Recently ZocDoc had a huge funding round demonstrating the success that they are having. There’s a number of lessons learned from ZocDoc’s experience. Unfortunately, many haven’t demonstrated Zocdoc’s wisdom leading to a large number of healthtech failures. A recent study highlights this phenomena. After interviewing 110 digital health entrepreneurs, RockHealth recently released its study Rock Report: State of Digital Health demonstrating the disconnect between the startups getting funding and what many startups are pursuing. This disconnect is the last and most important reason healthtech companies have failed that are detailed below. The following are the top reasons why healthtech companies have failed or had to do major pivots in order to survive:
Lack of Specific Focus or Adoption point
It’s well documented that a lack of focus kills startups whether they are in healthcare or not but it is particularly prevalent in healthcare. The diversity of opportunities in healthcare is so great that it’s tempting to try to solve it all. These startups are ignoring the old saying about how to eat an elephant — one bite at a time. Too many startups are trying to swallow the elephant whole.
Expected consumers to pay
With the exception of weight loss programs, there aren’t many examples of consumers paying directly for health services. Over time, this is likely to change as more of the burden of healthcare costs gets shifted to consumers as was highlighted in a Healthcare Disruption series (see links below). However, I’d be very cautious about any business expecting to have consumers pay in the near-term.