#Healthtech: Advice, opportunities, and our investor POV
The rapid evolution of healthcare, driven by emerging technologies, has seen few transformations as significant as those brought by AI. Initially limited to basic data analysis, AI is now reshaping the industry, from drug discovery to personalized care.?
Startups and ScaleUp leaders are pioneering AI-powered diagnostics and tailored treatments, improving patient outcomes and transforming healthcare delivery for a more efficient, effective future.
With HLTH USA right around the corner, we’re excited to dive into our ethos around #healthtech, including lessons from Calm ’s success in the wellness space, considerations for femtech-focused founders, and opportunities in digital health for aging.?
Keep Calm and carry on meditating: CEO David Ko on thoughtful growth and reshaping wellness
“Calm has a shot at making healthcare accessible through your employer and anywhere that consumers engage,” says Barclay.
In the world of meditation, mindfulness, and sleep stories, Calm dominates. It boasts more than 150M downloads and an enviable 4.8 out of five stars on the App Store.
“We’re in every country that we are legally allowed to deploy in. We’re in seven languages — it’s a global brand,” says CEO David Ko .
Some of Calm’s most famous fans have even become investors and narrators; pop star Harry Styles is among Calm’s backers, while actor Matthew McConaughey, who was an early adopter, was pivotal in the success of the app’s sleep stories.
However, there’s a lot of competition in the meditation space, with an estimated 2,500,000 apps now vying for users . “Not all of these apps make you better,” says Ko. “It’s easy to create and market an app these days. We are focused on outcomes.”
Independent clinical trials have proven that Calm really works. In 2019, a study showed conclusively that the app “reduces stress and improves mindfulness and self-compassion in stressed college students.”
“But growth for us has to be thoughtful,” says Ko. “It’s not a case of growth at all costs.”
Ko says that this kind of impact brings a lot of responsibility. Calm has reached profitability and, in January 2024, became the highest-grossing healthcare app in the world.?
“But growth for us has to be thoughtful,” says Ko. “It’s not a case of growth at all costs.”
?? Leadership lessons from Calm’s story:
Scaling innovative solutions in women’s health with software
Despite making up half of the global population, women and their health needs are underinvested in, underserved, and under-researched. It takes women four years longer than men to get diagnosed with 700 different diseases and conditions. This not only creates poor health outcomes for women but also considerable costs to our healthcare system.
The fraught challenges within women’s health present massive opportunities and potential value creation for current and future founders of software companies. As increased awareness, research, and education drive innovation, more healthcare and technology investors will take notice.
Here are Insight’s key considerations for founders building a software business within the #femtech space:
?? Value creation
A critical question femtech startups should ask themselves is, “How do we solve key women’s health challenges while creating value for key stakeholders, namely payers?” Alignment between value creation for patients and value capture as a business is vital.
While it’s tempting to go direct-to-consumer, and there is certainly a case to be made for this, it’s important that the cost of the next generation of innovation in women’s health is not paid solely out of women’s pockets.
?? Set out the vision
Success looks different for everyone. Building a unicorn is one archetype of success as a startup founder, and while more unicorns are great for the femtech market, the sector also needs to see exits at every stage.
Additionally, companies in the space should have a defined vision as to which problems they hope to solve. Does the company become a women’s health platform with multiple applications and conditions addressed? Or should the focus remain on a particular challenge? Each has its merits and place in the industry.
??Education is needed for all
While founders play an outsized role in educating the public about women’s health issues, investors, in particular, need to get educated and educate others. There might be a temptation to shy away from conditions that are not experienced personally or give into discomfort surrounding the topic of women’s health. Still, an unwillingness to learn will lead to missed opportunities.?
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Normalizing conversations about health is critical, and it’s amazing how normal these conversations can be when we create space for them. Investing in women’s health improves outcomes for everyone — lower healthcare costs, higher workforce productivity, and higher quality of life .
?? Anything you would add? Let us know in the comments.
The future of aging relies on purposeful software innovation
Digital health for aging is not a niche market. While historically, venture dollars have supported tech-enabled services for aging populations, we believe software will be at the core of delivering healthcare solutions in the home for what is now the fastest-growing demographic in the U.S.?
But, software must be done right: Technology and AI delivered without empathy for the patient and caregiver create more complexity. When executed correctly, technology should behave like magic because it does a seamless job of understanding its role in enabling aging-in-place.
But, software must be done right: Technology and AI delivered without empathy for the patient and caregiver create more complexity.
While aging-in-place innovation has historically over-indexed on services, we think the next decade is when software fundamentally “unlocks” better care at lower costs, at scale.?
Here are a few opportunities we’re excited about:
1. Software operating systems that orchestrate higher-quality services
Providers' ability to deliver quality services is systematically difficult to monitor. Most providers are small and partner with other providers to meet the full spectrum of their client needs. As a result, records and observations about an individual’s well-being may be fragmented across multiple organizations, and most care ends up being reactive rather than proactive.
Private insurers are looking for ways to capture growing demand in a way that ensures high satisfaction and utilization of services, enables attractive profits at scale, and allows them to remain competitive. This is where software steps in: advances in digital and clinical technology make possible the predictive analytics, patient safety monitoring, and asynchronous or virtual engagements that are core to achieving quality outcomes.?
This enables providers to offer comprehensive caregiving, blending different services together and moving away from fee-for-service constraints. Early examples of software enabling these outcomes include Dina , Sensi.AI , Renee.ai , Birdie , Perry Health , and August Health .
2. Software that turns family or in-home caregivers into superheroes
Seniors often require help with daily tasks, leading to a growing need for professional caregiving and enabled family caregivers. With the rise of chronic conditions and the need for ongoing medical attention, seniors are looking for ways to receive care in their homes.
Software answers this need by providing caregivers, area/state agencies on aging, and community-based organizations with tools to manage medications, track appointments, and communicate with healthcare professionals. This reduces stress and improves the quality of life for both caregivers and seniors. Look to ianacare , The Helper Bees , Cariloop , Jukebox Health , Mon Ami , and Homethrive for examples of companies already leading the way here.
3. Adopting managed care principles
LTCI has historically lacked innovation and is looking to adopt managed care principles to reduce claims spending and expand service offerings. Using platforms that provide real-time data and analytics, insurers can identify and prioritize high-performing providers.?
Software can also improve care coordination by providing real-time communication between providers, tracking and monitoring patient progress, and identifying areas for cost savings, such as shifting care to lower-cost facilities or exploring new service offerings. Companies like Assured Allies and Clarent (acquired by ProCare HR) are making progress on this front. This can lead to more personalized and cost-effective care, improving both patient outcomes and insurer profitability.
4. Mental and behavioral health
As people age, they often lose their ability to participate in daily activities and become more socially isolated, leading to a decline in mental health. Related but distinct, memory care and cognitive decline are becoming increasingly prevalent — dementia is one of the most common and debilitating health issues among older adults, and the number of individuals living with Alzheimer’s is expected to triple by 2050.
To help ease the effects of cognitive disease, software can provide seniors with access to online communities, social networking tools, and virtual events. This includes new forms of mental healthcare support in addition to systems specific to cognitive and memory decline.?
Software-enabled solutions like Altoida, Inc. , BrainCheck , Neurotrack , DUOS , MyndYou , and Hank can help track and monitor isolation and degenerative states.
These areas represent just a fraction of the opportunity to improve healthcare quality and outcomes for all. As leading growth software investors, we at Insight are eager to invest and partner with leaders in healthcare who are excited to scale.
We’ll be at HLTH later this month, and we’re excited to continue this conversation with you IRL and online. Managing Director Scott Barclay will be speaking on the “Consumer Wellness Means Business” panel on October 22.
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*Note: Insight Partners has invested in Sensi.AI , A Place for Mom, TytoCare, Hinge Health, Unobravo, Alma, and Calm.
MBA Candidate @ The Wharton School | Center City Ventures | Strategy and DataOps @ Black Crow AI | Yale University
1 个月Great takes! The lessons around scaling, relationship building, adaptability, and long term strategic vision for Calm are invaluable. As we further implement this future stage where AI dominates markets (in this case healthcare), I also think it's super valuable to discuss equitable distribution of care/value across populations - especially for more marginalized communities. Love reading these posts as always!