Starting a healthcare business is perhaps the most challenging task any entrepreneur will ever face. The sheer difficulty of getting a pharmaceutical or medical technology firm off the ground is enormous. It’s probably more difficult than sending rockets into space (sorry, Elon).
Many leaders simply give up on their ideas and go back to the drawing board. That’s their prerogative. But others would be successful if they simply avoided some of the perils that healthcare startups face during their formative years. If they got the first 36 months right, many would go on to achieve superstardom. In this post, we take a look at some of the perils of medical startups and what you can do to avoid them if you are thinking about taking your entrepreneurial career in this direction.
Failure To Properly Articulate Your Value Proposition
What is it that makes your company valuable? Think about it for a second. Is it that you offer a new type of drug with fewer side effects? Are you investing in preventative approaches that will keep people healthier for longer? Or do you have a device that doctors can use to get a better grip on patient health when they are out of the clinic? Spend some time thinking very carefully about what you offer. Then try to put it into words that your audience will understand. Don’t make it overly technical. Instead, communicate with others as though they are human beings.
Failure To Build Evidence
In most industries, customer feedback is all the evidence you need to prove that your product does the things you claim it does. However, in medicine, it’s a different store. You have to go through a robust evidence production, preparation and collection process that will convince regulators that you’ve made something safe and effective. The costs of this can be high. However, many startups are now turning to virtual clinical trials to solve the problem for them. These end-to-end services lower the cost of conventional clinical trials and actually speed up the evidence-generation process, providing investors with more confidence.
Choosing An Incompetent CEO
Selecting healthcare CEOs is notoriously challenging. You want someone with proven business acumen who also has experience in the healthcare field and knows how it works. Usually, you can have one or the other but not both. Perhaps the best approach here is to simply choose a CEO who has qualities that investors expect. The founder doesn’t necessarily have to be the CEO. You can hire one at a later date who fulfils your requirements.
Being In Stealth Mode For Too Long
Healthcare startups love being in stealth mode, protecting their intellectual property with a wall of NDAs. But remaining in this operational rut for too long can put you at a disadvantage. Eventually, you are going to have to come out of the woodwork and tell people what you are working on and why it matters. If you can come up with something good, investors will pile in, providing you with more seed capital to keep operations on track.
M.E.L. is an attorney and small business entrepreneur whose mission is to help professionals conquer the workaday world with style and poise.
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