Testbeds. Interview analysis. Expert perspective.
Terveysteknologia ry - Healthtech Finland
Terveytt? teknologialla - For people who care
Post 3 in A series of posts from the project on testbeds, public procurement, and regulations commissioned by the Ministry of Economic Affairs and Employment.
Last year, we at Upgraded were commissioned by the Ministry of Economic Affairs and Employment to study the experiences of Finnish health startups in three areas: testbeds, public procurement, and regulations. We jumped at the opportunity to investigate these topics separately and in connection with each other. At this point, when asked what areas they were finding difficult to tackle, our members would name one or all of them.
The report turned out to be extensive; in this post series, we would like to break it down by topic. This time, we will share the expert interview summary on the topic of testing and validation.
We talked with five experts on the topic, mostly testbed coordinators and directors, and started the conversation by asking to describe the process that the startups have to go through to conduct testing. According to experts, testbeds tend to specialize more and more. For instance, the HUS testbed is more focused on late-stage validation and less on pre-clinical testing. It is important to find a correct match between the specialization and stage of the company so the project would succeed. The application process usually takes from two weeks to a month.
From the financial side, some testbeds are run as a business, but this approach is not difficulty-free. Some testbeds do not charge the companies that have a big societal impact, the majority, however, charge a fee that starts from a few hundred euros and can go up to a hundred thousand. The price tag depends on the size and the specification of the project; some testbeds have an overt price list on their website, but some prefer to calculate the price for each company individually. The fee is often determined based on the staff working hours and facility and equipment rental.
To get funding for their testing project, startups can choose one of the two routes: private or public. They can pay for it themselves (however, they rarely do due to their limited resources) or obtain governmental support. Receiving funding from Business Finland is quite common (specifically, the Innovation voucher, 5,000 euros). Some testbeds occasionally assist startups in applying for funding. They can also use a public project to provide funds for a testing project that fits their goals so long as they do not exceed a certain number of such projects. Another way of cutting testing costs is to team up with other companies and test several products in one project. Such a collaboration then must be carefully curated from the ethics perspective to make sure different startups’ goals do not compete.
The biggest challenges of testing for startups
Our interviewees point out that one of the biggest challenges when working with startups is their size and, consequently, their lack of resources. From the business point of view, it is easier for testbeds to work with bigger companies or apply for funding for research projects.
Another challenge for startups from their point of view is finding the right partner. In medical devices, the R&D process is quite established and the path to clinical validation is clear. When we talk about digital health, which often benefits from agile development, clinical validation can be challenging timewise. Finding the balance between testing and sales and marketing is tricky as well.
The list of challenges goes on and ties into regulatory compliance. Not all testbeds are ready to work with early-stage companies that are just starting to look into regulations. Some testbeds only work with companies already going through the regulatory compliance process and having their documentation ready. The experts that we talked to note that sometimes the startups have accumulated excellent knowledge on the solution over the years, tested on their own but do not necessarily have the insight into the medical world, rules, regulations, or different validation processes. The usual bottlenecks, in this case, are regulations, cybersecurity laws, medical records, and patient information.
Furthermore, scarce financial possibilities can lead to lower prioritization of startups in testbed operations. Testbeds organized within and in universities have their staff working on multiple projects and sustaining daily operations, which is not an optimal way to run a testbed. Adding to that, testbeds are not their primary function by law. Similar issues arise in close collaboration with hospitals: they tend to work slower than startups which can be frustrating for both sides, and the medical staff is always busy with other duties.
The biggest advantages of testing for startups
The experts that we talked to suggest that testing a product is the best way to get a reality check for the company’s product, a great learning opportunity that is controlled and reproducible. Involving real-life environments and users and tailoring the product to satisfy a real need is a source of important insights. In a testbed, it is much easier for a company to get the right personnel and correct procedures compatible with the healthcare system than testing on their own. The feedback form is standardized, becoming a precise and informative assessment tool. And if the solution is not working how it is supposed to, startups end up not investing time and resources into a product that is not suitable for the market.
Furthermore, by testing companies get their first reference that adds to their portfolio. If the testbeds have commercialization assistance, startups can bounce their ideas off the consultants. They can make cost structure and customer flow calculations to evaluate the idea in the long run.
领英推荐
Suggestions for improvement
Experts suggest that more cooperation and collaboration in the field are necessary. Now the testbeds mostly operate geographically and are specialized in their own things. Specialization seems like the way to advance because it allows for better resource allocation. One suggestion is to work on abandoning the geographical principle altogether and do more referrals between testbeds according to their field of expertise.
Well-designed service provision with low fees would be ideal but it is challenging to organize with limited resources. Testbeds suffer from not being able to become self-sufficient. The goal would be to get these projects funded with minimum administrative overheads; there should be some way to provide funding in a more straightforward way, available with minimum extra bureaucracy. One way to find private funding is to be more involved by talking to investors and by networking (which can be a very long shot). Bigger innovation vouchers for testing could help in this regard. Currently, they are usually a few thousand euros while an extensive testing protocol can require tens of thousands. Lowering Business Finland requirements so that more companies could be eligible for this kind of grant could boost entrepreneurship. Finally, a strategic decision could be made to focus on startups more so testbeds could use more time to build those projects.
You can read the report in full here.
Shoot an email to our Head of Research,?Alena, if you have any questions about the study:?[email protected]
The series Table of content:
Post 6. Public procurement. Current state of affairs.
Post 7. Public procurement. Survey results.
Post 8. Public procurement. Interview analysis. Expert perspective.
Post 9. Public procurement. Interview analysis. Startup perspective.
Post 10. Public procurement. Roundtable summary.
Post 11. Standards and regulations. Current state of Affairs.
Post 12. Standards and regulations. Survey results.
Post 13. Standards and regulations. Interview analysis. Expert perspective.
Post 14. Standards and regulations. Interview analysis. Startup perspective.
Post 15. Standards and regulations. Roundtable summary.
Alena Konina