By Michelle Snyder

Last year was a banner year for digital health, as the market saw significant growth in funding, bigger deals and new investors entering the space. So what’s in store for 2013? According to a survey of nearly 140 digital health entrepreneurs and over 50 health care information technology venture investors, conducted by my venture capital firm InterWest Partners, we are in for another exciting ride this year. In the survey, we asked which sectors will see the most love from investors in 2013; which companies (if any) will see a $1 billion valuation; where they are having trouble recruiting; and which digital health entrepreneur would win “Survivor: HCIT Island” The answers? Well, it all depends who you ask.

Continue reading “Investors Are from Mars. Entrepreneurs Are from Venus”

By MICHELLE SNYDER

Practice Fusion, Castlight or ZocDoc will be the next digital health IPO. That’s according to a survey of over 100 innovative digital health entrepreneurs, conducted by my firm, InterWest Partners.

Nearly one third of respondents said Practice Fusion was most likely to be the next digital health IPO with approximately 20% of entrepreneurs voting for Castlight and ZocDoc, respectively.    Among the trio, all three have been impressive generating media coverage and raising money (collectively raising over $320m in the last 2 years alone with valuations ranging from $450m to upwards of three quarters of a billion dollars), in addition to having some of the most visionary leaders in the space.

Contrary to popular belief that digital health is primarily about the next iPhone app for weight loss, sleep or exercise, it was interesting to note that all of the leading “IPO” candidates in our survey have B2B models.  This is consistent with an insightful RockHealth report ( which found that nearly 80% of digital health companies have B2B models.   Future growth in this category is likely to continue as the leading healthcare accelerators such as RockHealth, BluePrint Health and Healthbox are all seeing more applications from B2B companies.

The responses to the IPO question reflect an interesting industry trend.  Though often classified as “B2B”, many of the leading digital health companies are really B2B2C – meaning that without the C there is no B2B.   Pricing transparency tools (Castlight), scheduling platforms (ZocDoc), employer based wellness programs, medication adherence solutions – they all must find a way to engage the end user or they won’t be purchased by the employer, physician, healthplan, hospital, or pharma company.    And though it’s impossible these days to sit through a day of pitches without hearing the phrase “consumer engagement” twenty times, I’m excited that people are starting to ask more of the right questions.  Why will someone want to use this?  Does it really solve a true need?  Is the product easy to use, intuitive, and fun? Continue reading “The Next Digital Health IPO?”

By Michelle Snyder

Over the 11 years I spent building the network at Epocrates, I learned a lot about physician behavior, motivation and the use of incentives.  And while influencing nearly 50% of U.S. physicians to use a product requires that it meet a true need, fit into their workflow and be extremely easy to use – building one of the most trusted brands in healthcare goes beyond the product.  It’s about being fanatical about understanding your users, engaging them at the right time, helping them support you and ultimately creating incredible loyalty.

Though we had a very analytical approach to user acquisition and brand strategy, I want to focus this article on something more fundamental – behavioral psychology.   Truly understanding not just physician behavior but human behavior was core to the business at Epocrates and permeated throughout our business, marketing and product strategy.  We focused early on in engaging physicians as consumers – B2C rather than B2B. Though a significant percentage of MDs are characterized as “small business owners”, we saw them as consumers first – hence, understanding human behavior, motivation, and influence drove product adoption and usage.

I was reminded of this recently listening to Dr. Robert Cialdini, speak at the 4th Annual Consumer Medicine Summit.   If you haven’t read it, “Influence: The Psychology of Persuasion” is one of those dog eared marketing “bibles” that has remained on my shelf for years because its lessons on how to influence people are universal and timeless.  In fact, I made it required reading for some members of my team. (Future postings on other favorites such as Nudge and Predictably Irrational, coming soon!).

Continue reading “The Psychology of Persuading Physicians”

By MICHELLE SNYDER

How many of us can remember a world without cell phones? Today’s medical students would undoubtedly be among that group. So it is no wonder these future physicians rely heavily on technology as they embark on their career path. We surveyed more than 1,000 medical students who are Epocrates subscribers about technology (software, hardware and EMRs) and other pressing industry topics.

The survey found 45% of respondents currently use an iPhone or iPod-touch, followed by Palm and BlackBerry devices. Even prior to the launch of the iPhone, Apple has connected with this younger generation and continues to play to its strengths. Our survey did not address carrier preference, but it appears students may be more device focused; nearly 60% of non-smartphone users planning to purchase an iPhone within the next year. It is also worth noting that students may be looking at what device residents or attending physicians are using as well. In the first year of availability, over 100,000 physicians are actively using Epocrates software on an iPhone/iPod touch. We still see a significant number of physicians using BlackBerry and Palm devices, so we expect those respective populations to grow as well.

Continue reading “Medical Students Want You to Know”