How to Sustain a Healthcare Startup?
By Sandhya Mishra
Are you running a Healthcare Startup and wondering how not to turn it into yet another hideous Rube Goldberg machine? This article may interest you.
A Startup is a fancy term that is dazzling nerds from the fancy management colleges to resign their top-notch jobs to do things that everybody else can’t get quite right. Startups are usually known for their out-of-the-box qualities and a vibe that even established firms are eyeing to tap into.
But as attractive as the idea may appear not many of these startup stories have happy endings.
This is especially true with Healthcare Startups because when it comes to disruption in healthcare, the industry is little shy.
Let’s hear it out from the best person we have on board, Mr. Pradeep K Jaisingh, a prolific Angel Investor and a founder of Healthstart and International Oncology and Outcancer Foundation
What are the major challenges facing the healthcare startups in India?
“The world of healthcare startups is not an easy place to be in at present. Undoubtedly the space has proved to be challenging to say the least even to the extremely well-funded startups so one can well imagine the formidable odds that are faced by the not-so-well funded ones,” says Mr. Pradeep.
He adds, “For healthcare startups to build a scalable business in India is not easy. Far from it in fact.” Why so? What are the major challenges?
Absence of a strong support system- there are very few options for early-stage/ incubation-stage companies in the healthcare space.
Follow-on funding— Even when the startups received initial incubation support / funding from the already limited sources, the follow on funding for pre-series A/ first institutional VC round has been extremely hard to come by making it very difficult even for promising startups to move beyond the pilot phase to the market launch/ initial scaling. The angel investor groups like Indian Angel Network, Mumbai Angeles and Let’s Venture have played some part but not nearly enough. The absence of many success stories/ attractive exits have made it even more difficult.
Technology adoption continues to be a big challenge both by the doctors as well as the patients at large. Many young entrepreneurs with technology background have found the going especially tough because they underestimated the role of healthcare domain expertise and the resistance to behavioral changes from the status quo.”
Successes that we can count on
“Fortunately, there have been some big success stories as well and the few worth mentioning here are,
Flatiron health— healthcare tech company focused on cancer connecting oncologists, hospitals, pharmaceutical companies.
Pharma giant Roche acquired the company for $1.9 billion mostly for its data access.
23andMe— Personal genomics company that had a near death experience but survived and is now thriving. DNA testing for multiple health and wellness applications.
Clover Health—-innovative approach to patient Analytics to drive Medicare /insurance benefits and other services.
Not without its own share of challenges but has recently raised $ 500 M in funding.
Zocdoc—appointment booking digital health startup has struggled with revenue models but is very well funded and is now charging a patient fee to the providers creating strong resistance but fighting it out.
So as we can see that even some of these success stories have not been without their own specific set of challenges and have had to often struggle for mere survival but in the end managed to not only survive but in fact find a way to thrive.”
How to Sustain a Healthcare Start-up?
“The Need identification is of critical importance in healthcare. Before you build a product/ solution or a service you must clearly define the need in terms of— what specific problem, for which population and with what measurable outcome/end result.
This may sound simplistic but the startup world is full of incredibly large number of failed attempts at correctly identifying the need.
Technology by itself is not the solution— What technology does can be the solution but that requires some doing.
This syndrome is often called “Technology looking for an application” and has been widely seen both in India as well as in US and Europe. A rather long list of unsuccessful digital health startups around the world testifies to this in an obviously unpleasant way.
Scaling-up in healthcare is a slow and painful process— the adoption challenges by both physicians and the patients will continue to pose problems and therefore the onus is on you—the entrepreneur—to create very compelling value proposition that would either dramatically improve the patient care/experience, reduce the overall cost or preferably both.
And even then your ambition should be local at best regional first before you have national aspirations to become the next Uber or Whatever of healthcare in India as so many of the startup founders are fond of describing their company as.
Remember just the Delhi/ NCR region is larger than Australia and you can indeed create a very successful company by just focusing on one big city like Mumbai, Bangalore or New Delhi initially.
Overall I would like to list three main per-requisites for success and while they are equally applicable to all entrepreneurs, in my opinion they are especially important for healthcare entrepreneurs.
I call them the three R’s
They are Resolve, Resilience and Resourcefulness.
Resolve is about your own strong personal commitment to your entrepreneurial journey knowing fully well that it’s going to be full of challenges.
Resilience is about your ability to bounce back every time from the setbacks of those challenges mentioned above.
Resourcefulness is about being innovative in the face of these challenges, finding options where none seem to exist. Searching and finding help, forming alliances and partnerships, trying the unusual, unconventional, unprecedented avenues but not giving up. EVER.
Here is my personal favourite quote that I would like to share with all of you entrepreneurs