Why Do Digital Health Start-Ups Fail?

As 90% of digital health start-ups fail in the first five years, what can start-ups do to protect themselves?

It is never easy to be an entrepreneur, especially in a healthcare setting. A good idea is not enough; you need funding, a viable and scalable business model as well as networks, links to the right people and a solid sales and marketing strategy. In the healthcare setting, you have all of these challenges and more as there are so many regulations to follow and a vast number of stakeholders to impress.

Investment in healthcare start-ups is high and continues to be a growing market. In 2018, investment in digital healthcare start-ups reached $8.1 billion. However, 90% of these businesses failed in their first five years. So, to ensure that this doesn’t put off prospective start-ups, what do entrepreneurs need to avoid, so that they can see their start-up succeed?

  1. Not being inclusive

A new innovation may sound like it solves lots of problems, but if you neglect the patient, then your product may fail. It is essential to understand the needs of patients in order to create a valuable solution. From your idea to the design and development to follow-up, the patient needs to be front and centre of your approach.

  1. Forgetting care providers

Most start-ups have to sell to care providers, not patients. This means there are a lot more stakeholders to please. While you may be thinking about the patient, you may not have thought about the insurer, pharmaceutical companies and doctors that you will serve, alongside the patient.

  1. Lacking in value

Products and services can often struggle when their clinical significance is questioned. Without detailed research and studies, your product may be deemed irrelevant or unable to offer a sufficient solution based on what you are measuring. Studies, research and proof are vital to show that what you offer can make a difference.

  1. Overclaiming

While you’ll want your product to succeed, you need to provide clear evidence that it works and does what you say it does. So many people claim to have a revolutionary new ‘life-changing’ product. However, you need to use extreme caution and make sure all your facts are in place before you start making false claims and bold statements.

  1. Inconvenience

Your amazing health tech solution will be doomed to fail if you make it inconvenient for patients to use. For example, you need to be able to use the product in homes to prevent patients from making unnecessary journeys. For doctors, it is important to consider the tools they already have and how you can sit alongside existing processes to make it as easy as possible to use.

  1. Miscalculating costs

For a product to be successful, it needs to be cost-effective. You need to make sure that you have a thorough and comprehensive pricing strategy that is not too high or too low. By misplacing your pricing or miscalculating costs, it can spell a swift end to a start-up.


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