Recently, the UK Office of National Statistics estimated that 35% of the babies born today will live to 100. We live in exciting times for the healthcare industry, and innovative startups are a big part of that story.
But even with the explosion of digital startups aimed at revamping the healthcare industry, many of the best entrepreneurs are still reluctant to enter the healthcare arena with its perceived high barriers to entry. That’s a shame, because there is no better way to have a real impact on millions of people’s lives and well-being while creating a successful business with significant rewards.
Consider the incredible forces shaping the digital health domain today, including the hardware already at our fingertips (i.e. smartphones), being transformed by astute entrepreneurs into clinical-grade medical devices. 4k camera quality, quad-core computation capability, infinitely wide broadband, $0 cost for storage, and ultra-accurate GPS technology are already here — they pave the way for serious medical innovation. Smart startups are using this existing technology to avoid venturing into the treacherous seas of hardware and other development, dramatically lowering the once daunting barrier to entry.
The following are five key lessons for founding a digital healthcare startup, many of which my startup team and I learned in the trenches the hard way:
1. Get the FDA involved early
Shoot for FDA-grade solutions. That’s the only way to make a real difference. Effectively, the FDA is recognized as the global healthcare regulatory agency and as such is key for collaboration with healthcare companies in the U.S. and around the world. Getting the Agency involved as early as possible can be incredibly useful when it comes to guaranteeing your company is on the right track for approval. The FDA has established thorough and clear guidelines for the approval process, with routine milestones. The organization’s liaison with healthcare startups through its pre-submission track is truly invaluable. With FDA involvement in mind, healthcare startups can craft a feasible roadmap for expedited product approval and, ultimately, business success.
2. Don’t reinvent the analog wheel
There is a wealth of existing technologies you can leverage to leapfrog solutions in the healthcare space. Spend your limited startup resources wisely by pairing these incredible technologies with your solution rather than trying to beat them. Be cognizant of the competencies of the analog healthcare system and the goals of your startup. If you can use today’s dipsticks in your solution, for example, use them, don’t try to reinvent them. By leveraging existing and previously approved innovations, you can pass more quickly through the initial operational phases and can reduce the “leap of faith” that consumers and physicians will have to make when considering your product.
3. Make sure you have enough runway
Despite the lower barriers to entry, digital healthcare startups are still not the kind of business you can start with two people in a garage and a few hundred grand. You will need a funding runway of 2-3 years to build your solution before going to market. The good news is that today’s healthcare startups can get through early FDA trials with $3-5 million in seed funding compared to several years ago when that number was an order of magnitude higher. These diminished costs have evolved harmoniously with developments in the financial ecosystem: Angel and other private investors are increasingly interested in participating in the early stages of a healthcare startup’s development, ideally with either conditional terms or a phased approach.
4. You don’t need a doctor on your team
You’re an entrepreneur, not an MD, so of course you need a doctor on your team to guide you, right? Wrong. The digital healthcare industry is so dynamic and multidisciplinary that you will be better off assembling a community of advising experts and MDs, from areas as diverse as computer vision to healthcare economics. Remember, you have entered the business of doing good. The right experts will seek you out to take part in the project, lending guidance and support along the way.
5. Just get started
Don’t disregard common fears about entering the healthcare industry, but don’t let them control your decision either. Although a healthcare startup may not yet enjoy an immediate risk-reward profile like tech’s “sexier” fields, changes in the digital and analog healthcare ecosystem have paved the way for a revolution in modern healthcare. The smart money is looking for innovation, which is why big pharma, multinationals, insurance companies, HMOs, hospitals, and other major players are wide open to working with nimble startups. A strong product or idea will attract the right thinkers and do-gooders who want to work to change the industry. If your goal is to improve lives, then digital healthcare is the space for you.
Jonathan Adiri is founder and CEO of Healthy.io, a mobile startup developing image recognition capabilities to enable affordable and decentralized healthcare. He served as the first Chief Technology Officer for an Israeli President, Shimon Peres, where he enacted a policy of technological diplomacy to foster international collaboration on water, space, agro, and biomedical issues. He is also a World Economic Forum Young Global Leader.