Hey Startup, You’re Missing the Mark on Healthcare’s Culture & People
By Craig Ahrens, Digital Health Leader & Entrepreneur
Healthcare innovations are changing a growing industry at an incredible pace, making pioneering startups more appealing than ever. New healthcare startups promising unique solutions and strategies emerge every day, but successful startups don’t thrive on great ideas alone. Attracting an initial venture investment based solely on a startup’s concepts and promises is great, but the real trouble can happen after signing the papers. The post-funding implementation process can derail even the most exciting startups if an initial sales investment is weakened too quickly to cut costs. Here’s one way that frequently happens, and some suggestions for avoiding this all-too-common misstep.
Digital health startups are among the hottest concepts in current VC circles, which means there’s a robust market for them.
The sales process doesn’t stop when the contract is signed. Multiple parties and stakeholders within the complex organization of the enterprise need to be brought on board for the product to succeed in the marketplace. The starting up part of a startup doesn’t stop when funding is secured, and the C-suite is determined. After initial closure, the concept has to be shepherded through multiple layers of people and approval processes to make a startup a going concern.
Let’s not forget that when we are working with big investors and the Silicon Valley folks, it’s hard to sell prospective backers on even the best ideas. Digital health startups are among the hottest concepts in current VC circles, which means there’s a robust market for them. Still, their appeal to investors that want to be involved in these businesses without much understanding of healthcare industry culture and people can doom even the most innovative products before they reach the market. These novice healthcare technology investors are prone to projecting their expectations as multifaceted VCs, and their lack of specific industry knowledge can cause their hopes for healthcare unicorns to sputter.
A sales team with industry experience is critical to the successful launch of any startup product. The model for enterprise success generally moves through specific phases: buy expertise in the form of a superb sales team; gain entry into the market; obtain social proof that the product actually works; and saturate the market. When meaningful market share exists, replicate this process and make adjustments as you learn. When a startup achieves a successful market launch, consider investing less in an expert sales force and shift to bringing in a junior team who can follow the prescriptive strategy determined by the expert sales team.
Many healthcare tech companies don’t understand that a premature shift to a lower-cost, less experienced sales team risks blowing up the company. Most new healthcare tech companies struggle to phase in the product after the sale. Getting initial C-suite buy-in is just the beginning; Once leadership has set its strategy, product implementation is still a multi-step process.
The Solution
Create a Finance and Measurable Return Model Right Away
The first step for a healthcare startup’s success is ensuring that your finance team builds its model around measurable returns on investment. Doing this upfront helps reassure your new investors, especially those with little industry experience. Startups often underplay the implementation aspect of the overall financial equation to create an easy to grasp metric for a measurable return. They must create a model that directly tracks a return on investment with direct relation to whatever product-market fit and value they want to create.
Ensure Frontline Users are as Invested as the C-suite
When your product is ready for its target market, it’s vital that the frontline users are as convinced by and excited about the product as the C-suite. This means ensuring your users are interacting with the product to see a high perceived value. When your frontline users and managers believe in a product, it is more authentic and natural for them to endorse it to other potential users.
The frontline users must have a clear understanding of who they can go to with product questions, troubleshooting, or feedback on better performance. The communication team must interact effectively with users, be an onsite presence, and optimize the use of the platform so it lives up to what the executives promised. Their constant presence will help represent the product’s value to the organization.
Bring on a Team of Product Champions
Recruit a group of supporters to endorse the product and provide assistance. This could be an executive champion, a user champion, and other ambassadors throughout the organization. This team needs a working script of talking points around the company’s value propositions. They should also have some sort of stake in the product — either a budgetary claim or a personal interest. Your champions help create a sense of urgency for the product to succeed.
The Bottom Line A strong approach to company and employee culture, combined with rigorous process management, allows healthcare startups to move beyond survival and achieve growth and success. This isn’t always easy, since the boost provided by open minds and a willingness to explore dynamic approaches are sometimes tough to pull off in a sometimes static industry. People across all levels of the organization have to commit to implementing a new approach through a novel product. That cross-departmental involvement leads to users who are more willing to accept new technology, which eventually drives the ultimate goals of improved performance and increased profits. This all starts with a commitment to understanding how people actually work with the technology and putting the exemplary ambassadors in place to shepherd it through implementation, and that’s a challenge many healthcare startups ignore at their peril.