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Author: captainccs Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 1416  
Subject: Re: Hospitals beginning to tout research results Date: 2/1/2013 8:46 AM
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Excellent article. The results are entirely as expected, the robotic surgery produces much more accurate placement of the implants than is usually achieved manually. This is not a medical issue as much as one of craftsmanship as any shipwright, joiner, or carpenter can tell you. Knees and hips join long bones which means that any small misalignment in the implant is greatly multiplied by the length of the bone.

Doctors who say they can do it manually as accurately as the RIO robot can are greatly exaggerating their own prowess. The real threat to MAKOplasty is any other placement system that can achieve similar results at lower cost. Beware Biomet's Oxford jigs!

In technology adoption "path dependence" plays an important role. Path dependence essentially means that a technology that gains acceptance is hard to dislodge. Geoffrey Moore called some of it "high switching cost." Once you learn something you don't want to invest in learning something similar unless it provides substantial additional advantages. This is how "disruptive technology" works, how a new technology can break the hold on the market of an older technology gained through path dependence. One important caveat must be kept in mind. It is practically impossible to predict which technology will fail and which will succeed. Pundits attribute causes to success and failure but almost invariably they do so with hindsight. The winning technology is picked at random by the market. Economists have shown that under the law of increasing returns there are multiple potential equilibrium points and no possibility of predicting on which the system will settle. Under the law of decreasing returns (commodities) there is just one point of equilibrium which makes it easy to predict that the low cost producer will likely be the winner.

The point of the previous long paragraph is to point out that even if Biomet's Oxford jigs are as accurate as MAKOplasty and a lot cheaper, that does not make them the automatic winner in the contest for joint procedures. They certainly would have the ingredient of a "disruptive technology" but the proof is in the pudding. As Tinker pointed out, the key metric to watch is the growth in system sales. Everything else, as interesting as it might be, is secondary. The market picks the winner and the market sometimes picks second rate technology as was the case with Windows and the x86, a non operating system until XP (the first versions of Windows were just a graphic overlay on DOS) and a chip that was no match for competitors from Motorola. Yet Mr. Market made Wintel a runaway marketing success that made a few billionaires and many more millionaires. Be careful to hedge your bets!

Denny Schlesinger
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