Healthcare IT Startup Advice

Over the past few months I’ve been approached by many startups to comment on their ideas and products. I love doing product reviews, especially for startups, because I’ve been an entrepreneur for years and I can’t help but offer advice (even when I’m not asked). Some of the common themes I’ve shared are listed here. Many of you are potential buyers of health IT startup products — what would you tell them?

• Don’t focus on your competition, focus on the customer. One of the main areas where I’ve seen startups waste their time is making their products “better than the competition”. In health IT the customer is often unhappy with the current suppliers because the vendors probably didn’t listen to their needs. Forget the competition, focus on the customer, and make your products apply to their needs and you’ll have a better chance of success.
• Simplicity beats complexity. This may seem obvious but many startups want to laden their products with features upon features upon features but forget about ease of use. Concentrate on the smallest number of things your product can do, make those things seductively simple, and don’t chase features. Your customers don’t use your products because it has many features, they use your products because it solves one or more problems that they have. Healthcare IT is complex and unwielding and no single product can do everything so stop trying.
• Spend time at your local clinic or hospital. It surprises me how many founders have spoken to me about their ideas and when I asked them what they’ve learned from spending a couple of days at a real hospital or clinic they reluctantly mention that they haven’t spent the time there. A common answer I hear is “my brother, who is a doctor, says…” or “my best friend, who works as a nurse, says…” :-). Don’t just listen to what they say but watch exactly what they do. Like an anthropologist learning about a culture by “living among the people” an engineer or product designer must “live among the customers” to really learn what is going on.
• Don’t try to chase venture capital, let them chase you. If you spend any time looking for money in your early days you are doing so at the expense of customer acquisition, product development, and other very important milestones. If you have built a useful product and have some customers ready to buy it you will find money. Don’t try to find money before you’ve proven you’ve got something because all you will do is waste 6 to 9 months of your life. Try to fund your own work or get a few friends to pitch in $10k a piece to move things along to full prototyping phase. If you can’t even convince your friends or family to part money to support you, give it up! 🙂
• Figure out how you’ll sell your product to your 10th or 20th client. Most startups can make initial sales — their first few clients are pretty easy to get because of personal contacts or friends of friends. Where they often fail is have the right pricing, deployment, or sales models for getting beyond their initial clients. Healthcare IT is a cottage industry with mostly local small businesses so getting your initial sales is easy. Worry about how you will sell to your first client that you do not know. If you focus your product only on those early clients that are the easiest to sell to, then you will have an even harder time when you get to clients where you don’t have personal contacts.