When I founded my own telehealth company a decade ago, the biggest challenge I faced was convincing stakeholders that telehealth was safe and regulation-compliant. Today, that obstacle has largely disappeared, but it’s been replaced by new challenges for health tech founders.
When I speak to founders now, the biggest challenge I see is market saturation. The health tech market is overloaded with so many new solutions, each promising to be more innovative than the last. It’s become incredibly challenging for startups to capture the attention of customers and investors.
While some mistakes are an inevitable part of the process of growing a successful business, others can be fatal. These are some of the biggest mistakes I see health tech founders making today.
Assuming quick adoption without building trust
Unlike other areas of tech, health tech startups can’t just buy rapid adoption with aggressive sales tactics. Because health tech by its nature involves so many stakeholders – including patients, physicians, administrators, and payers – startups must establish trust at all levels before they will see meaningful adoption.Â
Many health tech founders significantly underestimate this timeline, assuming that if they have an innovative solution, the market will be quick to embrace it. This misconception often leads founders to scale their business prematurely, for instance, by hiring large, expensive sales teams before they’ve achieved a product-market fit. This is a fatal mistake, leading founders to burn through cash while they wait for revenue to materialise. For health tech startups, building trust means demonstrating clinical validation, proving data security, and showing ROI to every stakeholder. This process can take years.
Failing to identify a clear target market
One of the most damaging mistakes health tech founders can make is failing to specialise in a specific target market. For instance, a product might be a great fit for hospitals, but there won’t be a demand for it in the pharmaceutical sector. These target markets also require different approaches: your sales force and your customer delivery will look different depending if you are targeting hospitals, pharmaceuticals, or insurers. It’s easy to become a Jack of all trades and a master of none, wasting time and money in the process.
Another common mistake is squandering resources on non-scalable opportunities. Rather than creating a standardised product that can be sold to a large pool of potential customers, some startups make the mistake of focusing time and resources on products and solutions that need to be individually customised for every customer. This is an easy way to stunt your business’s growth before you’ve even started out.
Finally, not specialising can also mean failing to choose a target geography for your go-to-market strategy. In some other fields of tech, you can get away with a blanket strategy for every geography, but this is not the case for healthtech, where healthcare systems involve different reimbursement models, different payors, and different patients.
Not looking at the right decision drivers
Founders often fail to understand what drives decision-making within healthcare organisations. While clinical outcomes are crucial, there are other factors that go into deciding whether a solution is adopted, like patient satisfaction scores, operational efficiency metrics, and financial targets. All too often, a founder’s pitch will focus solely on what their technology can do, without connecting these capabilities to the specific KPIs that are important to decision makers.
The most successful founders and startups align their value propositions with the metrics that actually matter to healthcare administrators. In doing this, founders gain a deep understanding of how healthcare operations work, as well as develop the ability to understand and address their customers’ challenges, which makes their sales team’s jobs much easier.
Overlooking team dynamics
It sounds like a cliché, but building a healthcare startup is a marathon, not a sprint. It can take anywhere up to two decades to build a stable, profitable business. Team dynamics are crucial to long-term success. When it finally comes time to grow their teams, many founders let themselves be dazzled by technical expertise or industry knowledge. Of course, these attributes are important – but so are communication style, resilience, and cultural fit.
Health tech is an extremely complex industry to operate in: your team needs to balance clinical, technical, regulatory and commercial considerations. As your company grows and faces challenges, transparency and communication become all the more important. Communication breakdowns can lead to confused priorities and direction as well as wasted time and resources. Building a strong team with a united vision is just as important as developing a great product.
Recovery and resilience are key
I don’t expect founders not to have made these mistakes – the most crucial skill is to learn from them. The success of a startup is largely dependent on the resilience and commitment of its leadership team.
Aside from developing a resilient mindset, my biggest advice for founders is: promote strategic thinking, focus on data discipline, and prioritise building a strong, positive team culture. The more success your startup has, the steeper the journey becomes – it’s crucial to find moments to celebrate every milestone.
