Success in the digital health startup arena involves navigating complex landscapes ranging from intricate health system’s infrastructures to venture capital pitches. At the recent ViVE conference in Los Angeles, leading health system executives and venture capitalists (VC) deconstructed the common pitfalls they have observed in startup pitches. Below, we delve into six missteps that they believe undermine an organization’s chances of either accruing capital or solidifying health system partnerships.
Overselling
Rebecca Kaul, chief of digital innovation and transformation at New York-based Northwell Health, highlighted “overselling” as a cardinal error committed by many startups. Kaul stressed the importance of a solution-oriented approach to pitching, rather than a sell-first mentality. For an investment to be successful, she affirmed the need for “mutual listening and learning” with the potential vendor.
Weak Plans for IT Integration
Virginia-based Sentara Health Chief Venture Officer, Michael Kalishman, discussed one common underestimate made by digital health startups – the intricacy of integrating a product into a hospital’s IT system. Lack of IT expertise in these startups frequently compounds frustration when it becomes clear that they do not understand the intricacies of dealing with underlying data systems and internal IT processes.
Inability to stand out from Competitors
Michelle Stansbury, VP of Innovation and IT Applications at Houston Methodist, points out the surprisingly common lack of differentiation in the crowded digital health market. Startups often fail to clearly illustrate how they differentiate from competitors, which Stansbury defines as a crucial question every startup must be prepared to answer.
Lack of Cybersecurity Considerations
Stansbury also underlined the concern over digital health startups’ failure to effectively address cybersecurity questions. Given the increasing prevalence of cyberattacks in the healthcare industry and associated vulnerabilities, cybersecurity considerations are non-negotiable.
Insufficient focus on Clinical Value
Lynne Chou O’Keefe, Founder and Managing Partner at Define Ventures, indicated that inability to discuss relevant clinical models is a red flag. For O’Keefe, the capacity to deliver clinical value outweighs the startup’s ability to grow financially.
Lack of Utilization and Engagement Metrics
The last error identified was digital health startups’ often-poor communication of utilization and engagement metrics. Cathy Gao, a partner at Sapphire Ventures, emphasized the need for startups to demonstrate user engagement effectively because large contracts hinge on sustained usage.
Understanding and learning from these mistakes could make the difference in the increasingly competitive world of digital health startups. More from the discussion, along with detailed context, can be found in the original detailed report.