How early-stage healthcare companies can move fast - despite slow health systems
It's the classic conundrum for healthcare entrepreneurs: You want your business to move fast and grow quickly, but it can take months for large health systems to make a decision about your product or service. "It's very hard for an early-stage company to get access to the right person and drive a decision in a meaningful timeline," said Puneet Maheshwari, CEO of DocASAP, a consumer website offering timely healthcare appointments. "As a startup, that becomes challenging because you don't have those kinds of resources. If you want to have a business that moves faster, healthcare organizations become a challenge."
While many healthcare startups simply avoid health systems in favor of working directly with physicians or consumers, Maheshwari said, DocASAP took a two-pronged approach. "We started forming alliances in the marketplace," he said. The company began by reaching out to smaller practices, Maheshwari said, while also forming strategic alliances with larger organizations. "That enabled us to walk into the boardroom with much more credibility," he said.
Though the discussion timeframes weren't reduced, Maheshwari said he was able to reach out to a larger set of organizations. At the same time, he said, the retail end of the business kept ticking - proving to potential partners that the business was growing at a reasonable rate.
Here are other entrepreneurial insights from Maheshwari:
Consider the role of geography in hiring - DocASAP is competing with other innovative tech companies for the best new hires, Maheshwari said. The health IT sector becomes even more competitive, he added, because startups are competing with high-growth tech companies while working with slow-to-move organizations. "I can't hire an individual who is going to build the next generation search module for DocASAP from a large health insurance company," Maheshwari said. "I have to hire them from someone like Facebook or Google." Geography can make the process easier - or more difficult. While New York City, where DocASAP is headquartered, is very competitive in terms of talent, Maheshwari said the company is taking advantage of the federal services sector in its new location: Washington, D.C. "There's a lot of talent," he said, "but they're not in startups." That makes DocASAP a commodity that can attract better hires.
Think beyond the money - Angel investment is great for a healthcare startup, Maheshwari said, but early-stage companies need more than money to be successful in this industry. It takes relationships, contacts and mentors - which come with institutional backing - to make it, he said. "From the very beginning," Maheshwari said, "we focused on strategic investors." While DocASAP could have raised the money they needed from individual investors, he said, the company wouldn't have gained the significant leverage of strategic investors, which put them at the heart of the healthcare community. "That gives us more than just capital," Maheshwari said.
[Top photo by Victor1558]
[Bottom photo of Puneet Maheshwari]