The role of a start-up within the healthcare ecosystem is a revolutionary one, holding the power to not only fast track lifesaving solutions, but bring innovation to the table. Agile and dedicated to specialising in ultra-specific areas, start-ups have particularly risen to the challenge of finding solutions as the world faced one of its major crises, the pandemic.
As FIME geared up for its 31st edition, it welcomed not only the new Healthcare Transformation zone that unveiled technological advances, but also Innov8 Talks which has had longstanding success in helping bolster start-ups in healthcare.
We caught up with Jim Stallings, Chief Executive Officer, PS27 Ventures and Pedro Sostre Co- Founder of Navigate, who served as judges at Innov8 to discuss what it takes to break into the industry as a start-up, the present challenges and the importance of diversity and inclusion in the narrative of the present and future.
Fuelling the launch and scale of early-stage companies
There has never been a more urgent time to start new companies to find ways to treat diseases and crises, commented Stallings when asked about the importance of fuelling the launch and scale of early-stage companies in healthtech. He explained that even with new approaches and technologies, the world is still undergoing the effects of experiencing one of the biggest pandemics in the past 100 years.
“It not only exposed us to the virus, but when lives were lost to COVID, it directed us to underlying conditions such as diabetes, heart conditions and lung issues. It also served as a wake-up call to address the lack of preventative care, health dilutions and infrastructure. We need new approaches, and young, talented entrepreneurs are bringing these health technology solutions to the market,” he said.
Sostre added: “We have seen what happens when corporations like big pharma have control, and prices rise for necessities from $13 to $1,000. I think this exists throughout the medical space, not just in pharma, where hardware is being built and there are all these solutions. From early-stage companies you get innovation and cost savings, whereas big companies must protect their margins. On the other hand, we see start-ups building solutions for $100,000 that would cost big corporations millions to execute. Therefore, it is critical to support the launch of early-stage companies, especially in healthcare where people's lives are at risk and give them the ability to create solutions for problems yet to exist.”
Empowering entrepreneurs
Stallings as an internationally recognised business leader, entrepreneur and investor founded PS27 almost 10 years ago after the company invested in their first venture, a wellness space, which was the propellant that made him look at this space. Over time, PS27 evolved and began to invest in health technology among other areas of finance and software solutions.
“From the very beginning, our team has been investing in women-led companies, long before diversity and inclusion initiatives were launched around the world. When we think of diversity at PS27, it is not necessarily about gender, race, or ethnicity, it is the diversity of thought,” he said.
Sostre, an author, entrepreneur, and angel investor, has led and advised on growth, sales, and marketing for start-ups, corporations, and government agencies. He has driven over $100 million in sales for early-stage companies and launched Navigate, a new founder community and incubator programme.
“As an entrepreneur for around 20 years, it is frustrating to see that the support needed in the early stages comes from mentorship and frameworks that were used to be successful in the past, and from limited access to networks and capital. Today, few organisations can provide this comprehensive support, and that too, to only one per cent of applicants,” he added.
According to Sostre, around 90 per cent of start-ups fail due to lack of support, and if one did not attend an IVY league school, they would have a less than 10 per cent chance of being successful. “Navigate was born from the idea of providing that support and delivering it to everyone. Our accelerator programme is not limited, and we accept hundreds of companies at a time. We know that several people can be successful if you give them the right tools. I am very proud of the fact that we have more women than men in the programme, and equal opportunities for people from all backgrounds” he explained.
Ecosystem of the future
When it comes to the future, both Sostre and Stallings shared their thoughts on what the future holds for healthcare, and on the horizon are personalised and holistic approaches in medicine.
“We are in the era of personalised medicine, with health technology leading the way. Several entrepreneurs have been focused on hospitals and the target market for their solution, but what people want is a personal relationship with a doctor, not an institution. The opportunity for an entrepreneur is to bring solutions to physicians and their patients and create a mutual interaction. As an investor, we are looking for new models of communication to track, connect, monitor, and provide solutions. I think we are moving to a model of outcome-driven healthcare,” said Stallings.
This holds exciting potential for patients as well as investors and promotes an expansion of ideas and solutions across various areas.
“It takes a lot of money to build medical grade hardware, and what we are seeing now are several hardware solutions in medicine along with a prevalence in holistic medicine as well,” Sostre added.
On a final note…
Healthcare is currently the single biggest industry in the US, said Stallings, and the country is only in its first inning of disruption with many markets yet to open. “This is a great moment for health technology entrepreneurs. The capital is there, the energy is there. We are talking about helping humans live longer, better and enjoy a great quality of life, with consumers willing to pay for these services. I am very excited for it,” he commented.
With that said, time is of the essence in the start-up race, according to Sostre, and it is necessary for start-ups to seek an advisor or mentor to provide the right guidance and resources. “If you spend two or three years trying to figure things out on your own, you will lose a lot more time, which is something you cannot get back. Many big companies in the healthcare space have a venture arm and an innovation department that are often on the lookout to fund start-up projects,” he said.
He advises aspiring entrepreneurs to build a map of their industry, track down all the big names in that space, and identify if they have venture funds.
“Several universities are open to partnering with start-ups and facilitating research or clinical trials. Once you validate an effective solution, you can go to other hospitals, and potentially gain them as clients.”
Kismet Technologies was crowned winner of FIME's Innov8 competition, stay tuned to read our interview with their co-founders. FIME runs online until the 29th August 2022