In healthcare, tech solutions follow their own rules
Tech solutions within the healthcare industry often don’t need to reach the most users to make a meaningful impact. They just need to make lives better. Smaller audiences don’t necessarily mean smaller profits for those that invest in healthcare technology — it just means the rules for navigating it can be different than the usual startup playbook.
Health tech solutions tend to take longer to come to fruition than other industries, for example. Due to the red tape and regulations in the medical world, it can be a tricky channel to navigate information technology and digital upgrades. Still, most healthcare companies are working toward digital solutions to streamline their customers' varied pain points.
We spoke with Dr. Kate Wolin, cofounder of Coeus Health, about how the same strategies for building a new food delivery app won’t always work in building healthcare solutions. Coeus seeks to scale digital health solutions — going from scientific research to consumers. To do it, Dr. Wolin straddles health and tech industry standards as a behavioral scientist and tech entrepreneur, allowing her to see the similarities and differences.
Health tech solutions should embrace scrapping the MVP
The process of building an MVP, or minimum viable product, is crucial for seeing how your tech solution will work. You build on it if it works well enough to earn users in the real world. That way, there are no sunk costs — you just roll out features as time and financial and human resources permit.
In healthcare, that doesn’t always work. For example, the definition of “minimum” can be very different. Maybe your minimum viable product is full-featured but built quickly on the back of an existing system. Or maybe you manually give users feedback instead of running a robust artificial intelligence backend, making it impossible to scale. If you end up scrapping your MVP because it can’t grow with your company, don’t think of it as losing money. That money went to gaining insights into the scalable solution.
“I’m a startup CEO and a scientist,” says Dr. Wolin. “In working with a couple of software development shops, the best thing they have done is to question what we are doing.”
Sometimes, building the perfect software right from the beginning isn’t a realistic goal. Developing a usable prototype can be enough to attract users and/or prospective investors, which can land you the resources to develop the project to the level you want.
Audience size for health tech solutions doesn’t matter as much as the impact
Doing something big for a small number of people should be considered just as transformative as doing something small for a big number of people, particularly in healthcare. While many in the tech world are looking for the next cutting-edge app to transform society as we know it, healthcare populations have different and specific needs. Serving any of them well can save lives. And bringing something to market that doesn’t work can do real harm. So while a laundry-washing app may need to scale to millions of people to reach a profitable cash flow, an app that serves a necessary medical function might not.
One size does not fit all for healthcare solutions, but one app can greatly impact a small portion of the population. Your team may not net returns across a wide audience, but you can get a higher per-user return from making an essential product.
Healthcare tech funding must move from home runs to base hits
Software can transform people’s lives without earning a giant return on investment. That doesn’t mean VCs can’t cash out once new health tech solutions are adopted. It just means you need to know what the market needs and what companies are serving what audiences.
“With VCs, you have 10 companies and nine can be failures as long as one gets a massive return. That means they’re only investing in ideas that have the potential to be billion-dollar businesses,” says Dr. Wolin. “The thing is, that to me is the equivalent of saying ‘I’m only going to assign sluggers to my baseball team.’ It negates the value of someone who’s really good at getting on base.”
What ‘good enough’ means in healthcare
The pitfalls of developing an app that doesn’t work in the healthcare channel are much bigger than the rest of the market.
“If I buy a pair of pants and they don’t flatter me, I’m disappointed. But if I choose your mental health app over traditional therapy, I’m risking substituting something that doesn’t work for something that does. For a lot of these outcomes, there’s something out there. It might not be accessible, and it might be expensive. But there’s an ethical consideration in giving people something that works,” says Dr. Wolin.
There’s value in getting something to market, but if people come to rely on your product and it can’t deliver, the consequences are far more dire than a one-star review on iTunes. Theranos is a chilling example.
Theranos brought many trustworthy advocates to the ground and tarnished Silicon Valley's reputation. Founder Elizabeth Holmes mislead investors, employees, executives, and the media into believing Theranos found a solution to perform a pin-prick blood test that could be used to perform many health tests, preventing patients from undergoing a series of bloodwork to identify a treatment plan. Nearly a decade later, Theranos, Elizabeth Holmes and the $9 billion evaluation dissolved.
If you’re going to fail, fail in a test environment. The real world of Healthcare is only for products that work.
“Do no harm” is a philosophy all tech could stand to live by
Hippocrates says in Of the Epidemics, the inspiration for the Hippocratic Oath, "The physician must be able to tell the antecedents, know the present, and foretell the future — must mediate these things, and have two special objects in view with regard to disease, namely, to do good or to do no harm."
This philosophy can also be applied to modern technology.
No doubt there are additional constraints in this space, and yes, they can hamper innovation, but the truth is that health tech solutions operate by a methodology and rules we sometimes wish the rest of the industry could follow.
Instead of aiming to reach the biggest possible audience with software that aims for the lowest common denominator, remember the value in building to the needs of specific populations. Embrace the 4x return, not just the 10x one. And before you launch, make sure your product actually improves the lives of real people in an ethical and humane way.
Published by TXI Healthcare in Digital Health