What a phenomenal year we had in 2015. imagine.GOis proud to have worked with some of the biggest names in health care this year – as well as some we believe will be in the not-so-distant future. Look for us to continue to launch innovative solutions into the market as we work with healthcare companies to hone their business models and get to market fast.
We wish you and all of yours a blessed, peaceful, and joyful holiday season.
After reading my 3 earlier posts, I hope we have you convinced that this is a worthwhile effort and that you should join us. By joining the forum – you join the movement to create a better healthcare system.
The solutions for transforming healthcare will come from harnessing diverse ideas from across the ecosystem of healthcare stakeholders. We are inviting individuals inside and outside of the healthcare industry to join us on one platform to ignite conversations and build solutions for new business models within US healthcare.
That means you – yes, you are invited!
When you sign up, you will join other passionate healthcare and innovation professionals to create meaningful change in the US healthcare industry. You will also cultivate new professional relationships, elevate your personal brands and identities, and receive direct attribution in my forthcoming book as permanent proof of the important co-creative role you played.
Please know this is not a marketing scam – we are sincere in our work and care deeply about our goals. Our end result will be a book published in 2014 that you will get to share in the credits for creating.
After that, there will be three Phases to the modelH project, which will last through at least March of 2014.
The three Phases are:
1. CoCreate a healthcare business model generator, called modelH. We will draw from the work of Alexander Osterwalder and Yves Pigneur in their book, “Business Model Generation: A Handbook For Visionaries, Game Changers, and Challengers” to create a new framework for developing health model innovation throughout the remainder of the project. Building the modelH engine is the most critical part of the project, and we’ll be devoting most of our time – 4-5 months – on this module.
2. Generate and evaluate ideas through the modelH engine. Next, we’ll gather your inspiration, insights, and research to develop ideas that can be tested in the modelH engine. These ideas will address our three main areas of concern for healthcare: creating positive consumption experiences, improving the care delivery mechanism, and aligning payments and incentives. If we’ve built modelH correctly, we will be able to produce innovative business models that reflect a new direction for US healthcare. We expect to spend 2-3 months on this module of the project.
3. Validate the health model innovation solutions. The final step is to review our modelH solutions to ensure they are fair, reasonable, and feasible. Once validated, Kevin Riley will be compiling the work into a visual playbook to be published later in 2014. We expect to spend 1-2 months on this module.
This project is a labor of love for all of us and the modelH team is fronting the cost to put all of this together. Our reward is the same as your reward: pride in creating a new path forward for US healthcare. It’s an opportunity to do something meaningful that has the potential to effect change on a system that is in dire need of change and to positively impact the lives of millions of Americans. We’ll also provide attribution to all contributors in the book as proof of the important role you play.
Keep in mind that this is an experimental project, and we expect some bumps along the way. If you encounter troubles, inconsistencies, or simply need clarity on how it all works, kindly let us know so we can improve the process. Also, we will have a firm “no jerks” policy in place within the modelH forum. We want disruptive thinkers, not disruptive individuals. If you are serious about making something that will help all of us create the healthcare system we so desperately need, please join in with a heart and mind for that task. If not, please sit this one out.
Understanding of the Consumer’s Need of Your Product
This is obviously of the utmost importance. If you cannot clearly and simply identify your consumer, you do not have a product. I speak in great depth about this in other BLOG posts so I will not go into detail on it here. But I will refer you to the following blog posts for reference:
At Last Year’s Startup Weekend I focused on how start-ups need to consider the larger market ecosystem surrounding their product. At the time, I was the Chief Innovation Officer for GuideWell and we were making plans to build our own start-up accelerator. We also had an active pipeline of ideas that we were watching the market for with the intent that we would make an informed build, buy, or ally decision on how to proceed.
During the discussion at Startup Weekend, I attempted to elevate the attendees thinking about their product so that they considered how it fit inside the prioritized needs of the existing marketplace. This is especially true in the healthcare space, where market entry is difficult and reliance on the existing infrastructure is of utmost importance. I asked them to consider if the product had viability to a large insurer like the one I worked for, and if so, would the best path forward be as a vendor or to outright sell it. I cautioned them that being a product vendor of a multi-billion dollar, highly-regulated company is high on the impossible side for a start-up, and could ultimately bankrupt them trying to get up to compliance with a long list of requirements and regulations. While this can be viewed as very unfortunate, it is nonetheless true.
Instead, I planted a seed for them to consider approaching large companies with the intent to sell their product and its IP in its current state. This form of exit strategy, I believe, will become more viable over the next several years. It allows the entrepreneur to acquire cash and most probably a retained contract to further develop it for the legacy company. Of course, that too comes with its’ own set of difficulties.
Understanding Your Competitors Position Against Your Product
I wanted to make some additional points on the need to have a greater understanding of the market and your product’s place in it. Today we will look at what we can learn from our competition. Here again, I advocate that if you cannot clearly and simply identify your competitors, you do not have a product. Even product category inventors like Ford and Apple have competitors.
Henry Ford, the inventor of the automobile, was once quoted as saying “If I had asked people what they wanted, they would have said faster horses.” While this may contradict the points I make around properly identifying your minimum viable product, at least it points to the fact that there is always some form of competition. I add to that the notion that you can learn a great deal from them.
My absolute favorite writing on this subject is from the blog of Marc Hedlund, the founder and CEO of the failed start-up Wesabe. His cautionary tale is entitled “Why Wesabe Lost to Mint .” Both Wesabe and Mint were/are online financial tools that puts the users’ bank accounts into one place, sets a budget, tracks their goals, etc. In 2009, Mint was acquired by Intuit (the makers of Quicken) for $170 million – not bad. Even with a year head start, users, press, and revenue – Wesabe lost to Mint and closed its doors forever. Why?
In his post, Hedlund bravely looks at the mistakes he made that led to being beat by Mint. In essence, he boils it down to Mint’s superior efforts in creating a simpler and more automated tool for consumers. Wesabe’s product features went deeper but required more user input and manipulation. Mint’s product features started at a much higher level but gave the appearance to the user of full automation. Hence, Mint was easier to use – so more people used it. By the way, since 2007 Mint has added all of those “deeper” features, and so much more. The lesson here is (in my opinion), it is better to win today with less, and add more tomorrow. This is the heart of the minimum viable concept model.
Hedlund and the team at Wesabe were mistaken in their interpretation of what their consumer’s minimum viable product actually was. They learned it by watching their competitor, but they learned it too late. Today’s start-ups must be nimble enough to quickly recognize market needs and pivot to ensure they always serve the customer best.
So I ask all you entrepreneurs out there, particularly in the healthcare space, to take heed of my words and think extensively not only about who are your customers, but who your competitors are and what you can learn from them. You can see the deck I presented with here.
Healthcare companies are trying to be innovative – but are their very natures preventing them from realizing success? My question is a simple one – how can you take the best of what is necessary and combine it with the best of what is available and form something both new and necessary?
Can you make gold from lead? Actually, it turns out that you can. It really is possible and has been done at Yale University in the 1970s. However, it turns out that it takes significantly more energy (and cost) than it is worth in return. Juxtapose this with the question, “Can a legacy healthcare company be agile and innovative enough to change itself and its environment?” And even if they can turn themselves into “gold”, is it worth the cost?
I believe we must combine the necessary with the available and pick the best source for each – and work very, very hard to ensure they grow, together. We know that healthcare is approaching a “cliff” – and the hands at the wheel are the same ones that helped create the current dysfunctional system. This includes the patient, as well the insurance plans, the care providers, and the purveyors of all things health-related (like pharmaceutical companies). We know that we must alter course. The Affordable Care Act has given the impetus to force a change. But to change course, we need to change the system. The system, like a living being, is interconnected and will resist change applied externally. Moreover, change to any one part of it without consideration to the impacts on the rest of the ecosystem is futile. As the laws of physics tell us, things at rest tend to stay at rest. Businesses are similar. Unless there is an external catalyst forcing movement, companies, like objects, will stay put (and stagnate). There is an alternative to innovation at gunpoint – it comes in the form of taking a proactive approach to change. However change from within is really, really hard to do. But it can be done. Why not combine the best parts (contributions) of a start-up company with the necessary (working) parts of a legacy company to form agile, yet comprehensive, solutions to the dilemma? I believe this can be done through 3 simple steps:
Place innovation front and center by embracing the successful attributes of start-ups,
Create ecosystems of stakeholders that include patient, provider, and plan, and
Simultaneously find the operational efficiencies needed to address rising costs.
I know this works because I have done it. But it takes a lot of effort to start the process for a breakthrough. It takes even more energy and communication to keep it going.
Start-ups come in many shapes and sizes. Some have had series A-B-C or angel funding, some are just a smart person with a great idea looking to get incubated. Some have proven their market space; some have yet to do so?
So how do you judge across such a spectrum of diversity and maturity? Some standard valuation points investors look at are as follows:
Value proposition – who perceives what you do as valuable and how is it offered?
Market size and potential – how many customers can you get?
Investors already on-board – who thinks it’s a good idea, enough to commit funding?
Pedigree of the leadership team – who is driving the idea to market?
Exit strategy – how can this idea be monetized, for the company and for investors?
All of these are important and I take no case with any. But since I spend most of my time looking at how to change the healthcare ecosystem for the better, I am going to offer some additional points for any start-up looking into the healthcare domain.
First, who pays?
Seems obvious, right? You would be surprised at how many ideas I have heard from very bright people that have no clue as to how revenue will actually be generated. And if your answer is “the plan will pay for it” – let me know how that works out for you? The plans are being pushed beyond their limits to find efficiencies in a rush to meet the reform market. There is some money available – but not as much as you might think. More so, they are distracted. If you really think the plan will pay for it, you need a clear and present value proposition that cuts through the noise and makes the case why your additional cost will be justified against squeezed margins.
Second, what is the ability to make a lasting and meaningful change?
If you are going to effect change, you must change behavior. Behavior change takes time. You cannot be the app de jour but rather a meaningful part of a person’s daily workflow. Since the axiom of no size fits all is relevant here, your great tool must be aligned to a specific user group – be specific and create meaning. Be general and users will not gain value from the interaction and lose interest. If users lose interest, their behavior does not change. See my point. For more on behavior change read The Power of Habit: Why We Do What We Do in Life and Business by Charles Duhigg.
Personally, I also invest in companies that work in areas I love and understand. Here is a company I am proud to say I am invested in. I use their services as often as my wife will allow me to do so! Deneki Outdoors owns and operates fly fishing lodges in Alaska, British Columbia, and the Bahamas. Take a look at their tag line – we run fishing lodges! Pretty simple and very understandable.
If you want to ever talk more with me on this idea, or any of my ideas, please meet me down in the Bahamas at our Andros South lodge. I will be waiting for you with a drink in hand and fly rod in the other.
I am CEO of a new retail health start-up called GuideWell. My company would like to announce that we have entered the JAX Boldest contest, which discovers and highlights the bold things created, started or expanded in 2011. As you know, GuideWell was launched in 2011, so we felt this contest would be a perfect one to enter.
JAX Boldest voting runs until midnight on April 7, 2012. The company with the most votes wins!
We would LOVE to win JAX Boldest, but we can’t do it alone so we’re asking for your help. Please visit HERE and press the ‘Vote’ button on the page. You’ll have to sign in with your email address and create a password — this ensures you can only vote for GuideWell once. It only takes a few seconds.