The Start-up Graveyard

How to beat the odds

Across all industries 9 out of 10 start-ups will fail. This staggering statistic doesn’t exactly inspire confidence. In healthcare the failure-rate may not be as detrimental but remains cause for concern. Which begs the question: why do so many start-ups fail?

A 2017 ‘post-mortem’ analysis of failed start-ups by Forbes and Statista revealed where founders and investors have gone wrong. Somewhat impressively, the most frequently cited reason for start-up failure is the lack of market need for the product/service in question. Start-ups are creating products that no one wants. Among the top reasons are also ‘getting outcompeted’ and ‘pricing/cost issues’.

These problems that start-ups in various sectors face, can also easily be applied to healthcare-based companies. The discovery of an innovative therapy/device/program is not enough to ensure success. Even if the intervention or technology appears to be solving a relevant problem healthcare professionals or patients face, this is by far not the whole story.

Careful consideration is necessary to scope out the existing market and current standards of care, to understand pricing, how a novel innovative product may compare, and to identify the real unmet needs (emphasis on unmet) that exist within a market.

This goes for anything, from the implementation of AI solutions, which may or may not complicate a physician’s job further, to novel drugs that are efficacious and promising, yet whose value message is not clear.

You might be surprised at how often start-ups go charging ahead with an innovative piece of tech or a ground-breaking new molecule, without stopping to think “Who needs this?”, “Why will they use it?”, “How is this better than what already exists?”, and “How can we ensure this product adds value for the end user?”.

Healthcare requires need-driven innovation, whereupon an unmet need is identified, the problems and existing solutions are well understood, and the stakeholders involved, their needs and perspectives, are carefully considered. This is where a market-access strategy is essential, to ensure your start-up won’t be among those 9 out of 10.