Home to a thriving startup scene, a competitive provider landscape and some of the largest healthcare corporations, Chicago is an ideal hub for healthcare entrepreneurs. Investors agree. In 2012, Chicago-based healthcare technology startups received twice as much funding than those in any other industry sector. If we ask the 27 founders of entrepreneurial brain trust Healthbox portfolio companies about their journey though, they will likely reply that growing a company in the risk-adverse healthcare industry is far from easy. So how exactly can startups gain market traction?
- Ask the 11th Question: Mentors are essential to growing your company, but don’t expect them to tell you what you need to know about your own business. Be deliberate and ask the right questions of the right person. There are natural barriers that make it difficult to penetrate the healthcare industry, and that even includes gaining access to experts or potential customers in the industry. Healthcare entrepreneurs must capitalize on each opportunity and think critically about what information they need to move their business forward.
- Sell the right solution to the right person: In healthcare, startups recognize early on that those who support, use, purchase and benefit from their products are often all different people, and each can play a key role in their product’s success or failure. Entrepreneurs have one chance to get it right and must clearly communicate the problem they are solving and how they will drive value for each stakeholder and the affiliated institution. This “value” must be based on real insight and data, not the entrepreneur’s perception.
- Don’t be afraid to change: To rise above the noise in crowded markets, entrepreneurs must always be prepared to iterate on their product and pivot their business models. This has to be done in real time in response to customer pilots, focus groups and early customers. Confirming that you’ve built a product that the market not only wants, but will also actually pay for and use, will provide investors with the confidence that you have a scalable business.
The demand for creative solutions in healthcare is undoubtedly high but infiltrating the market successfully is a challenge. Any entrepreneurial venture is going to come with risks. However, following these guidelines will improve the chances for an entrepreneur to build a sustainable business in the challenging healthcare industry.
Nina Nashif is the founder and CEO of Chicago's Healthbox.