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Blueprint Health inaugural class of start-ups reinforce business model lessons

I had the pleasure of being one of about 400 people attending Blueprint Health’s “Demonstration Day.” Angel, venture capital and corporate investors from across the US listened to investment pitches from the nine start-up companies that Blueprint Health selected (out of 300 applicants) for its inaugural accelerator class. I am an advisor to NEEDL, one of the nine.

Blueprint Health’s out-of-the box success deserves a shout-out. It serves as the hub of healthcare technology innovation in NYC by bringing together a collaborative community of entrepreneurs who build businesses and learn from each other in a co-work space that offers a broad array of educational classes. Companies that want accelerated help can apply for a 3-month program of support (in exchange for an equity share) from Blueprint’s network of healthcare entrepreneurs, investors and industry mentors, the largest in the country according to Blueprint. These mentors provide the insights, hard-love criticism, encouragement and connections to move a company from concept to becoming cash flow positive.

Blueprint Health is a Charter Member of the Global Accelerator Network, a group of independently owned and operated regional organizations that operate high quality start-up accelerator programs. Their shared aim is to dramatically increase the success rate of promising entrepreneurs in order to create 25,000 new jobs by 2015 and, in the process, build an engine for creating more successful start-ups over time. The Global Accelerator Network was started by Techstars, the #1 start-accelerator in the world with programs focused on internet and software startups in Boston, Boulder, New York City, Seattle, and San Antonio.

Each of the Blueprint Health accelerator companies did a great job of articulating a healthcare problem and how their web-based platform technology addresses it. The fast route to positive cash flow they promised demonstrates why healthcare IT is growing relative to regulated drug, device and equipment investments, where payback is longer and investment levels and risk higher.

The pitches reinforced the lesson that a winning business model solves a problem shared by a target market in a way that generates profit. The key to profitability?
  • Choose a problem many will pay to solve
  • Offer the best solution in a cost-effective way
  • Create barriers to replication
Investors also focused on founders’ experience, as an experienced team offers a lower-risk investment.
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Here are the 6 strongest business models:

5 O’Clock Records won best-in-class in my book, reducing the time clinicians spend sending medical records to insurance companies, lawyers and other requesters while enabling them (and 5 O’Clock Records) to earn revenue from fulfilling requests.

Aidin is an on-line home healthcare services consumer reports and scheduling system that hospitals use to help discharged patients secure the highest-ranked care. With hospitals spending $17 billion in re-admissions, the cost of which is increasingly borne by them, Aidin’s entering at the right time.

Needl connects clinicians and pharmaceutical companies in a Q&A format initiated by clinicians. Think Google, but a clinician’s search connects to an expert with the answer versus website lists the clinician must then navigate to find answers. Drug companies buy subscriptions and clinicians access Needle’s platform through commonly used clinical APPS like PI and Medscape. The pharma sales rep model is dying and Needle offers drug companies a welcomed alternative.

Patient Communicator automates how a physician’s office interacts with its patients, saving staff time and money while increasing patient satisfaction. Right product, right time.

Procured Health is a product assessment platform enabling hospitals to get more value from the $100b they collectively spend on medical equipment, devices, etc. annually. Bargain hunting for hospitals!

Symcat is a well-designed on-line triage service that saves health plans money by helping their customers chose the right care plan at the right place.

The other 3 start-ups appeared, in my view, to be too easy to copy, too hard to monetize or too hard for an investor to exit.

iCouch connects patients to therapists for internet-based counseling, saving patients time and frustration. But will insurance cover the fee?

Inquisthealth’s web-based platform organizes, aggregates, matches, schedules, and automatically connects patients with the same disease securely and privately. Its will connect all the patient support communities worldwide, like Gilda’s Club for cancer, and help providers offer patients a better experience.

Meddik curates health-related information for patients by sending subscribers up-to-date information on their health conditions. The team is strong, but consumer healthcare information is a very cluttered market space.

Leaving the event, I felt very optimistic that our dysfunctional healthcare system – it will be reinvented.

More articles by Kay Plantes

Kay Plantes is an MIT-trained economist, business strategy consultant, columnist and author. Business model innovation, strategic leadership and smart economic policies are her professional passions. She resides in Madison, Wisconsin and Oslo, Norway. For more information visit her website - Business Model Innovation and read her most recent book - Beyond Price.

The opinions expressed herein or statements made in the above column are solely those of the author, and do not necessarily reflect the views of Wisconsin Technology Network, LLC. WTN accepts no legal liability or responsibility for any claims made or opinions expressed herein.

Comments

JD responded 2 years ago: #1

Kay,
Thanks for a generally useful overview of the innovation in healthcare. I share your optimism that we're seeing a quiet revolution underway and can see how the much needed improvements will come from small disruptive companies. I also agree that young companies will do well to remember your two key points. "Choose a problem many will pay to solve" and "offer the best solution in a cost effective way". I'm not so sure why advisors and gurus like your self keep insisting on the third point. "create barriers to replication". The modern communications industry had several hundred phone companies all pretty much doing the same thing when it got started. The auto industry had hundreds of car companies even today many car companies exist, offering essentially the same products and technologies. Every computer company I know, including Apple offers "replicant" products and technologies. Open the app store and you'll see 50 apps for note taking. Preventing Replication, is not the issue. It's defensive thinking. I would suggest that business model innovation is a better focal point. Companies that develop better business models and continue to adapt them as they grow have a better chance of succeeding. Apple isn't dominating the tablet market because it has a barrier to replication. The other tablet makers simply can't win against its business model (the speed and means by which it is innovating, branding, pricing, locking up suppliers, aggregating app developers, creating distribution agreements etc.). That's the competitive strategy young companies need to understand. Sidebar. Your assessment of 5'Oclock records misses the mark. When HIE's arrive on the scene in a couple of years, requesters will be able to get access to patient records without having to create administrative requests. Their business model is short-lived. Thanks again for spurring dialog. I'm a regular reader.

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