Rock Health and Chicago Health/Tech 2.0 organized a fantastic event this past weekend with several informative speakers and healthcare industry experts. Here were a few of my favorite highlights from the speakers:
Keynote speaker, Simmi Singh (Senior Advisor, Health Innovation): My favorite comment was the reference that the trait most associated with Millennials is connectivity. We value being connected 24/7 with our friends, families, co-workers, and even our health. Our generation creates change and momentum at an unfathomable pace and by focusing on healthcare, we can help change the healthcare industry at that same accelerated rate.
Orlando Saez (Director at IL Office of Entrepreneurship): The problem that the state of IL struggles with is that we are affected with “middleness” syndrome. Not only are we physically in the middle of the country, but in terms of healthcare, we are neither at the top or the bottom of the rankings when it comes to issues such as public health, obesity (67% of people in Chicago are obese), and smoking (20% of adults smoke in Chicago vs. 12% in CA and 15% in NY).
- Some good IL health resources he also mentioned to check out included: Data.illinois.gov, Illinois Hospital Report Card, and Biosense 2.0.
- It was also exciting to hear that Chicago was selected for the International Biotechnology Conference coming up in June 2013
- And if you weren’t already aware of this additional source of funding, the state of IL has $20mm set aside as a VC fund and the application can be found on their website here. They have already received 80+ applications and have 40 industry experts who have helped them complete 14 deals.
VC/Angel Investor Panel: The most exciting part of investing in healthcare is focusing on quality of care to manage costs effectively, which is currently the largest problem the industry faces today
- Investors typically look for entrepreneurs who understand regulatory factors very early on and the company hopefully already has the software, some customers (who may or may not be paying yet), and more than just a minimum viable product (MVP). Also, they like to see the company selling into very big pain points, so that way you will know that people will want to adopt quickly or regulation will force them to adopt.
- Investors are looking to invest in trends or lines, not dots (which I hear from every VC panel that I attend), so start relationships with angel and VC investors early on. The best way to go about this is to mention to them the accomplishments you hope to achieve in the next three months and tell them you would like to follow up with them then. When you go back to them, they would love to see that you accomplished everything you mentioned and more, which gives them that much more confidence in you and your product. It also never hurts to get a warm introduction, so aim to get close to advisors who can give your company more credibility and help make introductions for you.
- And of course, you can’t have a VC panel event without the question that everyone is always curious about: “What is more important to investors, the team or the idea (i.e. the jockey or the horse)?” Not surprisingly, all four of the investors on the panel mentioned that for early-stage companies, the team is much more important, but the space/industry trends are still a major component.
- There was also a great question about how the JOBS Act would affect the investors on the panel. The main answer was more of a warning to entrepreneurs who are considering crowdsourcing. The JOBS act and crowdsourcing actually makes it more difficult to attract institutional investors, since the process becomes much more complicated and messy if you have to deal with 100 other investors who came in before they do
- Also, some trends to be focused on right now in early-stage healthcare include:
- Primary care physician shortage
- With all the data now available to consumers (through devices such as FitBit, Zeo, Withings Scale, etc.), there needs to be a way to process all this info for consumers
- Consumers need to take more ownership of their data. We need to focus more on consumer-led health and wellness applications as preventative measures, since the rising cost of healthcare is becoming more and more unaffordable in the U.S.
- Products should aim to enable consumers to take the behavior they want to take vs. forcing them to change their behavior (which is often too challenging)
- Investors like to see regulation that quickly forces adoption and has significant long-term benefits such as cost reduction, quality of care, improved staffing on provider side
Lyle Berkowitz (Northwestern Memorial Physicians Group, Director of IT & Innovation):
- Entrepreneurs should focus on how your product/service affects:
- Time (physician, staff, patient)
- Quality of Care
- Cost of Care
- Questions investors should ask new healthcare startups include:
- Does it require behavior change? (it’s better and easier to require process change instead)
- How are incentives aligned? (for providers, physicians, payors, patients)
- What has been your physician involvement with development of your product? (make sure to involve the customer in the development phase)
Amy Schwartz (IDEO Healthcare Lead):
- Design thinking should consist of all three of these components: technical (feasibility), business (visibility), human (desirability)
- She also provided great advice on ways to help with the design-thinking process:
- Learn about real people in their real world for insight and inspiration. In order to figure out how to innovate, you cannot just ask people what they want and need because half the time they won’t know and the other half the time they’ve already created a make-shift way to deal with the issue.
- Find inspiration from analogous examples
- Learn from “extreme” users
- Consider the context at a conceptual level
- Think across all of these segments: physical, cognitive, psycho-social, cultural
- Prototyping is the best way to think through things and be sure to pilot test to learn from the launch, develop proof of concept and create a formal assessment
- “In the end it’s not about what we make, it’s about what we make possible”
At the end of the event, I was very excited to hear that the first annual Chicago Health 2.0/Tech Conference is taking place September 28-30th. I’m sure there will be just as many great speakers, so if you’re interested in attending more healthcare startup events, be sure to get on their mailing list: http://chicagohealthtech.org/