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How Many Garage Entrepreneurs Are In Healthcare?

Posted on December 29, 2017 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

The final image this holiday week comes from a tweet shared by David Chou. In his tweet e shares an image of some incredible companies that were founded out of a garage. Hard to argue with these companies and the success they’ve garnered:

When I look at this image I try to think of any massive healthcare companies have been started out of a garage. I couldn’t think of any off hand. Then I started to wonder if that’s a good or a bad thing. Would love to hear your thoughts.

Regulation Lesson Learned from Theranos

Posted on April 13, 2016 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

For those who haven’t been following the Theranos drama, it’s a total mess. At first Theranos and its founder, Elizabeth Holmes, were being touted as the next major thing to happen to healthcare. They used that fame to raise $700 million (per Techcrunch) on the back of lab tests from samples as small as a few drops of blood. However, through a series of missteps, Theranos got itself in real trouble with CMS.

Today, it seems like things have gone from bad to worse as regulators plan to revoke Theranos’ lab license and to remove Elizabeth Holmes and Sunny Balwani, company president, from their positions as leaders of Theranos. You can read more in this Techcrunch story and see the letter from CMS. I’ll leave the analysis of Theranos’ future to others who are covering every detail. However, it’s worth noting that others are working on similar lab testing that uses small amounts of blood, so I’m hopeful we’ll still see that technology come to market.

Instead of focusing on Theranos’ future, I think we’re better served learning an important lesson from the Theranos experience. Government regulation matters in healthcare and you better have all your i’s dotted and t’s crossed.

There are a lot of startup companies that enter the healthcare startup world thinking that they can be rebels and succeed in healthcare. In some respects they can and I’d be the last to discourage rebels from entering healthcare. We need more rebels that fight against some of the lame status quo experiences we have today in healthcare. However, rebellion can only go so far in a massively regulated environment like healthcare. Whatever rebellion you want to lead has to fit within the constructs of regulation or it will come back to bite you.

The good thing is that the Senate is trying to make it more clear what healthcare technology will be regulated and which won’t with bills like the MEDTECH Act. However, there’s still a ways to go and there’s still some leeway for the FDA to get involved if you overstep your startup into regulated territory.

This exact problem is why many startup founders see so much opportunity in healthcare, but then shy away. I remember reading a venture capitalist that said “All the normal business mechanics that you’re use to seeing don’t apply to healthcare.” I don’t agree completely with that quote, but there’s definitely some truth to it.

I’m not saying that startups shouldn’t enter healthcare. They should, but they should think very seriously about the regulation required to participate in many parts of the healthcare system. Some will see the regulation as a downside, but remember that regulation can also be a great barrier to entry for your competitors. You have to take the good with the bad. We all know that healthcare regulation isn’t going anywhere. In fact, it’s likely to get worse over time.

Dropout Docs – The Answer for #HealthIT Startups?

Posted on July 23, 2015 I Written By

Colin Hung is the co-founder of the #hcldr (healthcare leadership) tweetchat one of the most popular and active healthcare social media communities on Twitter. Colin speaks, tweets and blogs regularly about healthcare, technology, marketing and leadership. He is currently an independent marketing consultant working with leading healthIT companies. Colin is a member of #TheWalkingGallery. His Twitter handle is: @Colin_Hung.

We’d like to welcome a new guest blogger to our ranks. If you’re on social media, you probably know Colin Hung (@Colin_Hung), Co-Host of #hcldr. Colin is also head of Marketing for @PatientPrompt, a product offered by Stericycle Communication Solutions. We look forward to many posts from Colin in the future.

Recently both Nick van Terheyden (@drnic1) and Mandi Bishop (@MandiBPro) shared a link to an interesting article via Facebook. “Dropout Docs: Bay Area Doctors Quit Medicine to Work for Digital Health Startups”.
Dropout Doctors - Bay Area Doctors Leave Medicine for Healthcare Startups
The article highlights a new phenomenon happening In the Bay area – would-be doctors are dropping out of prestigious medical schools to pursue careers in digital health. Even those that complete their schooling are opting to join digital health start-ups/incubators (like Rock Health located in San Francisco, very close to USCF Medical Center) rather than apply for residency.

Being a doctor or a surgeon was once the pinnacle of achievement in American society, but with changes to reimbursements and general healthcare frustration, many are not seeing the practice of medicine as the rosy utopia it used to be (or was it ever?). Now even physicians are succumbing to the siren call of #HealthIT where there is a chance to “do good” and make a difference on a large scale.

I believe this trend could be a good thing for #HealthIT. Having more peers who are enthusiastic and passionate about improving healthcare can lead to more positive innovations. Consider the following quote from a doctor who joined a health care company instead of practicing medicine (from the KQED article):

“I realized that the system isn’t designed for doctors to make the real change you would like to for the patient.”

Having more people who want to put the patient at the center of healthcare makes my #HealthIT heart race. You can’t teach people to have this inner fire. It is something that is intrinsic to the individual…and we need more peers in #HealthIT with this flame.

There is just one line from the article that don’t agree with:

“…dropout doctors are well-positioned for a career in digital health as they have an insider’s view of the industry – and ideas about how to fix it.”

I think it is a bit of a stretch to say that people who went through med-school have a true “insider’s view”. Having not worked in a practice or in a healthcare setting, they would not be familiar with the political, financial or workflow aspects of care on the front lines. I hope these doc-dropouts are humble enough to remain open-minded as they listen to real-life customers provide feedback on the technologies and solutions they are involved with. In fact, dropout docs would be well served by remembering one particular part of their medical training – truly listening to the patient – which in this case may be the entirety of healthcare.

The mHealth Move from Direct to Consumer to Employer Health

Posted on May 7, 2014 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

I’m starting to see a trend that’s happening over and over again in the mobile health space. Many mHealth companies focus initially on direct to consumer. They put their app on the app store and wait for the patients to come rolling in. Unfortunately, Field of Dreams was wrong when it said, “If you build it, they will come.” Mobile health companies quickly realize that marketing a mobile health app direct to consumers is a really tough business. Plus, consumers can be really fickle and so it’s hard to make money even if you do get some traction and following.

In the startup world when something like this happens, they do what they call a “pivot.” Essentially they pivot their product from one business model to a new one. Sometimes that means basically scrapping their product and starting a new one. Other times it’s applying their technology to a new space.

The pivot I’ve seen most often with mHealth companies is the pivot away from a consumer health application to an employer health application. Many employers are looking for ways to improve the health of their employees since their healthcare costs are huge and real. So, a mobile health company can make an ROI case for why the employer should buy their product. I won’t dig into the ROI of employer health here, but I should in a future post.

I had one guy I talked to recently basically say that healthcare startups should focus on the employer health space. He saw that as the real opportunity for a healthcare startup to be successful. While I certainly find the employer health space intriguing, I’m not sure it’s the best space for healthcare startup companies. A lot of it depends on the company and the DNA of the people at that company.

What I do see is a trend of mobile health companies interested in employer health. I’ll be interested to see how many of them give it a go and then pivot back to being consumer health focused companies.

7 Health Tech Accelerators You Should Know About

Posted on November 6, 2013 I Written By

James Ritchie is a freelance writer with a focus on health care. His experience includes eight years as a staff writer with the Cincinnati Business Courier, part of the American City Business Journals network. Twitter @HCwriterJames.

You don’t have to look far to find a health IT accelerator. At least, not as far as you used to.

Programs to give healthcare entrepreneurs a boost are appearing throughout the country, providing opportunities for innovators who don’t live in a major tech hub — and don’t want to move to one.

Here are a few accelerator programs to know about, with special attention to those away from the coasts:

  • The Iron Yard is based in Spartanburg, S.C., and seeks companies involved in areas such as wellness apps and enterprise software. It provides $20,000 in seed capital and three months of mentoring and workshops in areas such as fundraising, user interface development and lean startup methodology.
  • Healthbox is operating programs in Chicago, Nashville and Jacksonville, Fla., in addition to Boston and London. (OK, technically, Jacksonville is on the East Coast, but still.) It’s a four-month program that provides startups with $50,000 in seed capital along with office space, mentoring and training. Healthbox asks for 7 percent in equity. According to the accelerator’s website: “Competitive applicants will address a specific and pressing challenge in the healthcare industry. For example, solutions of interest may improve patient engagement, provider effectiveness or preventative health and wellness.”
  • DreamIt Health started in Philadelphia and has expanded to Austin and Baltimore. The Baltimore version, which will last four months, is selecting as many as 10 firms from around the world and offering as much as $50,000 in stipend money and professional services. Applicants should be “working to use IT to solve significant industry problems faced by key healthcare stakeholders including providers, payers, public health, biopharma, device makers, employers and patients themselves.”
  • The Sprint Accelerator, powered by Techstars, is a program launching in Kansas City with a focus on mobile health technology. The three-month intensive mentorship program will begin in March, with startups receiving as much as $120,000, including $20,000 in seed funding and an optional $100,000 convertible debt note.
  • Health Wildcatters is a new accelerator in Dallas that invests as much as $35,000 in each firm. It’s open to a broader range of startups than some of the other programs, stating on its website: “Many healthcare IT, SaaS, digital health and mobile health companies are a fit, but we also encourage medical device, diagnostic and even pharma companies to apply.” Wildcatters takes an 8 percent equity stake. The site explains that in Texas parlance, wildcatters are “independent oil entrepreneurs willing to take chances with regard to where they drill” and that their success comes from “low operating costs and the ability to mobilize quickly.”
  • XLerateHealth runs a 10-week program in Louisville, Ky. Selected teams get a $20,000 stipend and donated professional services worth an estimated $50,000. The goal is to “help early stage healthcare companies build out their commercialization strategy, which includes their intersection with Payers, Providers (hospitals, ACOs, nursing homes, home health and group practices), and customers (employers and/or consumers).” XLerateHealth receives a 6 percent equity stake.
  • Innov8 for Health operates several programs in Cincinnati. This month it’s holding a Health Startup Showcase in which firms present their solutions to entrepreneurs, potential customers and investors and compete for $5,000 in cash and in-kind services. Last year it helped to launch seven companies in a 12-month accelerator program providing each firm with $20,000 in seed funding.

There are, of course, plenty of other programs. Paul Sonnier has compiled a more comprehensive list at Story of Digital Health.

With the rise of open platforms and the growing number of support networks, health IT entrepreneurship has become a viable career option for many.

And, now more than ever, it’s possible to innovate close to home.

Crowdfunding Healthcare Startups – Medstartr and Indiegogo

Posted on October 5, 2012 I Written By

John Lynn is the Founder of the HealthcareScene.com blog network which currently consists of 10 blogs containing over 8000 articles with John having written over 4000 of the articles himself. These EMR and Healthcare IT related articles have been viewed over 16 million times. John also manages Healthcare IT Central and Healthcare IT Today, the leading career Health IT job board and blog. John is co-founder of InfluentialNetworks.com and Physia.com. John is highly involved in social media, and in addition to his blogs can also be found on Twitter: @techguy and @ehrandhit and LinkedIn.

I have been seeing more and more activity around the idea of using the crowds to fund various healthcare IT startup companies. This shouldn’t be that surprising to any of us given the success of websites like Kickstarter and Indiegogo. They’ve created a whole new way to raise money for passion projects. Plus, as they’ve grown they’ve shown a new way to see if your customer really wants what you plan to offer.

One challenge is that Kickstarter generally hasn’t approved healthcare startup company projects on their platform. In fact, a whole company was born to try and help solve the problem of making crowdfunding available to healthcare. This company is called MedStartr.

I’ve been keeping an eye on it for quite a while. So far they’ve had some successes with these projects getting funding: Medstartr, The Walking Gallery, Peer-to-Peer Global Support for Rare Disease, and Avado. Plus, Reconstruction Bras for Breast Cancer Survivors and Previvors have met their goal, but are still raising money.

I think the most exciting one is The Walking Gallery since it raised well over twice of the money requested. I’m interested to see how some of my friends like referralMD and My Crisis Records do on Medstartr. Their projects are still open if you want to back them.

I think the biggest challenge with Medstartr right now is that it’s currently a “bring your own crowd” fundraising platform. The platform works to raise money if you already have a built in audience that is willing to pay to support it. So far, Medstartr hasn’t been able to produce a large community of “backers” that can fund a project that gets listed. In fact, I don’t think Medstartr even reached its fundraising goal in its campaign (although, it’s listed as such on the website now).

What is also really interesting is a healthcare project that was posted on Indiegogo for a Asthma Education App. So far it has raised $7125 for Health Nuts Media who wants to create the app. That’s not a bad start for their app with 27 people helping to fund that goal. Although, even that number was influenced by a $5000 commitment from Medicomp Systems makers of Medcin. I’d be interested to know how they landed that backing. That’s a nice one and if they can get more of those, that will be powerful.

The good thing with Indiegogo is that whatever money is raised the project gets. In Kickstarter you have to reach your goal or the project gets $0 of funding. I haven’t heard which model Medstartr has chosen to adopt.

We’re still in the early days of Crowdfunding. Plus, true crowdfunding (ie. small investment for small equity) is still waiting on the official rules to be put out. That could really change how companies get funded. I’m excited about the opportunity, but cautious about the challenge of getting enough people to care about healthcare enough to support those projects.

Rock Health Startup Elements: Habit Design

Posted on April 20, 2012 I Written By

In this edition of Rock Health Startup Elements, BJ Fogg of Stanford University discusses the importance of habit design.

 

 

Watch the video.

HISUM2012: Doing Well by Doing Good: Opportunities in Digital Health with Mitch Kapor

Posted on February 13, 2012 I Written By

Mitch Kapor discusses the key factors in technology and policy which are enabling start-ups to lower health care costs and improve outcomes while building sustainable businesses at HISUM2012.

 

 

Watch the video here.

Striiv Launching a Portable Health Device That Requires No Input From You

Posted on October 17, 2011 I Written By

Most of the apps and devices that are in development for healthcare out there require the user to input at least some amount of information.  At the very least every device requires you to push a power button, but Striiv has developed a new proprietary technology that allows users to track their physical activity to play games, and ultimately donate to charity.

This technology, called “TruMotion”, is put into a device about the size of an iPod Nano that can be attached to a belt loop or even a keychain.  During the day there is pretty much nothing you have to do as the device simply tracks your daily interactions such as walking, taking the stairs or actual exercise.  Your activity is translated to success in the games.

MyLand is the first game where as your activity increases, your island fills up with exotic plants and animals.  More games will come out over time and they will start to include other bonuses and rewards that have become so popular in most games.

Success in the games ultimately translates to donations to charity.  Initially the charities that Striiv has chosen are GlobalGiving to donate clean water to children in South America or a polio vaccine to children in India.  It really is a win win situation as you get exercise, and kids get something that quite literally can save their lives.

The device attaches to any computer using a USB port which makes it incredibly easy to go from tracking your activity on your keychain, to helping donate money to charity.  Co-founder David Wang says they are really trying to appeal to the mainstream but particularly women.  They think that combining gaming with real world movement, and essentially no input will revolutionize the fitness device sector.

The startup has raised $6 million from iD Ventures and a number of angel investors, which leads me to believe that there is some real merit to this idea.  $6 million is no small sum of money, and gives some real credibility to the idea.

They have not said where the device will be sold other than to say that they have a few big names they are discussing distribution with.  The device will retail for $99 and can be reserved right now on the company’s website.