Daisy flower in the desert

Daisy flower in the desert

Economists say the US will go into recession within the next year. For digital health companies seeking new customers and raising dollars, this uncertain economic landscape can present some challenges.

Jonathan Bushveteran healthcare entrepreneur and Zus Health A CEO has three rules he believes digital health startups should follow amid these shifting economic winds. He shared them with me during a discussion we had HLTH 2022 in Las Vegas.

The first thing startups need to do is relatively simple. They must ensure that their technology performs a task that healthcare stakeholders have recognized it must perform, according to Bush. The second rule is a bit more complicated.

“You have to be able to do this job in a way that makes money,” Bush explained. “So if somebody’s already doing the job, you have to do it for a lot less than they’re doing it, so there’s some number in the middle where [the customer] gets paid and you get paid.”

For him, it is imperative that startups are very clear about how they can bring in more money doing their work than their competitors. It’s also important to be able to do this work cheaply — “so cheap that you can split the difference and make money,” Bush said.

Although it depends on the varying levels of charisma and charm of the founders, the last rule is probably the most difficult. To be successful, startups need to put more energy into finding “foodies” willing to try their product, according to Bush. This is even more critical for early-stage digital health startups, he pointed out.

“You have to come up with an addressable market that has people who are a little bit unattached and a little bit unlocked — not typically health plans and not typically large health systems,” Bush said. “Employers are working – there are thousands of them. Nine hundred employers could tell you no and tell you you’re nasty, but when the 904 number comes in, you’re off to the races.”

Startups should identify “something like a small to medium business segment” to go after with their product, Bush recommended.

He said young healthcare companies should be especially cautious about pursuing health plans as a sea of ​​startups knocks on their door. If a startup founder goes that route, health plans will just see him as “the 183rd person to say, ‘I’m going to fix your diabetics,'” according to Bush.

Even if a startup’s technology is top-notch, this third step can prove difficult amid the looming recession. As Bush said, the founders of young companies will have to tighten up and look hard for “people who are restless enough to try something new from a new person who doesn’t have trust.”

Photo: masik0553, Getty Images

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