The article Entering a growing market: considerations for entrepreneurs in the field of digital health was written by Sigal Admony Ravid for Geektime.
The development of technology and the accessibility of information have made traditional fields such as finance and insurance more transparent and have helped to deal with large and bureaucratic bodies. In the health sector, the connection between digital tools and platforms and the medical world has led to the beginning of a health revolution that empowers us as health consumers and enables us to monitor, manage and improve our health.
From applications that warn of memory loss (which may indicate Alzheimer’s), through diabetes detection and prevention platforms, to imaging and machine learning companies, the potential for disease prevention, early detection, the treatment of an aging population, and the creation of health solutions for developed and developing countries is endless.
The digital health market is currently valued at an estimated $140 billion. By 2025, its value is expected to grow to more than $400 billion. The leading companies in the field are not necessarily the “immediate suspects” in the health and insurance sector, but companies like Apple, Samsung and Microsoft. Recently, Amazon, Berkshire Hathaway and JPMorgan Chase have also joined forces to reduce costs of medical expenses.
A field that encourages pioneers
Israel has made a significant contribution to innovation to the field. The centralized structure of Israel’s health system, in which all patient information is maintained and concentrated by a few groups, enables Israeli companies to be pioneers in health IT, which in many ways has become a part of the term ‘digital health’. As a result of Israel’s unique environment, the amount of products and solutions that have developed in the industry is enormous.
There are hundreds of start-ups in Israel that have made great achievements. Among them you can find digital medical device giants alongside start-ups, such as Zebra Medical, which develops tools for medical diagnosis based on artificial intelligence. There are also younger companies that deal with a variety of medical needs, such as Proactive Care, which developed a platform for the involvement of medical organizations in the lives of health consumers and the management of preventive medicine. Playwork transformed physical therapy equipment into a digital gaming platform, while Pink Of View developed a digital tool that estimates the risk of breast cancer in women without a genetic affiliation.
Extending the life expectancy of a start-up
This is a huge and growing market, and the entrepreneurs working in it can affect the lives of patients and contribute to life expectancy and quality. Still, the sector already has many digital solutions for managing health consumers, for taking drugs, for diagnosing and treating diseases, and many enterprises are failing to establish themselves, leading to their eventual closure. So, what should we focus on in order to increase the chances of the start-up’s successful longevity?
“Beyond the innovative technology, it is vital that companies know the markets in-depth and accurately identify the medical need and key players in the field in which they operate,” explains Lior Titelbaum, Vice President of Business Development at Mindup.
“You have to pay attention to the activity of non-health concerns, which provides additional opportunities for companies in the field,” adds Daniel Gamzu, Director of Life Sciences Investments at Incentive. “Apple with Siri and Google already know about disease awareness and home testing. It is important to choose the market in which to compete and to understand whether it is appropriate to offer complementary, competing, or integrative products.”
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Neta-Li Nedivi, a partner at Triventures, says: “It is not enough to identify the need; it is still necessary to make sure that the need is significant enough for customers to be willing to pay for it, whilst enabling the company to build a growing business. As always, it is important for entrepreneurs to surround themselves with a collection of the best who understand the market, whether they are investors, consultants or experts in the field of human capital. ”
Business model and regulation
How do you know if there is a real need? As in any market, it is essential to ask the right questions. For example, is the client a CIO of an organization that needs to manage several platforms simultaneously? Is the client a doctor who needs to open an additional screen and application to help the patient? Is it the patient himself who needs to learn a new system and wants a comprehensive, dedicated and simple solution? Each situation requires a different solution.
Noam Gabison, who leads digital health on Facebook, emphasizes the importance of service with consumer focus, and says that modern consumers have become accustomed to today’s advanced, immediate, transparent and customized experience with their healthcare services and products. He says entrepreneurs must ensure that this focus is maintained in the product, the marketing efforts and the consumer experience. He emphasizes that these are people, not patients, and therefore providers must understand the persona of future consumers – who they are, how old they are, what interests them, and how open they are to recognize their health issues and seek a solution, prevent it in advance, or monitor it better.
But a good solution is not enough. Ultimately, one must ensure that the business model is airtight, that the numbers are accurate, and that the benefits are adjusted to costs. Yonatan Friedman, a partner at the LionBird Foundation, reminds us to dwell on the basic questions: “What is the revenue model? What are the sale channels? Is the model B2C or B2B? Who are the customers? What is the sale cycle?”. At times it is very tempting to provide general answers, but at the end of the day, one must create a specific message that is very significant to a specific position at the customers end, otherwise the product may become another dash-board that does not provide enough value and will not generate consumer interest.
Identifying a true need and creating a successful business model surrounding it is essential, but those who enter the field must also prepare for and be aware of the expected challenges – as some may know how to identify them in advance. Since this is a relatively new field, business models are still developing, resulting in schedules for commercial integration of medical service providers which are longer than expected.
“It’s also important to know the regulation well,” adds Titelbaum. “Check the rules for exposing users and data, what can and cannot be done with the data collected, and what settings should be determined.” For example, if the solution you offer can identify or rule out a particular disease, it is important to examine the legal liability inherent in such a statement and the associated risks.
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The health industry has changed and the classic barriers are diminishing. In some models, which include a direct marketing strategy for the consumer, fueled by data and a successful creative, every Israeli start-up can bring its innovative product to millions of consumers around the world and improve people’s quality of life.
The article Entering a growing market: considerations for entrepreneurs in the field of digital health first appeared on Geektime.
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