Tectonic Shifts in Digital Health Transformation

1. DIGITAL HEALTH
ENTREPRENEURSHIP
DIGITAL HEALTH CONFERENCE
MIT INDUSTRIAL LIAISON PROGRAM
SEPT 17, 2015
ZEN CHU
ZENVEN@MIT.EDU
@ACCELMED

2. NOBLE CHALLENGES OF
EARLY STAGE MEDICALVENTURES
TRUTH
IMPACT
VALUE…

3. HEALTHCARE RE-DESIGN
HACKING MEDICINE
PHILOSOPHY

4. MODEL EARLY STAGE INVESTIGATIONS
THIS COURSE DOES NOT TEACH…
• BASIC SCIENCE
• BASIC ENTREPRENEURSHIP
• GENERAL STARTUP, PATENTS +VC FUNDING
• HOWTO COMMERCIALIZETECH FROMTHE LABS
• FDA REGS + REIMBURSEMENT
• PHARMA DEVELOPMENT, CLINICALTRIALS PROCESS
IMPOSSIBLETO COMPRESSTHIS INTO A CLASS…
WE TEACH A DIFFERENT PHILOSOPHY…

5. ACTIVE LEARNING LAB
WITH EARLY CLASS SUCCESSES >$90 MILLION RAISED
FOR WHICH HCV DESERVES NO CREDIT!

6. PILLPACK.COM TODAY
FROM HACKATHONTO $64M FROM ACCEL
PITCHTO LIVE IN 45 STATES IN 2YEARS

7. HACKMED ECOSYSTEM
HACKATHONS ACCELERATE
PROBLEMVALIDATION +TEAM BUILDING
SEPT 25-26 MGH SPAULDING REHAB HACKATHON
HACKINGMEDICINE.MIT.EDU

8. CARE RE-DESIGN + CO-CREATION
PARTNERSHIP WITH
MGH HEALTHTRANSFORMATION LAB
TAKE MIT TEAMS DEEP INTO
DISEASETREATMENT WORKFLOWS
HOSPITAL OPERATIONS
www.cocreate.hctransformationlab.org

9. ATASTE OF
HEALTHCARE TRANSFORMATION
AND ITS COMPLEXITY

10. HEALTHCARE’STECTONIC SHIFTS
AGILE STARTUPS ADAPT FASTER

11. USA HEALTHCARE SPENDING
MAPSTO MAJOR PLAYERS… FOLLOWTHE MONEY
… NOW PATIENTS AS CONSUMERS

12. IMPROVING PATIENT EXPERIENCE
SURPRISINGLY LOW EXPECTATIONS!

13. HEALTHCARE IS MORE COMPLEX
WHO BUYS?
WHO BENEFITS?
WHO PRESCRIBES?
CLASS JOURNEY: NAVIGATE COMPLEXITY
WHO COMPETES?

15. VALUE
TIMECRITICAL MILESTONES
Acquisition/IPO Exit
Reimbursement
Published clinical results
Market Introduction
Salesforce hired
Europe & Japan distribution
FDA Approval
Manufacturing ramp
Human pivotal study
Corporate partnership
First human data
First Hiccup & Danger of Momentum Loss
CEO hired
Pilot manufacturing
Patent grant
First FDA meeting
Regulatory opinions
Money raised & team hired
Animal testing
Clinician feedback
Patent disclosure
Prototype/Reduction to Practice
Market Analysis
Idea
TRADITIONAL MEDICALVENTURES
LONG DEVELOPMENT PROCESS

16. “… MVP is that product which has
just those features (and no more) that
allows you to ship a product that
resonates with early adopters; some of whom will
pay you money or give you feedback.”
“The MVP is often an ad on Google.
Or a PowerPoint slide. Or a dialog box. Or a landing page.
You can often build it in a day or a week.”
— Eric Ries
MINIMUMVIABLE PRODUCT
PILLPACK’S 24 HR PROTOTYPE

17. OBSERVE
PITCHDESIGN
TEST
+
LEARN
PITCH toTEST NEEDS
GATHER FEEDBACK
DIVERSE CUSTOMERS
SUSTAINABLE BIZ MODEL
NEEDS = VALIDATED PROBLEMS
= JOBSTO BE DONE
= BIG + PAINFUL
MVP DESIGN PROCESS

18. VALUE
TIMECRITICAL MILESTONES
Acquisition/IPO Exit
Reimbursement
Published clinical results
Market Introduction
Salesforce hired
Europe & Japan distribution
FDA Approval
Manufacturing ramp
Human pivotal study
Corporate partnership
First human data
First Hiccup & Danger of Momentum Loss
CEO hired
Pilot manufacturing
Patent grant
First FDA meeting
Regulatory opinions
Money raised & team hired
Animal testing
Clinician feedback
Patent disclosure
Prototype/Reduction to Practice
Market Analysis
Idea
FRONT-LOAD USER FEEDBACK
BEFORE FUNDING + LAUNCHING A 10YEAR JOURNEY
FOCUS MVP
PRIORITIZE RISKS
FASTER LAUNCH, ROI

19. DE-RISKINGVENTURES
HOW BESTVC INVESTORS PRIORITIZE RISK
VALUE
TIME
Market Adoption Risk
Reimbursement + Consumer Drivers
Physician & Patient Adoption
Distribution
Regulatory Risk
Safety & Efficacy
Management Risk
Technology Risk
PRIORITIZE
UP FRONT

20. TECHNIQUES +TECH FOR
SCALING MEDICINE
•DE-SKILL COMPLEX DIAGNOSIS +TREATMENT
•CREATE NEW EXPERIENCE + PROCESS
•CREATE NEW PLACE or NEW SERVICE
•FIND NEW PROVIDER + EXTRA CAPACITY
•PATIENT ENGAGEMENT + SELF-SERVICE
•NEWTECH ENABLES SCALABILITY + ACCESS
… START WITH A GIANT PAINFUL PROBLEM

21. HIGH GROWTH VENTURES
SMALL FOCUSED COMPANY IN A LARGE ADDRESSABLE MARKET
TOTAL MARKET
STARTUP

22. ADAPT BEST PRACTICESTO
HEALTHCARE COMPLEXITY
MARKET = PRODUCT * CUSTOMERS
VENTURE = MARKET*ADOPTION*SHARE
PRODUCT = NEED *VALUE PROPOSITION

23. DIGITALTRANSFORMATION
ESTIMATEDTO SAVE BILLIONS + DISRUPT MULTIPLE MARKETS

24. ELECTROCARDIOGRAM (ECG)
NOW INYOUR POCKET!

25. FUNDING STRONG
Source: RockHealth.com Source: CBInsights.com

26. HOT CATEGORIES

27. … BUT HYPE DRIVES COMPETITION
Source: RockHealth.com

28. DIGITALTRANSFORMATION
Source: CBInsights.com

29. HOW HIGH IS THE TIGHTROPE FORYOU?
ENTREPRENEUR MINDSET
NOT FOR EVERYONE
APPRECIATE CHALLENGES
VENTURE CAPITAL ANALYSIS
EVALUATE HEALTHCARE VENTURES