Perspectives and Insights
So, you have a new health technology that you’ve packaged into a hot product offering. You’re excited about your product. As you think about going to market, you practice reciting all the great things about your offering. This product’s going to take the world by storm! Your largest potential market: self-insured employers.
We wouldn’t make drugs without chemists. So why make digital health products without behavioral scientists?
The Importance of Behavioral Science When Building a Health Product. Humans are complicated, and changing our behavior is hard. 1, 2 Despite all the hype about artificial intelligence and personalization, most consumer-facing behavior change tools are incredibly unsophisticated, relying on basic self-tracking and superficially-tailored feedback to change behavior.
Understanding the difference between medical training and scientist training helps to explain why the passion of a scientist entrepreneur may not necessarily translate into a viable health product or why the associate who did your medical diligence missed all the red flags that blocked your investment from widespread market adoption.
In a recent Business Insider article, John Ioannidis, Racquel Bracken, and other health tech experts lamented that the Silicon Valley tech ethos of “move fast and break things” is not being counterbalanced by the healthcare principle of “do no harm. (Why everybody gets duped by hot health and science startups, June 2019). Ironically, tech’s desire to move fast is slowing its ability to achieve widespread market adoption and profitability for health-related products. The goal of this blog is to help both industries better understand the importance of their cultural differences in order to get high-impact products to consumers more quickly.
Why Investors Need to Do More Rigorous Medical Diligence as a Core Part of any Healthtech Investment
Over $50 billion has been invested in health tech in the last ten years, but with very few successful exits. Clearly, most medical diligence that has been done to date has not been rigorous enough. For the most part, it has failed to separate those companies who are creating a clinically and commercially viable health product from those who are not. And it has failed to detect the ones making the egregious missteps we are seeing in the headlines.
The Formula for Widespread Adoption of Health Products that Every Investor and Health Tech Entrepreneur Needs to Know.
Building a health product or service that will gain widespread adoption requires a long term plan and thoughtful orchestration between your Medical Affairs and Commercial teams. For the formula we outline below, it’s important to note that each step of strategy and execution are intertwined over time as milestones are achieved.
Despite healthtech being one of the fastest growing industries with over $50 Billion being spent since 2011, there have been relatively few success stories. Most venture investors expect an exit within 7-10 years yet it can take between 10-15 years to gain widespread adoption and reimbursement of a health product. Many companies have and will run out of money before they become profitable.