AdviNOW Medical’s Engineering Approach to Product-Market Fit: How Six Sigma Analysis Uncovered a $100B Market
Most founders start with market research. James Bates started with a stopwatch.
In a recent episode of Category Visionaries, the AdviNOW Medical founder revealed how engineering methodologies uncovered a massive market opportunity that traditional market research had missed. While forced into healthcare by a non-compete agreement, James applied industrial engineering principles to an industry that had never seen them before.
The Engineering Mindset Meets Healthcare
When James began evaluating medical practices in 2016, he didn’t start with customer interviews or market sizing. Instead, he conducted a Six Sigma cost analysis of every movement in medical clinics. “I cost every single movement in the clinic from the time the patient goes in. What does a front desk do? Do they have to stand up three times? Do they go to the printer?”
This granular analysis revealed something surprising. Despite being part of America’s largest industry, medical practices were struggling financially. “Most people think, oh, doctors, everything associated with medicine, a third of our economy, that must be everyone’s rich. But the medical practice businesses, they don’t make money. We’re talking low, single digit EBITDA.”
Finding the Hidden Inefficiency
The breakthrough came when James quantified how physicians spent their time. “Two thirds of a physician’s time was spent doing activities that there was no regulatory reason for them to do. They just happened to be the one with the knowledge, so they were doing it.”
This wasn’t just an interesting observation – it was a massive market opportunity. Physicians, the most expensive resource in the system, were spending most of their time on tasks that didn’t require their medical expertise.
From Engineering Insight to Market Opportunity
James saw parallels with his previous work in self-driving vehicles. “Using similar type of artificial intelligence that I used in the self driving vehicle world… I could take that. Mimic a physician’s brain, build an AI that will mimic a physician’s brain, and then we build an AI that mimics an administrator’s brain.”
But the engineering mindset didn’t stop at product development. It also revealed why previous attempts to solve this problem had failed. Traditional solutions like hiring scribes weren’t economically viable. “Scribes will cost you about 100 grand a year for a reasonable scribe… physicians that are probably working in these fields, they make two to $300,000 a year. They’re not going to give up $100,000 of their salary to go give it to a scribe.”
Engineering-Led Go-to-Market
This analytical approach also shaped AdviNOW’s go-to-market strategy. Rather than trying to sell to everyone immediately, they focused on facilities where the pain was most acute. “Right now, urgent care and primary care are by far the quickest to adopt. They suffer the most with the overhead burden and the low profitability.”
For B2B founders, particularly those entering complex industries, James’ approach offers a valuable lesson: sometimes the best market research isn’t research at all – it’s detailed analysis of how systems actually work. While others were focused on what people said about healthcare’s problems, James was measuring what they actually did.
The result? A company that’s not just solving a problem, but transforming an industry. As James puts it, “AdviNOW inevitably becomes a Google of healthcare.” Sometimes, all it takes is an engineer with a stopwatch to see what everyone else has missed.