My friend Matt Ethington sent me a note about Forbes.com’s recent article on The Keys To Building Health Care IT Companies. The article nicely covers what they think are “the most important things to consider when creating a health IT firm.” As an advisor to many health IT firms I often repeat the same things mentioned in the article (verbatim from Forbes.com):
- The product must be a true “have-to-have,” not a “nice-to-have”.
- Health care is actually an aggregation of many small markets.
- Startup revenue streams and value propositions are elusive.
- Customers must have more money with your product than without it.
- Businesses with strong network effects are gold mines.
- The customer is mobile.
- Expect to have a service component to your business, but avoid becoming a customized consulting shop.
- Beware of businesses dependent upon heroics. Make it easy.
- Know your domain. Health care IT is neither health care nor IT.
- Secure customer references and studies.
- Do well by doing good.
Commercializing healthcare information technology solutions is very difficult because the first couple of sales are so easy to make: each of us knows a doctor, a hospital executive, etc. and can sell the first few copies of almost any solution or software quickly. It’s the next 20 or 200 or 2,000 sales that are very difficult to make because there is so much variability in customers (no two doctors or no two hospitals operate in an identical manner).
A few months ago I spoke executives and founders of numerous healthcare IT and media startups at my NIH speech on how to commercialize their products. It’s worth reviewing that as well if you’re in the health IT startup market.