Editor’s note: This is Part 2 of a two-part post about innovation in digital health, co-authored by Rob Coppedge, CEO of Echo Health Ventures. Read Part 1 here.
The Path Forward
Between Echo Health Ventures and Blue Cross and Blue Shield of North Carolina, we work deeply on both sides of these partnerships and have perspective that accelerate their development or shut them down. Our advice to startups wanting to ensure Digital Health Survival always includes:
1. Don’t confuse marketing with sales.
All of your Twitter followers, conference keynotes, and grand theories about disrupting our industry are great, but will only get you so far. Focus on proving your expertise, be specific about how you helped navigate challenging implementations, show us the money, and be clear about how you delivered actual value. Your tweets become far more interesting when they articulate something you’ve done instead what you want to do.
2. Build a strong, high value investor syndicate, board and advisory team—and use them.
While VC mega-rounds drive great early press releases, it is earnings, outcomes and a right-sized cap table that will drive your digital health returns. If you are lucky enough to be able to choose, make sure you pick quality allies, co-developers and distribution partners over even the “smartest” capital. We are seeing the lack of demonstrable proof points, solid outcomes studies and references stand in the way of accelerated sales across digital health. In the early stages of building your business those are priceless. As you scale, investors that can help open doors and drive growth play the same role. Prioritize true strategic value over the brand name on your fleece vest every time.
3. Do your homework and understand the priorities of all of your partner’s stakeholders.
When you come to pitch us on a strategic partnership, show that you actually know what we need. Who at the table will benefit from a strategic partnership with you? Who fears losing autonomy and influence as a result of your partnership? You need to sell a personalized strategy and use case for each and every potential stakeholder at the table. Entrepreneurs must understand the context for the “disruption” they plan to bring to market, which requires a keen understanding of the gory details of workflows, productions systems and financial flows that underpin the broken systems.
4. Be honest about your competitors. You have them (and they’re also pitching us).
In the rare times where there is literally no one else doing what you are doing, your primary competitor is human behavior. What are your customers doing now instead of using your product? Be prepared to share your detailed plan on how you will outplay, outwit, and outlast the competition.
5. No matter what race you think you are running, prepare for a marathon, not a sprint.
Realistic valuations and investor expectations remove barriers for downstream fundraising, strategic pivots, or exit options. You need investors and partners that not only understand this, but who can also help you learn faster—and support your agility in making these decisions earlier.
Of course, partnership is a two-way street. For legacy companies seeking to build their capabilities as an Innovative Incumbent, … Next Page »