We recently wrapped up market research for a couple of health tech startups who’s working on changing the world of hard diseases as we know it. There are a few things you really need to know about this market. That’s, of course, if you’re interested in becoming or working in a health tech startup.
Health Tech Startups Burn Rate
It’s a no-brainer that all these health tech startups that work in R&D require cash flow to burn through.
- You’re going to start a company with a creative product.
- You’re going to have a team.
- You’re going to have to pay them salaries,
- You’re going to have to pay for devices which are extremely expensive.
You’re not going to be expected to make revenue quickly. There are many approvals in the process. That could take a good number of years. As an example, it takes around 12 years to manufacture a new medicine or a drug for instance. It costs around 2.5 billion dollars.
So you can imagine how difficult and long it’s going to be and how a long journey it will be. But at the end of it, there’s always a reward that you can keep in mind. You’re working on something bigger than yourself and bigger than the money of your investors.
You’re working on saving lives which fuels most health tech startups. It’s much easier to sell a product that is impacting people’s lives. That is compared to, a company like Uber with a luxurious product that makes you transport.
Our Health Life
Health tech startups are always going to exist in the upcoming 50 years. Let me explain why. When we worked on this research for a health tech startup, we noticed that one of the biggest reasons for mortality in the world is CVD or cardiovascular diseases.
Those diseases are easily preventable by having a healthy physical lifestyle. That’s for example by having a good healthy meal to have instead of eating fast food like french fries. So theoretically, a startup that is working on a solution for cardiovascular diseases is not really needed if people would just go back to basics and incorporate a healthier lifestyle.
But the truth is this is not realistic. Most of the companies in our ecosystem are actually promoting devices that are against a healthy lifestyle. In the top 10 companies of the world, the most valuable companies are Apple, Microsoft and Dmeta for instance.
Those three companies are just building devices that would make us focus on looking at screens rather than going for a walk. That simply makes the demand for health tech startups increase in time. Similarly, those diseases are going to keep on maintaining the same rate and that’s the reality of nature.
Nature is harsh, however, it’s more because of human intervention.
Health Tech Market Research
When you’re working on a health tech company, you’re going to have to conduct a market research which is perfect. Most of the medical terms and most of the health elements of any health care startup are available online due to the fact that a lot of countries exert a huge amount of their GDP focusing on health.
So if you’re working on a product that has to do with similar to the Apple Watch for instance, you’re going to find a lot of research on how these devices are healthy versus how they’re not. How a use case of a device similar to this sold in New Zealand for example versus how it failed in a country like Japan.
These are just examples, but you see where I’m going with this. You’re going to find a lot of research compared to working for example for an industry like astrology where you’re not going to be able to find a lot of data in how this market could be shaped in the upcoming 10 to 15 years.
Case Studies
I think it’s one of the most important thing when you’re working on a health tech startup is to learn from those who failed and those who succeeded. Companies like Theranos with their health tech product and the need for it and how much they raised in terms of investments.
Why did they fail? They failed because they didn’t have a product and because they committed fraud. Now the concept of committing fraud with a company like Theranos is proven to be correct by law.
But if you’re working on a theoretical device and you start getting investment in the healthcare industry, you would still not be 100% sure that it’s going to work, which is pretty normal. It’s how it is in the startup world and in the investment world and any investor would know that there is a risk of this product not seeing the light of the day.
What they did wrong was that they misled investors and told them that it actually exists and it works and gave them fake results. But the truth is there is a lot of patience involved in this market and it takes a specific mentality to be actually able to go through this for a long duration of time.
Steps to Work on Your Health Tech Startup
So if you’re working on a health tech startup, remember to refresh your research every quarter. That I think would be very enough because of the change in medicine and data that occurs almost every single day with new cases, new changes and how people are behaving to some specific item and so on.
Secondly, you would want to start by networking with the proper people involved. You need to network with researchers in your field. You’re all working on the same team. This is a particular note that you have to keep in mind.
It’s not like your Uber versus Lyft. It’s not like your Snap versus Meta. Any person or any company working in health tech are actually part of an ecosystem that aims to develop a better life for humans.
So you are not really competing. You are more integrating to form a big single startup called the health tech startup.