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TECH: Health2.0–this time it’s different?

Dmitriy is worried that Health 2.0 is turning into a bubble. His piece Health Social Networking & Web 2.0 Bubble is a response to his rather prominent featuring in Laura Landros’ WSJ column. He’s concerned that it’s yet another bubble with no business model behind it. I’ll say more about this later, but there are two reasons to be less pessimistic than Dmitriy.

First, the business model is better because a) the tools are significantly cheaper to build and b) one player (You know who) has figured out how to build an advertising supported business online that really works—and is insanely profitable.

Second, even if there are no great riches to be had by independent Web2.0 and Health2.0 companies, the tools, techniques and technologies of Health2.0 will be adopted by the health care system and the consumers of health care. And that will be the most important feature of the entire “movement”.

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Jay SrinivasanJohn BellUnity StoakesJeff O'ConnorRyan Tomayko Recent comment authors
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Jay Srinivasan
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Jay Srinivasan

Heck…I commented on a discussion that goes back to 2006?!

Jay Srinivasan
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Jay Srinivasan

I find myself agreeing with the points made by *both* Matthew and Dmitriy – and, no, I am not sitting on the fence. The fact is, it is early days yet for so-called Health 2.0 ventures and the jury is possibly still out. Some may survive, even make it good, but not because they stuck to their original business plans but because they were flexible and adapted to new opportunities. Many – if not most – may fail because either the concepts surrounding “Health 2.0” are ahead of their times or because they rub against some behavioral aspects that dog… Read more »

John Bell
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This is a great discussion. I am a bubble-survivor (I used to say that I survived the “first” bubble but didn’t want to be a harbinger of another “pop”). It’s hard to argue that there is a whole lot bad about the experiments in digital healthcare happening. From vertical search, to communities, to all-in services like Revolution – there is some really interesting stuff happening at the intersection of social media and digital health. Sure, some will fail. Sure some of those failures will share attributes of non-health Web 2.0 companies. But I am seeing some earnest attempts at creating… Read more »

Dmitriy Kruglyak
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Unity, let me address your points in no particular order: #1) The purpose of my post was neither to point fingers at any particular company nor claim that Trusted.MD has all the answers. I am sorry if it hit the nerve. #2) Let me address your comment re: Trusted.MD. I made that announcement only reluctantly, knowing that I have to tell attendees (and the rest of the world) something about the plans for the next year. The announcement sticks to the facts (like the deal with Transmarx) and it is up to everyone to decide what to make of them.… Read more »

Unity Stoakes
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Let me clarify/suggest a few comments regarding Dmitriy’s last comment: 1) I never mentioned “unsuspecting” investors. That’s your word. I have rarely, if ever, met an unsuspecting VC, private equity, or angel investor. They are cunning and opportunistic. And that is why I suggest they will be investing in online health care companies. Because there is huge opportunity in online health care. There has been little innovation in the past 10 years, and the demand is way past due. That’s what we are seeing anyway as we build our business. 2) Since you continue to use the word “hype”, I… Read more »

Dmitriy Kruglyak
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All: I am glad this is generating interest. Vince: I hear you. But my point was that if we let the next wave of eHealth be defined by proxy by questionable (bubbly) concepts, like Web 2.0 this will confuse development of real healthcare applications. What I am suggesting is think harder to find what the next wave of eHealth should be, rather than parrot buzzwords. Jeff: Thanks for eloquence in expanding on what has been my intended argument, especially eToys and Pets.com example. “Online pet stores” have been THE butt of jokes for all that is wrong with ecommerce for… Read more »

Unity Stoakes
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Great post Matthew. In our opinion Web 2.0 and Health 2.0 are completely different trends. It’s sort of like comparing apples to oranges. I don’t agree with Dmitriy that Web 2.0 will have a chilling effect on health 2.0 at all. In fact, just the opposite effect will occur. All of the VC’s, private equity investors, and angels (who have billions of dollars and must invest it somewhere) who are done investing in copycat video sites, calendar tools, and companies with no proven business model, will be looking to invest in untapped sectors with huge growth potential (i.e. online health).… Read more »

Jeff O'Connor
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Vince, Just as eToys and Pets.com ruined it for would-be e-tailers in other sectors, failed “social networking” sites and sites that base their business on “user-generated content” and go bust are going to ruin it for companies trying to apply similar concepts to the healthcare space. “2.0” and all the jargon it’s ushered in are going to become codewords for “money-losers,” and that will have a chilling effect on the application of this sort of technology to our market. The leaders at the time of the slow-down/crash will remain leaders because their competition will have died-off or have already been… Read more »

Vince Kuraitis
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Ryan and Dmitriy,
…so if I follow your argument, I should be worried about the possible burst of a possible bubble in Web 2.0, and that this could impinge the development of deserving but not yet existing Health 2.0 companies and applications?
Guys, I’m on your team as to being a believer and advocate for technology in health care, but we gotta build a stronger case here….

Dmitriy Kruglyak
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Ryan,
You are 100% on target. The point of my post was to warn people to be watchful of a bubble. Rather than hype “Health 2.0” it is best to (quietly) get to work on proving the real applications.
The bubble environment was once summarized by Warren Buffet thusly: “when the tide is high you do not know who is swimming naked”. When bubbles pop, legitimate companies in overheated sectors get stigmatized too.
I do not want this to happen.

Ryan Tomayko
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Vince: I believe the argument is that there’s a Web 2.0 bubble and that the handful of companies running with the “Health 2.0” moniker will pop with the larger bubble. From the linked article: If you compare the first and the second boom and bust cycle, in the second one healthcare is lagging. Every business that has ever been tagged by “Health 2.0” label is still in the diapers in terms of proving the model. Yet the bigger space “Web 2.0” is about to implode. Look for intangible indicators and note the Top 10 words of the year. What this… Read more »

Vince Kuraitis
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Just who are all these Health 2.0 companies? does anybody have a list?
I’m personally aware of just a handful of companies that would call themselves Health 2.0. Laura Landro’s article in the WSJ only references non-profit or government health related social networking organizations (Daily Strength.org, American Cancer Society, CDC).
So how can the Health 2.0 bubble break if it isn’t a bubble in the first place?

Ryan Tomayko
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I think you nailed it. The bubble is there but tiny compared to 2000, IMO. More products are coming to market faster with much less capital and better technology. Many will fail but they’ll fail fast and cause less damage. What’s interesting to me is that I think you can see two clear segments here: 1.) the relatively few old-school, big capital, cathedral building startups like Revolution Health that are trying to be, well, revolutionary, and 2.) the many new-school, grow with revenue, bootstrapped outfits that are trying to be *evolutionary*. The second group didn’t exist during the first bubble… Read more »

Dmitriy Kruglyak
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Matthew, I appreciate you highlighting this, but suggest we look a little deeper into the points I was making: #1) There is HUGE difference between new “user experience and empowerment” and attempts of people to build businesses that capitalizie on it. The first is here to stay. The second is faaaaaar from proven. #2) Sure the tools are cheaper – especially for end users. But if you want to be an “operator” and create an “epicenter” that attracts user attention, tools are your last worry. People have deficit of attention and gravitate to handful of sites. In every category it… Read more »