Digital health investors don't want your buzzwords

October 6, 2017



Venture capitalists at Health 2.0 explained what it takes to get noticed.

Every day a cadre of PR pitches are created to hype the latest and greatest digital health companies. Unfortunately, many of them use the same buzzwords, rendering the reader tasked with figuring out what it is the company actually does.

Every nascent healthcare company, for example, suddenly became an artificial intelligence (AI) company. The investor community can always be counted upon to throw a cold splash of reality on fads among the digital health business landscape and provide their insights into where they see the market going. To this end, their comments across panels at Health 2.0 in Santa Clara, California, this week did not disappoint.

Merging b2b and b2c

For companies trying to chalk up a W, organizations should look to employ both business-to-business and business-to-consumer principles.

In the past, b2c was a big play for digital health startups but, with a few exceptions, many have not gained traction in the space. “Unfortunately, a lot of money has been spent and so far there’s not really a business model to emulate,” Dimkova said, adding she does think the consumerization of healthcare will still eventually happen.

To O’Keefe, a lot of healthcare is b2b2c. “You need the enterprise knowledge of cracking the health ecosystem but then you have to understand how to acquire customers, have them on your platform and engage with them,” she said.

For those looking to break into the space and who aren’t trying to reimagine the playing field, Sinha suggested looking to areas that individuals don’t understand. Such areas are “ripe for disruption,” she said, giving how drug formularies are negotiated by pharmacy benefit managers as an example.

The good news is, as Bill Ericson, managing partner at Wildcat Venture Partners, noted, there is so much capital on the table. And if funding trends have been any indication, there won’t be a shortage of companies trying to enter the space, or investors looking for the next big hit in the healthcare industry.

Read the full article on HealthcareDRIVE here.