Entrepreneurs in any industry need to start with a big idea – and a big tolerance for risk. But in health care, startups often need to take on a unique set of regulatory hurdles, complex systems and entrenched ways of getting things done to successfully build and scale.
At the TEDMED conference Thursday, a few of the industry’s most seasoned entrepreneurs and investors gave emerging startups a dose of advice. Here are a few of their tips:
1. Let your experience inspire, but don’t just build for yourself.
Several of the most interesting startups I’ve encountered were started by people who had their own collision with the health care system or were deeply affected by the experiences of people close to them. But while personal experiences can inspire powerful solutions, Nina Nashif, founder and CEO of the Chicago-based health startup accelerator HealthBox, advised startups to make sure that they don’t skimp on doing their homework and talk to multiple stakeholders.
“There are a lot of entrepreneurs that may have experienced their own situation or the situation of someone close to them. And they’re developing a solution for that without actually going out and talking to enough people to make sure they’re not solving the need for one institution… and that they’re building something that has the ability to scale,” she said. “You can’t just sit behind your computer and code in health care, you have to be out in the trenches.”
2. Nuance over need.
As with anything, the devil is in the details. Nashif also said that while healthcare has a lot of need and a lot of solutions, the startups with impact are those that figure out exactly where and how to apply their approach.
“It’s important for entrepreneurs to understand the complexities of the industry and that’s not always easy because entrepreneurs and industry aren’t always speaking the same language,” she said. “Entrepreneurs really need to put their solutions in context.”
3. Build to build, not to sell.
Entrepreneur Michael Weintraub has sold or taken public six startups during his career (most recently, his health IT startup Humedica was acquired by UnitedHealth). But his big piece of advice was this: “I think the key to innovation is building something because you really want to build it not because you want to build to sell it.”
But he also said that startups should get to know the top 10 companies that could be potential acquirers years in advance: “There are a lot of people working for you and counting on you to make the right decision. You’re not flipping the business to cash out, [you’re] putting it in a place that has greater leverage and impact potential,” he added.
4. Ask yourself the hard questions.
When it comes to figuring out the future of your company, it’s important to keep your feelings about your “baby” in check and think hard about the reality of the situation, said Castlight CEO and co-founder Giovanni Colella.
“There’s a point in the life of the company [when] the entrepreneur has to ask himself and the management team the hard question: ‘Can we build the company to last or are we better off as a feature of a bigger product?’ You have to be really honest with yourself,” he said. And even before that point, he added, it’s critical to find investors and a management team that will hold you accountable and force you to think.
5. Get some gray hair on your team.
The general perception may be that startups are for hoodie-wearing early twenty-somethings. But in healthcare (and other fields), you’d do well to find some people with deep experience in the industry and some battle scars to show for it.
“As you’re thinking about starting companies, if you’re young, put a little bit of gray hair into your team of people who have failed and people who are not afraid to say I screwed up… and these are some of the lessons learned, said Juan Enriquez, managing director at Excel Ventures and the founding director of the Harvard Business School Life Sciences Project.