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Will economic recession impact digital health startups?

Written by Object not found // 03 October 2018 //

Economic recession forces startups to go back to Basics: is there a pain point that is large and important? Can they help fix it? How do they prove it works? Is somebody willing to pay for it? What validation data do you need to convince them? Is the cost of acquisition lower than the Long term customer value?

As an HealthTech pioneer and advisor for the last 30 years (before the digital health hype), economy cycles historically have slowed down the “easy funding money” and get the target customers to ask “show me the Money: value...and cost savings” with longer and more skeptical selling cycle.  Ironically my biggest Billion-dollar exits were from companies that were started and grew during economic downturns ... as they were laser focused on creating/proving value to potential buyers … while being forced to be lean and mean by more skeptical VC who had run to the hill (i.e. later stage funding).

So I welcome an economic downturn to fasten the triage of good value vs hyped companies. There are a lot of big problems to fix in healthcare... so opportunities to build big companies… but we need to go back to the Basics of business building, not fund raising!  

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