Ninety-five percent of digital healthcare startups are destined to fail. What sets apart the winners from the losers? What does it take to succeed in business of telemedicine? Doug Shinsato, CEO of Anthill Ventures seed incubator and management consultant firm gives us an investor’s perspective of the telemedicine industry and the repeated lessons he’s learned from over thirty years of investing in and working with digital businesses and technology companies that have both succeeded and failed.
Telehealth for better healthcare efficiency
US healthcare expenditure now amounts to 17% of GDP and is likely to bankrupt the economy if nothing changes. Indeed, the current US hospital model is more than 300 year old and is in desperate need of a revamp. The problem is that the current model is designed to maximize the profitability of healthcare organizations with little regards to the patient’s real needs. What is needed is a business model that focuses on improving health rather than mitigating illnesses. This would not only improve the efficiency but also improve patient satisfaction.
Telehealth is a perfect candidate to help increase healthcare efficiency and reduce healthcare expenditures. It has the ability to overcome the barriers of distance and access to needed healthcare expertise and services. For many years innovative companies have been developing telehealth applications in areas such as patient education, remote patient monitoring, and outsourcing of specialty services. What can we learn from them? What do we need to know for the business of telemedicine to successfully join the digital revolution
Lesson 1: Choosing the right telemedicine customer base
A lesson learned from India startups was that the most successful startups were those who went after insurance companies rather than hospitals or drug store chains. This is because telehealth goals easily align with insurance companies’ bottom lines: improving their customer’s health so they can reduce the cost of healthcare. Hospitals, on the other hand, are still stuck in their old business model of keeping their rooms filled with patients, and healthcare retailers are not willing to risk something new. So choosing the right customer group can make or break your telemedicine business
Lesson 2: Too much success often leads to failure
Kodak and Digital Equipment were two extremely successful companies that have faded away into near oblivion because they became too attached to their business models. Kodak, known for its print film was killed by the digital camera, while Digital Equipment was knocked out by the PC revolution. The more profitable a business model is, the harder it is throw away its model of success and invest in still developing technologies and processes. Established companies are often so blinded by their successes that fail to keep their products relevant to a constantly changing society.
Lesson 3: Having a great telehealth product is not enough
Many startups have the right idea but take the wrong turn. They think that customers will come as long as they have a great product. While these founders may be brilliant engineers and scientists, they often don’t realize the necessity of strong sales and marketing skills. They may not understand the healthcare industry they are getting into. They underestimate the cost of user acquisition and allocate most of their resources to engineering and research while ignoring UI, UX, and user retention.
Lesson 4: Lying, cheating, and putting lives at risk do not work
Integrity is very important for success. Elizabeth Holmes, former CEO of Theranos, rose quickly to fame by lying about what the company’s blood tests could do and then trying to cover up reports that showed otherwise. She put lives at risk, and has ruined her reputation.
Lesson 5: Timing is essential to telemedicine success
Each stage of new technology uptake development, market education, user adoption requires a different business strategy. If you get into the game when too much investment is available you may be too early, but if the market is too crowded, you may be too late. For telehealth, the time is now.
The healthcare industry has been a late adopter of new technology. As a highly regulated field, there are many concerns surrounding legal and privacy issues, device interoperability and generation latency. Healthcare payers and current reimbursement systems which wield a huge amount of political power and financial clout have been slow to embrace telehealth. Nevertheless, we are now at a point where the market is still relatively open, regulatory barriers are coming down, and the push into telehealth era is inevitable.
Check out more details for tips for telemedicine business model transformation in the video below.
<iframe src=”//www.slideshare.net/slideshow/embed_code/key/gTCqEEEYQXTUT2″ width=”595″ height=”485″ frameborder=”0″ marginwidth=”0″ marginheight=”0″ scrolling=”no” style=”border:1px solid #CCC; border-width:1px; margin-bottom:5px; max-width: 100%;” allowfullscreen> </iframe> <div style=”margin-bottom:5px”> <strong> <a href=”//www.slideshare.net/VSee/telemedicine-lessons-from-walmart-texas-prisons-dr-glenn-hammack-9-feb2017″ title=”Telemedicine Lessons from Walmart & Texas Prisons – Dr. Glenn Hammack 9 feb2017″ target=”_blank”>Telemedicine Lessons from Walmart & Texas Prisons – Dr. Glenn Hammack 9 feb2017</a> </strong> from <strong><a target=”_blank” href=”//www.slideshare.net/VSee”>VSee</a></strong> </div>
ABOUT THE SPEAKER
Doug, founder Anthill Ventures, focuses on the integration of telehealthcare, renewable energy and sustainable food production. With teams in Singapore, Tokyo, Taipei, Hyderabad and Hawaii, Anthill’s emphasis is on high-impact/low-cost technologies. Doug sits on the advisory boards of Northern Europe’s leading investment firm and Asia’s top branding strategy company.
Telehealth Failures & Secrets To Success (TFSS) gets beyond the market hype to discuss the realities of doing telemedicine and the challenges facing the telehealth industry.
Join our TFSS Webinar series with telehealth experts and thought leaders from Microsoft, Qualcomm, Intel, and healthcare systems across the nation!