healthcare investing.
The search for management and operational teams do not end since she continue search over pool of talents not only in the U. S. but also worldwide. In short, Christy Jones can build superior team composes of several people as shown in Table 1. 4. Revenue-Generating Model In general, revenue generation composes of two activities. First is new customers’ acquisition and second is the retention program from existing customers. Figure 1 shows the representation of revenue generation model. Figure 1 General Revenue Generation Model
Prior to generate revenue from customers, Christy Jones and her team start making money when they win HBS contest. Furthermore, she generates capital by having a network of friends and family. The revenue generation model of Extend Fertility is derived from market opportunity where women who want to have children spend much money in fertility-kind program. According research, the costs of IVF are about $10,000 and a couple may spend many attempts that result in $58,000 expense to obtain a baby.
In much details, the revenue model of Extend Fertility composes of providing egg-freezing services to couples who want to have children, license, and service fees that customers and fertility clinics pay to Extend fertility. 5. Competitors As mentioned previously, fertility clinics are big business since many couples have difficulty having babies. In the U. S. alone, there are about 400 fertility clinics. The largest clinics are estimated to have only eight doctors and obtain 5% market share.
Many of the clinics offer “home-brew” techniques for egg freezing but not yet gain approval from FDA. 6. Opportunity Finding Process Christy Jones and her team find the opportunity from demographic data where there is an explosion of childless women at age 30-40, representing about 5 million women in the U. S. alone. In addition, the top wage earners tend to be price insensitive customers when come to deal with having children. Moreover, since many women start wanting to have children when they reach above 35 of age, there is opportunity to conduct eggs freezing business.
7. Credibility The first of credibility is HBS winner contests. This achievement represents that Extend Fertility is developed seriously with details business plan that any investors would interest in funding this business. In addition, Extend Fertility also gains FDA approval as the brand differentiation compared to hundreds of fertility clinics that have not obtained FDA approval. Extend Fertility also succeeds in conducting affiliation with the most prominent West Coast fertility clinics such as Huntington Reproductive and Stanford Medical Center. 8.
Market Research Extend Fertility takes benefits of several market researches. Scientifically, the company gain market research about fertility of women with following information: Secondary Survey • In 2002 alone, couples spent more than $2 billion on fertility treatment • Average costs are $10,000. the success rate is about five time of program equals to $58,000 to obtain a baby Primary Survey • 60% of respondents are willing to spend about $10,000 for having eggs freezing program • 21% of respondents are willing to spend $15,000 for the same program while
• Respondents that have income above $100K per annum are willing to spend more than $15,000 for egg freezing treatment. 9. Prospects The potential revenue generated form this business is enormous since research reveals that many women tend to have children above 35 of age, the period where the fertility already decreased significantly. to be precise the potential business of eggs freezing is as following: • 20% of women intend to have children after they reach age 35 • Fertility reaches optimum at age 27 and deteriorates significantly after age 35. 10. Vulnerability of Fertility Business
Vulnerability of the business occurs from the financing method where the company is self funded for 18 month while in fact in order to grow faster, the company needs total investment accounts for $2 to $3 million to cover the upcoming costs. In addition, another method to increase fertility of women above 35 of age is still growing, suggesting that in the future, Extend Fertility will faces fierce challenges from competitors. 11. Competition Contests Christy Jones can win the HBS contests since she worked for two years prior to developing business plan.
The situation suggests that Jones prepare the business plan very carefully and comprehensively. In the business plan, she did only describe the potential revenue of Extend Fertility but also the method to deliver fertility-related services and the support for further research and education. 12. Potential Investors Potential investors for fertility business is the government who concerns about helping women above 35 to have children, venture capitalists that see huge opportunity of funding fast-growing business that have huge market demands, and private medical institutions. 13. Internet Ad of Extend Fertility
Extend Fertility currently positioned as leading fertility treatment in the U. S. The company address in www. extendfertility. com shows several achievements that the company accomplish since the company’s birth till today. The company’s products, the eggs freezing also caught attention of national and international media ranging fro CNN, Washington Post, Newsweek, Globe, ELLE, NBC, and Forbes, to name a few. This situation highlights that the company gain improved brands in the fertility treatment business. Reference: Hart, Myra and Sensiper, Sylvia. (2005). Extend Fertility. Harvard Business School