You can order an Uber to take you to the airport, book your tickets while driving and board the plane without having to print the tickets, only to arrive at your destination where you’ve already booked a beautiful Airbnb to enjoy your weekend off. Comparing this non-utopian world to the health sector, it seems there still is a long way to go. How come disruptors like Airbnb and Uber have yet to change the health industry?
Truthfully, disrupting the healthcare industry is quite difficult due to the complex field, the risk-avoidant mindset of care providers and scaling difficulties. The Dutch market also faces financial challenges with the reimbursement model and the government-imposed budget ceiling. Despite these challenges, we’ve seen many innovative health concepts at the Accenture Innovation Awards (AIA), and several of those can be classified as successful. So, what is their secret? If we take a closer look at some of these startups, will we find common traits in all of them? We have analyzed the journey of 42 AIA health finalists from the years 2011 to 2017 to find out how they are doing, and what has contributed to their success. This may support startups in their future journey.
In the period between 2011 and 2017, AIA has given us 42 Health finalists. Of those 42, 41 still exist, either as a part of an organization or as an independent company. This is an unusually high percentage, as the health market generally sees a failure rate of 44 percent. Out of these 41 surviving healthcare innovations, 16 have received significant amounts of funding, several collecting more than €1 million. Also, a total of 16 innovations have partnered with other organizations to increase chances of success. Are there more traits that led these innovations to be groundbreaking within the health sector? We have spotted four immediate eye-catching denominators, which are visible in most of the startups and each of the startups possesses at least one. These are the traits that have contributed to the success of AIA finalists:
“So, instead of thinking outside the box, get rid of the box”: Track trends
True innovators see opportunities where others see challenges, this is not different in healthcare. Startups that catch a first wave of innovation, like machine learning in 2014, follow upcoming trends, or aim to resolve existing issues, such as increased pressure on the workforce, are more likely to succeed. Especially in health, where multiple big challenges face the industry, focusing on these challenges can increase successfulness. One prime example has been MedEye, which participated in 2016. MedEye focuses on preventing medication errors by verification of medicine at the bedside. The current staff shortages cause a higher workload and pressure among healthcare professionals which can result in errors in their works. MedEye effectively prevents medication errors, resulting in a reduction of both work pressure and healthcare expenditure.
“Join forces for maximum impact”: Partner up
Over the years, one of the trends is that many startups team up with an acknowledged partner. Partnerships can come in all shapes and sizes, from partnering with big players in the industry to achieve lots of exposure to financial partnerships. Partnerships do not only help startups with scaling up their business; in some cases, it can also overcome the deeply rooted barriers within health, such as risk aversion or reimbursement difficulties. For example, by partnering with a health insurance company, startups can reduce financial barriers caused by the traditional reimbursement system of the Netherlands. A great example is AIA 2017 contestant LEA who has partnered with health insurer CZ to support their pilot, which is view by CZ as a way to accelerate revalidation.
Why not both? Innovation 3MDR, an AIA 2013 finalist, spotted the VR trend and was one of the first to develop a VR-therapy for PTSS. They’re now growing through several partnerships, with both companies and research centers.
“There’s no good idea that cannot be (im)proved”: Prove to improve
It is insufficient to simply claim an increase in patient wellbeing when trying to sell your innovation for health; demonstration and results are absolutely necessary to prove impact. Proof of value of an innovation through a pilot will increase the chance of a successful partnership. A successful completion of a pilot with proven results will often lead to a partnership with hospitals or attracts investments from external investors. Many innovations that have participated in AIA events have conducted pilots over the past few years to prove their solution in practice, which may have been a major contributor to their success. One excellent example is AIA 2015 contestant Patient Journey App, who proved their initial value through a pilot, which allowed for a proof of concept and enabled them to find new clients. They didn’t stop there as they are still piloting every iteration at several key clients.
“In an easy world there is no competition, in this world differentiate”: Be different
The health sector is a booming sector and there is a slim chance that an idea is totally unique. Most likely, similar ideas and solutions have already been developed by someone somewhere. This means that a startup should have an advantage to competitors within their field. An innovation should not be a ‘stand-alone’ concept that is added to the proliferation of innovations that patients or health providers must deal with. It needs to be integrated with other services actively used within the industry. For both products and services, pricing is an important means of differentiation. Past AIA innovations demonstrated that more affordable solutions are more successful as they are more accessible to a larger population and can be incorporated more easily in the current reimbursement system. Similarly, services should also focus on interoperability. This will allow for easy incorporation in existing systems that, subsequently, will increase accessibility and decrease installation costs. Legbank, an AIA contestant from 2017, is a great example of affordability; their business model revolves around offering cheap prosthetic solutions for low-income amputees.
Turning your innovation for health into a success
We have explored several possibilities why AIA finalists have been and still are successful. These denominators are based on a selection of high-potential startups, set by a multidisciplinary jury. The jury’s influence on the selection cannot be ignored. But what are exactly the jury's criteria to determine which innovation for health has the most potential?
Looking more closely at the top 20 reasons why startups fail gives us some interesting insights. Many of the top 20 reasons for failure are natural selection criteria of the jury. The typical selection criteria that determine a jury’s decision when rating a startup in the AIA program are the market need, product timing, performance compared to the competition, business model and the quality of the product. These criteria are portrayed in the traits ‘Track Trends’ and ‘Be Different’ as they are great examples of market status.
However, there are also several causes for failure that have been difficult to forecast by the jury. Examples of these are: not the right team, no financing and poor marketing. These reasons for failure often surface after the initial startup phase. Surviving this phase requires more than just a good idea, especially in health, where guidelines and regulation are prominent and the time between development, using a product and return on investment can be long. ‘Partner up’ and ‘Prove to Improve’ can create a better starting position for pivoting into a new phase.
Ultimately, partnering, networking and (im-)proving may be the key differentiators for successful startups and should guarantee that they’ll sustain enough funds. So, as a startup, look for advice and find a (future) partner. As an accelerator, the Accenture Innovation Awards can support startups in this pivotal journey. With AIA’s extensive network of partners, startups can make the connection with important and inspirational organizations.
Additionally, relevant master classes and coaching from the experienced jury member provides valuable feedback on their vision, business model and next steps.