Traditional Accelerators Aren’t Equipped to Support Healthcare Startups
If you start a technology sales conversation with a doctor, you’re going to end up down a clinical rabbit hole of why it won’t work. There is a substantial portion of the healthcare sector that is resistant to innovation, because doctors are risk averse when it comes to hurting the quality of care and patient interactions.
That is just one of the many unique challenges that healthcare startups face — and that traditional accelerators often fail to address.
The complex regulatory landscape, intricate buying processes, and specific market dynamics of healthcare require a tailored approach to support these companies. In this blog post, we will delve into these and other reasons why big Silicon Valley accelerators may not be the best fit for healthcare startups. We’ll also explore the essential considerations that should be taken into account when supporting and evaluating healthcare startups.
Challenges Faced by Healthcare Startups with Traditional Accelerators
Lack of Understanding of Industry Dynamics
Tech startup accelerators often lack a deep understanding of the unique dynamics of the healthcare industry, such as its complex and lengthy buying processes. For example, a typical B2B SaaS sales cycle is measured in weeks or months, whereas in healthcare they can take two years. As a result, startups in this sector may find it challenging to receive the tailored support they need to navigate these complexities and thrive in the market.
Inadequate Evaluation of Healthcare Startup Potential
Traditional accelerators may not possess the industry expertise required to accurately assess the viability and potential impact of healthcare innovations. Most do not understand the ecosystem that exists around the delivery of care to patients.
If a startup delivers huge value for doctors, that’s unfortunately not enough. Why? Because the buyer may actually be the leadership teams of the large hospital systems that the doctors are part of. And they have different priorities and incentives.
Consequently, promising healthcare startups may not receive the support they need to go to market successfully.
Limited Access to Industry-Specific Resources
Healthcare startups often require access to industry-specific resources and networks to succeed. However, traditional accelerators may not offer those necessary connections and resources. This limitation can impede the ability of healthcare startups to form strategic partnerships, gain market insights, and access crucial resources, ultimately hindering their progress within the industry.
Additionally, healthcare overall is a state- and region-specific industry, which creates further go-to-market barriers. Networks and connections that are valuable in one area may not be helpful at all in another.
Regulatory and Compliance Hurdles
Navigating the complex web of healthcare regulations and compliance requirements is a daunting challenge for startups in this space. And these rules contribute to the risk aversion that permeates healthcare culture. Traditional accelerators may not be able to provide the guidance and support needed to overcome these regulatory hurdles effectively. As a result, healthcare startups may struggle to meet compliance standards.
Healthcare Startups Need Specialized Support
As the healthcare industry continues to evolve, there is a growing need for specialized support tailored to the unique needs of startups, which traditional accelerators may not be equipped to provide.
Understanding the Unique Buying Processes in Healthcare
The healthcare industry operates under distinct buying processes compared to other sectors. Healthcare startups often face challenges in navigating the complex web of regulations, procurement processes, and decision-making hierarchies within healthcare organizations. Traditional accelerators, which are more familiar with consumer-focused or B2B industries, may not have the expertise to guide healthcare startups through these intricate buying processes. Specialized support tailored to the healthcare industry’s unique dynamics is essential for the success of healthcare startups.
Navigating Regulatory Obstacles
Regulatory hurdles are a significant barrier for healthcare startups. Unlike in other sectors, healthcare startups must comply with stringent regulations imposed by governing bodies such as the Food and Drug Administration and laws such as the Health Insurance Portability and Accountability Act.
Navigating this regulatory landscape requires specialized knowledge and experience, which traditional accelerators may lack. Healthcare startups need support from accelerators that understand the complexities of regulatory compliance in the healthcare industry and can provide tailored guidance to help them navigate these obstacles effectively.
Proper Evaluation of Healthcare Startups
Assessing the potential of healthcare startups requires a deep understanding of the industry’s nuances. Traditional accelerators often fall short in evaluating healthcare startups due to their limited understanding of the landscape. The unique challenges, market dynamics, and potential impact of healthcare innovations require a specialized approach. Healthcare startups deserve thorough and accurate assessments that can only be provided by accelerators with domain expertise.
The CosmaNeura Approach
Advances in generative AI and the explosion of healthcare startups using that technology present unique challenges and opportunities. AI applications can be profoundly helpful in ways that traditional SaaS businesses can’t, and they can transform how healthcare is delivered in the process — specifically as an interface between doctors and patients, to improve both interactions and outcomes.
But they will run into some of the same issues in terms of getting market adoption. Why? Because the accelerators and other firms that are supposed to support healthcare startups are relying on the same old B2B SaaS business model: selling to the big guys, focusing on value at system level instead of provider level, and delivering point solutions that don’t integrate with broader systems.
At CosmaNeura, we work directly with small, private practice providers — especially those that are faith-based — and we focus on providing end-to-end value. To meaningfully improve the delivery of care, a generative AI tool can’t be a standalone feature. It has to be part of an integrated system, because that’s how healthcare operates.
