Digital Health funding is exploding. Last year, startups received more than $2 billion and that amount is expected to double this year. Please check my video interview at the Digital Health Summer Summit on How the HealthTech Conference on October 14 and 15, 2014 will address the Right Impact Metrics to build sustainable companies.
Although this level of funding is exhilarating, it also brings back old memories of another exciting time—the dot.com years. In both eras, success is being measured by money raised at high valuations rather than exits and profits returned to founders and investors. We all know the dot.com story—valuations soared to the moon…and then crashed! These companies had no revenue and were counting eyeballs, number of employees, and other metrics to justify extraordinary valuation multiples. Sound familiar? I’m hearing the same justifications for digital health valuations.
Don’t get me wrong…the HealthTech/digital health revolution is here to stay, and we’ll be seeing some big, sustainable exits. The healthcare industry finally is being reshaped, and the changes will impact everyone—providers, payers, employers, device manufacturers, pharma companies, and most importantly…patients. As the repercussions ripple through our society, impacts will go beyond the primary target of reducing healthcare spending, which currently is 18% GDP. Out of these disruptions, big winners will emerge.
What metrics are important? What lessons have we learned? At the third annual HealthTech Conference on October 14-15, 2014, seasoned veterans are sharing their hard won experiences and future visions. Co-hosted by HealthTech Capital and Stanford Hospital, key panels will deliver insights and identify what’s really important for founding and growing a HealthTech company successfully. How can the lessons of the dot.com boom and bust be applied today?
1. The dot.com survivors were companies that built sustainable revenue models and tracked their key metrics. Although Amazon planned to lose money to build critical mass, they never lost focus on tracking their true metrics of lowering customer acquisition costs and increasing long term customer value (revenue). Fast forward to today, with our HealthTech Conference panel on "Lessons learned from Stars," which includes proven entrepreneurs and investors from Venrock, iTriage and Doximity.
2. Successful entrepreneurs focused on building businesses, not products. They continuously investigate customer unmet needs as the industry was evolving and maturing. Providing a satisfactory solution to a pain point was the driver... technology was just the enabler. Since our new healthcare world is impacting all players, we have several panels at the HealthTech conference to discuss the unmet needs of:
- Providers (Stanford hospitals, UCSF, Sutter Health, Cedars Sinai, Kaiser and VNA)
- Employers (Chief medical officers from Target, Cognizant and Safeway)
- Third party payers (CMS/Medicare, United Health/Optum and Blue shield California)
- Patients/Consumers ( AARP, Adidas, HealthLinkNow, Omada Health)
- Physicians (Doctor on Demand, GrandRounds Health, MedHelp/Physicians Interactive)
3. It took smart money and a village to build successful companies.
On October 14, we will have four business building workshops where successful industry leaders will share their experience and wisdom on
- Building the right team = talent + culture + innovation (Fenwick, Bioquest, HLM Ventures, Sterling, Evolent Health)
- Board dynamics: Investors and Management (Interwest, Venture Valkyie, Band of Angels)
- Financing strategy and tactics beyond traditional VC (California Healthcare Foundation, Square One Bank)
- Scaling up via business partnering: opportunities and pitfalls (King & Spalding, DigiFit, Tangramcare/CardioNet/Caremark, Optum Health)
On October 15, our audience and Venture Pitches Judges (Canaan partners, Norwest Ventures, USVP and Merck Global Health Innovation Fund) will pick the most promising Healthtech Company of 2014.
Come check our exhibition hall for upcoming companies and more breakouts session on Big Data (Valence Health, MedHelp) and Insurance exchange (Exchange Solutions/Towers Watson and Covered California).
Please join us at the HealthTech Conference on October 14 and 15. Together, we can learn how to change healthcare for the better and anchor this new HealthTech sector with successful companies—those with real business models and sustainable revenues.
Interested in becoming involved as a sponsor or an exhibitor for the conference? Check the many ways your company can be front and center in health care innovation this year. Contact Gary Wiener for more information.
Also, check @Docweighsin blog on how the HealthTech Conference will address the right metrics in building sustainable HealthTech Companies