Common Mistakes Digital Health Startups Make

The US digital health market continues to grow each year. With an annual growth rate of 5.58%, the market is projected to grow from USD $29.82 billion to USD $32.07 billion by 2026.¹ As technology further advances and integrates into all industries, it is no surprise that healthcare is becoming more digitized. With a wide variety of health issues left unsolved, people are realizing there are many possible business opportunities in digital health which has led to thousands of startups being founded. In 2021, global funding for digital health startups reached a record-breaking USD $57.2 billion.²

These positive trends for digital health have no doubt attracted many people who are passionate about improving healthcare to start their own company. However, there is much to consider when building a startup, especially one based in the healthcare field. In this blog, we reveal the most common mistakes digital health startup founders make and how to prevent them from happening for new founders.

Common Mistakes Digital Health Startup Founders Make — and How to Avoid Them

1) Unfocused Go-to-Market Strategy

Founders start a company because they believe they have a great idea. In many cases this is true, but that’s not enough to have a successful business after they launch.

To succeed in terms of revenue and customer base, you need to have a solid GTM (go-to-market) strategy. One specific issue that new companies face is not working closely with their target customers to validate their assumptions during the development process. Without doing this, it’s difficult to know how marketable your product is, since you don’t know how your target customers feel about it. Having them be part of the testing process at different stages of development not only helps you see how your users interact with your product but also learn about customer needs that you hadn’t thought of yet. Being able to take advantage of this information before launch and even before writing a line of code can help reduce issues farther into the future, and save you money and time.

What’s also important in your GTM strategy is your UVP (unique value proposition). A company’s UVP is what your product has to offer that makes it stand out. Consider why you are the best option compared to your competitors. A lot of companies tend to be too general when stating their UVP to their target market or potential investors. With all of the new entrants into the digital health space, without clear differentiation to competitors, it can be difficult to get customer and investor traction. Not being able to clearly and specifically articulate your UVP leaves you at a disadvantage when pitching, advertising, and highlighting very specific components of your product. These components can focus on cost-effectiveness, accessibility, or convenience. But remember, they should be specific and relative to your competitors.

2) Underestimating Navigating the Healthcare Regulatory Guidelines

The healthcare industry consists of many policies, regulations, and legislation, all necessary to reduce risk to patients’ lives. Just federally, there are 629 requirements that have to be fulfilled by healthcare systems.³ This does not include the many other requirements by the state or non-government organizations.⁴ All of this makes it difficult for many digital health startups to satisfy all the requirements and to have their products approved for use. Although there are federal plans in the U.S. being enacted to facilitate digital health technology fully integrating into our traditional healthcare institutions, regulators aren’t keeping up with the fast growing rate of these startups.⁵

Many startups underestimate how much effort and time should go towards further research into the healthcare industry. If your product fails to follow all the required guidelines, it will not be approved for use until changes are made. This slows down your time to market and forces you to invest even more into the development process.

Having an expert on your team or someone with healthcare experience is helpful. Not only would they make sure all guidelines are satisfied, they have firsthand experience in how the healthcare industry works and what is prioritized by patients. Dedicating actual time into understanding the field is essential and should be a step that is taken before finally launching your product.

‍3) Not Properly Designing and Developing the Patient Experience

With the expansion of digital health, patients have many more options to choose from than they did before. Previously, patient expectations were low since the few options they were offered were clunky or difficult to use apps or portals.  Whereas now easy-to-use and greatly designed experiences are the norm, as startups compete with one another to offer the best product in the market.

Many startups actually fail to prioritize the patient experience. Why would consumers stay with a product that is not easy or convenient to use even if the idea is novel? If there is not enough investment into UX (user experience) design, possible customers will be frustrated when using the technology or won’t even consider testing it out in the first place.

It is essential to focus on the nuances within the design and development process, especially in relation to how consumers interact with the technology. Startups that rush this stage often struggle to build a reliable customer base and have challenges retaining users. In health technology, for design and UX to be considered sufficient, there has to be accommodations for all types of users.⁶ Remember that every patient is different, so there is no “one-size-fits-all” solution. Designing and developing with many user personas in mind helps in making sure your product works for a wider range of people.

4) Bias/Inequality

Healthcare is supposed to be impartial and equal. Patients shouldn’t be treated differently by their healthcare providers based on any characteristics. However, it is impossible for an entire industry to truly be fair due to systems that have been around for centuries that are inherently biased towards certain groups of people. Digital health is no exception to these biases and disparities.⁷

Many startups make the mistake of focusing on certain groups of people and forgetting about others when developing their product. These forgotten groups are then not cared for as efficiently, and the treatment they receive is not at all equitable. Startups sometimes forget to consider different languages, social classes, cultural backgrounds, or even location in creating their product. This leads to a product that is not at all inclusive of all possible patients, reducing not only the startups’ potential customer size but also enabling inequality within digital health.

A company’s brand reputation could be also ruined by their lack of digital inclusivity and failure to consider all possible patients in their solution.⁸ Why would people want to support a company that they find to be unfair and displays poor values? This lack of diversity in healthcare continues to be an issue as healthcare providers favor certain groups of people over marginalized groups.

5) Lack of Flexibility/Adaptability

Many startups believe that after launch, the development process is over with, but that couldn’t be further from the truth. Customer feedback and service are essential to a startup’s success because they provide unique insight into how they’re using the product and what should be added or changed to improve it.

The development process is never ending as you should be updating and adapting to the ever changing trends alongside your customer’s feedback. There is no system or product that is perfect, otherwise there wouldn’t be so many startups that are popping up. The ability to be flexible and change is essential for a startup.

Healthcare consumerism is growing as people are starting to become more involved in their healthcare decisions.⁹ As they put in more thought in their choices, reading reviews online and doing thorough research on their options, it is important now more than ever that companies be prepared to adapt to fit their consumers’ needs.

Wrapping it Up

Although digital health is a growing industry with many opportunities, there are many things to look out for in order to be successful. Remember that the field of healthcare is complicated and not originally created to be flexible to change. Therefore, digital health startups need to put in a lot of time and care into their idea, product, and execution. With so many factors to consider, it may be easy to make the common mistakes above as a new startup. However, it’s important to remember that while technology can make life easier for many, it can also have life-threatening consequences. We hope that this blog was helpful in teaching you what to avoid with your own digital health startup. If you’re building a new company in healthcare we’d love to hear from you to see if Tellescope’s Patient CRM can help you deliver a great patient experience. Email us today at inquiries@tellescope.com to learn more!