Healthcare is facing pressure from many directions: diminished budgets, increasing demand, ageing population, critical consumers, increasingly personalized treatment, greater focus on prevention… This should not, however, be seen as a threat. Instead, these developments are accelerating innovation. Parties who previously might not have been aware of each other’s existence are joining forces, sharing expertise and resources to create fantastic crossovers, leveraging technologies and data in new ways.
Best practices I’ve seen in practice
I attended Breakthrough Day on November 30th hosted by Philips HealthWorks, and I saw how joining forces can work in practice. Five enthusiastic HealthTech startups that had developed innovative business solutions, working closely together with large corporate players, knowledge institutes and care providers. The 12-week program they’ve successfully completed shows us that making smart decisions from the outset means a network of collaborators can reach concrete, market-ready results very rapidly indeed. In fact, I personally think this kind of approach actually yields better results than a prolonged program.
By focusing on one specific area - Fertility, Pregnancy, Parenting and Neonatal care - program participants could work intensively with a group of medical experts. Not only does this result in a deeper understanding, but also a faster transfer of knowledge. In addition, the startups are stimulated to exchange ideas, business models, and market information.
Not unlike Philips HealthWorks, our organization has two key goals: speeding up healthcare innovation and boosting business activity. Creating partnerships between entrepreneurs and leading corporates is essential to growing the startup ecosystem that makes this possible. In this way, we contribute to the creation of robust activity and to improving the affordability, accessibility and quality of healthcare. To realize our goals, we are focusing on developing a major network of innovative companies, hospitals and other care institutions, governments and knowledge institutes. By ensuring the success of individual network members and participants, we increase the value of our total network. An adequately functioning network brings support across many business development areas, from financing, grants, IP, legal matters, business development and marketing to personnel management, product development and research.
Making it mutually beneficial
To make cooperation’s in a network successful, however, transparency is vital. Each party has to explain to the other exactly what they expect to get out of the cooperation, and what they plan to contribute.
During the introductory presentation at Breakthrough Day by HealthWorks, insights were shared into how two parties in a network might typically work together: the large, established company and the startup or scale-up. The findings discussed resonated with my own experiences. A corporation can bring a great deal to collaborations with startups, such as IP, marketing and commercial expertise and a global network of healthcare contacts. For a big company, working with a startup can be challenging. They have to be careful not to pull the startup into their orbit, so to speak, and try to make them adhere to corporate processes and ways of thinking. It’s essential there’s a single point of contact for the startups as well as commitment at board level. However, the corporate stands to gain a great deal from working with a startup. Until recently, the standard approach to finding out what end users might be interested in would be to have market research carried out. However, without knowing the exact questions, methodology, target audience and hidden biases, the results can be misleading. Working with startups gives corporates access to data on end user needs and market developments that they may otherwise not have been aware of.
Of course, the corporate needs to realize that a startup or scale-up must have room to breathe, to stay flexible. Startups, in turn, need to understand that things might take a lot longer than they would like. During their presentations, the startups at the event explained how it can be challenging for them to stay focused on their original short-term goals, as they receive new information and meet lots of experts. Another aspect of business development that can be frightening is spending large sums of money on things such as patents and legal expertise - but startups simply have to do this as soon as possible. In areas like these, the guidance of a more experience partner is extremely valuable. Market prognoses and spreadsheets can be distracting.
However, as emphasized during the HealthWorks Breakthrough Day panel discussion, you need to keep your sights on the niche in which you can make a real difference. Becoming a thought leader in healthcare isn’t about having an opinion on everything – it’s about having a clear vision and argumentation about the areas in which you can truly excel.
Adding value by accessing expertise
True innovative strength arises from a combination of demand, knowledge, expertise and funding. Challenges, ideas and knowledge are transformed into concrete technological innovations, new medicines or tools and different ways of working. Today, we’re seeing the development of HealthTech hubs based on this approach, not only in the Netherlands, but also in London, Berlin and Silicon Valley, for example. In each of these locations, parties have understood that ultra-competitive business models are outdated. It’s all about identifying needs and finding out how to get access to the expertise that can help provide a solution and add real value.
In conclusion: I was impressed with the broad and deep network Philips HealthWorks has put in place and with the commitment from the executive board, which is essential. There really is something beautiful growing in Eindhoven and in the other hubs, where promising startups are joining forces with large a technology driven company like Philips. One key learning from the day I’d like to share – Philips is the first company where CTO means ‘Cool Technology Officer’!
About Marc Kalf
Marc Kalf MSc MBI is a Health(care) innovation manager and business development specialist at Health Valley Netherlands and chairman of zorginnovatie.nl.. His areas of interest encompass everything from e-Health, medical devices and robotics to personalized medicine and diagnostics. He has over 20 years of sales and marketing experience and is an experienced coach for startups in the healthcare market, and pharmaceutical innovation project leader and healthcare products development team leader.
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