Considering the 4 P’s of Healthcare To Cement the Success of Your Start-Up
Last month, I wrote a blog about one of my favorite trends in healthcare: consumerization. I’m a fan of consumerism in healthcare because I believe it will fundamentally transform our system to everyone’s benefit. But despite my optimism, in that same blog, I cautioned consumer-driven healthcare entrepreneurs to carefully consider how well they interact with the broad range of stakeholders in the healthcare industry to increase their chance of success. This week I’m going to expand on that idea.
No matter how great your product or service, the success of your business rests on whether or not you have thought about how your business interacts with these stakeholders.
The “4 P” Devotee Club: Examples of Companies With The Right Approach
In an effort to make this analysis more tangible, I thought I would speak to two companies who not only have high net benefit scores but have also experienced high growth (after all, the two are closely correlated!):
Liazon – As the leading private benefits exchange company, Liazon is a great example of the rise of consumer-driven healthcare. Think of Liazon as the Amazon.com for healthcare benefits; it helps consumer shop for the insurance products that are right for them. Given its heavy consumer focus, Liazon had to build an online storefront with back-end support functions on par with those of top consumer-facing web companies. But, because they are in healthcare, the Liazon team is very focused on how their offering is perceived by insurance companies, employers, and brokers –traditional stakeholders involved in the payment and distribution of insurance products and services.
LifeImage – On the face of it, LifeImage’s cloud-based medical image sharing software seems so focused on radiologists that it would be a long shot for a high “4 P” score. But LifeImage founder and CEO, Hamid Tabatabaie, is a seasoned entrepreneur who understands the healthcare ecosystem. He brilliantly designed a world-class product that serves the interest of many different healthcare stakeholders. By doing this, the LifeImage team expanded what could have been a niche point-to-point radiologist-only solution into a much larger opportunity. Although it requires more time and money to build a product suited to the needs of multiple constituencies, as Hamid and his team did in medical imaging, it is the only way to create and benefit from true network-effects.
By this point, you are probably thinking: OK, now give me an example of a company with a low “4 P” score. Trust me when I say that we see far more companies with high net detriment (or low net benefit) scores each day than companies on par with Liazon and LifeImage. Take, for example, the standard consumer-focused, “game-ifed” mobile healthcare app everyone seems to be building these days. Typically, these products are created by an entrepreneur who has given little thought to how a doctor or an insurance company will use or interact with them. Companies like this might be successful —BVP has been known to be on the wrong side of a bet!—but because of BVP’s approach to opportunities in the space, these companies probably won’t get a second meeting with our healthcare team.