The healthcare sector is nearly 20 percent of GDP and rising all the time. As a civilization, we’re plowing vast amounts of money into looking after our bodies. And every year, we’re getting sicker and sicker.
Life expectancy is going down in the US among specific segments of the population. Despite improvements in medical technology, the abuse being wrought on our bodies is at an all-time high. Disastrous diets and a lack of exercise, plus stress, chemicals in the food, and pollution, are all combining to destroy the health of the average person.
For entrepreneurs, therefore, there are considerable opportunities in the sector. On the one hand, there’s a massive need to make the operation cheaper and more efficient. It simply isn’t sustainable for a fifth of the economy to be dedicated to keeping people in good shape. And on the other, there’s a desperate need for preventive medicine – intervening in people’s lives before they get seriously ill.
However, attempting to solve healthcare problems is a long and tricky road that many have walked before. There are no easy answers here. Everyone knows the underlying issues but remedying them is a political, economic, and social nightmare.
Take the idea of getting people to eat healthier. We all know that an ideal diet should be mainly fruit, veggies, whole grains, seeds, and beans. And yet virtually no one eats this way, despite the massive benefits. Rationally, everyone has a clear idea in their heads about what they should eat. But then their emotions, friends, or taste buds get the better of them, and they wind up justifying their bad habits.
The same goes for new drugs that could help treat the chronic diseases people get. Launching a startup to create a modern medicine that deals with these problems is usually a multi-billion-dollar project, thanks to all the regulations and red tape.
Health entrepreneurs know that there is an opportunity to make a difference in the world, but they’re not sure exactly how to do it. Spending on health is currently around 18 percent of GDP, and it could rise to more than 30 percent over the next thirty years if we don’t do anything to change the status quo.
So what can entrepreneurs do to succeed in the sector?
Play To Your Strengths
If you’re the sort of person who knows a lot about leading a healthy lifestyle, it doesn’t make sense to go into healthcare software. It’s not where your skills lie. Instead, you should focus on the area in which you have the most experience.
Getting people to make behavioral changes is probably the biggest challenge faced in medicine today. If you’re somebody who knows how to change a person’s mind, you can radically improve their health chances and provide them with tremendous value.
We already see a lot of companies trying to do this. The most famous example is probably Weight Watchers. But there are undoubtedly better ways of doing things that help people stick with their routines. Getting people to stick with exercise plans and diets is a massive industry where you can make a lot of money.
Similarly, if you’re somebody who understands how the medical system works, you can achieve remarkable success. The world needs research, development, and novel therapies. If you have an idea that works, you can often get venture capital backing pretty quickly, without having to fight tooth and claw for funding.
Be Aware Of Your Limitations
Humanity will hopefully get to the stage where it can defeat most diseases. We have the scientific method, an excellent understanding of the human body, and extensive health infrastructure. But that doesn’t mean that you can solve tricky diseases overnight. These things take time.
When you’re a health entrepreneur, it can be tempting to try to solve all the world’s health problems in one fell swoop, but results like that are unlikely, to say the least. Healthcare isn’t, unfortunately, one of those sectors amenable to revolutionary change (as far as we know). So a lot of entrepreneurs in the industry modulate their expectations. They’re happy if they save a thousand lives, not a million.
Knowing your limitations is critical. You might become a master of the universe. But it’s less likely here than in Silicon Valley.
Ensure That Everyone In Your Organization Prioritize Safety
As in any business, healthcare entrepreneurs must focus on making their activities as safe as possible, both for their staff and patients. Any contamination could be detrimental to patients, and you don’t want that.
A lot of firms in the sector now use medical safety videos. The idea here is to provide colleagues and customers with the information they need to build and use products safely. The better the instruction, the more likely it is that people will interact with your goods and services in the way you intend. And the less liable you’ll be for suits and increases in your insurance premiums.
Follow The VC Money
Trends in the healthcare sector evolve and develop over time. Venture capital funding is at an all-time high, as new technologies like CRISPR and artificial intelligence emerge.
It’s worth paying attention to where these guys are putting their cash. Investors tend to have a good nose for opportunities. And they’re often willing to invest large sums of money into healthcare sectors that are likely to generate returns.
It can pay, therefore, to follow their lead as an entrepreneur. Currently, there are many digital healthcare startups, all doing whatever they can to solve administrative problems. But over the next ten years, that’s likely to shift to biotech, with more companies analyzing the genetic code and finding information-based ways to serve patients.
Strike A Balance Between Social Responsibility And Profitability
All healthcare startups need to make money to stay in business. But healthcare is about more than just making money. It’s also about saving lives. Firms in the sector, therefore, need to focus on the social side of their operation. You could charge a million dollars for a pill, but doing so will probably lead to a lot of unnecessary deaths. And you don’t want that on your conscience.
Top biotech startups now usually have an ethical charter. The idea is to take only the money that the company needs while delivering treatment to as many patients as possible. We’ve seen this approach time and time again in the medical sector, especially in the era before onerous regulations. And nothing is stopping it from emerging again under the right conditions.
Remember, working in the private sector is the best way to get the cost of healthcare down. You have way more flexibility to adapt your processes and find more efficient methods of doing things. The same limitations do not constrain you. And you have real incentives to bring the cost down: the lower your expenses, the more profitable your enterprise.
Keep Your Eye On Emerging Technologies
Innovating technologically is the key to any entrepreneurial venture. You need to be in the right place, at the right time, to take advantage of opportunities. Enter a market too early, and your product will be too expensive or unable to slot into the existing ecosystem. Enter too late, and you’ll miss the boat entirely.
Electronic health records, patient treatments, gene therapy, and medical equipment are moving on in leaps and bounds. There are numerous opportunities in each of these areas, many of which will become multi-billion-dollar opportunities.
Choose Investors Who Understand The Challenge
Most investors steer clear of the healthcare sector. They know that it is notoriously hard to navigate successfully and that most startups fail. Others, however, are naive about the challenges. They expect results in a year or so, like in other sectors, and then pull out when they don’t get them.
Entrepreneurs, therefore, need to exercise extreme caution for who they choose investors. Ideally, you want somebody who understands the difficulties of getting a health business off the ground and as willing to stick with you for the long haul.
You also need an investor who really understands the intricacies of the science and where it is headed. The world has limited resources, so everyone has a responsibility to make sure they only pursue productive avenues. Burning resources on a non-starter is bad for everyone in the sector, especially you.
Assess Market Needs
Becoming a successful health entrepreneur is all about understanding the market needs as they are right now and building a product that will address them. Successful health entrepreneurs, therefore, spend a large chunk of their time trying to figure out what it is that people really want. It doesn’t make sense, for instance, to establish a health clinic in a city that already has several. Likewise, there’s no point in developing a treatment for a disease that is no better than the existing options.
In summary, if you’re thinking about becoming a health entrepreneur, know that it is one of the most challenging fields. It is, however, one of the most rewarding too.