Failure to Launch: How to Avoid the 5 Common Mistakes That Cause Digital Health Ventures to Crash and Burn

Elena Lipson

The digital health market in the first quarter of 2017 enjoyed continued momentum, with 71 deals totaling over $1B (which by some accounts, is actually a conservative estimate).[1]  But don’t let the steady deal flow fool you – it’s extremely challenging to successfully launch a digital health venture and even tougher to sustain it over the long-term.

Many first-time founders and even serial entrepreneurs new to digital health expect to employ a lot of the tactics they learned in business school or had success with in other industries.  They craft well-meaning plans to develop a minimum viable product (MVP) and launch some pilots, and anticipate that the customers and deal flow will follow.  And sometimes it does.  But more often than not these founders encounter unexpected delays and hiccups due to the complex and highly regulated nature of healthcare.

Here are the top five mistakes I’ve seen digital health founders make that can lead to their early demise:

  1. Confusing personal experience with a broader market need: Healthcare is deeply personal and many founders decide to enter this space because they or a loved one has had an unsatisfactory encounter with the healthcare system. While that passion and personal experience can be an attribute, it can also blind founders from seeing other viewpoints and trick them into believing they have the best and/or only solution that solves that problem.  Just because you have experienced something first-hand, does not mean that your problem is going to translate into a broader market need.
  2.  Failing to clearly differentiate and communicate where your solution fits in the larger ecosystem:  Today’s digital health ecosystem is much different than it was 5-10 years ago, when barriers to entry were higher, categories for products and services were more defined and only bigger companies could afford to launch a new solution.  As a result, there are literally thousands of companies vying for customer revenue dollars and it can be hard for a smaller start-up to distinguish itself from competitors. If you fail to differentiate your solution and rise above the noise in the market, you will have a tough time getting anyone’s attention.
  3. Inadequately identifying a paying customer:  It’s also hard to get customers to pay for a digital health solution. In healthcare, consumers rarely believe they should have to pay for a product or service.  It can also be really tough to convince insurance companies that they should pay. So founders are caught between a rock and a hard place. Because the categories in digital health can be blurry at best and it’s hard to define a paying customer, it can be hard to generate awareness and adoption for your solution.
  4. Underestimating the length of the sales cycle: Typically deals in healthcare take about 6-18 months due to the complexity of the ecosystem and the sheer number of stakeholders.  It’s unlikely that you’re going to be that “special” company that lines up pilots, partners and customer much faster.
  5. Oversimplifying the complexities of the regulatory and scientific validation processes:  This one is more common for entrepreneurs who don’t have a healthcare background and may not be aware of how much regulations and clinical validation can slow down your product roadmap and market launch.  There are few shortcuts here to speed things along, although if you’re new to healthcare, a good advisor who can guide you always helps.

Most of these mistakes can be avoided or mitigated if founders would just slow down in the beginning, which ultimately allows them to move faster later on.

Many founders are so eager to develop their MVP or solution and go to market that they gloss over a lot of the upfront work that sets the foundation for their business.  By taking the time at the beginning to focus on their business model, founders will likely uncover many of these challenges and can possibly mitigate them before they destroy what they are trying to build.

Some entrepreneurs may shudder at the idea of spending precious time that could be used on product development to develop their business model.  But I’m not talking about a 50-page business plan that sits on the shelf and collects dust.  Rather, I’m talking about the foundational components for your entire business, including who your customer is; the problems you’re solving for them; your product/market fit; revenue model; and key activities, resources, partners and costs.  In fact, these components should really be driving the product development; you are doing yourself a disservice if you skip over them or only give them cursory consideration.

But let me caution you – this upfront work to define your business model is not fast or easy.

It requires you to go into the market and actually talk with prospective customers and, more importantly, listen with an open mind to the problems that are most important to them.  These insights will help drive you towards a solution that solves their problems, rather than designing a solution and then trying to find a customer with a problem to sell it to.

You also need to have a deep and realistic understanding of where your offering falls in relation to other offerings in the market.  In most cases, there are going to be products and services that are similar (or even perceived to be the same as yours) on the market.  You need to take the time to understand what solutions already exist, as well as what may have failed before you, and position your solution differently to rise above the noise in the crowded market.

This deep understanding of your customer and their problems, coupled with your intimate knowledge of your product/market fit, will help you develop a differentiated value proposition so you don’t get lost amongst a sea of “me too” products and services.

It’s also critical to map out the key activities and resources needed to deliver your value proposition.  This is where you need to go deep and dive into any regulatory requirements (i.e., HIPAA, FDA clearance, reimbursement policies, etc.) along with whether your solution requires clinical trials, which can be lengthy process.  These dependencies need to be built into your activities, resources and costs.

Once you have a good sense of who you are serving and how, you can also develop a revenue model, taking care to identify who is actually going to pay for your solution.

I’ve only really begun to scratch the surface about how to avoid these 5 common pitfalls of digital health entrepreneurs.  In reality, it’s even more nuanced than what I have described and it can also bring up a lot of emotions for founders, causing them to question their assumptions and even their confidence in their solution.  Like I said, this isn’t easy.

If you’d like to learn more, please feel free to reach out to me at elipson@mosaicgrowth.com or on LinkedIn.



[1] Rock Health, “Q1 2017: Business as usual for digital health.”

 


The time is now: Addressing health inequities in rural minority populations

Marva Williams-Lowe, PharmD, MHA

In 1966 Dr. Martin Luther King Jr. gave a speech to the Medical Committee for Human Rights and said “of all the forms of inequality, injustice in healthcare is the most shocking and inhumane.” In 2017 inequality in healthcare still exists and the consequences are striking.

Health inequities or disparities in urban communities are well known and in some cases more resources may be available to address them than in a rural community. In rural previously homogenous communities these issues are even more significant as the minority community begins to grow but the healthcare systems have not changed or are not moving fast enough to keep pace with diversity.

Ethnic disparities in health care cost the U.S. billions of dollars. African Americans, Hispanics and Native American Indians experience higher rates of chronic diseases like diabetes and hypertension than other populations.  In many cases, these increased costs and reduced quality of life and mortality are preventable with wellness programs or disease state management that takes into account the specific population needs.

A May 2017 data summary from the  Centers for Disease Control and Prevention (CDC) shows African Americans ages 18-49 are twice as likely to die from heart disease than whites and African Americans ages 35-64 years are 50% more likely to have high blood pressure than whites. The data shows that African Americans are dying younger from diseases like cancer, diabetes and heart disease than whites. 1

The US spends trillions of dollars on health care each year yet not everyone can afford to access health care when they need it and some populations are more challenged than others in accessing care. If you are able to seek care when you need it, you may or may not be able to afford your medications. If given the choice between paying rent, buying food or getting medication for a chronic illness some patients will choose not to fill their prescriptions. If the prescription is filled, in some cases they will not take them consistently if they believe they can save money in the short term. Drug prices and the impact on patients when they cannot afford medications is a significant issue for our country and contributes to the long term increasing health costs and poor health outcomes. This adds an additional complexity to the rural locations, poverty, race and issues that contribute to an unequal distribution of preventative care, disease management and access to overall healthcare.

Our neighborhoods and communities affect how we live, our daily lives and our well -being. In rural communities where the minority populations are growing and they are underrepresented in healthcare professional and provider positions; gaps are likely to exist. In these communities, health care providers are often not aware of the challenges that these minorities face to access health care or the challenges they face when they meet a provider who is not aware of their economic, environmental, social or cultural challenges.

Consider the story of Janice, an African American who visited a healthcare provider in a rural community. Janice rarely accesses the health care system and when she does, her experiences have not given her confidence that the providers recognize the importance of her difference as a minority. On her last healthcare visit, the provider was not familiar with a rash that she had on her skin which she describes as commonly seen in the African American population. When Janice previously saw a provider in a city well populated with minorities, the provider was familiar with her skin condition, was able to assist and Janice had a positive outcome.

Roberta is an African American who was seen for the first time by a gynecologist in a rural community. After the visit, Roberta reviewed her chart and noticed that the provider incorrectly documented her as Caucasian. Roberta wondered if this was a default setting in the electronic medical record since she lives in a community that was primarily white but is now experiencing a growing population of minorities. Roberta wants her provider to “see” her and recognize her difference as she knows that race can play an important role in how some disease are diagnosed and treated.

While these are not major examples of issues with healthcare interactions in a rural community they do provide an inside view of why minorities may be hesitant to visit a provider, may not be confident that they will be understood or that their differences will be recognized. Ethnic and racial differences have a significant impact on health outcome. The challenges faced by minorities in seeking care can negatively affect their ability to lead healthy lifestyles.

To begin to address these issues we need to create equal opportunities for health at the community level as it affects the overall health status and costs for our nation. Community engagement and partnership with key stakeholders will be a necessary element to create and sustain change. Understanding specific populations, individual culture and barriers are necessary components to establish healthy communities to reduce and one day eliminate inequities in health.

The journey to health equity in the rural locations will require community partnership with health care organizations and the development of programs and policies to address access to services for minority populations. Community discussions, assessments and the development of cultural competencies will be key elements for this journey in rural populations. It will require the creation of equal opportunities for all races and populations to access and participate in healthcare and to experience no gaps in health outcomes. It will be a worthwhile journey to a worthwhile goal.

Dr. Marva Williams-Lowe is the Regional Pharmacy Director for the Dartmouth-Hitchcock Health System. She has responsibility for hospital pharmacy practice and operations including purchasing and inventory management, budget, personnel, medication-related policies and procedures and regulatory compliance. 

 

  1. (2017, May 2). National Center from Chronic Disease Prevention and Health Promotion. African American Health. Retrieved from https://www.cdc.gov/vitalsigns/aahealth/index.html


Saving a life through health IT

Jeri Koester

I recently watched Jimmy Kimmel share a personal story about his new son on live television. His son, Billy Kimmel, was born with an undetected heart defect that required immediate surgery. Because of the great healthcare his son received, Billy lives to see his future.  While my heart ached as I listened to Jimmy’s emotional message, I was overcome with appreciation for all the work medical professionals do within healthcare.

I think of the compassion and care that clinicians provide every day for patient-centered care – within our own healthcare system and beyond.  These prestigious professionals have humanity as their foundation. This also represents my passion within healthcare IT leadership and what drives me to support top-notch patient care.

I witness the daily operations of my colleagues who are responsible for providing IT solutions and services to our healthcare system. These vary from electronic health record (EHR) adoption, medication dispensing solution, enterprise data strategies, cyber security and much more. But above all, we create, implement and improve technology that may help save patient lives.

The solution we create flags a medication that could cause an allergic reaction for a patient. This may save a life.

A reminder system that notifies patients of needed preventive screenings or tests for disease development instead of waiting until the symptoms appear. This may save a life.

A risk model that shows patients most at risk of a heart attack based on algorithms allows clinicians to intervene and engage with the patient before a life-threatening situation occurs. This may save a life.

A completely redundant infrastructure with zero unexpected downtime so a patient waiting for a discussion with their clinician regarding a cancer diagnosis does not have to hear, “We need to reschedule your appointment because our system is down.” This may save a life.

Healthcare IT leadership has never been more important.  Technology is no longer just a tool, but a part of the strategic initiative in moving organizations forward in the ever-evolving healthcare field.  In conversations regarding EHR, interoperability, blockchain, cloud-based applications, and more, care and compassion need to remain at the center. We need to advocate for the safety of our patients when introducing technology.

This can be accomplished in many ways. We can start by talking about it openly.  Our organization is moving forward with strategic initiatives that includes implementing hospital systems, re-platforming legacy applications and supporting shared services efficiencies. In one of our recent meetings, the project manager highlighted our project purpose and objectives to the number of applications we need to retire.  This alone sounds arduous; however, shifting the intent of the meeting to how this is important to our patients restored vision and determination.  The engagement from employees on the project increased significantly when our conversation focused implementing a system safely for our patients.

Additionally, our operational services can benefit from this shift in thinking as well.  We are in the process of implementing lean techniques to how we work.  When discussing the value stream, we place the patient in the center of our “True north” and have established measures to track success as it relates to our customers and patients.  This concept creates a meaning as to why our decisions are important because we can help save lives.

Within our organization, we are expected to deliver solutions for provider efficiency and patient safety. In doing so, we share the same mission and vision of our health system, which is to enrich patient lives. And at the center of our days are patients who need care and compassion. We work to safely implement systems and ensure important data is present when it’s needed most.  Healthcare IT leaders should openly discuss the effect technology has on patient care, to support the humanity of healthcare.

As healthcare leaders are continuously asked to control costs and deliver more, I have found that focusing on the very thing that keeps our hearts warm is a way to move mountains.  And as the amazing providers and staff worked their miracle to save Billy Kimmel, we were all there.  Ensuring the programs ran, the information was available and doing what we can to help save lives.

Jeri Koester is vice president of IT business management at Marshfield Clinic Information Services (MCIS, Inc.). 

 

Sparking Inspiration in Front Line Leaders

Chantel Johnson, PhD, RN

As an operation leader in ambulatory healthcare, my days are filled with “fire-fighting”—staffing the clinics, managing physician schedules, moving improvement work forward, etc.  Little time is spent on individual leadership development.  Let me be more honest–no part of my day is usually spent thinking about leadership.  Yet, it is absolutely essential for all of us to carve out time to further develop ourselves as leaders.

Over the years, I have benefited from various forms of leadership development.   Whether from structured classes, coaching, or making tough mistakes, these experiences have shaped me as a leader.  This year my organization sponsored me to be an inaugural member of the Carol Emmott Fellowship (CEF).  While sitting amongst the other fellows in our first session, I was struck by the deep learning that I was experiencing.   The rich discussions with my colleagues gave me new perspectives on leadership and stretched my thinking.

I went back to work after the first CEF convergence session inspired!  I wanted the leaders under me to be similarly stimulated.  I searched within my company for existing leadership offerings.  Yes, the fundamentals of management were covered well in new manager orientation classes.  How to hire the best, how to use project management skills, how to give presentations were covered nicely by existing programs.  On the other hand, I didn’t see anything like the content I was exposed to at CEF.  I abandoned the idea and felt disappointed for my managers.

A light bulb went on for me a few weeks later while I was having a 1-1 with one of my managers.  I brought up issues of gender in leadership from what I learned in CEF.  I asked her what she has noticed about women leaders in our organization.  I explored her observations on how women leaders behave, how others behave around them.  Interestingly, she hadn’t really thought about it before.  We talked well past our meeting time.  When I was leaving she said that she’d love to have another leadership discussion our next 1-1.  This was the lightbulb moment.  I can bring my managers together and have inspired discussions.  What had held me back was thinking that I needed to be some type of leadership guru.  I thought I needed a degree in leadership or to be an expert on the topics.  I am none of those things. I am not a leadership development expert or professional coach.  However, I have learned some things over my years in leadership.  I am an expert in my own life and experience and that’s enough.

I decided to host a lunch with my managers to talk about gender and leadership.  Gender is a hot topic that most people avoid, either intentionally or because they think gender doesn’t matter anymore.   I invited my managers to this 1 hour “Leadership Lunch and Learn” session.  I sent out a couple of quick homework items before the session.  I asked them to read a short article and watch a Ted Talk video to prime their thinking.  During the session, I gave a 20 minute overview on the gender, women in leadership, and why the topic was important.  We spent the rest of the time in discussion.  I prepared several conversation starters based on the homework and my overview.  I asked them about how gender differences show up in their leadership teams.  I shared my own struggles with being a woman leader with the assumptions and double standards sometimes put on us.  My team came alive with such a dynamic discussion!  One of my managers shared strategies she uses to command more of a leadership presence in meetings.  She does small things like standing up straight and avoiding inflections in her voice.  Another manager jumped in and said she has been struggling with the same issue and wants to try those ideas. They weren’t just talking to me.  They were talking to each other. They were inspiring each other!

For the second offering, I chose the topics of power and influence.  I talked about different forms of power and why influence is such an important leadership quality.  In preparation for the session, I reached out to our executive team.  I gathered their tips for how to: 1) gain influence and 2) how they have effectively used power or seen others misuse it.   My executives appreciated the chance to have their ideas shared with the front line leaders.  My managers loved these tips.  They started guessing which senior leader had given each tip, as a way of connecting to them and matching their impression of them with their words.   I have the third Leadership Lunch and Learn scheduled to talk about our personal leadership philosophies.

The feedback about my sessions have been overwhelmingly positive.  My managers have extended these meeting invitations to their colleagues and supervisors so they can benefit from the content.  My managers shared that they feel valued because I have taken time to offer the sessions.  They said they can tell I really care about them and want to support their growth.

Even more inspiring is that I have noticed my managers are putting their learning into action.  I notice subtle changes in how they present themselves in group, utilizing strategies that increase their presence.   Another example great example of the impact of this type of learning was seen when a manager was recruiting for a supervisor.  She was surprised that one of her star employees hadn’t applied for the position.  From our Lunch and Learn session, my manager understood that frequently women do not apply for promotions when their qualifications are not a perfect match for the position.  She used that information to directly reach out to her star employee and have a discussion with her, ultimately encouraging her to apply.  These are just a few examples of the ripples from the Lunch and Learn sessions.

I have learned so much in this process!  I learned to give myself permission to own my expertise and share it with others.  I learned that I don’t have to wait for someone else to give me “permission” to mentor and coach people.  I don’t have to be a world renowned expert on a topic to still provide meaningful information and spark enlightened conversation.  My team learn more from each other than they do from me.  My role is to help facilitate and guide, prime the pump with some reading and ideas.  I also learned that I don’t have to make it complicated.  No, the Lunch and Learns are not a comprehensive leadership development course.  Grassroots leadership development can be small and still create a huge difference.

I suggest other leaders to give this a try.  Ask your team to join you for lunch.  Pick a leadership topic and dive in.

On Becoming a (Positively) Disruptive Woman, and Passing It on to Others

Christine Malcolm

When I was 22 years old, I received my A.B. honors from the University of Chicago.  I had been taught that the world was entirely open to me.  I wanted to pursue a career in public health and healthcare, and began an intensive job search.  My heart was set on an Administrative Internship at Hennepin County Medical Center – an organization that fit well with my passion for health equity.

I was told by my interviewer that I couldn’t apply for the position because I was female.  He added that the field of health leadership was limited to men, nuns and nurses, and I wasn’t any of them, so I should rethink my career options.  I was stunned.  He told me matter-of-factly what was available to me – a clerical slot – the only position open to a woman who wasn’t clinically trained.  I needed the job, accepted the position, and vowed to prove him wrong.  I then promptly set about “disrupting” the fixed ideas about what was possible for health care, for me, and especially for women like me.

Disrupt Yourself - First, I disrupted myself – I decided to return to the University of Chicago Business School, a place that had always eschewed bias of any kind.   I was one of the 20 percent of the class that was female, and the one of the few who were married. After graduation, I took a challenging job in management consulting, traveling 5 days a week with clients of all kinds, and starting a health strategy practice at what is now Price Waterhouse Coopers.

Accept Disruptive Help - There were several men who opened the door, or sponsored me, starting with my first boss (who made me department administrator).  There were almost no women in leadership, so without men’s help, I would have been stymied.  One of them gave me a raise while I was off on maternity leave – talk about a positive disruptor!  They told me they had confidence in me, and trusted and advised me along the way.  My husband served as a rock of confidence and support – committed to being a two-career family – and we worked hard at helping each other become a success.

Find Other Disruptors, and Support Each Other - Over time, I have been fortunate to be part of two remarkable networks of leaders in the field – first, 20 years in a very senior network of men and women in health, and more recently, with the Women of Impact – a group of health leaders committed to creating positive transformation in the health field.  These networks sustained me, opened my mind, and expanded my notion of what is possible through collective action.  They have continued to positively disrupt my life and purpose.

Align Around a Crystal Clear Disruptive Goal - One woman I met in the last decade was Carol Emmott.  Carol had been a stand for women and diversity throughout her career – in government, in search, as a luminary in the field.  She was committed to leadership development and innovation – founding the California and Massachusetts Health Leadership Colleges, and the CEO Roundtable.  She tragically passed from cancer far too young – and in her last days, asked her family and friends to join together and form the Carol Emmott Fellowship for Leaders in Healthcare.  She wished to ensure that the experiences of our generation would not be repeated – and that women would never feel the sting of having their dreams dashed by limiting beliefs and behaviors.

Seize the Moment for Disruption - Discouragingly, equality statistics reflect a worsening situation over the last eight years.  The latest studies show it may take more than 100 years for women to catch up, and the prospects for women of color are even worse.  Love for Carol, combined with frustration as to the lack of progress that has taken place, motivated the national leaders on our Advisory Board, to work to make this innovative program a reality.

Powerfully Support the Future Generation of Disruptors - We have a remarkable class of 15 mid-career leaders in health who are in our inaugural class – they hold senior positions at some of the leading healthcare providers in the country – including Yale New Haven, Penn Medicine, Henry Ford Health System, University of Miami Health System, Lahey, Carilion, Marshfield Health System, Rush University Medical Center, Palo Alto Medical Foundation, Duke Health System, John Muir and Dartmouth-Hitchcock. Our class includes chief operating officers, physicians, deans, chairs, physician practice leaders, plus people from a variety of other clinical and administrative roles.  They each have committed themselves to creating change that makes health care better by taking on an ambitious Impact Project during their fellowship.  They have the powerful support of their sponsors and champions within their institutions.

Enlist the Assistance of People Who Are Known for Positive Disruption - We have been blessed with the tireless support of over a hundred very senior male and female volunteers – many of whom are “household names” in health care – serving as mentors, leading presentations to the fellows, hosting them in Washington, Chicago, Scottsdale and San Francisco. They demonstrate how when we stand together and for each other, behind huge goals, anything is possible.

This week, the fellows are in Washington DC, where they will learn more about how to create broader impact through advocacy.  They will meet with the Women of Impact, a partner organization, to explore more deeply what might be possible for the fellows as they complete their fellowship and go into the world – together, and in concert with other leaders committed to positive change in our field.  Robin Strongin, a Woman of Impact, has kindly offered this week of posts on Disruptive Women to introduce a few of the fellows and explore how we might jointly move beyond bias.  Thank you, Robin – for being the original Disruptive Woman in Healthcare.

We are certain you will be impressed with our fellows – and their commitment to making healthcare better.  Please join our movement to create a health field where bias and disparities of all kinds will finally be overcome!

 

 

 

 

 

 

 

 

 

 

Carol Emmott Fellowship 2016 Launch from Carol Emmott Fellowship on Vimeo.



   Event Photos

View all event photos »

   Ebooks

Our newest eBook "The Different Faces of Caregiving" explores the state of caregiving in the United States. Download it today!
Download our two new ebooks »
   Are you Disruptive?

Disruptive Women is looking for submissions from women in the health care field, from doctors and nurses to policy experts and legislators. Learn more »