Ten years ago, we each decided to move to Silicon Valley. Since then, within our industry, we have seen and witnessed the incredible, the inspirational, the irresponsible, and the wasteful. And now we are on a mission.
Despite healthtech being one of the fastest growing industries (over $50 billion spent since 2011) it can claim relatively few success stories. Most venture investors expect an exit within 7-10 years. Yet for a health product, it can take 10-17 years to gain widespread adoption and reimbursement. Many companies have (and will) run out of money before they become profitable.
Furthermore, many companies with promising ideas have suffered completely preventable missteps because they simply didn’t understand the process of successfully getting a product into the healthcare market. Some well-known examples include Theranos, uBiome, and 23andMe. There are many other stories that weren’t high-profile enough to make it into the mainstream press.
Our early years at healthtech companies in Silicon Valley were challenging. After working at a number of startups we realized that medical expertise was often significantly underrepresented. We learned that tech had a completely different culture from what we had been accustomed to in health care. For example, a common ethos in the tech industry is move fast and break things . It’s standard practice in consumer tech to launch a minimally viable product (MVP) and iterate on the fly.
In contrast, the primary rule in health care is first, do no harm. And the data proof points for health products are much higher than in other industries.
And yet there is a clear and well-established formula for healthcare market adoption and reimbursement. Unfortunately, entrepreneurs are often several years in before they are fully aware of all the steps that this formula requires.
For example, when commercializing a health product you have to communicate in a different way in order to convince a skeptical audience. There is a strategic approach to marketing and business development activities. It requires a combination of the right message, at the right time, with the right data, from the right person, through the right channels. Persuading a scientist or physician isn’t done with a testimonial or a five-star rating. It happens through studies, peer-reviewed publications, podium talks, health economics data, and medical society guidelines.
We believe that what’s missing in the healthtech industry is a medical diligence process. In most investment transactions, there is usually a rigorous due diligence process which includes legal, financial, and technical diligence. But there is currently no established protocol for assessing the clinical and commercial viability of a healthtech product.
Our hypotheses are
- Healthtech entrepreneurs need to find the balance between “go fast and break things” and “first do no harm.” If they understood the formula for healthcare market adoption earlier, they could accelerate their path to market.
- Investors in healthtech need better ways to assess whether or not a healthtech company can successfully capture sufficient market adoption in the expected timeframe.
- Organizations such as employers, health systems, and commercial retailers who are being approached by healthtech companies need an objective way to assess the clinical viability of health products before they adopt them.
It’s taken us 10 years to learn how to speak both languages and balance the best of both worlds. Our aspirations when we came to Silicon Valley were to be a part of the responsible transformation of healthcare. We believe that a core part of this is bridging the cultural divide.
That’s why we founded MDisrupt.
MDisrupt is the world’s first medical diligence company for the healthtech industry. Our mission is to unite healthtech and healthcare stakeholders to accelerate the responsible disruption of medicine. By doing so, we can get potentially impactful health products to patients faster.
MDisrupt also provides an easy path for practicing medical professionals to participate in our mission. We will matchmake them with the healthtech companies who need their expertise. Our network consists of some of the most experienced people from the scientific, medical, regulatory and commercial sectors of health care. We call them MDisruptors.
We all share a common desire to see the products that can have the biggest impact on patient care make it to market quickly and responsibly. We believe that by uniting the innovators, entrepreneurs, and investors from the healthtech industry with our team of experienced MDisruptors, and applying a medical diligence process, we can get there faster together.
Written by Jill Hagenkord, MD and Ruby Gadelrab