Healthcare tech solutions often don’t need to reach the most users to make a meaningful impact. They just need to make lives better. Smaller audiences don’t necessarily mean smaller profits for those that invest in healthcare technology — it just means the rules for navigating it can be different than the usual startup playbook.
Healthcare tech solutions tend to take longer to come to fruition than other industries, for example. It can be a tricky channel to navigate digital upgrades due to the red tape and regulations in the medical world. Still, most healthcare companies are working toward digital solutions to streamline the varied pain points their customers have.
We spoke with Dr. Kate Wolin, cofounder of Coeus Health, about how the same strategies for building a new food delivery app won’t always work to build healthcare solutions. Coeus seeks to make digital health solutions scale — going from scientific research to consumers. To do it, Dr. Wolin straddles the health and tech world as a behavioral scientist and tech entrepreneur, allowing her to see the similarities and differences.
Healthcare tech solutions should embrace scrapping the MVP
The process of building an MVP, or minimum viable product, is crucial for seeing how your tech solution will work. If it works well enough to earn users in the real world, then you build on it. That way there are no sunk costs — you just roll out features as time and resources permit.
In healthcare, that doesn’t always work. The definition of “minimum,” for example, can be very different. Maybe your minimum viable product is full-featured, but built quickly on the back of an existing system. Or maybe you manually give users feedback instead of running a robust AI backend, making it impossible to scale. If you end up scrapping your MVP because it can’t grow with your company, don’t think of it as losing money. That money went to gaining insights into the scalable solution.
“I’m a startup CEO and a scientist,” says Dr. Wolin. “In working with a couple dev shops, the best thing that they have done is to question what we are doing.”
Sometimes, building the perfect software right from the beginning isn’t a realistic goal. Developing a useable prototype can be enough to attract users and/or prospective investors, which can land you the resources to develop the project to the level you want.
Audience size for healthcare tech doesn’t matter as much as impact
Doing something big for a small number of people should be considered just as transformative as doing something small for a big number of people, particularly in healthcare. While many in the tech world are looking for the next app to transform society as we know it, healthcare populations have different and specific needs. Serving any of them well can literally save lives. And bringing something to market that doesn’t work can do real harm. So while a laundry-washing app may need to scale to millions of people to reach profitability, an app that serves a necessary medical function might not.
One size does not fit all for healthcare solutions, but one app can make a huge impact to a small portion of the population. Your team may not net returns across a wide audience, but you can get a higher per-user return from making an essential product.
Healthcare tech funding must move from home runs to base hits
Software can transform people’s lives without earning a giant return on investment. That doesn’t mean VCs can’t cash out once new healthcare tech is adopted. It just means you need to know what the market needs and what companies are serving what audiences.
“With VCs, you have 10 companies and nine can be failures as long as one gets a massive return. That means they’re only investing in ideas that have the potential to be billion-dollar businesses,” says Dr. Wolin. “The thing is, that to me is the equivalent of saying ‘I’m only going to assign sluggers to my baseball team.’ It negates the value of someone who’s really good at getting on base.”
What ‘good enough’ means in healthcare
The pitfalls of developing an app that doesn’t work in the healthcare channel are much bigger than the rest of the market.
“If I buy a pair of pants and they don’t flatter me, I’m disappointed. But if I choose your mental health app over traditional therapy, I’m risking substituting something that doesn’t work for something that does. For a lot of these outcomes, there’s something out there. It might not be accessible and it might be expensive. But there’s an ethical consideration in giving people something that works,” says Dr. Wolin.
There’s value in getting something to market, but if people come to rely on your product and it can’t deliver, the consequences are far more dire than a one-star review in iTunes. Theranos is a chilling example. If you’re going to fail, fail in a test environment. The real world for Healthcare is only for products that work.
“Do no harm” is a philosophy all tech could stand to live by
No doubt there are additional constraints in this space, and yes, they can hamper innovation, but the truth is that healthcare tech solutions operate by rules we sometimes wish the rest of the industry could follow.
Instead of aiming to reach the biggest possible audience with software that aims for the lowest common denominator, remember the value in building to the needs of specific populations. Embrace the 4x return, not just the 10x one. And before you launch, make sure your product actually improves the lives of real people.