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KLINIKUM+ | Why Digital Health Startups Fail?

Let’s recap:

The digital health market size is estimated to have been at USD$240.9Billion in 2023 and projected to keep on growing to USD$1,965 Billion by 2030. This is a HUGE market to venture on.

Now that I have your attention, this industry is not without its quirks, it does have one of the highest failure rate out there.

Digital health startups face unique challenges beyond what an everage entrepreneur is used to, and several (hidden) factors contribute to their failure. Let's explore why some of these ventures fall short:

1. Tech-Driven Approach: Many digital health startups adopt a "move fast and break things" strategy, similar to the tech industry. However, healthcare is more complex and regulated. What works for consumer apps may not translate well to healthcare solutions.

2. Stakeholder Landscape: Unlike consumer tech, digital health products must appeal to various stakeholders: doctors, patients, regulators, and insurers. These groups influence adoption. Entrepreneurs often overlook this, leading to misaligned strategies.

3. B2B Pivot: About 61% of digital health companies that start as B2C (business-to-consumer) end up pivoting to B2B (business-to-business). Selling to insurance companies, employers, or hospitals becomes crucial.

4. Clinical Validation: Some startups launch products without proper clinical validation. In healthcare, evidence matters. Clinically unproven solutions struggle to gain traction.

5. Physician Workflow: Products that disrupt physician workflow instead of simplifying it face challenges. Understanding healthcare professionals' needs is essential.

6. Regulatory Hurdles: Navigating clinical trials and regulatory approvals can be time-consuming and costly. Startups must anticipate these challenges.

7. Market Fit: Failing to address a genuine healthcare problem leads to irrelevance. Need-driven innovation, starting with a problem and designing a solution, is more effective.

Wanna learn more? Dig in

(1) Why do digital health startups keep failing? - Fast Company.

(2) Why Online Therapy Startups Are Falling Short | TIME.

(3) Viewpoint: Why digital health startups fail - Becker's Hospital Review.


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