That’s a useful and timely question, given the news that Castlight Health will launch its IPO with valuations north of $1 billion. Yes, “billions,” and according to a MarketWatch analysis, “it’s a bargain at $1 billion.”
So then – do we anticipate a bubble? asked Marc Monseau of the Mint Collective, the convener of our panel who brought together Robert Stern, a successful health-tech entrepreneur whose latest venture, @PointofCare, focuses on patient engagement; Marco Smit of Next Innovation Health Partners (parting from the Health 2.0 Conference family where he led Health 2.0 Advisors for several years); and me.
Some key themes emerged at our session:
People building new health companies need to really, truly understand the health care system: physician work flow, patient life-flow, how dollars flow in and out, how technology gets adopted, and a myriad other intricacies which make health care so different from other vertical markets. It seems at this SXSW event, and other meet-ups where investors and industry mentors are called upon to critique start-ups’ ideas and prototypes, some developers seem to never have spoken to a user – a doctor, a nurse, a patient, a caregiver. This sounds so 101, but it’s absolutely still true. So…
Design, design, and design is the new location, location, location for health-tech. Design thinking must be embedded into the start-up process from the beginning…even before the beginning in ideation. Zen Chu, who teaches digital health within his curriculum at MIT Sloan School of Management, told me just before this panel that if he had to do it over again, he might have gone to design school. In today’s fast prototyping, manically paced world, design can make (and lack thereof usually breaks) a promising idea in the health care space.
The goal of a business model shouldn’t be to develop for the N of 1: it should be to scale to the N of many. Many entrepreneurs are inspired by someone they know – a family member or friend – who takes ill, has a bad patient experience – and is motivated to start-up ‘something’ to deal with that moment. Inspiration and passion are important, but nothing beats a business model that makes sense to solve a big challenge in health care. Make sure when you’re solving a problem in health care that it’s a real problem, a meaty problem, with a scaleable solution beyond your aging Mom or your friend whose hospital-borne injury could have been avoided. Both of these are great places to start: but don’t end with them as your market research insights.
It’s OK, and probably useful, to be stealth. There’s no problem with keeping your head down and not being written about in Fast Company or Wired in Year 1. Keep doing what you’re doing: build that business, gather up the data and experience that builds your business case, then take that to prospective customers. You’ll be in the press soon enough without chasing stardom (digital health is a hot topic in local business journals and national tech press). If you’re successful in a health care start-up, you’ll be a rock star in health-tech.
Adopt the Triple Aim as your operational and strategic beacon. Drive population health and outcomes. Enhance and enchant patients and their experience with the health system – both in care settings like doctors’ offices and hospitals, and for bolstering peoples’ self-care at home and on-the-go. Help drive costs down through making health care personalized, inspiring, engaging, and more streamlined and efficient. Learn from Jiffy Lube, Nordstrom, Walmart, and yes, Apple too.
There’s lots of data being collected: generating data is not an end-point or business model. We’ve got data emerging from health care claims in insurance plans, employer groups, hospital and physician encounters, pharmacy scripts filled, retail sales, and user-generated health data from activity trackers and sensors. Let’s work to make sense out of that data now and build insights that arm decision makers (clinicians and consumers alike) to make better choices in health care. Maker Faire coming to health doesn’t mean it has to be a shiny new thing: it can be creating brilliant insights that motivate smart(er) behaviors.
You can reconstruct much of our discussion tracking the Twitter hashtag #DHBubble (for “digital health bubble”).
I thank my fellow panelists for an energized discussion: you taught me a lot and inspired me to keep doing what I’m doing….putting the person, patient, consumer, and caregiver at the center of the health care ecosystem. Advocate for transparency. Know my customer, how they live and work and what they care about. It’s going to take a village, crossing silos and chasms, to make health care better.