There are two questions I hear all the time from digital health care entrepreneurs: 1) How can I gain initial market traction? 2) How do I grow my client base?
Health care is an incredibly tough market to sell into. Even if you have a highly-differentiated solution with proven value, the barriers to access and scalability are extremely high.
For entrepreneurs trying to break in, the problem is two-fold. First, the majority of providers are focused on patient care – getting on their radar is difficult. Second, even if an entrepreneur does gain buy-in and proves value to a single provider or group, it’s difficult to build upon that success.
Negotiate Strategic Partnerships
The first lesson to get ahead: Learn how to spot a valuable partnership and negotiate a good deal—whether with an accelerator, incubator, or VC.
There are 87 accelerators (and counting) dedicated to jumpstarting the most promising health care startups in the country, and each is as differentiated as the companies they nurture. These accelerators vary in how structured their programs are, as well as the threshold of capital they invest. Timeframes differ, the amount of equity required varies, the level of mentorship fluctuates, and the quality of contacts/potential clients runs the gamut. Despite the differences, the objective is the same: to help propel entrepreneurs into health care.
I hate to give away all the punch lines from my California Healthcare Foundation report on healthcare accelerators, so you will just have to read it for yourself. However, a few extra tidbits that didn’t make it in are here below (as you can imagine, I can’t be quite as Lisa-ish in a commissioned report as in my blog). Among my many discussions with a myriad of willing report interviewees (thanks to all of you!), I started collecting some funny stories that I have begun to refer to as Tales from the Accelerator Crypt. A few of them are here below for your amusement.
- From an East Coast Economic Development-Focused Accelerator: By far the worst idea pitched to us was from a company that proposed to prevent falls among the elderly with a vest containing an airbag whose deployment is triggered by EEG signals coming from a wearable computer brain interface. It’s probably obvious why this is so insane. Getting beyond who might actually wear such a thing around their home or to bed, can you imagine the number of erroneous deployments from the notoriously unpredictable, noisy EEG signal? If only they had made a video. That same week in the same city, I was amazed to be introduced to a rival company also developing a wearable airbag for accidental falls, but at least this one was triggered by an accelerometer. File under “You know wearables have jumped the shark when…”
- From a University Program in CA: The most awful pitch we had was from a clinician-entrepreneur whose answer to every probing question on commercial viability was “This is going to save countless lives.” It was his answer to every question, clinical to operational to financial. The most entertaining stage moment, however, was when a CEO of a company developing a ‘next generation’ needle-free injector did a live demonstration of his product by injecting himself with saline while up on stage doing his pitch. He unbuttoned his shirt, gave himself the shot and buttoned up again, claiming how painless it was. As he continued to speak, blood pooled and spread from the injection site, down his arm and across his entire white shirt. It was a slow motion disaster. He didn’t recover very well. Needless to say they didn’t win the demo day competition.