Health IT, Startups

Better co-founder shares insights about what went wrong

Geoff Clapp shares some insights into the challenges of healthcare entrepreneurs and some of the factors behind his previous business, Better's demise last year.

From left: Lisa Suennen, Geoff Clapp, David Shaywitz

From left: Lisa Suennen, Geoff Clapp, David Shaywitz

The sad reality of leading a startup is that the odds are strongly against its success. The $4.5 billion in funding pumped into the digital health sector last year has supported loads of startups, many of which will ultimately fail.

Yet few, if any, entrepreneurs want to talk about what went wrong until years later when egos have been mended and they’ve moved on to brighter things. So that’s why former Better co-founder and CEO Geoff Clapp’s talk with Lisa Suennen and David Shaywitz about his company’s demise last year on the Tech Tonics podcast hosted on Venture Valkyrie is worth highlighting.

Better’s approach was a concierge care business that matched people with professional personal health assistants to coordinate care, coached them on healthy lifestyles, and connected them with medical advice. The company also had a payment service. It provided subscribers a review of their insurance and medical bills that was designed to cut through industry jargon to help resolve problems. Investors included the Mayo Clinic’s investment arm and the Social+Capital Partnership. Clapp co-founded the business with Chamath Palihapitiya and raised a total of $5 million for the Palo Alto business.

Clapp said the idea of a concierge service for healthcare “is still right but the execution was wrong.”

He chuckled as he acknowledged that when he first talked with Suennen about the business hinged on a direct-to-consumer model, she said he was nuts.

One of the first warning signs, Clapp reflected, was the challenge of answering the question of who would pay for this service.

“We never figured this out…We were trying to be all things for all people.”

Another problem with the business was product market fit and alignment.

“If you put all of us in a room, we had fundamentally different takes on what the business should be,” Clapp said.

A particularly interesting part of the conversation revolved around the corporate venture factor — at what stage of the business should a startup get strategics involved? If used too early, they may shape the business into what they want, but at the risk of putting off would-be customers. And yet, a big strategic investor can add credibility, validation and enlarge a startup’s profile. It was a key issue on which Clapp still sounded unresolved.

Clapp added that the company “wasted a bunch of time trying to make everyone happy” and collectively they “waited too long to get in front of people with prototypes.” Suennen asked, “Was perfection the enemy of good?”

“Absolutely,” he responded. He continues to serve as a mentor and adviser to several digital health groups and startups, such as Health 2.0 Health Refactored Advisory Board, Omada Health, Lumoback, Reify Health, and Eligible, among others

Suennen referenced a quote commonly attributed to inventor Thomas Edison that was an appropriate summary of the conversation: “I have not failed. I’ve just found 10,000 ways it won’t work.”

You can listen to the entire podcast below:

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