The words “healthcare start-up” just don’t sound sexy in a world where the social entrepreneurial success of Facebook and Pinterest rule the roost. Halle Tecco, 28, co-founder of Rock Health, a SF-based incubator for digital health start-ups, wanted to change that.
“Why, on the surface, didn’t healthcare appear to be as creative, open, and exciting as technology? Why is technology getting the greatest minds of our generation?” she asked. Tecco and a Harvard Business School colleague, Dr. Nate Gross, MD, saw this as a threat to the future of healthcare—and Rock Health, originally conceived as a class project, was born.
For selected groups of seed-stage health entrepreneurs, Rock Health provides funding (from big names like Mayo Clinic), office space at its headquarters in downtown San Francisco, and “expert medical support” from Mayo Clinic, Harvard Medical School, UCSF, and Cincinnati Children’s Hospital—not to mention a laundry list of start-up support services in design, healthcare policy, and law. There’s also entrepreneur-friendly conferences and open-to-the-public healthcare “bootcamps” that teach brass tacks like insurance reimbursement and ObamaCare.
The idea: to provide a space for “people who aren’t healthcare entrepreneurs yet but want to understand [the system’s] problems… and for current entrepreneurs who are trying to navigate the system” says Tecco. Rock Health is where start-up alumni like Skimble (a health and fitness app that turns your mobile device into your very own personal trainer) come to find resources to fix an industry that could desperately benefit from some high-tech TLC.
For me—a gal who has spent most of her waking hours under the fluorescents of a hospital or clinic—this rumbling in the belly of healthcare (pun intended, of course) is utterly intriguing. I wanted to meet Tecco, the women she works with, and other healthcare entrepreneurs to learn more about the industry’s (likely digital) future.
And since I happen to excel at the fine art of email introduction—meet them I did.
So, now it’s time for me to step aside to allow Tecco, named as one of CNN’s 12 entrepreneurs reinventing healthcare, to set the stage for my series on the newest wave of female founders in the body business.
Give us an idea of the current terrain for digital healthcare start-ups.
We just put out a report that answers a lot of these questions. In the United States, 103 healthcare and digital health start-ups were funded this year (at $2 million or more)—that’s an increase of 80% from this time last year. If you look at the business models—we are seeing more business-to-consumer models this year—more of them are getting funded.
What typically drives the creative force behind a healthcare start-up?
Everyone has a story, something from his or her own experience—either frustration with the system or a patient experience. We have a team called Healthy Labs founded by Shawn Ahrens who lives with Crohn’s disease [a chronic inflammatory disease of the digestive system]. He was really frustrated with the lack of tools for him to track his disease and meet other patients. Someone has an experience and says, “Wow, there are no tools out here—and I’m going to build them.” That is pretty common.
Can you share a Rock Health business success story?
I can’t play favorites—so I would say I love all my children equally! But there are a few start-ups that are easy to talk about because they are products. We have a team called CellScope that built an otoscope [an instrument used to look into ears] for a smartphone. It’s a little device that fits over the phone and turns it into a device to detect ear infections. It’s directed toward the market of parents with kids who have chronic ear infections—they don’t want to spend the time and money to go to the MD, so the parents can just snap a picture at home [and send it to the physician]. They raised a seed from venture and are quickly building out their business.
What are the “must haves” for new healthcare tech entrepreneurs?
I think the teams that do really well are multidisciplinary—they have experience in the healthcare system and they understand how to build and market something to a healthcare consumer. And, a lot of patience! There are a lot of unknowns in healthcare technology—you don’t have a “Facebook” of healthcare to look to as a company to emulate.
Why do many entrepreneurs shy away from healthcare?
The list is long—especially compared to the consumer web. There, you build a product, you share it with your friends, they share it with their friends, and then it goes viral. You get into Tech Crunch and there you go—nothing really stops you.
But when you are building something in healthcare, the biggest challenge is understanding this complex and regulated market—the FDA and HIPAA [a patient confidentiality law] are a part of that challenge. You also have to figure out who is going to pay for it (healthcare consumers aren’t used to paying for their own healthcare). Lots of hoops to jump through.
What virtues keep healthcare entrepreneurs going in the face of adversity?
Patience, curiosity, and determination. There is certainly a lot of naysaying and negativity in this space—you have to constantly remind yourself or the team that building this business will be a good force in healthcare. I meet a lot of entrepreneurs who dip their toes into healthcare but say, “This is too complicated” and they back out—which is OK because it filters people out. [You want] the people who truly care about the problem versus the people who are just looking for a business.
What is something that you’ve learned from Rock Health alumni?
We see start-ups at the very early stages. Some people come to us with just an idea. So at that point, it’s really about the team—the idea is going to change so much and evolve during the incubator. A good entrepreneur will figure things out—a good team with good dynamics will be productive and make the necessary adjustments. Whereas, a good idea without a good team will not get anywhere. So, we’ve really learned that is it better to bet on the jockey and not on the horse.
Stay tuned for part two of our series (in two short weeks), when we’ll introduce you to Cheryl Swinrow of Sherpaa—an NYC start-up that provides around-the-clock email and phone access to a friendly doctor (who listens!) for your every bump and bruise.