Why Go To Market Strategies Fail In Digital Health.

Having looked into why other types of digital health strategy fail in a recent edition, this article explores why Go To Market strategies often don't work out. Developing effective GTM strategy is challenging in any sector and so whilst many points are broadly applicable to businesses outside of digital health I'll try to provide content that is also sector specific.

Wrong Drivers

We all know the drivers of digital health:

• The rise in life-style associated (chronic) disease.
• The effects of a global ageing population
• A global shortage of healthcare professionals

People can't just pop into the hospital or their general practitioners to be cured of chronic conditions or old age... and our current healthcare systems aren't geared up to address these issues. The pressure has been mounting for a long, long time and as such, our global healthcare systems are said to be unsustainable. This was identified as one of the early and most powerful drivers of digital health. Surely, with the very future of healthcare at stake, digital health could provide solutions to many of healthcare's greatest challenges.

All we had to do was light the touch paper and watch the digital health revolution take place... and yes, I actually thought this way for a few years. From 2008 to 2012 I was enthralled and took my place on the starting line.

I should have known better.. there were plenty of people to ask:

• the patients smoking cigarettes outside the hospital cancer ward who valued their habit more than their chances.
• the pharma company executives selling drugs to everyone, based on the metabolism of the average Caucasian male.
• the overwhelmed GP who didn't want to add to his waiting list by uncovering new patients to treat.
• the head of IT who had spent years becoming increasingly entangled in complexity

In the early years of digital health it was entirely understandable if GTM strategies faltered based on the belief that these powerful drivers were actually the forces that would shape digital health . They weren't but there has been a lot of learning since then but GTM strategies still fail.

Here are some of the main (and feel free to chip in with more) reasons why GTM strategies in digital health fail.

No Buyers Part I: Disruption

In the early days of digital health we genuinely thought we could drive a revolution but are you still intent on disruption? Healthcare is remarkably resistant to change let alone disruption. In 2024, the mantra has been "don't disrupt, follow the money".

Disruption is needed - badly... but many GTM strategies have failed because disruption doesn't usually translate into buyers (in the healthcare space).

No Buyers Part II: Reimbursement & Regulation

If your intention is to sell something novel into a healthcare organization, it's sensible to check that the processes exist for you to get paid. As part of this exploration it's worth checking what regulations you will have to comply with. After all, healthcare organizations can get sued for using unregulated products so they won't buy/use anything that hasn't gained regulatory approval.

If there's no process in place by which you can get paid and there's no clear regulatory pathway, you need to know this before investing a dollar/Euro. It suggests a long, winding and very risky road.

• Sure... go ahead if you're informed about this and you think you have the resources to pursue a path never trodden before; you're a true pioneer and I take my hat off (I'd never have the balls to do this and I say this with all respect).
• If you haven't taken the time and trouble to understand the risk ahead and you think determination and guile are enough to get you there... think again.

If you're reading this from out with the field of digital health I imagine you'll question why I'm even highlighting such an obvious issue but it has been a common and occasionally spectacular reason why GTM strategies have failed.

No Buyers Part III: Need but no demand

I have the utmost sympathy with companies who have based their future on unmet need. It's what many are taught and surely, health is such an important thing that where there is need there will be buyers. No.

Please see previous articles for examples. It's a diverse list and I could write a separate article about this but a few quick examples.

• You want to sell preventative healthcare solutions? Preventive healthcare expenditure in the EU increased 88.2 % in current price terms between 2020 and 2021... don't get too excited, it increased from 0.38?% to 0.65?% as a percentage of GDP largely due to immunization against Covid. Other sources indicate that ~3% of healthcare budgets are allocated to prevention (which includes immunization). Preventing obesity, preventing diabetes, preventing falls? Massive and growing need.... numbers speak louder than words.
• A common trap is to develop a solution to a problem where the benefit won't be felt by the budget holder They're really not going to pay you to solve someone else's problem. There's need but... you won't get paid for your hard work.
• Oh and don't forget those smokers outside the cancer ward. Try to offer them some lifestyle management app for less than the price of a Sky TV subscription/a months spend on cigarettes and see what reaction you get. There's a little of them in all of us.

The key is to identify unmet demand. Demand means someone will pay for your offering.

Overwhelmed By Opportunity I (Breadth)

Many digital health technologies have broad application within health, care and the life sciences leading to a plethora of opportunities, some of which look good on paper and some of which are genuine opportunities. You need to assess them all and prioritize them based on your company's capabilities, circumstance and the nature of the opportunities. Typically, you should be able to list 25 - 40 opportunities for your product/service and that can feel like an overwhelming number to assess and compare, but you need to do it.

All GTM strategies have inherent uncertainty, but without doing this you are in effect, driving blind. Reduce your risk. Do the hard work early.

Overwhelmed By Opportunity I (Depth)

So you've produced an impressive list of potential opportunities. What factors do you need to consider in order to you assess them effectively? There are many.... size of market, size of accessible market etc tend to get the headlines but I'd suggest time to first contract, revenue profile, evidence gap (the gap between currently available evidence and that required to secure a contract), regulatory pathway, marketing budget etc all need to be considered. In fact, just about all the factors listed in this article.

This can feel overwhelming but without doing this you are again, driving blind.

Inappropriate or no Framework

To develop a go to market strategy you'll need a structured approach to do this properly.

• Do you have a process to follow that allows you to assess all your options and how they might relate to each other to offer synergy?
• Once you have developed your GTM strategy, can you explain how it was created and why?

No? It's one of the most important aspects of your business... why would you not?

The Market Moves On I (Competition)

Digital health and its subsegments continue to evolve.

• The US employers market once presented huge opportunity for start-ups but now its full of incumbents. How will you dislodge this competition?
• The launch of the German DiGA scheme seems like only yesterday but suddenly, we are years into it. The early DTx movers with staying power are now in a good position. New entrants need to take this into account.

Keep your knowledge current. Revert to "traditional" thinking on GTM strategy that addresses entry into markets with incumbent players.

It's now unusual to find an area of digital health without competitors but I occasionally see business proposals claiming "no competition" but even "doing it the old way" is competition. In most cases, competitors exist and if you haven't taken the time and trouble to find them early in your journey, you're very likely to find them when its a little too late.

Build your networks early. Keep your feelers out!, Do your homework.

The Market Moves On II (Market Dynamics)

The pandemic provided a boost for digital health but the dynamics of this black swan event couldn't last. As the world turned back to some form of normality, the demand for some services fell as recent withdrawals from the US market has highlighted.

This may be an extreme example but markets always change. Demand may rise and demand may fall. New doors open whilst other doors close. Digital health is still an emerging market and as such, it's extremely dynamic.

Being aware of change requires you to be actively in the game; constantly networking, reading, thinking, talking. You (or someone close to you) needs to be a natural at this.

Refresh your strategy on a continual basis (I suggest a quarterly review in year 1 and then every 6 months); everything changes constantly.

Evidence Requirements

What evidence do you have now and what kind of evidence do you need to reach market? You'll need different types of evidence for different stakeholders.

I was once "the guy in the white coat with pipette" and I thought i knew what evidence was.... :) Life teaches you.

Create a stakeholder map and against this match the need for different types of evidence. "Jo public" will need a different kind of evidence to "Jo pharma executive" who will need a different kind of evidence to "Jo FDA/MHRA" who will need a different kind of evidence to "Jo clinician" who will need a different kind of evidence to "Jo privacy/data regulator" etc.

Do this before you develop anything. It can be very influential on how you get to market let alone how you go to market.

Too Much Focus

The golden rule of 3 different sources of revenue is not to be ignored . Investors usually like to see this and it provides some form of insurance policy should sales not work out as anticipated.

Focusing only on one opportunity increases the risk of failure.

Not Enough Focus

The golden rule of 3 different sources of revenue is not to be ignored. If you adopt a scatter gun approach "to see what sticks" you may:

• spread yourselves too thinly and run out of time/money.
• overlook real opportunities because the skills and/or networks necessary to realize these genuine opportunities aren't present in your sales team.

It's good to identify as many realistic opportunities as possible and then select 5 or 6 for verification. Focus on 3 and keep some in reserve if possible.

Verification

You put together a good looking GTM strategy and then you went off to sell!.. and then you realized some of your assumptions were wrong. Maybe your pricing wasn't spot on... or your business model... your value proposition etc.

Always verify your GTM strategy by reaching out to the market before selling.

Value Proposition

Can you articulate who your customer is and what value you offer them? Are there various stakeholders involved in your sales cycle? Have you mapped them? Have you worked out what value you offer to them?

Stop what you're doing (reading this!). In your head or in a quiet corner, can you express the value to your buyer here and now in under 30 seconds. It's a good test.

Ask your colleagues to do the same.

You can? You can't? Enough said.

Wrong Skills, Knowledge Networks

"Sales is sales" and to an extent, transferrable skills come into play but market knowledge and networks are more specific. Selling into (for example) the NHS is a very different task to selling into (for example) retail or pharma or.... I could go on.

If you develop your GTM strategy early on, you're more likely to recruit sales people who have the right networks and experience.

From First Contact To First Contract

Your GTM strategy has to be realistic in terms of timelines. The timelines associated with a credit card purchase in a D2C model compared to commissioning of software into secondary care that has to be integrated into existing hospital systems is vast.

Also, remember the inverse rule that the largest contracts tend to be associated with the largest organizations and take the longest to secure... whilst smaller contracts are associated with smaller, private sector organisations.

If your GTM strategy predicts revenue from pharma/insurers/the NHS in less than a year then the real world will teach you.

No Synergy & Up Selling

So you have identified many genuine opportunities. Which of these are synergistic such that your sales team can utilise their existing knowledge, skills and networks to serve them all and up sell from one opportunity to another.

People Are Perverse

I touched upon the scenario of smokers outside of the cancer ward. This is an extreme example but we are all guilty of this to an extent. A burger or a salad? A beer or a mineral water? Celery sticks or chocolate?

Whilst digital health offers the potential to promote behaviour change to help us lead healthier lives, we talk a good game and are actually a lot less willing to pay for prevention than you might think. Equally, even when managing more serious conditions, people are still extremely reticent to do what's good for them, particularly if they have to pay for the privilege. It's difficult to underestimate just how big a challenge it is to convince people to depart with money to benefit their own health.

What might seem a "no brainer" from your perspective might not work in the real world. You can try to test your assumptions through surveys and focus groups but people are (unconsciously) deceptive. They'll say one thing and do another. Extreme caution is required if you're going to bet your business on this.

Data

Is your digital health business dependent on data? Of course it is. Do you understand what you can/can't do/must do and the consequences of misunderstanding/getting this wrong? All your hard work could disappear with some bad publicity or a court case if you're in market but haven't taken the time and trouble to match data/privacy requirements with your route to market/buyer.

Trust & Brand

We have a love hate relationship with tech brands. Many of us love their new shiny devices and "free services" but are concerned that they take our data and sell it. There are increasing regulations around data and privacy which you need to be on top of but branding is a key factor. If people perceive that a brand can't be trusted with their data, it will have an effect. If people don't know your brand, how will they trust it? These are factors that are magnified in healthcare.

What routes to market will you adopt and how will you build your credibility and trust to feed into these channels? A 101 but this seems to get overlooked on a regular basis.

Business Model

It's possible to diligently identify your route to market, buying groups, value propositions etc and then to falter. Digital health has been a creative hot bed of business models and there is plenty in the literature about the different approaches that have been taken by different companies and as such, scoping an ideal model is something to be done early in the GTM phase.

It is possible to have more than one business model for a product/service and again, the opportunity to test different models can be an important part of the verification phase. If you take the right approach during verification and ask for feedback as opposed to selling, you may well find that you receive feedback that helps shape your model(s)

Bias

It's difficult to have a neutral and informed perspective and this can be a real problem when developing GTM strategy. Bias may be introduced because you don't know what you don't know or you are seduced by familiarity and/or logic. This applies on an individual basis as well as a group basis.

• Good opportunities may be overlooked in digital health because its so broad, it's difficult to access expertise that covers every element of health, care and the life sciences. Earlier in this text I referred to an average of 25 to 50 opportunities for a digital health technology. If you list less than this maybe others have been overlooked "because you don't know what you don't know".
• Folk in the field of digital health tend to have either medical, technology or scientific backgrounds and as such, that's the lens through which the field is viewed. There are so many aspects to developing digital health based products/services, it's essential to surround yourself with a diverse team to provide alternative perspectives.
• Be careful of "strong voices". Some people have a natural ability to influence but it doesn't mean they are right 100% of the time. Even people with considerable experience in your field have their own bias.

Actively accrue information and advice and objectively assess this in light of your own GTM needs.

Group Think

I have a love hate relationship with digital therapeutics. With my "digital health enthusiast hat on" I love them. They offer so much potential and I take my hat off to everyone trying to move the field forward. They were (before I'd even heard the term) one of the reasons I moved from the life sciences into digital health.

As a Go To Market strategy professional I like them less. Their understandable appeal and popularity has, I suspect, caused many GTM strategies to be based on what the "headline act of the day" is doing as opposed to a rational and informed strategy which is individual to the company.

There are so many options open to DTx companies that your GTM strategy has to be based on your ambition and your circumstance and market dynamics. Your DTx company is unique. Don't be unduly influenced by others.

Burn

An old one but an essential one. A GTM strategy that does not consider burn rate is not a good strategy. You'll need to model pricing, ongoing costs, cost of sales, margins as well as the overall cost of running your operation to know what volume of sales over what time period you'll need to survive and then thrive.

When selecting your 3 opportunities to pursue, consider short term revenue requirements as well as longer term ambition. Be generous with contingency.

Scale

Your GTM strategy should help guide you through your first few years to the point where you become self sustaining or you can secure a new round of investment but can your business scale? In all honesty its a learning phase. To achieve scale whilst developing a GTM strategy is likely to be wasted effort as you'll learn much during your GTM phase. That said, a frame work that illustrates the way in which your business can scale, which can be readily modified on the back of real world experience, can be a valuable and living document which can feed into a more detailed planning phase later in your journey.

Going International

A massive topic and too big to address here (maybe the subject of another article). Even at the beginning of your journey its wise to evaluate options for international expansion based on more than population size or market reports. A basic understanding of country systems/buying groups/reimbursement mechanisms/competition etc can be enhanced as you are building your business in your domestic/primary market.

It's understandable/sensible if your initial focus is on your domestic market but start your thinking early about opportunity elsewhere. It lends credibility to you/your business even if you have no immediate intentions. Such efforts can be invaluable further down the line.

When you're ready to enter a new territory you'll need to consider all the factors listed in this article through the lens of your new market and your new business.

Rolling Feedback

I've already covered the need to constantly review your GTM strategy but you should also introduce mechanisms to capture market feedback on your product/service such that it can be improved and adapted. Whilst GTM strategy is necessarily focused on commercial aspects of a business, the ability to adapt not only your strategy but your offerings on an ongoing basis can be an essential and agile quality; something that's particularly important in the field of digital health where you are constantly breaking new ground.

Just Lucky

Let me finish with a reason why some GTM strategies work; people sometimes just get lucky. Some folk don't do their homework but are in the right place at the right time to succeed. There are a few (and I've met a couple of very honest CEOs) who had a lucky break. That said, I imagine most founders would like to reduce the risk.

Working up a GTM strategy isn't easy as I hope I've illustrated. If you want to increase the chances of your business succeeding its a necessary task... or are you hoping you'll get lucky?

ABOUT

I've been helping companies develop Go To Market Strategies for a long time. My UK consultancy began helping companies enter the UK market in 2015 but quickly we realized our clients didn't have a strategy, so we had to create one before we could go to work.

Over the next few years I created a bespoke process to rapidly develop GTM strategy, taking into account all the factors that I've covered in this article. My knowledge of different markets and territories has evolved along with my experience in digital health.

I've been a "Supermentor" (selected from a large pool of mentors made up of CEOs, investors and consultants) on the EIT digital health catapult program since 2020 helping some of Europe's leading companies prepare for investment at the semi-final stage of the competition. Often this involves a close look at GTM strategy as this is a key requirement for investment.

If you need experience, knowledge, process and structure to plan your market entry, do get in touch.

Digital Health Strategy 101 Including GTM Strategy

I'll be hosting a short course that provides a detailed overview of strategy in digital health in July which will include a session on GTM strategy.

If you're wondering how you can cover all the ground listed in this article, I'll share insight into a process that allows you to consider all the factors listed above and assess numerous opportunities in a rapid and structured fashion. I take my clients through this in about 3 weeks to create a testable go to market strategy.

If you're interested...

• Unique sectoral insights make the program suitable for both experienced and entry level strategists.
• In these sessions, we'll cover best practice; from the soft skills required for developing and communicating your vision through to the structure and logic required to work with appropriate frameworks associated with the most common types of strategy in this field (GTM strategy, Innovation strategy, Implementations strategy and Learning & Dissemination strategy.

Course dates: July 9th, 16th, 23rd and 30th, 1pm - 2pm CET

Priced from 399 Euros.

More detail through this link. Feel free to IM me.

Digital Health Strategy 101 ( dhv-net.com )