So Mo Lo? The Fallacy of Technology Start-ups in Healthcare
Like they say, it’s impossible to look away from a train wreck. That’s as true in healthcare as it is anywhere else, as evidenced by the public meltdowns of Theranos and Zenefits. These companies have extremely different offerings, business models, and leadership – yet both are struggling to make it on the big stage of healthcare. And while there are different reasons for that, their troubles are symptomatic of a much larger issue.
Are technology companies really taking healthcare seriously? Can they communicate and operate effectively in this new world?
A recent article from The Washington Post sums it up well: “Zenefits is just the latest example of a high-flying startup trying to revolutionize the health-care space, only to discover along the way that Silicon Valley’s philosophy of disruptive innovation can be more difficult to apply to health care than in the digital world.”
In other words, healthcare isn’t like other industries. Yeah, everyone says that, but I worry that start-up technology companies aren’t actually taking it to heart. It’s not just about the fact that healthcare is life-or-death, infused with deep emotions and morality that cut to the heart of who we are as humans. It’s also – perhaps because of that – extremely risk averse.
Healthcare’s risk aversity is rooted in history. Take the Hippocratic corpus, which states, “these two things in disease are particularly to be attended to: to do good, and not to do harm.” While this was referring to the practice of medicine, and specifically the role of the physician in treating disease, I’d warrant that it applies to the business operations of many healthcare companies as well.
So instead of building something that works great outside of healthcare, and trying to force-fit it into healthcare, innovators must take the opposite approach – working first with investors or partners who know the ins and outs of the healthcare delivery system, to ensure their business model is appropriate and needed.
After that, it’s all about communications and sales. When technology start-ups come flying in with their talk of revolutionizing healthcare, they’re setting themselves up for failure. Stop calling yourself the “Uber of healthcare.” Stop saying you’re “disrupting the status quo.” JUST STOP.
Instead, speak to the pain points and history of your audience – healthcare executives who are facing challenges far more complex than the need for more convenient transportation. Talk about how to address the rise of consumerism, how to stay fiscally solvent, how to manage rising drug costs, and how to succeed in complex payment models.
Perhaps HBO’s brilliant show, “Silicon Valley” says it best in this parody piece. Do yourself and your company a favor. Be more than just another “So Mo Lo” technology play. In healthcare, innovation is coming, but it will only come with great care, collaboration, and communication.
With his pragmatic outlook and to-the-point style, Kaufman challenged conventional wisdom and shared the pitfalls and strategies the hospital C-suite must know. You’ll hear more from Nate as a keynote speaker at our 2018 Summit, and we’d love to see you there. In the meantime, here are some takeaways from his webinar presentation. You can also download the slides using the form on the right side of this page.
Health:Further is an annual conference focused on the future of health, coordinated by Jumpstart Foundry and held annually in Nashville, TN. The event attracted 1700 attendees, and many of our provider, investor, and tech clients were there – but if you missed it, here are a few takeaways.
In the first half of 2016, alone, the healthcare industry saw 52 mergers and acquisitions – a 6.1% increase from the first half of 2015.