The National Institute of Health Commercialization Program (NIH-CAP), designed to assist promising life science companies bring their technologies to market, is a nation wide program funded by NIH and managed and executed by Larta. The Larta Institute invited me to talk to this season’s group about my thoughts on Healthcare IT, Media, and Training. Here’s what I told them.
Healthcare Industry Fallacies
I started with a brief discussion about how selling to the healthcare community is very hard but not for the reasons they might think. I mentioned that:
- Healthcare folks are neither technically challenged nor simple techno-phobes. Because they are in the business of saving lives and improving health, they care about technologies that help them achieve their mission.
- Most product decisions are no longer made by clinical folks alone, CIOs are fully involved. Don’t try to sell just to the clinical folks — make sure the IT side is engaged and on your side.
- Complex, full-featured, products are not easier to sell than simple, stand alone tools that have the capability of interoperating with other solutions are much easier to sell. Software as a service is a good approach.
- Hospitals will not buy unless one proves value. This seems obvious but most startups think that because they think something is important, their customers will just agree.
- Selling into doctors offices is not easy. There were a few startups looking to sell to individual physicians’ offices. I told them selling to to your first dozen physicians is pretty easy since we all know doctors. Just be careful, though, since selling to the next dozen and beyond is where companies fall.
Conducting Market Research
Lots of startups don’t do basic market research so I suggested the following approach:
- Find the right search terms for your industry or product. Don’t be esoteric. Because startups will only be found through word of mouth or on the Internet, don’t choose terms to describe yourself that no one else understands. Selling to hospitals is not about creativity, it’s about value. If the customer doesn’t understand what you’re selling give up now.
- Use competitive intelligence to locate your competitors and existing firms. The easiest way is to use Internet search. Once you know your competitors, call them up and ask them about client references Call up their clients and talk to them about their products and services and what can be improved.
How Tech can help Healthcare today (what areas are good to get into)
- Fraud detection and improved billing (revenue cycle management)
- Offshoring. Inshoring.
- Convergence of healthcare IT and clinical engineering.
- Virtual clinicians in radiology and ICU monitoring.
- Data interoperability for medical records.
What types of Business Models to Consider
- Software as a Service (SaaS) and subscription model — best model for startups with something they can maintain in their own data centers
- Consulting and Solutions model — when you can provide packaged help
- Licensed model — when privacy or complexity requires solutions to be installed in house
- Freemium model (and open source)
Some Success Criteria
- Make sure your company and its value is easy to explain
- Make sure your value is defendable and differentiated (but without being esoteric)
- Make sure that you have ability to attract partners and can either create or be part of an ecosystem
- Ensure that you have word of mouth opportunity
- Have scaleable staff and systems
- Have a scaleable product — build once, sell many times
- Have an uncomplicated pricing and deployment model
- Be very focused — you can’t “solve healthcare” but you can solve very specific problems
- Try to own the relationship with and information about customers — don’t rely on partners that won’t give you access to customers