The convergence of #MedTech – monitoring, diagnostics, remediation

Earlier this year, I participated in MedTech’s Got Talent, a competition for medical technology and biotech startups, organised by STC. Now, HCF in partnership with Slingshot have announced a similar accelerator program, called Catalyst. Launched at a recent meetup event hosted by Startup Victoria*, Catalyst is the latest industry initiative to lend support to the growing #MedTech sector. It’s fair to say that the sector is not without its challenges (regulatory compliance and IP protection being foremost), but there is substantial investor interest given the potential for growth and widespread application of the resulting technologies. I also see that there is increasing convergence in respect to some of the digital products being brought to the market – through the use of wearables, mobile apps and analytics to deliver monitoring, diagnostic and remedial solutions.

Screen Shot 2015-11-22 at 8.10.47 PMAt the Catalyst launch, three #MedTech founders discussed their startup experiences and offered some insights to budding applicants. Jarrel Seah (Eyenemia), Phil Goebel (Quanticare) and Leonore Ryan (Cardihab – Cardiac Rehab Solutions) covered the product development process, being part of an accelerator program, and the specific challenges of medical technology.

There was  broad agreement that Australia (and Victoria in particular) has a strong and successful history of #MedTech development and innovation. There was also a sense that the future funding of telehealth services will be key to the sector’s development, especially the shift from “fee for service/solution” to “fee for value” models.

Aside from the regulatory and IP challenges, two of the biggest hurdles for #MedTech are the customer complexity, and procurement models, which can be summarised as follows:

Who Pays? Is it the clinician, patient or carer? Who, in effect, is the customer?

How Do They Pay? Each State has its own procurement and hospital funding models, plus there is the interplay of private health insurance and providers.

During the product development process, the founders stressed the need to manage expectations for an MVP, the use of customer discovery interviews, and the importance of making clinicians part of the solution. There is also a problem with data gaps (e.g., hospital re-admissions), and the requirement to establish patient trust: while the software, data and apps can support more meaningful consultation, there still has to be some human component to foster behaviour change. There was also a comment about marketing for tomorrow’s market, not the current state.

Having each been through some form of accelerator program, there was common agreement on the benefits:

  • Access to networks of mentors and strategic advisers
  • Help with navigating the regulatory landscape
  • Options for one-off funding to help convert trials to customers
  • Ability to focus on the project, along with peer stimulation, and a sense of urgency

Each of the three startups mentioned here deploy some combination of smart phone technology, sensors and analytics – just as Dr.Brand does, which featured at the recent Future Assembly. The notion was reinforced most recently at Swinburne University’s Design Factory Gala NIght which showcased, among others, innovative #MedTech student projects that utilise a mix of digital display/visualisation, wearable devices, mobile apps and analytics to address three key cognitive-related issues: patient falls in hospitals, dementia, and Asperger syndrome.

Previously, I have described health as one of the three pillars of the digital economy. Furthermore, the future of #MedTech (as distinct to biotech) is going to be built on the combined deployment and integration of smart sensors, personal devices, artificial intelligence and machine learning to monitor, diagnose and remediate behaviour – not necessarily to cure the patient, but to overcome physiological challenges and age-related conditions.

 

*Apologies – normally I acknowledge the Startup Victoria event sponsors – but since the team have been doing such a great job in securing new supporters, there are so many to mention!

Next week: There’s an awful lot of coffee in Japan (but not much espresso….)

Are Start-Ups a young persons’ game?

Last week’s Lean StartUp Melbourne meeting was devoted to the AngelCube accelerator program. Given some of the high-profile start-ups that have come through this process, it was hardly surprising that nearly 400 people turned up to hear various AngelCube alumni share their personal experience (as well as to enjoy some free beer and pizza, courtesy of the evening’s sponsors: inspire9, BlueChilli, Kussowski Brothers and PwC).

First up, there were lightning talks by 3 successful program graduates: the team behind fantasy sports app developer C8 Apps, Ash Davies from self-publishing platform Tablo, and Phil Bosua, the technical genius at LIFX who designed the WiFi-controlled LED bulb. All of them vouched for the benefits of the AngelCube program, and offered key learnings – such as “fail hard, fail fast, fail forward”, and the value of having a disciplined weekly cycle of iterative product builds. Access to quality mentors was also a key factor.

Then Indi from OutTrippin joined the guys for a Q&A panel session, facilitated by AngelCube co-founder Nathan Sampimon.

Some of the accelerator program insights on the night were quite revealing –

  • it’s all about product-market fit
  • a solo founder will usually struggle on their own
  • be prepared to either pitch or pivot at the weekly program reviews
  • the $20,000 seed funding (for 10% of your business) doesn’t go far…
  • a B2B concept is less likely to be accepted to the program (due to longer sales cycles)
  • the model is founded on lean methodologies, frequent iteration and getting to an MVP
  • people with at least one start-up project behind them tend to do better
  • the AngelCube angels are investing in the team as much as the idea

But are start-ups really only for young(er) people? This question has been posed by Dan Mumby, from Melbourne’s StartUp Foundation, which offers a different sort of program aimed at would-be entrepreneurs who may have all the trappings of middle age: family, job, mortgage…. which means they have different personal and financial risks to consider.

On the other hand, as at least one AngelCube participant said, if you are serious about founding a start-up, “your first job is to quit your job”.

Another, broader challenge facing the local start-up community is a lack of serious investor interest. According to one panel member, “In Australia, getting funding is a joke unless you are literally digging for gold”. This may change with the launch of VentureCrowd an early-stage equity funding platform. (But it looks like it will be a struggle – at the time of writing, none of the 20 or so deals publicly showing up on VentureCrowd’s website have attracted any funding.)

An alternative funding model, based on the sweat equity principle, is a venture bank, like New Enterprise Services that essentially matches ideas with expertise through a risk-sharing process.

I always recall the advice I was given by one serial entrepreneur when I asked him whether start-ups are for everyone (regardless of age). He replied: “Unless you can afford to invest at least $20,000 in your idea, and support yourself for at least 6 months while you develop it, then maybe it’s not for you.”