‘Move and wake up’ is a bad idea for health tech startups.


it can be seen It’s counterintuitive, but one of the reasons some entrepreneurs are interested in health care is regulation. No industry other than national defense is scrutinized with this much scrutiny. There is good reason. Extra caution is essential when dealing with people.

The rules, requirements and regulatory complexity can be barriers to entry into the world of digital health startups, but they also present opportunities.

Founders often find creative ways to adjust additional oversight, such as saying that their launch is just a proof of concept or that they can’t justify the cost of spending hundreds of thousands of dollars a month on advertising to attract new users.

When venture funding was scarce, there was a need to prioritize speed and maximize the runway offered by small seed rounds. But the environment has changed. With soaring investor interest and sufficient available capital, the need to allocate a significant budget for compliance is even greater.

Speed ​​and efficiency can be essential for startups, but compliance need not be a bottleneck or a financial waste.

If compliance isn’t a consideration in the first place, sooner or later, founders will have to rush to get things done behind the scenes and end up spending huge amounts of money on legal fees. This is the best case scenario. In the worst case, the deal can be closed.

It is understandable how these concerns can be overlooked in the first place. There is a certain degree of creativity and dissatisfaction with the status quo that the founders need to build something that doesn’t already exist.

However, when building a digital health company, the ultimate end-user is someone with a medical need. Your stake is bigger than making your next puzzle game or food delivery app.

Leave a Comment