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Category: Entrepreneurship
Tags: DesignHealthcareInnovationRegulationsStartups
Entities: FDAIBMInvestorsProctor and Gamble
00:00
Today we'll be discussing setting up a new healthcare venture and this will be important because learning about the nuts and bolts at least having you get
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fasile with the terminology will be extremely helpful when interacting with folks such as investors as we'll discuss in later lectures. Let's begin.
This is a great overview slide. I often return to particularly at the top as we
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teach classes on thinking about the journey of starting a health care company. Whether it's a startup or a new venture within a larger business, it's very important to understand that there are certainly segments of the journey that cannot be ignored.
That said, in
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today's lecture, we will not be able to cover all of these areas, but I want to really hone in and focus on answering the question posed here. Should I start a healthc care business?
And as we look at the bottom left, the start of the
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journey, albeit it does look positive and upwards, and the reality is it's often a cliff that you fall off of as you're trying. I want us to think about two things.
So the two questions that matter the
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most are what problem are you going to solve and second who are you going to solve it for? As you think about the technical aspects of your new venture, your new software, your new code, the
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beautiful widget that you've created that will solve somebody's problems. What you really have to come back for is will anyone care?
Does it bother them on a daily basis? And can you prove that by finding your first customer?
Again,
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we'll discuss that part later. But I want you to keep these two at the center of your thinking for the remainder of this lecture.
And I want you to even hone in further to say the problem should be a very specific problem for a specific persona that will help create.
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One caveat here, startup ventures are not for the faint of heart. The rate of failure is extremely high, higher than even grant writing in academia or medicines that we provide to patients.
So don't feel bad if you start, try and
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fail. Many entrepreneurs do it over and over again.
Once you've identified what problem do I solve? I utilize the analogy of the stethoscope to demonstrate that if you're really hearing and putting some
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your your ears to the ground just like the stethoscope goes into your ear and then you're trying to oscultate the problems that really resonate. It's often a really complex maze.
What you find is there's a lot of dead ends. Somebody tells you this is the biggest
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problem they have, but then you find out they're the only person suffering from this and their colleagues have not mentioned the same thing. Or similarly, patients may say, "I have trouble getting my health care data, and that's certainly a problem." But you may go down another dead end and find out it's
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a quagmire that has more to do with regulation and the transfer of encrypted data than it does really giving patients that empowerment. So I want you to strip it down again.
What problem am I solving? And now as I'm interviewing
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people and thinking about this venture, is that problem resonating with many many people from different spheres, different geographies, and most importantly, am I not just asking family, friends, and colleagues that I work with who simply don't want to hurt
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my feelings by telling me it's important? Next, we're going to talk about finding your paying customer.
Why is this important? Many people say they want something in life, but it is only when they decide to pay for something in life
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that you know that they are serious. So before we go through this slide, I want you to take a look and think about the fact that the target customer, I'll show you at the center, is often found through a concentric exercise with lots
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of interviews. So let's go through it.
On the right hand side, the target persona is shown as a as a human and you then also see a series of circles outward in. There's really a step-wise process which if you talk to serial
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entrepreneurs say once you identified a perceived pain point, start by iterating how to solve it and for whom you're solving it for. But this brings up the next most important point.
In health care, the person paying for the product
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or service, the medical software, the digital app, is often not the user of the product. So, you have the person that you need to please, whether it's the patient, the clinician, the health care payer, but they're often not the
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ones putting the dollars down. See how this gets complicated.
Then I want you to really test and iterate the simplest way to solve the customer's dilemma within the reasonable and current workflow of healthcare.
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Many times I have come across great ideas where people say well if we could just have folks in the hospital change the way they do things or change the way the flow is managed our tool will solve all of their dilemmas. But the most
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successful health care companies look at the current environment with which their product will be used and pay attention to that as they start to think about the target user. And that cannot be emphasized enough.
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How do we do that? Well, number one, we go ahead and employ appropriate methods.
We want to make sure that the technology that you're using meets as we've discussed the technical requirements and this has already been covered in that
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there are a lot of regulatory requirements from a health IT perspective. Second, and this is not intuitive for those of us that are scientists or engineers, the target customers, then the paying customers will become your
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best advocates for your product and they will be writing love letters on your behalf, continually helping you to iterate to find the narrowest niche. That terminology, if you see it in the entrepreneurial writings, is called the
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target persona. And I want you to liken it to the target product profile.
It has to have all of the specificity in terms of age and usage and environment and geography. Now, here's an interesting concept.
Not
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only would I want you to be using my product, I want you to be delighted by my product. Let's think about the fact that the companies that are most successful in health care find the most troubling um excruciatingly painful tasks that
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people whether they're patients or providers of health care are facing, companies are facing, and they hone in on I'm going to solve that one particular horrible problem for you. and they caveat it with, "I cannot solve all
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your problems." So, let's take a look at the scale shown here. Just try to start at 10.
To be frank, something that you constantly hear from your potential customers as utterly horrible or unimaginably terrible is the place that
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you would love to start. and all you're trying to do is walk them backwards towards the left to something that's a little less distressing or even not painful at all.
Why you're doing this is important. Once you have the engagement
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of an activated customer in health care, you are then able to capture them to change behavior. And that's really very difficult in any sphere, but particularly difficult in healthcare.
The way to do that, to turn your sad red
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face into that smiley green face, is really to say that the prototype has to be simple to understand. If you show me as a clinician very complex code and tell me that this will solve the problems of the way in which I may
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perform procedures in the clinic, I simply won't believe you. But if you show me a simple picture, a before and after, here's how you're able to better navigate during surgery, I suddenly understand.
So simplifying your software
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or your digital wrapper to its most understandable form will just provide you that experience that will allow the user to become a customer. Now, the last part that was on that slide is a little controversial in that
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in no other sphere will you routinely hear that you don't necessarily have to have a successful business model all figured out. In fact, in health care, if you have found your problem niche and you have found a paying customer, you
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may not even know what they should pay or what exactly they're paying for. That'll come after countless users sort of sign on and believe that you can solve their problem.
That's very counterintuitive and in later lectures we'll discuss that investors are fairly
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fasile with this concept. Next we will look at identifying stakeholders and mapping.
To simplify stakeholders as in any industry are all the people that you have to keep happy with your product. they may not directly
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interact. I show on the top for the software folks an example of this similar ideiation product pro uh process in IBM and as you can see they have the developers they have the higherups such as the Cto
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CPO and then they have groups of people who all have arrows leading to the each other. What do the arrows mean?
The arrows often become super important. How many of you have worked in an office setting or a lab setting or university
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setting? And there's definitely two or three people that work on the floor that sort of determine the state of affairs.
They're not necessarily the boss. They're not necessarily your your immediate colleague, but everyone listens to them.
In business, we call
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them the influencers. So when you do stakeholder mapping, it helps you through various interviews to understand who makes the decisions by driving people's ideas, changing their mind.
You don't have to convince the chief
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financial officer to invest if you can convince the clinician and the IT person that he or she really trusts. And that is a very complex concept that can only be solved with one thing.
and we'll return to this over and over, which is
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getting out and chatting with people and really going to their workplace environment and understanding how that flow works. So, let's return to the diagram.
Once you've mapped who the buyers and influencers are, you are really easily
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able to understand that in order for me to have the chief technologic officer at the top or the chief financial officer buy my product, all I have to do is talk to the two pink sticky notes, for example, that that he or she relies on
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for information. But it's tough to know that from the outside and the best way to do that.
We will discuss that concept is called design thinking. Human- centered design or design thinking really means stepping into the
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shoes of the user into their environment. Let me give you an example before we return to health care.
Design thinking was utilized by Proctor and Gamble and several other companies years ago when they were talking about how
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many blades to put inside of a men's razor. And they had had some mergers and acquisitions and they were thinking to enter the Asian market, specifically India, a large market with increasing technology and increasing business
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center and folks getting dressed up to go to work. And so they put a team together in Boston and they had all of these engineers and designers showing the Mach 3, the Mach 4, the Mach 6.
This predates the Mach. But what's important there is the number of blades was
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unbelievable. The thinness of the blade was unbelievable.
The closeness of the shave was better and better with each product team that was pitching for Proctor and Gamble to use their idea. So what did this very wise CEO of this division do?
He sent a few engineers to
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India and he had them go to some of the people's homes and ask permission to watch their morning routine and they learned a few lessons that led them to become the market leader in razor blades uh sales in India and the lessons were
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as follows. There's one bathroom for a large number of people to get ready in the morning.
So time efficiency is key. You cannot use the bathroom for an hour.
Most men or women they saw, well men in this case they saw were using the
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restroom for 10, 15 minutes max. Had to change, shower, shave and get out of there.
The second lesson they learned in a lot of these urban areas is that water is at a premium and wasting water or running water to clean multiple blades
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just didn't make sense. you had to really um shake it and keep washing it and it was very wasteful and they noticed that a lot of people turn the tap off in between usages.
So what did they do? They went with the single blade
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and all other competitors made fun and thought they were ridiculous. And it turns out that using one blade that you can wash in 10 seconds was used by the majority of working folks and a large market.
Why is this important? Well, let's think about healthare.
Design
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thinking in healthcare, as you can see at the top, is really no different. Who's going to touch your product?
Who are the people involved? Where is it used?
Can I get in there? Can I come to your office?
Can I come to your clinic? Can I come to your operating room?
And
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without interrupting you, watch you in your natural habitat. Why do we love our iPhone?
Why do we love our car? Why do we love our shoes?
because certain manufacturers have thought hard about how our feet get tired. If we're working in healthcare, there are certain
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companies that have designed for this. Really, what I'm saying is you have to get out of where you work and go to where your consumer is.
And I think that's the big takeaway from here. But we cannot forget the big elephant in the
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room, which is the regulatory steps. Now you have a great idea.
You've identified a problem. You have a customer.
You have visited multiple customers, they're ready to pay, but are you allowed to sell to them? Compliance is huge.
And as we have discussed in several sections in
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our lectures, understanding the local and your country's standards to be met not only for technical specifications, but for safety within the use of health care is important. Getting the help you need to understand rapidly changing
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guidelines is important. and then really having legal counsel on the claims that you make.
In the United States, for example, the FDA has become increasingly interested in what we are doing in the digital realm and has put out quite a few guidances and standards that need to
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be met. Trying to navigate that yourself can be very difficult.
So, it's very important to partner with appropriate legal counsel. Now, I want to talk about a softer side.
Entrepreneurship can be very lonely. Is
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it the right time to do it? You can see all the questions raised in the top slide.
And the answer is if it's the right time for you, it's absolutely the right time right now in health care because not only do we have dilemmas in healthcare, but we have increasing cost
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to health care. However, let's be clear.
As sexy as we sell it to be and as great as we hear the success stories, it is often a lonely road. And as I'll discuss later in the sections on raising capital, many times you are told, your
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idea is completely crazy and it will not go anywhere. But if you continue to follow the rigor, you have people that you know want to use it, people that are willing to pay for it, people that are willing to help you get there.
It's quite important that you circle back to
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that and keep that in your mind. I just want to go back to the last line for a minute on this slide.
The entrepreneur, a solopath versus a team. It is so important to have that team around you, that core group that sort of keeps you
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going. In fact, oftentimes when you're starting a healthcare venture, you may come up with the idea yourself, but you definitely want to be mindful about sharing that idea with others and getting them on your path.
So, in summary, we've covered quite a
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bit of content. We've talked about the fact that there are a series of steps that need to be taken, but I would argue that the key takeaways here are absolutely have you identified a problem to solve that someone really cares about.
Can you multiply that someone by
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many people through rigorous interviews and on-site observer through design thinking? And then finally, are there customers and are those customers excited by what you're showing them?
and are they giving you feedback to iterate?
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If you do those few things alone, you're far ahead of many, many companies who start with the technology and then look for the customer and the problem to solve afterwards. And we want to help you avoid this path.