Keep Your Eye on the Horizon: Four Considerations for Healthcare Startups
Hubert Zajicek, CEO, Health Wildcatters
According to the Global Entrepreneurship Monitor (GEM), there are approximately 27 million working-age Americans currently starting or running new businesses. That means 14 percent of the population consider themselves entrepreneurs!
Many startups in the U.S. have become highly successful in their respective marketplaces over the past few years. Just think – we didn’t have iPhones, tablets, Uber, Zocdoc, Facebook, Instagram, LinkedIn or Twitter, to name a few, just a little over 10 years ago. And, startups are vital to keep our economy growing and thriving with new ideas and businesses.
It is true that in healthcare the hurdles are higher, but so are the potential rewards. While it may be more difficult to get started, these same hurdles, once overcome, become barriers to entry for your competition. If you are considering starting a healthcare company, here are four pieces of information you should consider before taking the leap.
1. BEHIND - Healthcare is far behind other industries.
Until recent years, the majority of healthcare organizations were still heavily relying on physical patient records in folders, as opposed to utilizing online or cloud resources to store the data. Especially when it comes to digital ideas, the healthcare industry are laggards in adopting technology, unless it is a medical device they can use in the operating room or during procedures.
2. REGULATION - There are hurdles you must overcome to break into the industry.
Beyond slow adoption rates, there are other hurdles when breaking into this marketplace. The industry is built around being compliant with HIPAA (Health Insurance Portability and Accountability Act) standards, FDA rules and ISO standards, among others. These can dictate heavily what organizations are willing to do or not do. Additionally, most healthcare providers are very cautious of trying new technologies because of cybersecurity challenges that have plagued the industry in recent years.
3. FIRST, DO NO HARM - Healthcare professionals are typically more conservative.
Remember that every healthcare professional follows the moto of Primum non nocere, or “first, do no harm.” They typically do not like to take any action until there is a clear purpose behind it and established that this is the best course of action. Your startup must have a value proposition that simply cannot be ignored that will greatly benefit their work or the patients.
4. COMPLEXITY - The education process is longer in healthcare.
While you do not necessarily need a background in healthcare to be an entrepreneur in this industry, it does not hurt. Your investors and customers will know you are truly knowledgeable about the needs of the industry. The more you can prove you understand the challenges and have developed a solution that meets these, the better. It does slow down the entrepreneurial process to become degreed in the healthcare field, and that may not be necessary, but it does make the cycle longer as compared to startups in other industries.
Ultimately, healthcare moves somewhat slower than other industries, despite how fast you may want to move in getting your startup off the ground. Because healthcare does not adopt change as quickly as other industries, you need to be aware there’s a good chance someone else had a similar idea, tried to take off with it and was defeated by the industry’s aversion to change.
Don’t get discouraged! The best ideas are innovative and creative and I encourage you to keep at it. It’s a very exciting time and there are many healthcare startups breaking into the industry. Be persistent and patient while working with healthcare professionals, it’s a marathon and not a sprint.
[Image courtesy of Baitong333 at FreeDigitalPhotos.net]
Dr. Hubert Zajicek is the CEO and co-founder of Health Wildcatters, a Dallas-based mentor-driven, health care accelerator program founded in 2013. Health Wildcatters is a 12-week program that offers health-focused startups in the early stages of funding an initial seed investment, as well as access to mentors, advisors, office space and strategic resources required to help the startups grow.