The four barriers every DeepTech founder hits before they scale and how to overcome them

Silicon Valley’s unofficial motto is “Move fast, break things”. Software companies build, launch, iterate, and scale, hoping that by the time debt catches up you have enough customers and resources to deal with it.

And when the main risk is a bug that your client most likely ignores, this approach to scaling is completely justified.However, not all fields are as forgiving.

In this article, we discuss scaling your company in DeepTech, where sectors are usually highly regulated such as DefenceTech, energy, FoodTech, and medicine.

As a result, growing your company in DeepTech markets is significantly harder, and there are four main barriers that you as a founder have to overcome.

The cost of launch

All DeepTech markets have a very high barrier to entry, mostly because of the research and development process. Developing a new medical device, for example, is an incredibly long and capital-intensive process: building labs, iterating through trial and error, and moving through preclinical and clinical validation.

Unlike software, where products can be tested and deployed almost instantly, medical innovation requires years of experimentation and carries a high risk of failure. The average concept-to-market price of a medical device is over €27.3 million ($31 million), and the average time for releasing the device is 3 to 7 years. This combination of expensive and long R&D unavoidably leads to a ~75% failure rate among all medical startups.

Regulations are also a significant factor, as many DeepTech markets are subject to much stricter government oversight. Whether it’s sanitary compliance in FoodTech, or extensive background checks in energy and defence, you will have to deal with significant regulatory requirements.

In medical devices, for example, you can’t just enter a market because you see that it’s underserved – you enter it only after you’re allowed to. Often, regulations are the main reason behind underserved markets – there’s simply too much compliance and tests needed to receive a certification for a certain medical device. 

Navigating regulation

There are more than 190 countries worldwide, and all of them have different approval pathways and testing requirements for DeepTech companies. Major medical regulatory frameworks include FDA in the U.S., National Medical Products Administration in China, Pharmaceuticals and Medical Devices Agency in Japan, ANVISA in Brazil, Health Canada in Canada, and Medical Device Regulation in the EU.

To operate in global markets, a product must meet each regulatory framework separately, with no overlap between the different sets of rules.

Another thing to keep in mind is that regulations and the frameworks are constantly evolving. For example, we launched Efferon in Europe right in the middle of the transition from Medical Devices Directive (MDD) to European Medical Device Regulation (MDR), which significantly raised the bar for clinical evidence and slowed down approvals across the board.

According to the 2026 EU Notified Bodies Survey, out of 33,175 MDR applications, only 17,549 certificates were issued, which means that only ~53% of all applications result in approval. 

When acquiring our MDR, we tried to rely on external consultants, but after failing twice during the internal pre-audit, it became clear that no one could navigate the complexity of our product better than we could. Understanding that there’s no easy way to receive the certification, we made the decision to acquire the EU regulatory expertise ourselves.

So a key takeaway for every founder – do the hard work of researching the frameworks yourself, and it will pay off in the long run.

Hiring a team

When it comes to hiring, it is good to keep an open mind toward a wide range of opportunities. Building and maintaining a strong community within my field is essential. Being physically present at conferences and industry events plays a key role in this, as it opens a door to meet potential hires while staying closely connected to and continuously monitoring the market.

Equally important is the creation of effective incentive structures. Annual bonuses, equity participation, and other performance-based rewards encourage employees to work not out of fear of losing their jobs, but out of genuine motivation to succeed and be recognised.

One hire in particular had a transformative impact on the company: our international sales director. He brought decades of experience and deep relationships with hundreds of doctors worldwide. More importantly, with the right incentives in place, he was entirely self-motivated and required minimal external management.

Picking the right distributors

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