Maybe you’re the most idealistic person in the whole world and you’re really aiming to make a difference, even if it sounds too pretentious. We’d like to say that it is nice of you to be that person, and we’d like to shake your hand if you are. Nevertheless, everybody knows that creation of something truly innovative needs a lot of resources.
So, what should you do when you’re full of ideas and have not so much money? The answer is simpler than you might think. Find yourself an investor!
You can say that healthcare is a specific industry with its own complications. And if you will disregard those, investors won’t even look your way. So, in this article, we’ll cover the question of how to make an investor interested in your project.
Fortunately, you don’t have to spend a dime on these tips, so read on!
Find out the healthcare industry problems and fight them
The idea is a nice thing for sure, but it’s important to know how relevant it is in today’s world. Investors won’t put their money in a product that doesn’t have potential users or market demand on it. Hence, to plant an interest in the investor’s heart you have to be sure that your startup solves one of the top healthcare industry problems.
So, some of the main industry problems are as follows:
- The need to move to the EHR (electronic health record)/EMR (an electronic medical record), which contains all the medical data about patients. Applications like these help medical specialists build better control over the patients’ data, improve interactions between medical staff and patients, as well as perfect the diagnostics and treatment quality. According to the CDC, approximately 85% of doctors are using such systems but the demand for it grows.
- Management is also a problem. Basic medical education doesn’t cover the need for management that institutions may have. Thanks to the management software, the healthcare industry may become more convenient both for patients and med-staff.
- Demand for the digital transformation of healthcare. According to Deloitte, it can be used for new vaccine development, cutting costs on diagnostics and treatment, as well as quality improvement of medical services. Today the demand for software with innovative technologies AI, ML, Blockchain) implemented is especially high. It may improve the data analysis, hence, affecting the diagnostics process and illness prevention based on symptoms.
Analysts from Deloitte and CDC highlight these problems as the top-ones nowadays. So they may define the investors’ interest. Take a look at these to create software that can solve top-problems of the industry.
Healthcare industry prospects
We believe that if you started your journey towards a healthcare startup, you already know why you’ve made such a decision. Nonetheless, now you need to convince your future investors. Your goal must be to show them that the industry has prospects, that a market is interested in your product and you can get a wide client base. This will draw the invertor’s attention in the first place.
The infographics from Statista show general satisfaction with medical services by country. Blue is the number of people who are completely satisfied; dark blue – nor satisfied, nor disappointed, and grey – completely disappointed.
You as a startupper may see out of this graph how many people are interested in the changes you may bring by solving the problems we’ve talked about above. Now you see the clear perspective in numbers of the vector where the market is leaning and can show it to your investor.
Those percentages on the picture aren’t people who say “Yes. I like your idea!” But those are the people, who say “I don’t like what I have now, and if you have something better I’m ready for it.” They are those who wait for your thoughtful research, interesting propositions, and changes that could improve the industry.
And, the last one bit for a desert. According to Statista, the healthcare industry is the second most expensive venture capital investment in the US in 2020. More so, according to the Bank of Silicon Valley, investments in the healthcare industry in the US were approximately $10 billion in 2019. Now the numbers are rising since the world is buzzing about how we need to improve the industry in general in our crisis times. This all is evidence of the fact that the healthcare industry is on the rise nowadays. Having your investor understand that this industry has lower risks and will more likely give them profits is a proven means to make them lean your way.
Be stronger than your competitors
The healthcare market like any other has its innovators who bring something new to the industry. For example, Flatiron Health, helps researchers find new methods of cancer treatment. Their uniqueness lies in the improved work with the data about every patient with cancer. This allows specialists to research the sickness’ symptoms and diagnose it sooner. Hence, thanks to Flatiron Health the cancer diagnosis is now more accurate and quick.
Or, let’s take Apple who creates healthy lifestyle applications for their Apple Watch. They’ve managed to attract millions of users to a healthy lifestyle and even make an impact on the lifespan of an average American.
Yes, these are the biggest companies on that market but they won’t be your direct competitors if you’re a Pre-Seed/Seed startup. These company’s app ideas have something special in them and this is what makes users get back to them over and over again. Flatiron Health is different thanks to innovative technologies such as AI and big databases. Apple makes a difference to the world with its great usability and company policy.
The beliefs of those companies let them change the world and you should take a lesson out of it.
If you want to get investors’ attention, you need to have an original spark in your idea. Numbers only won’t be enough. The fact that the market is ready for your product doesn’t mean that people will want your product, let alone buy it. Find something that inspires you, the reason why you have this startup going, what you want to change with it. Find this in your idea and show it to the investor. Prove, that you’re doing what you’re doing for a reason; prove, that you believe in your success.
Then investors will be able to believe you too.
However, even this still won’t be enough to attract an investor’s attention. You need to have all other components of the winning formula to raise your chances higher than average.
All other components of the winning formula
- Define and narrow your target audience
Investors will expect that you have a clear understanding of where the market trends are going and what place in the market you will take. If your target audience is “people who get sick” you’re falling into the rabbit hole. If your target audience is “65+ aged people with Alzheimer’s syndrome”, that’s much better.
Besides, investors think that you know who are the “big fish” in your market. They may expect you to have those startups as an example to create something more comprehensive and innovative. An awesome idea is no longer enough, you must prove to your investors why people will be willing to buy the product of your idea.
Show them that you’ve evaluated your chances and are ready to move from launch to being accepted by the market in the short term. But you also have to convince them that in the long run, you’ll be able to make profits too.
“As a startup, you require a change in the market/behavior/technology. Creating change is uncomfortable because you have to go against the status quo (which many like and defend), yet you need to work with the system to make sure enough people within it follow/join you. In practice, you need to balance the work “with the system from within and against the system from the outside.”
– Udo Szabo, VP Product and Marketing at Beddit (sleep-control application).
- The team
Investors expect to see competent people on your side, and no one can blame them for it. Healthcare is by far not the easiest field to work at. A team that consists only of people who have experience as startupers or technologies in general, won’t be enough. You need to have people with medical knowledge on your side, people who have experience in the industry you work in. Besides, those have to be the people who can empathize with the end-client of yours.
So, if you create a healthcare startup for medical clinics, your ideal employee is an ex-paramedic who knows the industry specifics and its inside problems.
The team defines the investors’ attitude towards you more or less because everybody knows that there is no room for solo players in the business.
- You have to be competent
Yeah, we know, that’s “golden” advice! But believe us, you can’t let this one slip away. If you launch a healthcare startup with a zero healthcare background your chances of getting an investor’s attention are also almost zero. They might ask you whether you’ve taken part in professional research, do you have real numbers of market demand on your product, have you spoken to opinion leaders in this industry.
In this case, it’ll be a major fail not to give them any data since this is important not only for the investors but also for your end-client. Robert Huckman the professor at Harvard Business School also outlines that the healthcare industry has a high intolerance for changes. If you don’t have any real and clinical validation of your product, you will have to forget about attention from both customers and investors.
Tip: besides, pay attention to the psychology of investment. Empathize not only to your clients but to your investors too. We’d advise this to any startupper from any industry. If you’re interested in this, take a look at The Psychology of Investing, a book by John R. Nofsinger. It’ll help you understand the investors and, hence, see the world from their perspective for a bit. Undoubtedly, that’s one way to understand how to get their attention.
- Ensure that your startup technical capabilities are unique
The technical part is also worth noting. It is so mostly because the only suitable solution for disruptive healthcare startups is custom software. Ready-made products simply won’t be able to give you a real competitive advantage which may result in affecting investors and your end-clients.
And, at last, a bit of pep talk. There is a phenomenon that people have been talking about for years; the phenomenon of being the first. It may look like every industry is already monopolized and disrupted by your potential competitors. But if you have an idea that potentially can do anything helpful for the medical industry in today’s harsh times, don’t delay it.
The idea lives only for half a year. Don’t miss the opportunity of being the first and work with the changes you are capable of making. Entering the healthcare market today is a brave decision for any startup after all.
If you’ll become one of those who take the risk of working in a complex industry and will scale their idea to a full-fledged project in the near year, your perspectives are higher than you think.
Even if you have a million ideas and not a million dollars, today the opportunity for converting your ideas into success is too high. Don’t miss your moment!
Find a reliable technical partner, understand and empathize with your target audience and your investors. That’s all you need to make a first step towards becoming a Unicorn.