Saturday, June 15, 2013

Joining StartUp Health

I’m now going into my fifth week of working with the StartUp Health team reviewing applications for companies interested in joining the StartUp Health Academy. It’s been a really great experience so far going through the 800+ healthcare startups in the system to review and rate them and then providing recommendations for which startups to interview.

After going through roughly half of the applications in the system, I've noticed that there are a few big themes that new healthcare startups seem to be focusing on including ideas around patient engagement, telemedicine, physical rehabilitation, big data, wearable devices, etc. I've also realized that it's very important to have a clear idea of what I'm looking for when I rate and compare the startups. The main factors that I have tried to focus on as I've been going through the applications is the product differentiation, market size/opportunity, experience of the team, and customer traction.

When I’m reading about the product description, going through the company's website and watching the product demo video, the two key questions I like to think about is whether the product/service helps reduce costs in the healthcare system and whether it can make a big impact on improving the quality of healthcare. After thinking about whether the idea has the potential to greatly reduce costs or improve quality, I then consider the market size and business model. The main factors I use to rate the startups is how big the unmet need is and whether there is a significant ROI they can prove for their customers. The market opportunity is ideally greater than $50 to $100 million and the ROI should be a quantitative analysis demonstrating the value add of the product to customers. Also, since a lot of the startups that I review tend to be in the digital health space where there is less regulation and patents involved, it’s important to think about how the startup can create barriers to either prevent other competitors from entering the space or significantly differentiate itself from existing competitors. This is why another of the important factors to understand is customer traction and whether the idea has the potential for a large network effect. The other part of the business model that I like to learn about is how the startup reaches and acquires new customers. I want to understand the sales cycle and how much it takes to acquire new customers.

It's been exciting to see that there are a large number of new startups emerging in the healthcare space that have the potential to make a huge impact on both reducing the costs and improving the quality of the industry. This past week StartUp Health celebrated its 2nd birthday and I'm sure there will be many more years to come for the organization as it continues to help startups transform our healthcare industry by providing guidance, mentorship, connections and resources to grow these ideas into innovative companies.

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