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Norman Niven

Health tech – the new Klondike?

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Norman Niven, chief executive of Protelhealth, explains why it is so difficult and expensive to break into the health tech market.

It seems that just about anybody and everybody wants a piece of the health tech action.

From construction companies to law firms, it seems that the inexorable drive to create another Facebook, Snapchat or Twitter is intensifying.

It is looking more and more like the Dot.com bubble of the early 2000’s. However, it is not individual investors who are massing at the gates to the health tech riches, but normally conservative, sober, boring companies in staid and unexciting markets.

These companies are united in the belief that health tech is the new promised land, but is it? Just how many of the health tech products have become successful businesses? Just how many new products can health providers use and more importantly afford?

I am amazed by the number of health products that are ME2 products; I have been approached by at least 25 start-up companies with products that are ‘new, innovative, ground-breaking and disruptive’ that have already been on the market for years and will become just more ME2 products with no hope of selling.

You only have to look at the companies making sensors that detect movement and allow monitors to detect changes in a person’s (usually elderly) normal movement patterns.

Setting aside the gross intrusion of these types of products, often installed without the knowledge or full understanding of the patient or service user, there are scores of companies making them.

They are all ME2 products, working in the same way, using the same types of technology. And yet, I still receive at least five information packs for new sensor monitoring products each month. Most start ups do not bother even Googling to see if the products they intend to develop already exist.

So what does all this mean?

Quite simply, there are not enough areas of healthcare that require new technology-based products and where there is a need, somebody has already got there first.

And with a better product than the one a new start-up company is offering. Breaking into the health market is very difficult and expensive, with most health organisations reluctant to take a risk on a new start up, even if their product is sound.

And there is no way that a new start up company will displace a company making the same type of product, but which can demonstrate a credible track record of delivering their products on time, every time.

So, will incubators make a difference?

Absolutely not

It strikes me as somewhat disingenuous to refer to office rental at supposed discount rates, as a business development and support entity. Just what support and mentoring do most of these incubators provide?

And anyway, an entrepreneur should be able to stand on their own two feet from the start. That’s what the entrepreneurial spirit is all about

I visited Stockholm recently and was proudly shown around the department Entrepreneurial Development, a university department that considered itself to be a cutting edge and essential partner for the development of health technology innovation.

Really?

A university department of entrepreneurship? An oxymoron if ever I saw one. How is it possible to ‘teach or train’ somebody to be an entrepreneur?

Such people are born not developed.

And in the same way, incubators or health tech zones or health tech innovation hubs or whatever you want to call them, take away the need for entrepreneurs to be obsessively focused and always fighting the establishment with resentment and anger that gives them a real business edge.

Operating from incubators is like spending all of your time on an indoor ski slope and believing that real slopes must be the same. The real business world is terrifyingly tough with competitors trying their utmost to kill your business.

Being streetwise and confident and confronting all possible hurdles is what makes a great business. Not the sanitised unscrupulous incubators that dilute the real-world realities.

So, a new Klondike?

Yes. But remember, the people who made the real money out of the Klondike gold rush, were the people who sold the picks, shovels, and whisky. Not the prospectors.

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  1. Pingback: Disrupting the system and shaping the future of health tech | Health Tech World

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