Health care around the globe is witnessing rapid digital transformation. This evolution has brought forth many innovative health tech entrepreneurs. However, many digital health startups – perhaps, even yours – operate under misconceptions and false assumptions that ultimately end up hurting their businesses. Some of these could also be holding back your business from taking off.
Here are six such common myths – busted!
1. Consumers Are Uncomfortable Using Digital Technology
The low usage of digital health tools means consumers are reluctant to use such products. This is because of the sensitive nature of medical care, as well as concerns over security and privacy of medical information.
According to a recent report by McKinsey & Company, more than 75 percent of respondents would like to use digital health care products, provided they meet their needs and expectations. Moreover, research suggests that 80 percent of consumers are open to health care tools on their smartphones.
Users are slow to adopt health tech products because these tools either don’t meet their needs or are of poor quality. It is key that digital health startups like yours stress on functionality and user experience (Link to Digital Health Blog #1 when ready) while developing your digital health products and services.
Is your digital health product meeting the expectations of your end users?
2. Successful Digital Health Startups Can Only be Run by Health Care Experts
Health care is a complex, mysterious space. A digital health startup, therefore, must be led by specialists in medicine or genetics in order to be successful.
This assumption has been proven wrong on many accounts. Scores of successful health tech ventures are led by people who are not from the health care space.
Kit Check is one such example of a successful health tech company. It was founded by Kevin MacDonald and Tim Kress-Spatz – both had formidable experience in software and technology information, but none in health care.
While it is definitely helpful to have people with intimate knowledge of health care, this is not a rule set in stone. In fact, health care is one industry which everyone can relate to.
Is your startup led by software engineers or health care specialists?
3. There is a Lack of Funding in Digital Health
Health care is a hard space to survive in, and funding is not easy to come by.
Health tech is blazing hot right now! In 2015, digital health startups attracted $5.8billion in funding.
In fact, in the first quarter of 2016 alone, at least $770 million was raised in funding by digital health startups. These statistics offer ample evidence that the digital tech industry is thriving right now, and millions of dollars are pouring in!
Isn’t this great news for digital health entrepreneurs like you?
4. Patients Want Out-of-the-Box Solutions
Ground-breaking innovation is necessary for successful startups. Users are awaiting innovative solutions.
Your digital health product does not have to be revolutionary in order to be a hit! Many existing health tech startups offer simple solutions to common problems.
In fact, the McKinsey report suggests that users want applications and tools to address simpler day-to-day issues rather than flashier, highly innovative products. Consumers want products that will reduce costs, increase efficiency, and offer reliable and quicker access to health information.
Are your health care products addressing the basic health care needs of consumers?
5. Selling to Hospitals is Just Too Hard
Only big stakeholders like Epic or Oracle close billion dollar deals with hospital chains. There are too many big players in health care already.
Medium-sized digital health companies are thriving in the same competitive market as mega-sized companies. For example, Synapse has both local hospitals, such as Stanford and UCSF, and large hospital chains as its customers. Another health IT company, Adhere Tech is also currently working with Walter Reed and Weill Cornell Hospitals.
It is certainly true that hospitals can make tough customers. However, understanding a hospital’s typical buying process can help you analyze your own processes in order to better suit your target market.
According to Steve Carbonara, a health IT specialist, knowing the typical buying process in hospitals is the first step toward successfully selling health IT products to these organizations. He lists the process down as: Strategic Planning > Assessment of Technology > Research of Vendors > Acquisition > Utilization.
Are your startup’s business processes aligned with those of your target market?
6. Have to be Based Out of New York, Boston or Philadelphia
New York, Boston and Philadelphia are the emerging investment hubs in health care. Digital health startups need to be based in one of these cities to make it big.
Contrary to this common perception, many other states in the U.S. offer incentives to attract innovators and entrepreneurs. Connecticut, for example, is increasingly drawing digital health businesses. These health tech entrepreneurs benefit from advantages like low rent, broader base of customers, huge pool of academic and business talent and the favorable geographical location between New York and Boston.
Moms 1st Drs 2nd and Clear Health Analytics are two examples of digital health startups that are successfully taking advantage of the environment that is conducive for business growth in Connecticut. Moreover, there is also a rise of coalitions like Innovation Destination: Hartford and Connecticut Technology Council that are dedicated to enhancing the state’s ability to support startups.
Have any of these myths hampered the growth of your digital health business? What other myths do you think are prevalent in the digital health industry?
I think it’s time to ignore these myths and successfully ride the digital revolution that is taking over health care.