There has never been a more exciting time to found a digital health company. We’ve reached a tipping point where enough healthcare organizations have adopted some third party solution to augment their existing care tools that it is no longer uncharted territory. Let’s be honest, healthcare is one area where you rarely want to be first. Now that the proverbial canaries have gone deep into the mine it is safe for the next wave of innovators to introduce their solutions to the world.
Not only are we entering an era where organizations are comfortable adopting niche focused software solutions, we’re living in a time where tools exist for developers that make building, testing, piloting, and launching a digital health solution easier than ever before. When we started, you couldn’t even get your hands on sample patient data. If you weren’t working closely with a health system, good luck understanding what the final workflow would look like. Today, you can build an MVP and use our developer tools to simulate integration with robust sample patient data and a complete demo instance of Allscripts, athenahealth, or DrChrono.
Beyond these improvements, all of the great successes and failures in digital health have been well documented. A bible of do’s and dont’s exists for anyone willing to look. In the spirit of providing value to future innovators I’ve gone and compiled the top 5 resources available today for someone looking to develop and launch a digital health application.
#1: Boston Children’s Innovators Roadmap
If there is one thing you take from this post, it is to download this roadmap and read the entire thing. It is bar none the most comprehensive, user friendly overview of how to found a digital health startup and actually sell it to health systems. It is a truly impressive document that starts with a crash course in entrepreneurship (chapter two could be the curriculum for “startups 101” at any high school or college) and moves through key considerations when designing for digital health, app development best practices, ip and legal considerations, a commercialization path, and resources around funding opportunities. What I love most about this guide is that it is coming from the health system’s point of view. In case you missed it, that means your customer just created a paint by numbers manual for what they are looking for from a product that wants to sell into their institution. While not everyone will qualify for Boston Children’s digital health accelerator or sell into their system, they’ve provided invaluable insights for any group getting started. Boston Children’s Innovators Roadmap.
#2: Rock Health’s Digital Health Startup Handbook
There’s an interesting dynamic at play in digital health. On one side you have technologists who look at healthcare’s woes and set out to reinvent the wheel without taking into consideration the unique nuances and sensitivities of the space. On the other side you have companies founded by clinicians that understand their users and the value they can bring but don’t have a clue about how to start or run a business. For the latter group, Rock Health has done a great job compiling a funding 101 guide that will help any clinical founder (or non serial entrepreneur) quickly know as much about stock options and dilution as they do about treating someone with pneumonia. Rock Health’s Digital Health Startup Handbook.
#3 Lisa Suennen’s Venture Valkyrie blog
I was first introduced to Lisa during a panel at Health 2.0’s fall conference back in 2015. It was immediately clear that she wasn’t just another speaker regurgitating tired metaphors and truisms. No, Lisa has opinions, strong ones, and they are backed by years of experience as a strategic advisor and venture capitalist. Her blog posts cut through the fluff and offer very pragmatic advice that digital health entrepreneurs should take to heart. While it might be tough to hear some of what she has to say, you’ll be better off in the long run. You can read her posts over at her blog, I’d suggest going through her popular posts, or at MedCity News where she is a regular contributor.
#4 Join an accelerator (a good one)
The number of accelerators and incubators that exist today can be overwhelming but the right program can still provide add incredible value. Redox as an organization has actually participated in three different accelerators (DreamIt, TMCx, MassChallenge, and Healthbox) so we know a bit about the landscape and can tell you pointedly where we benefited most:
- Met many future customers
- Made initial connections with venture funds that went on to invest in Redox
- Hired talent we were introduced to as part of the program
- Received priceless time with health system executives
- Built long lasting relationships with other members of the digital health community (trust me, this makes the conference season far more enjoyable)
I don’t have a secret for picking the right program but getting feedback from past participants shouldn’t be too difficult. You are also lucky to be starting at a time time where more and more organizations are moving to a non-equity stake model which makes joining a much easier decision (what do you really have to lose?). At the end of the day, an accelerator will force you to craft your story, improve your pitch, and introduce you to potential customers, investors, and employees. Get involved and have fun! For more thoughts on the accelerator landscape, check out this post overviewing our experiences.
#5 pitch to a VC
I’ll be honest with you, I generally don’t like venture capitalists. Really, anyone who’s primary focus is turning money into more money so already rich people can get even richer isn’t my first choice for a coffee date. That being said, their hyper practical questions are an important litmus test for any digital health startup. You can’t build a successful business that positively impacts your customers without a model that allows you to hire good people and deliver on your promises.
Healthcare is a space where emotions run high and a number of entrepreneurs seek to tackle problems they’ve felt on a very personal level. Their heart is in the right place but, unfortunately, that isn’t enough. You need to understand the competitive landscape, you need to figure out a pricing model, and you need to have enough money to keep the thing alive until you are sustainable. Venture Capitalists have spoken with thousands of companies and are laser focused on understanding the competitive landscape, who is making waves, who has failed, and their feedback should be solicited. You never know, they might save you from starting the 999th personal health record company.
I’d like to note that not all VCs make my skin crawl. We’ve been very lucky to find organizations that not only believe in our vision, but also employ genuinely great people. Cheers to you .406 Ventures, Adams Street, Avenir, Battery, Flybridge, HealthX Ventures, and RRE. If anyone is currently raising money we couldn’t recommend these groups enough.
Anything else?
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What did I miss? Are there resources you found valuable on your path to digital health domination? I’d love to hear about them! Comment below so we can spread the word and help the next wave of digital health solutions launch products that improve healthcare for all of us.
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