Guest post by Wendy Dessler of Outreachmama.
Startups are taking the world by storm; it seems like now, you can’t possible go through the day without hearing the word, especially given that many—such as Joyable and Ruby Cup—are making a positive impact in the world. Still, you’d be surprised to find that there’s one industry in particular where startups get mixed results: healthcare. Like finance, law and education, healthcare is a field with one of (if not) the most extensive regulations.
It makes sense, given that lives are literally on the line. Equally as intriguing is that we are talking about a multi-billion-dollar industry (investors gave $16.1 billion to healthcare in 2015 alone), loaded with opportunity for tech startups to become successful while saving lives, improving hospital work flow, and speeding up research. That being said, we’ll examine the ways startups are succeeding in the healthcare industry, as well as why a startling number of them fail.
Startups that Are Doing It Right
Flatiron Health is one of a handful of successful startups that aced the healthcare industry. As reported by Inc., the young startup created a tech platform that shares data collected from cancer patients (information remains anonymous) with research and pharmaceutical facilities. As of now, 260 clinics use Flatiron Health’s cloud-based invention.
By sharing health information more easily, hopefully cutting-edge cancer treatments and medical options can be more readily available.
Majority of Healthcare Startups Are Not Cutting It
While Flatiron Health and other startups succeed in the world of healthcare, a majority are barely making it—if that. Forbes reports that as many as 98 percent of startups funded by angel investors fail in the healthcare industry because of a poorly thought-out business marketing strategy and uninspiring business model.
The Story of Healthcare.gov
Nonetheless, the tech startups that do succeed can make a huge difference in individuals’ lives. As is the case with Marketplace Lite, a young tech startup, rebuilding healthcare.gov from the ground up. As told by The Atlantic, healthcare.gov originally was a failing website. On launch day, only six people were able to sign up for healthcare insurance. The reason for such the low signup numbers had more to do with the site’s poor login features than the number of people trying to sign up.
The site had a 91 percent uptime rate. Meaning, it could take several hours for people to log in, let alone sign up. (In case you w percentnt to know, uptime rate is the percentage that a website is up and running, hence the name.) While 91% may seem high, take into consideration that a 98 percent uptime rate means the site is unavailable 28.8 minutes out of the day, which yields to 3.4 hours a week, which turns into 14.4 hours per month, which comes out to 7.3 days a year. Now, consider the amount of time a site with a 91 percent uptime rate is down.
What Marketplace Lite did was update and replace the login system, on top of creating App2 (an insurance application), as well as dealing with infrastructure problems. Now, healthcare.gov is a fully functioning, user-friendly site … with a much better uptime rate. Thanks to the work from Marketplace Lite, people are able to easily access it. (Speaking of healthcare, follow these eight tips to reduce your out-of-pocket healthcare costs.)
Tech startups in the healthcare industry face many challenges — extensive regulations plus going into production with an ineffective marketing strategy and business model. While many do shut down, several have risen above, making a name for themselves while making an impact in people’s lives. What do you think about startups in the healthcare industry? Leave a comment!