I had the pleasure of being one of about 400 people attending Blueprint Health’s “Demonstration Day.” Angel, venture capital and corporate investors from across the US listened to investment pitches from the nine start-up companies that Blueprint Health selected (out of 300 applicants) for its inaugural accelerator class. I am an advisor to NEEDL, one of the nine.
Blueprint Health’s out-of-the box success deserves a shout-out. It serves as the hub of healthcare technology innovation in NYC by bringing together a collaborative community of entrepreneurs who build businesses and learn from each other in a co-work space that offers a broad array of educational classes. Companies that want accelerated help can apply for a 3-month program of support (in exchange for an equity share) from Blueprint’s network of healthcare entrepreneurs, investors and industry mentors, the largest in the country according to Blueprint. These mentors provide the insights, hard-love criticism, encouragement and connections to move a company from concept to becoming cash flow positive.
Blueprint Health is a Charter Member of the Global Accelerator Network, a group of independently owned and operated regional organizations that operate high quality start-up accelerator programs. Their shared aim is to dramatically increase the success rate of promising entrepreneurs in order to create 25,000 new jobs by 2015 and, in the process, build an engine for creating more successful start-ups over time. The Global Accelerator Network was started by Techstars, the #1 start-accelerator in the world with programs focused on internet and software startups in Boston, Boulder, New York City, Seattle, and San Antonio.
Each of the Blueprint Health accelerator companies did a great job of articulating a healthcare problem and how their web-based platform technology addresses it. The fast route to positive cash flow they promised demonstrates why healthcare IT is growing relative to regulated drug, device and equipment investments, where payback is longer and investment levels and risk higher.
The pitches reinforced the lesson that a winning business model solves a problem shared by a target market in a way that generates profit. The key to profitability?
- Choose a problem many will pay to solve
- Offer the best solution in a cost-effective way
- Create barriers to replication
Investors also focused on founders’ experience, as an experienced team offers a lower-risk investment.
Here are the 6 strongest business models:
5 O’Clock Records won best-in-class in my book, reducing the time clinicians spend sending medical records to insurance companies, lawyers and other requesters while enabling them (and 5 O’Clock Records) to earn revenue from fulfilling requests.
Aidin is an on-line home healthcare services consumer reports and scheduling system that hospitals use to help discharged patients secure the highest-ranked care. With hospitals spending $17 billion in re-admissions, the cost of which is increasingly borne by them, Aidin’s entering at the right time.
Needl connects clinicians and pharmaceutical companies in a Q&A format initiated by clinicians. Think Google, but a clinician’s search connects to an expert with the answer versus website lists the clinician must then navigate to find answers. Drug companies buy subscriptions and clinicians access Needle’s platform through commonly used clinical APPS like PI and Medscape. The pharma sales rep model is dying and Needle offers drug companies a welcomed alternative.
Patient Communicator automates how a physician’s office interacts with its patients, saving staff time and money while increasing patient satisfaction. Right product, right time.
Procured Health is a product assessment platform enabling hospitals to get more value from the $100b they collectively spend on medical equipment, devices, etc. annually. Bargain hunting for hospitals!
Symcat is a well-designed on-line triage service that saves health plans money by helping their customers chose the right care plan at the right place.
The other 3 start-ups appeared, in my view, to be too easy to copy, too hard to monetize or too hard for an investor to exit.
iCouch connects patients to therapists for internet-based counseling, saving patients time and frustration. But will insurance cover the fee?
Inquisthealth’s web-based platform organizes, aggregates, matches, schedules, and automatically connects patients with the same disease securely and privately. Its will connect all the patient support communities worldwide, like Gilda’s Club for cancer, and help providers offer patients a better experience.
Meddik curates health-related information for patients by sending subscribers up-to-date information on their health conditions. The team is strong, but consumer healthcare information is a very cluttered market space.
Leaving the event, I felt very optimistic that our dysfunctional healthcare system – it will be reinvented.