The healthcare market is projected to grow over 5% each year between 2017 - 2022—to the tune of over $10 trillion in global spending. Folks are spending more money on their health, and in this market, that means startups have plenty of opportunities to revolutionize the stodgy world of healthcare.
Healthcare entrepreneurship comes with a lot of challenges. Regulations and laws can cripple your operation overnight. But if you learn to roll with the punches, you can build a competitive moat around your startup, weathering everything that comes your way.
What does “healthcare” mean, anyway?
Before we dive into the nitty-gritty of healthcare entrepreneurship, let’s draw the line between “healthcare” startups and “wellness” startups.
“Wellness” is all about healthy lifestyle choices that stave off disease. For example, brands like Peloton and Ritual are wellness companies because they help customers live an active, healthy lifestyle. You can think of it as wellness preventing disease instead of treating it.
“Health,” on the other hand, is a state of physical and mental well-being. Some people define it as the absence of disease or illness. Health brands are charged with treating or managing medical conditions. Brands like NURX that deliver prescription drugs and teledoctor services would be considered health companies.
There's a lot of buzz — and potential — around wellness, but that's for another article. So, before you start marketing your startup, understand which camp you fall under.
Top 3 things startups should know about the healthcare industry
Whether you’re a veteran or a newbie, there are 3 things startup founders need to understand before they enter the healthcare market.
1. Healthcare isn’t innovation-friendly
Our healthcare system is set up to avoid innovation. This isn’t because they want to stamp out new ideas, but because the risks are so high. Healthcare organizations are scared to try new things because people literally die if things go wrong. If that weren’t bad enough, regulations, hospital policies, and administrative rules add another layer of innovation buzzkill.
Healthcare startups have to navigate these layers of rules, which can be complex and challenging to understand. To overcome this challenge, your startup needs proof of concept. This is probably obvious, but you can’t just stroll into Johns Hopkins if you just have a concept without results—in healthcare, your numbers have to speak for themselves.
2. It’s hard to build trust
You’re a startup, and that means the market doesn’t trust you. That’s a pervasive problem for startups in any industry, but it’s more common in conservative industries like healthcare.
How can you convince a hospital network to trust your three or five-person team?
The key is to create a relationship with potential clients. Ideally, your founding team and close circle of advisors have been developing these relationships for years. If not, no worries. All hope is not lost; it just means you’ll have a steeper adoption curve.
First and foremost, you have to demonstrate product safety. Show potential clients your plan to scale and how you can support that as your startup grows. Second, make it very clear that you have consistent funding and a solid business plan. This will help clients feel more comfortable because it means you won’t disappear overnight, leaving them high and dry.
3. Long sales cycle
Want to close a deal by the end of the week? Sorry, that doesn’t happen in healthcare. Because of regulations and stakeholders, it can take years to get a healthcare organization on your client list. A perfect storm of budgeting, trust, regulations, and privacy requirements lengthen the sales cycle.
However, you don’t want to drag this process out more than it already is. Make sure your business plan and funding are solid before you pitch to new clients. Always keep the ball in their court to move things along.
Top healthcare startups of 2019
But don’t let these challenges scare you. There are approximately 2,500 startups in the healthcare sector right now , split into 34 categories. If you can successfully navigate the healthcare landscape, your startup will reign supreme. Let’s break down some of the most successful healthcare startups of 2019 to inspire your own startup journey.
As you look through these categories, consider which niche your startup falls under. Use your experience, network, market momentum, or technology to gain the upper hand by choosing the right healthcare niche.
🔖 Clinical administration startups
Healthcare organizations are still businesses, which means they need help with mundane tasks like billing and task tracking. Remedly is a startup that helps with practice management, handling appointment reminders, tasks, inventory, and more.
⚙️ Digital medical device startups
Medical devices have come a long way in the last 10 years. Instead of implanting a plain Jane plastic medical device, healthcare startups are designing digitally connected devices. Clarify Medical is one of those startups. Its light therapy system helps people with skin conditions treat themselves at home.
📱 Electronic health records startups
Electronic health records, or EHR, are the digitized version of a patient’s medical history. But medical practices need a leg up with managing and storing this data, which is where startups step in. Elation Health helps physicians track patient information in an easy online portal, as well as other features like e-prescribing and trend tracking.
🧬 Genomics startups
It’s an exciting time for DNA research! Genomics startups are vying for their piece of the pie as more patients and physicians use DNA to inform health decisions. Many people have heard of the startup 23andMe, which charts an individual’s ancestry and genetic health profile with a simple saliva test.
🕹️ Health gamification startups
Games make boring tasks, like medication and treatments, more fun for patients. That’s why healthcare startups are creating gamified apps to entertain and inspire patients. Perx Health helps patients stick to their treatment plans and medication in a fun, non-judgmental way.
🤖 Robotics startups
Robots are taking over healthcare, and for patients, that’s a very good thing. Spanish startup Able is developing robotic exoskeletons to give more mobility to people living with disabilities.
🏃♂️Fitness devices
Digitized fitness devices are all the rage these days, but they aren’t just cool accessories; these devices get real results. For example, Atlas Wearables is an Austin-based startup that invented a body-sensing fitness tool that comes with preloaded workouts.
🚑 Internet of Things startups
Internet of Things, or IoT, connects the real world to the digital realm. Healthcare startup RapidSOS uses connected devices to connect people in need with 911 and first responders, saving lives.
👩🏾⚕️ Service search startups
Patients don’t want to deal with the headaches of scheduling doctor’s appointments. Between finding a nearby doctor, handling insurance, and finding an available slot, it feels impossible to see a doctor when you need one. Startup Zocdoc empowers patients to schedule the right doctors quickly.
📈 Medical data startups
Healthcare organizations are realizing how important data is for patient health. Healthcare startups fill this information gap between patients and healthcare providers. Flatiron is a growing startup that speeds up cancer research by forming a community hive mind, complete with a secure data exchange.
💬 Patient engagement startups
Patient engagement helps people take charge of their health. Instead of being passive consumers, patient engagement apps help doctors work with patients in a two-way relationship. Startup Advancing Synergy uses technology to put the patient and their doctors in one space, where they can make more connections for better treatment.
☎️ Telemedicine startups
Thanks to services like UberEats and Amazon, you don’t need to put on pants if you want to shop. Telemedicine startups connect patients with doctors no matter where they are—and pants are optional. Telemedicine startup MDLive gives patients 24/7 access to a doctor in just minutes.
💊 Mobile app startups
People are on the move. They need healthcare that keeps up with them, and that’s why mobile app startups are so popular. For example, Hinge Health app helps patients manage back pain without drugs or surgery.
☁️ Remote monitoring startups
Remote patient monitoring, or RPM, helps both patients and doctors see real-time information about a patient’s treatment. ClairVista gives physicians a glimpse into patient medication adherence in a sleek, cloud-based environment.
🍎 Nutrition startups
Nutrition is an important part of healthy living, but most American diets are unhealthy. Oviva is trying to change that by taking a nutrition-first approach to healthcare instead of medication.
🇧🇴 Population health startups
How do you help patients in certain populations manage their health? In the past, doctors couldn’t do anything about this because they didn’t have data. Thankfully, that’s changing with population health startups. WellTok gives doctors AI-powered data and tools to engage with patient populations.
🌅 Doctor network startups
Doctors need a little love, too. That’s why startups are creating digital communities just for doctors. Sermo bills itself as a social platform for doctors, helping physicians earn money on the side, connect with each other, and relieve stress.
👁️🗨️ Informational health startups
Information is essential to health. Both doctors and patients benefit from information hubs, which plenty of startups offer. HealthCentral features real patient stories as well as health tips for patients—but without the scare tactics that sites like WebMD are famous for.
🏘️ Health community startups
It takes a village to manage a disease, and that’s why community is so powerful in healthcare. Startups like HealthUnlocked have created social networks for patients looking for community.
💌 Messaging startups
Patients don’t want doctors to call or send snail mail: they expect fast, digital communication. The problem? Digital channels aren’t always HIPAA compliant. But healthcare startups like Voalte have created real-time, digital messaging that satisfies privacy requirements.
⚡ Marketing startups
Healthcare companies are still businesses, and that means they need to market their services. But they also have to balance patient privacy and regulations, which is where Crossix steps in. The startup helps healthcare businesses find new patients in a safe, compliant way.
🧷 Insurance startups
Insurance is a dreaded topic for both patients and doctors. Healthcare companies often deal with insurance, even though they really don’t want to. Startups like VisitPay streamline the financing and insurance communication process to save healthcare providers more time.
🍬 Diabetes management startups
Nearly 10% of all Americans have diabetes. Innovative healthcare startups are joining in the fight against diabetes, designing solutions that make it easier to live with the condition. Glooko created a diabetes management app that patients can use to track progress with their doctor.
💉 Medication management startups
Although doctors prescribe medication, that doesn’t mean patients take it. Medisafe created a medication management solution that helps doctors see, in real-time, if their patients are taking their meds.
📅 Appointment scheduling startups
Appointment scheduling eats up a ton of time for health clinics. Startups like Practo give health companies more of their time back with smart 24/7 scheduling and automation tools.
🌿 Medical cannabis startups
Cannabis is an explosive sector of healthcare that’s worth billions. But medical cannabis patients can’t always travel to a dispensary. Eaze is a cannabis startup that delivers patients’ medication in a compliant way, keeping folks medicated without the need to travel.
🧪 Respiratory startups
Respiratory diseases are hard to detect and manage. NuvoAir created a digitized respiratory tool to complement therapy, provide a diagnosis, and assist in clinical trials.
🧒🏽 Pediatric startups
Kids need healthcare, too! That’s why Hazel was founded: to help school nurses manage students’ urgent care, checkups, and health education in a HIPAA and FERPA compliant way.
🚚 Pharmacy delivery startups
Nobody wants to wait in line at the pharmacy. Phil delivers patient prescriptions for no charge—while helping doctors fill specialty scripts without the wait.
👩🔬 Women’s health startups
Femtech is a $1 billion market. Female patients need an added dimension of care, which is what startups like Jessie try to deliver. Jessie gives patients access to prescriptions, video chats with their doctor, and at-home lab tests.
🧠 Mental health startups
With more patients taking charge of their mental health, mental health startups like Talkspace have stepped up to make counseling more convenient. Talkspace connects patients with certified counselors for smarter, digitized therapy.
👵🏻 Continuing care startups
Millions of patients rely on continuing care to stay healthy and comfortable. Hometeam is a startup that connects caretakers with patients in a compassionate, efficient, and safe platform.
💓 Cardiac startups
Heart disease is the leading cause of death in America. Irregular heart rhythms are a sign of heart disease, but patients don’t always pick up on their symptoms. AliveCor turns a patient’s smartphone into an EKG machine, catching life-threatening cardiac issues before it’s too late.
🦷 Concierge health startups
Concierge health puts the patient in control of their experience. They get to work directly with their doctor for personalized, one-on-one care. Health startups like Parsley, One Medical and Forward give patients access to a doctor on a membership basis usually in addition to regular co-payments with insurance companies.
The bottom line
2020 is around the corner and there's a lot up in the air with the healthcare sector from the political spectrum. But from looking trends in the industry, there are a few trends that will undoubtedly continue: mobile-first approaches, mental health startup apps, telemedicine, and digital diagnostic tools will shape the healthcare landscape in 2020 regardless of the outcome of the election.
Healthcare isn’t an easy industry, but as consumer behavior shifts, there’s an enormous opportunity. It’s a space that’s ripe for innovation; you just need the right solution and a hefty dose of patience.
Don’t be afraid of the boring parts of healthcare, either. Chances are, if it’s boring, there’s less competition. Follow this guide to set up a successful healthcare startup that can change lives for millions.
