Here's something that many healthcare entrepreneurs ignore
Despite innovation in medical science, healthcare is usually behind other industries. By 3-5 years or more.
The industry gets by with old technology and processes. People resist change. Regulations slow progress. Companies market and sell using traditional approaches.
Such an environment sets the stage for new healthcare businesses. Some startups succeed. Several fail.
These failures aren't sudden or dramatic like in other sectors. You can't really fail-fast in healthcare. They are slow deaths. Companies drag on. Then they die when the money dries up.
The healthcare mousetrap
You have an idea. With your passion, you raise money. Or, you invest your own.
You build a team. Spend many months building a product or service. After toiling for many nights, you finally produce something beautiful.
Now you want people to buy your creation. At least a handful of customers.
You push for sales. But it's tough.
You spend money on website traffic. SEO. Facebook Likes. Twitter campaigns.
You think - may be if you offer it free, you can get users onboard.
You use the "users" number to show traction and raise more money. You use the money to "buy" more users.
Doctors or hospitals aren't buying. Sales people are too expensive. Google Adword clicks in healthcare are pricey.
You need sales to raise more money. You need more money for sales. With no money, your product will age. But you can't spend more on product until you at least sell some.
You are trapped.
Finally, many founders end-up writing post-mortem essays on Medium.
CB Insights analyzed numbers from 101 of those essays. Here are two big reasons for startups going belly-up.
- No market need (42%)
- Ran out of cash (29%)
Something so obvious that we love to ignore
Healthcare has many layers of complexity. Entrepreneurs often lose sight of what to focus on in this maze.
You can be a new hospital or software product or device maker. It doesn't matter. Your success depends on understanding two main players in healthcare. Build something that they really need.
#1: Patient - because of whom healthcare exists
#2: Doctor - without whom healthcare cannot exist
(I know some of you technologists are thinking - but AI will soon replace doctors. It's a separate topic. But for now, let's agree that we won't be seeing Elysium-style medpods anytime soon.)
It's not that entrepreneurs entirely ignore patients or doctors. They simply assume that they already know enough.
Instead of this, spend time with patients and doctors
But then healthcare is peculiar.
Even if your product or service doesn't directly serve patients or doctors (e.g. something for insurance companies). It will still need to finally serve patients or doctors.
Patient behavior changes depending on context. She may agree to something in front of the doctor. But may do something else at home.
Treatment patterns also vary. The same patient could be treated differently depending on place of service, her insurance plan and where she lives.
Entrepreneurs love focusing on better technology. Or a better looking website. Or an ideal notion of how healthcare must be. Or quality processes. Or marketing tactics.
All those are important. But could become meaningless. If patients or doctors ultimately have no pressing need for your product or service.
Instead of building what you want and finding buyers later. Build what they want.
Flip your thinking.
Talk to them. Ask them deep, probing questions. Observe them closely. At work and beyond. Know them more than they know themselves.
It might take you longer to get started. But it saves you from going down a tunnel with no end.
Patients and doctors. It's where all healthcare begins. It's also where it ends.