Tips for startups from a healthcare accelerator
When Blueprint Health was launched as a healthcare accelerator last year, it joined RockHealth and Health Box as seed stage vehicles to fund and grow primarily health IT startups. More recently other incubators and accelerators and hybrids have moved into the space including StartUp Health and New York Digital Health Accelerator.
As New York-based Blueprint Health collects applications for its summer session, co-founder Dr. Brad Weinberg spoke with MedCity News about what he sees as some of the interesting trends in the space.
“I think there’s definitely a population of folks that are really passionate about how we improve healthcare and solve problems. They … don’t see the world as it is, they see it as the world could be,” he said. “It’s a blessing and a curse unless you are willing to take that risk. We’re showing that it can be OK to take a risk.”
“The programs that are out there are making that transition. It’s easier to play an important role for people.”
What opportunities do you see startups missing?
We often see companies too focused on building their product before ‘validating’ it or selling it to customers. There is definitely a balance to the extent that you need to present a credible story to potential customers, but people often waste a lot of time and money thinking that the secret is just building more features.
Have you noticed any commonly overlooked areas where startups could improve?
Definitely generating inbound marketing. Enterprise marketing in the healthcare space is difficult and takes a diligent, well thought-out strategy. I had the fortune to work with one of the best early-stage healthcare marketers, Dr. Rajiv Kumar. He uses a mix of clinical research, client surveys, and thought leadership content to drive inbound interest.
Where do you see early-stage money coming from? Have you noticed any interesting trends emerging or growing?
Mostly individuals (entrepreneurs, doctors, friends & family, etc.), but we are seeing more VCs participate in seed rounds. I think it has become a little easier for individuals to participate in the primary markets, partly due to the standardization of deal terms and more information about primary market opportunities through sites like AngelList and accelerators like Blueprint Health and TechStars. It is still difficult to raise your first $500k, but if you are a compelling founder and know how to tell a story and tell enough people, there is capital available.
You came from a medical school background. Do you think that gives you a more informed perspective?
I took a couple of years off to start a company. Mostly people were supportive — I got some flak from some. But anyone that fully understands it can see we’re changing millions of lives through policy that can scale innovation.
What are some of the most interesting trends you are seeing?
Payors are working with early-stage companies to form relationships and provide resources for those companies. That’s very different from the way payors used to do things — before they would say you can only work with us, and now they are being more flexible. We saw in other markets people who tried to create walled gardens. These products need to span across insurance providers, they need to be patient-facing and need to communicate with out-of-network providers. It used to be that they’d say, “You can’t work with our competitors.”
Smart payors realize it’s not in their interest. If they want to work with the best entrepreneurs, they have to be more willing [to compromise].
How have things progressed for your inaugural class? What are some new developments for Blueprint Health?
Seven out of the nine teams have closed their financing rounds, so we’re excited about that. We’ve created a space for a mix of early- and later-stage companies to work side by side and we expect to have 40-50 companies working in the expanded co-working space. We’re getting some interesting applicants for our summer class.