Just over two weeks ago, I had the opportunity to speak at a dignitary-filled event organized by MeHI and the Mass Tech Collaborative which heralded the launch of a new Digital Health Cluster initiative in Massachusetts. The initiative is a public-private partnership intended to spur the development and growth of digital health companies in Massachusetts in much same way the $1B Massachusetts Life Sciences Strategy has contributed to the growth of the local life sciences sector.
No funding commitments have yet been announced in relation to the Digital Health Cluster project, but I do feel that the announcement is a step in the right direction. It’s good to see commitment from the state and industry to assert Massachusetts as the leader driving digital health innovation, especially in the face of competition from the Bay Area and New York City. What remains to be seen are the specifics of how the initiative will actually help startups.
A few reporters asked me for my thoughts immediately following the event (see coverage from WBUR and The Boston Globe), but as I’ve reflected on the announcement and have spoken to other healthcare startup founders, I’ve come up with a few thoughts what is needed to help fledgling companies succeed
1. Help startups do customer development
For those of us following the ‘Lean Startup’ methods, we intend on ‘leaving the building’ to do customer development by speaking with users and potential customers. For healthcare startups, what often happens is that we leave our own buildings but find ourselves locked out of the buildings housing our users! And if we do get in, we still don’t get in often enough to obtain the variety of viewpoints needed to validate (or invalidate) our ideas. The Digital Health Cluster initiative could have a strong impact if it can facilitate access to partner healthcare organizations (hospitals, health plans, health IT vendors) and the people to work in them.
2. Inform healthcare organizations about innovative solutions
Lack of uptake of new technology is not necessarily because healthcare organizations do not want to innovate. Often, they simply do not have the access to information about new solutions - this is a problem of market inefficiency. Faced with a problem to address, healthcare organizations may attempt to build the solution in-house instead. Wouldn’t it be better if the healthcare organization collaborated with a startup that is already working on solving that problem by offering its clinical expertise? By promoting new solutions to healthcare organizations, the Digital Health Cluster can drive further efficiency in the local digital health economy.
3. Support early collaboration
Some of the biggest hurdles for healthcare technology startups are being able to demonstrate their value propositions and operationalize their solutions in a live healthcare setting. For many, this means gaining entry to a hospital system, healthcare insurer, or a larger healthcare IT company - all organizations that can be difficult for early stage companies to access. The Digital Health Cluster initiative could be game-changing if it can help guide, fund and support pilots of new technology to provide infrastructure that encourages early-adopter organizations to experiment with startup solutions.
If the initiative can truly improve the success of local digital health startups, then it will also help spur the growth of more established healthcare technology players through M&A activity. And, with a deeper pool of healthcare innovation talent in the region, Massachusetts will be able to attract more health tech companies to establish operations here. There is a lot of potential but little time to waste if we want to pull ahead of the Bay Area and New York City. Let’s hurry it up!