Disruption and convergence are widely touted terms among digital health advocates who view some of the technologies coming to market as a way to improve healthcare delivery, boost adherence and make communication easier.
But the flipside is that entrepreneurs positioning themselves as disruptors or who have developed technology that straddle a couple of industries can find it challenging to convince investors to back their businesses.
There’s also the risk that entrepreneurs are too early for the kind of cultural change their would-be customers are willing to make.
When Investment Rhymes with Canada
Canada has a proud history of achievement in the areas of science and technology, and the field of biomanufacturing and life sciences is no exception.
Some digital health companies shared their insights at a recent healthcare conference held by University of Pennsylvania’s business school, Wharton. Among the companies were Jintronix, Sensoria Fitness, Force Impact Technologies and big data business Ayasdi.
Alick Law is the director of marketing and business development at Sensoria Fitness, a company that embeds sensors in socks to help people analyze their running performance and what they need to do to improve. His company has one foot in the garment industry and another in technology. “We produce specific goods and that lowers our margins. That’s hard to understand for technology investors.”
Still, the company succeeded in closing a Series A last year. It added a European based strategic partner in the IT sector — a non-traditional investor.
Law noted that in his role at Sensoria Fitness he has learned an enormous amount about the production process for socks and the garment industry in general. The slower pace of the smart garment industry prompted the company to pursue the consumer health market first with the idea that it will target other parts of the healthcare industry later.
Anthony Gonzales, co-founder of Force Impact Technologies, touched on the challenge of producing technology to make sports safer. His company developed a mouth guard to alert coaches to players that have experienced a high impact hit to direct them to see a doctor to check for a concussion. Although tools to promote safer sports might play well in the press, Gonzales said that social shift required for broader adoption of these devices by sports teams will take time.
Patrick Rogers, chief marketing officer for Ayasdi, which produces healthcare analytics tools, said it’s very hard to bring in new technologies that disrupt the way healthcare professionals do their job. “From a health IT perspective, we have to show that new paradigms of care can be substantially improved without too much disruption.”
Another challenge is how to approach investors at the early stage when a company is pre-revenue. As Daniel Schacter, CEO and co-founder of Jintronix put it, it becomes a chicken and egg issue. If a company can get the funding they need to do studies that generate data that demonstrates proof of concept, then it becomes easier to attract investment. But finding seed stage investors is tough. Angels are an important source of that seed stage funding.
