Healthcare, as I once heard a speaker say at a Stanford Medicine X event, is simultaneously the most complex and the more rewarding sector in the world, and I agree. Now is truly an “age of miracles” when it comes to healthcare – case in point, the speed at which the Covid vaccine was created and rolled out. Healthcare startups can be thrilling to work with – there is a mountain of healthcare problems to solve, and new, critical issues are being tackled every day.
There are plenty of articles already on “healthcare startup trends for 2022” (mainly focused on technology) – instead, let’s look at current healthcare startup trends from ”the People Angle”. Having been in healthcare myself for seven years on the business side at Kaiser Permanente, and then moving to consulting, executive coaching and training for past ten years, serving both healthcare startups and professionals in large healthcare organizations (plus a host of other industries too), I tend to look at most situations by starting with the people and how they are acting or feeling. No matter what size the organization is, at the heart of things it is always about the people.
I spoke recently with Darren Cooke, the Executive Director of the Life Sciences Entrepreneurship Center at University of California, Berkeley, about recent trends he was seeing. Darren and I are both longtime Venture Advisors at U.C. Berkeley’s SkyDeck accelerator, and we’re both very passionate about healthcare. He had a lot to say.
- Professors are now quitting to become entrepreneurs.
In my opinion, this has been coming for some time. I saw a similar trend emerge years ago with physicians getting burned out and leaving their practices for something new. And professors being co-founders in startups while still teaching is not new – what’s surprising is the latest step of leaving academia altogether, even when they are at the pinnacle of professorship (e.g.a prestigious role at UCSF, which is considered to be the Gold Standard). Higher education overall has taken its lumps in recent years, with issues around admissions, diversity and affordability – and Covid didn’t help either.
From the People Angle: The Great Resignation has permeated all sectors. We were all forced to “step off the treadmill of work/life” and even in challenging, rewarding careers (or at least those that look so on paper), people are now choosing what they want their life to be like going forward in a much more deliberate way. It will be super interesting to see how this all plays out 3-5 years from now – whether there will be a “boomerang” effect that drives people back to more traditional health-related jobs (including academia), or if health-related entrepreneurship will surge to new heights.
Some things for those bold co-founders to consider are:
- Similar to tech, being a leader in the lab does not automatically prepare you to lead a business. Seek out advisors, co-founders and investors who will be able to help you fill the skills gaps.
- Keep the ego out of it and make creating a viable solution as “the most important thing”, with you as a steward who is tasked with bringing it to the world.
- SBIR grants are now being used by VCs as a screening/vetting mechanism for health startups. And at the same time, there is a veritable “feeding frenzy” for health-related startups – VCs are desperate for deals.
The healthcare startup sector has been hot for a long time – Covid and other factors have made it hotter than ever. VCs wanting a sure bet is nothing new; from what I have observed they can be a skittish lot, easily spooked. (I still have not gotten over the tragic outcome of a blood assay startup led by a woman founder I was advising back in 2016 – when the Theranos debacle exploded, her VCs pulled their funding simply due to the startup’s similarities to Theranos – nothing more. Their amazing solution died on the vine).
From the People Angle: The stars of Sandhill Road and beyond are mere mortals, just like us. The behavior of wanting to have others verify the startups they fund, pulling out funding when things feel scary, and frantically seeking deals strikes me as being in “fight or flight” (survival) mode. Dear VCs – Stop and take a breath! Operating from your Lizard Brain, as we say in my business, limits your capacity to plan, think clearly and make good decisions. Dear Co-founders – Know your audience. Realize that the VCs need you more than you need them. Be kind but also very reassuring – take pains to show them how they will make their money when they invest in your startup. If you don’t know how to tell that story clearly, get some help with your pitch.
- Diagnostics used to be dull. Now it’s sexy!
Some areas of healthcare used to be a hard sell, and diagnostics was in that bucket. But the world getting used to self-testing for Covid out of sheer necessity has had a silver lining – it opened up new avenues such as self-diagnosis for health issues beyond Covid.
From the People Angle: Working on something you’re very passionate about can be a great driver (e.g.https://www.ava.me/ – a real-time captioning solution for hearing-impaired individuals – one of the founders had loved ones who were deaf and were often left out of conversations). And – looking at trends is also potential untapped rocket fuel for your startup because people (including investors) crave the familiar. If you’re a potential or current healthcare startup founder, take a look around you – your community, the world. How can you solve something and also ensure that it will be well received right now due to being “on trend”?
Whether you are a seasoned healthcare entrepreneur, a new founder or an investor – remember to look at things from the People Angle – it’s truly the heartbeat of healthcare itself.