I had the privilege to meet with and speak to the local Healthcare meet-up recently (thanks to Pete Kanee at www.healthcare.mn) and as part of my discussion, I shared a list of things that I’d encourage the local (healthcare) startups to continue to keep in mind as they grow their companies.
I had the privilege to meet with and speak to the local Healthcare meet-up recently (thanks to Pete Kanee at www.healthcare.mn) and as part of my discussion, I shared a list of things that I’d encourage the local (healthcare) startups to continue to keep in mind as they grow their companies.
These are relevant to not only healthcare-focused startups but all startups for that matter. They’re pretty common, but in my recent conversations with healthcare entrepreneurs, I found many of these needing to be brought up as part of the dialogue.
So here it is:
1. Talk more, share more – one of the challenges I see in the entrepreneurial community in healthcare is there’s a lack of robust conversations going on between the startups and the rest of the industry (including doctors, insurers, other startups). As a result, we see a TON of early stage healthcare startups who don’t appear to have a full understanding of the industry they’re seeking to win in. Talk. Reach out. Converse. Make sure you’re connecting to a LOT of people in the industry. Make sure you’re sharing your vision, your ideas, your thoughts as well. This will help in so many ways.
2. Build lean, agile startups – the Lean startup movement is working for a reason – it contains some powerful, simple and timely disciplines and practices that great startups have been doing for decades (Eric just happened to codify them into a book). Be frugal with your cash, test your hypotheses regularly and incessantly, be flexible and smart about your pivots.
3. Avoid VC money if you can – my VC friends might wince at this, but it’s a reality – VC money is the most “expensive” you can take on, but it comes with other benefits as well. Just make sure that as you think about capitalizing your business, that you’re just as concerned about the cost of this growth capital. The best capital comes from paying customers – what are you doing today to get them to pay you (even if it’s a little bit) for your offering?
4. Learn and do your homework – tied to item #1, this lack of dialogue and seeking to learn from the players in the industry results in startups who may have an idea with potential but have huge blind spots. If you’ve got an idea, please don’t start your company without a number of extensive and thoughtful discussions with players in the industry, to see if you’re looking at the problem right. There’s a lot of qualified companies in this space – if you think you’re onto something, ask and learn, “why hasn’t _(company)__” done this yet?”
5. Make sure the problem is real – and on the heels of #4, there’s plenty wrong with the healthcare industry today. But just because it’s wrong doesn’t mean it’s a problem that’s seeking a solution. There’s a lot of simple, quick ways to find out if the problem, as you see it, is truly a problem and more importantly, people are willing to pay someone to do something about it. Ask prospective customers a simple question, “Would you be willing to pay someone to fix this/improve this/change this?” And then ask, “why?” Keep asking “why?” until it’s clear they’re serious about this problem.
6. Be sure you’re providing value – I centered this comment on the explosion of health-related mobile apps out on the market today. Just because you can code up an app and get it online doesn’t mean it’s providing value. The challenge with all these apps is they’re just temporary – they’re not creating lasting value. And this industry needs things that’ll create enduring, lasting value, not something that’ll garner 10,000 downloads and be ignored in 2 weeks. In addition to learning and listening to the industry players, be real clear that what you’re going to provide is of VALUE to whomever you’re selling it to. This may not be easy to see or discern – you’ll need to deeply understand who it is you’re serving, what their circumstances and needs are and just how motivated they are to have this problem solved. Value is measured in many ways, but make sure you’re asking the tough question – is this really providing value or just trying to get customers?
7. Have a solid business model – I think the Business Model Canvas (http://www.businessmodelgeneration.com/canvas) has done a wonderful job in helping entrepreneurs expand their thinking about their business model, to go beyond just how it’ll make money. In a simple format, it leads the entrepreneur to think through ALL the elements associated with building their business. I can guarantee any entrepreneur that if they go through the canvas process, they’ll see something about their business they hadn’t thought of. Use it, but in the right way – to be thorough in thinking through all the aspects of your business as well as creating multiple business model canvas’ to explore.
8. Leverage Human Centered Design tools – another evolution that’s making a difference in how entrepreneurs look at their business is the advent of applying Human Centered Design principles into their process. Folks like Ideo and the Stanford D-School have offered up their tools for free so make sure to learn about them and see where they can apply. While you’re not expected to be a master in human centered design, it can provide you with some great tools to think expansively about the problems you’re trying to solve and the people you’re trying to solve them for. A great HCD toolkit can be found at – http://stanford.io/ipaPIa
9. Network like a madman – while I don’t like the word “network” I do believe there’s a profound value and impact that comes from creating connections with the people in the industry you serve. Make sure you’re creating bi-directional relationships with – providers, payers, service providers, user groups, communities, other startups, etc. I know you’ve got a lot on your plate, but make it a point to regularly connect with others in your space. AND always make sure you ask, “what can I do to help you?” – don’t make it just a 1-sided, “I-win, you-lose” encounter.
10. Be conscious about your team – I’m stealing a practice I was taught in Silicon Valley – as you build your company, be very thoughtful about who you bring onto the team. Hire A-players. People who, while a bit more expensive, are ones that can really deliver the goods but are also people of integrity. In general, few of us are taught how to really interview and find the right people – if you’re not one of them, find someone who can help you make sure that as you bring folks on board, you’re bringing the right ones, who’ll make a difference and create a 1 + 1 = 8 impact to the company.
Your job is tough enough – to create a game-changing startup for the complex, confusing, turbulent world of healthcare. But this list contains many of the simple, avoidable things that cause so many well-intentioned startups to fail. This industry is going to undergo dramatic change in the next 3 years and this change will create wonderful opportunities to make a difference, create real value and fundamentally change the game.
I want to cheer you on as you change the game (and possibly the world) – so check this list – how are you tracking?