Venture funding for Digital Health startups keeps breaking records and the interest in the market keeps growing. However, the need for digital health solutions and the funding also comes with a blind spot. Many startups display that their products reduce healthcare cost, increase revenue and provide better and personalized care to the customers.
Yet, with this narrow focus on growth and KPI’s they often forget to build a relationship of trust and accuracy. Examples are the brain-training app Lumosity and the blood-testing startup Theranos. Whereas they marketed their products as healthcare improvements to decrease cost and increase revenues, they failed to prove the accuracy and effectiveness of their products. Once this trust is lost, it is hard to regain.
Trust is the Challenge in Digital Health
Startups wanting to operate in the digital health space need to realize the importance of trust to sustain their business, building it as well as maintaining it. Of course this is key in all fields of business, however, it particularly is when operating in the field of digital health.
The healthcare sector is a complex and highly regulated industry. Moreover, both care receivers and care providers are highly sensitive and careful when it comes to once health and wellbeing. Likewise trust is critical when deciding on a business model and when wanting to obtain funding.
The digital health market is young and investors are still getting to know the space. Being able to; provide evidence of effective products/services, prove once knowledge of the market and demonstrate the manner of capturing value, makes the difference between investors opening their pockets or keeping them firmly closed. In principle, can each interaction with a stakeholder, whether they are your customers (B2B or B2C), investors, potential partners, a government organisation or something else, have a positive or negative effect on the trust of that stakeholder in the startup.
And like I stated before, once that trust is lost, it is hard to recover, the negative impact will find its way to other relationships through negative publicity. But now… how can we build that trust with our stakeholders?
The Next Steps in Healthcare Entreprenueur Programms
To start off, when operating in the healthcare sector it is key to gain some kind of certification or approval for your product. This can be done through a FDA approval or a CE certification. Yes, getting these are time consuming. Gaining a FDA approval in the EU might take 6-8 months and in the US even 9-12. A CE certification takes even longer, about 18 months. However, they display that your product is safe and up to standard.
Moreover, gaining such a certification or approval is critical when wanting to work with/ sell to insurance companies, pharmaceuticals, physicians, governments and many more. It thus indirectly allows you to grow and increase your customer base. Another great way to build trust is through clinical validation. Having a professional clinical study in place allows you be in a better position when negotiating partnerships and helps with gaining reimbursement from insurance companies. However, likewise this can also be time consuming and sometimes very expensive. It will give you the return on investment you need though.
Finally, and maybe even most importantly, to build trust, continuity, transparency, responsiveness and sticking to your word, will help a startup to build and maintain its relationships. Rather tell a possible partner or client you cannot do something or that you are not a 100% sure of the accuracy of a product than selling a lie. In the end, digital health entrepreneurs have to remind themselves that building a reputation of trust takes time and when it is there it needs to be maintained continuously. Trust is crucial when wanting a successful, sustainable business. Most importantly, we will need it if these startups are to transform our current healthcare industry.
Are you interested in learning more on how to build trust in the Digital Health space, or need validation for your digital health products or services, please feel free to contact us at any time.