THE AUTHOR:
Statistics say that the largest number of startups appears in the financial sector of business, second place belongs to e-commerce, and healthcare is only in third place. And yet, experts are confident that today the most success can be achieved precisely by finding solutions for healthcare challenges.
Last year, there were predictions that the global HealthTech market would reach $511.06 billion by 2026. The world expected a growth rate of an impressive 25.6% per annum.
Companies expressed high interest in the rapid development of digital technologies in healthcare, especially against the backdrop of the global COVID-19 pandemic, which accelerated the adoption of new solutions.
We expect the market to grow due to new technologies such as telemedicine, artificial intelligence, and wearable devices, which are changing the approach to healthcare services and patient care.
However, new forecasts show more moderate CAGR growth over the long term. The global HealthTech industry size is to reach $946.0 billion by 2030, at a compound annual growth rate of 21.9% from 2024 to 2030.
We can suggest that this could be due to the market stabilisation and becoming more mature. At the same time, we can explain the slowdown in growth caused by market saturation, the technology challenges in healthcare, and changing economic conditions.
Nevertheless, we still have an optimistic outlook because the industry is strong and has space to grow in the coming years. At least, this is the reason why investors are so interested in new prepositions in the health market.
The eventual success is influenced by HealthTech startups issues, so explore the major obstacles currently encountered by these companies.
B-Series Funding as the Next Step for a Startup
Getting the next level of funding is a key task for HealthTech startups. Many beginners usually wonder what B-series funding for startups means.
Basically, it is an opportunity to get more money to develop innovative products and ensure stable growth for the company. It is clear for experienced financial consultants how funding works for startups in any sphere of business.
However, there are some unique differences that HealthTech Startups meet on the way to gain investors:
1. How to Ensure Stable Growth
To be honest, startup funding levels are not new, and every small company faces this problem after receiving the first series of investments. Money raised on different platforms, like Crowdfunding, is usually enough to develop a fully functional prototype, build and add strategy, and implement only the first part of a startup’s business plan.
Solving each healthcare technology issue is important to ensure stable growth and show other investors the attractiveness and reliability of the offered idea and the whole company, in particular.
The goal of Series B rounds is to help companies advance past the HealthTech software development stage and into new markets. Investing in startups allows them to reach a wider audience.
Hiring top personnel is essential for developing a team and creating a great product. Investing heavily in business growth, sales, advertising, technology, support, and staff comes at a high financial cost to the company. And this is the point at which the business ought to locate more later-stage investment specialists.
The HealthTech technology designed in close collaboration with doctors has more chances for success due to its relevance.
However, it cannot be used as the only trump card in the sleeve when it comes to a new product. The constant appearance and growth of competitors should serve as an incentive for the further development and improvement of the company’s business strategy.
2. How to Convince Stakeholders of Your Effectiveness
It is also important to know how healthcare funding in the private sector works. In order to get the next level of funding, a Health Tech startup should prove that the industry or a certain category of hospitals needs the product it offers to the market.
One of the main ways to achieve this is to implement and distribute your product as much as possible. There are two ways to solve this problem:
• Free distribution for the test group. When it comes to applications or devices, this can be doctors or patients.
It will also provide shareware and access for a short time, during which the necessary statistical data and feedback from users will be collected.
This method allows to shoot two birds with one stone: test the product to identify its strengths and weaknesses and conduct an in-depth analysis of the target audience.
• Large-scale advertising campaign. By using it, the product will become as widely known to the consumer as possible.
The greater the audience reach, the greater the chances of introducing a ready-made application or software in hospitals and medical facilities.
However, this method is not suitable for niche products that are designed for a limited group of consumers.
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3. How to Use Innovation and Original Solutions
Today’s healthcare challenges include hypothermia management in premature babies, lung infection in ventilated patients, life support for babies outside the NICU, more accurate labor monitoring, vertigo diagnosis, post-cardiac event monitoring, and screening for blindness, cancers, and other conditions.
To find the proper solution and offer a truly unique product, the startup should leverage cutting-edge technologies such as machine learning and artificial intelligence, along with electronics, mechanical engineering, and product design expertise, to create innovative, patented products that address the global market.
The startup on the early level of investments can start on the local market, and solve problems only of their own region or of a particular medical institution, but a business plan and strategy must necessarily take into account the further growth and expansion of the market of consumers of the finished product.
This may include the HealthTech software development and implementation of additional functions in the application, the improvement of equipment for new needs, and the expansion of the product line with new models.
4. How to Properly Monetize the Product
The general mistake of startups is the lack of a plan for the long term. As a rule, most companies make forecasts for two or three years ahead, on the basis of which the strategy of growth and development is built, and the future profits and opportunities of the company are predicted.
Also, such a plan rarely includes the monetization of the final product. It is not reasonable to include a lot of paid services or restrictions at the initial stage of developing or implementing your offer.
However, an understanding of how this can be implemented in the future should be already at the initial design stage.
Monetization is also one way to attract investors, as it clearly demonstrates how to make a profit from the project.
Most often, monetization includes advanced features for subscribers or additional services for a fee, placement of links or advertising.
It is important not to overdo it with the implementation and application of the selected methods of making a profit. First and foremost, the final product must address the healthcare industry’s challenges and be attractive to consumers.
you make an application overwhelming with advertising or all useful functions are made payable at the start of product implementation and distribution, you can ruin the entire project instead of receiving new funding for further development.
Professional financial experts and marketing specialists will help develop the monetization plan for the project.
5. How to Use Big Data
Healthcare technology is essential to how businesses collect, store, protect, and utilize massive amounts of information.
The industry’s emphasis on data hasn’t always been merited. In the past, data was hard to obtain and of questionable quality.
Healthcare companies haven’t always encouraged data-driven cultures that are designed to improve operational effectiveness.
Even the most recent “big data” initiatives to improve clinical quality and public health have been overly straightforward and unrelated to operational efficacy.
Although traditional healthcare metrics such as market share, profit, stock price, and shareholder return have their place, with increased access to data, healthcare leaders can better understand and plan for improvements to critical success metrics like quality, satisfaction, waste reduction, and operational efficiency.
Beyond that, executives might turn to more advanced analytics to address deeper performance factors. For instance, insurance firms may plan for new services based on a better understanding of changing populations and manage risk more effectively if they have access to linked clinical and claims data.
6. How to Optimize Long Development Cycles
Launch schedule delays will have a big impact on possible revenue. Even worse, you can wind up chasing a less strong rival to the finish line since you missed the market opportunity.
A product that is released six months after its competitors can see a 33% decrease in earnings over the course of five years, according to a McKinsey analysis. If a product is developed 50% beyond budget, it will still only result in a 3.5% decrease in profit if it is released on time. Sure, time is money when it comes to product creation.
Is it thus always the case that speed is better? Not if putting speed over values is the only priority. A faster healthtech product roadmap means a shift in focus for your team.
The actual issue with a roadmap isn’t that it’s just a feature list; rather, it’s that the features aren’t linked to the company’s goals, objectives, or development cycle pace. This is the fundamental problem that prevents most roadmaps from succeeding.
Before creating a detailed healthtech product roadmap, start by outlining your company’s business goals over a set timeline. The roadmap should include various initiatives aimed at achieving these goals. Clearly define objectives, execute them effectively, scale results, and refine as needed.
Focus on high-conversion features that offer the most value to customers and have the potential to grow revenue. By explaining the ROI, purpose, and plan for each feature, you can save time and energy, benefiting the entire team.
It’s crucial to have a development team with a product-focused mindset, emphasizing real value creation rather than arbitrary milestones.
Developers should understand each product decision, study user interactions, and help shape strategies, especially when addressing issues with technology in healthcare.
HealthTech industry is one of those areas where there have been many changes in recent years. It is noteworthy that the reason for the transformation was not big companies and veterans of the market, but startups, with readily solving healthcare challenges.
However, the reverse side of the medal shows that not all enterprises are durable: the success gained at the start is very difficult to maintain if you ignore the main factors for the development of firms in this industry. Remember, the phrase “have a finger on the pulse” is as relevant in the Healthcare sector, as nowhere else.
A team of experienced engineers can help solve any HealthTech startup challenges. Email us at info@computools.com and we’ll discuss the details.
Computools was selected through an RFP process. They were shortlisted and selected from between 5 other suppliers. Computools has worked thoroughly and timely to solve all security issues and launch as agreed. Their expertise is impressive.