Are Health Startups the Next Big Opportunity? (TCTV)

December 19, 2011

RockHealth

Hi, I’m Ben with TechCrunch TV, and today we’re here with Leslie Zigler and Hallie Tekko from Rock Health, and they’re going to tell us a little bit about what Rock Health is. So, what is Rock Health?

Rock Health is a digital 3D accelerator for health care start-ups.

Great, and so, can you talk a little bit about what the opportunity is, you guys see in health care start-ups and what made you guys choose this.

Yeah, health care is the largest industry in our economy and there is relatively little innovation in terms of software, compared to other sectors. And we saw that there was a huge opportunity, and I think a lot of people did recognize that there was a large opportunity for software start-ups to disrupt the space.

But that there were still a lot of barriers. So, we still see a lot of regulation and uncertainty around HIPAA compliance and FDA regulation, and so, there were challenges for entrepreneurs, that they would look at this industry and think that there was lower-hanging fruit elsewhere. So, we think that makes it an even bigger opportunity because fewer people are chasing this industry.

Great, and there’s a really fascinating story, Hallie, of how you started this Can you talk a little about that?

Sure, so when I was in graduate school, I was working at Apple and I was in the app store covering the medical and healthcare segment, and I sat next to the woman who covered gaming and we became friends, and I was very jealous of her job because she was meeting with tons of really interesting and creative developers every day, and they were coming in and they made these outfits that they absolutely loved, and what we say at Apple is love is in the details.

They came in, and her whole cubicle was really colorful, and there was just such a vibrant energy around the gaming category, and then I was in health care and medical segment, and relatively, there were fewer apps, but they were also just left creative and robust. They were less exciting. They weren’t taking advantage of the native features.

This was in 2010, so even just since then there’s been a huge improvement, but we noticed that the types of entrepreneurs that were getting into health care just weren’t the same people Actually, most of the developers in the health care space, were coming from large organizations and not necessarily these scrappy, creative entrepreneurs, here in Silicon Valley.

And Leslie, could you talk a little bit about what the challenges are, that health start-ups face, and how that’s different from just your general tech start-up?

Sure, I mean, you know, it’s difficult to build a good product, but in health care there are so many regulations, there are rules, a lot of dealing with the government, and there are a lot of barriers to entry in institutional sales, you know, it’s any highly regulated industry is gonna have these problems.

So, and I think it’s one of those things, you know, you look at it, if you don’t have a lot of information and you think, wow, these challenges are pretty insurmountable. It’s just difficult to find good information on it, because it is a relatively new space, and you know, and no one is really talking about it yet.

That’s really a big part of what we’re trying to do is, not only educate the entrepreneurs in our program, you know, through workshops and bringing in really amazing people, but also open-sourcing what we have to share with the community at large in the hopes that more entrepreneurs from, you know, who are building games or social applications start revisiting building something in health.

Great, and you have a lot of really exciting partnerships. Can you talk a little bit about those and how they specifically help with dealing with some of the challenges that the start-ups face?

Yeah, absolutely. I mean, so one of the things that’s really important and I think special, about Rock Health is that we try to bring all of the right people to the table. So everyone from VC’s who are absolutely essential for capital, to big companies like Proctor and Gamble – pairs with a United Health Group – Pharma, Genentech.

So we really are bringing together lots of people that normally don’t talk and don’t work together to solve these problems, and we’re providing all of those resources. They’re very involved with the program. They come in and spend time with the start-ups, advise them, help themout . Actually three of our companies have pilots at the Mayo Clinic.

So it’s very exciting to be you know, to kind of get in there and literate and work with the people who are, you know, making decisions. Great. So there’s especially in the Bay Area plenty of incubators out there. So what would you say to a start-up that happens to be in the health field but is also looking at more established.

Incubators like Y combinator tech stars one of those, what’s your pitch to them in saying come to us instead. Good question. Well there are a lot of really fantastic incubators and since I have, I’d encourage the entrepreneurs to figure out which one is the best fit for them. I think, if you are someone that going to be building a product that has to go through the challenges of thinking about its traditional sales, about piloting with hospitals about going through FDA regulations, I think that it makes sense to go to a place that actually has the resources to help you overcome those challenges, but ultimately, you have to like the people behind it, you have to be excited about the other teams.

And we’ve already gone through one class, so we’re slowly, you know, becoming a little bit more widely know. We had thirteen teams that demoed in November and a good handful of them have already received funding. So, we’re hoping that those start-ups can now be an example of how an incubator like Rock Health can help them achieve their goals.

Great. And so, how do you guys define a health start-up? It seems like it can be as broad or as narrow as you want. Do you stick to specifically healthcare in hospitals, I know you have a few others that are outside that. Is there a focus, or how do you guys look at that?

Yeah, so we love the span of healthcare. We like actually our portfolio to be pretty diverse, anything from fitness, we have Skimble, which has now had over two million downloads, they’re one of the leading iPhone apps, actually iPad 2 and Android apps, in the fitness category, all the way to teams like Omada Health that is going to be announcing their funding soon.

But they’re in the diabetes prevention space. So we like to be able to bring in a diverse set of entrepreneurial working on different problems in health care, i think there is a trade off between consumer app, that don’t have to go through. through the ecosystem at the hospital and going straight to the patients, versus something that would be more an enterprise a product.

So there’s definitely trade off’s in terms of the needs of those start ups. I think there are more consumer start ups out there, but [xx] is actually more likely to actually get the funding, so we like to kind of have a balance, and our partners also like that too. What do you guys see as the biggest opportunity in the whole space?

[xx] i don’t know. I mean As a patient.

Yeah, yeah, i mean actually as a patient and a designer, i think that historically we’ve seen, if you’ve ever been to the or the doctor’s office, when you’re handed 2 sheets of paper when you’re sent home, it’s not a great experience. So for me personally, i think, you know, focusing on patient experience, building things that are people-centric, you know, and really putting people at the center.

People are clearly not at the center of the medical system as it exists now. You know, I can’t tell you how many times I’ve gone into the doctor’s office and just wondered, like, okay, why am I getting fifty phone calls about this, why isn’t there an e-mail or text message, you know, and you know, even a system like with…we saw that really cool, you know, lab design report that Thomas gets redesigned.

But, you know, even things as small as like the piece of paper you’re handed when you go home really, you know, just needs to be re-thought.

Have you noticed in working with specifically hospitals and maybe some of the bigger health care companies. How much of the problems do you feel are technical problems that need to be solved where you bring in design and maybe start ups just to come up with better solutions? And how much of the problems are more bureaucratic and political?

Wow, that’s a good one. I, it’s, for me, it’s kind of equal, I mean, I think they both have to be fixed. You know, there are structural problems that prevent solutions from being implemented widely, from even getting the right solutions in front of the right people, just because it’s such a tough process and there are so many layers.

And then, you know, once you actually have a great idea, getting that implemented at scale is very difficult in these big systems, so we really both have to come together and work.

And there’s been some resistance among tech investors to invest in health care start-ups. Have you noticed any of that? And what’s been, you have some great partners, so what have you noticed in dealing with them and how did you convince them to come on board?

Actually, I think tech investors are really excited about the space, because actually, American Dreams wrote a really good piece about how software is eating the world and health care and education were, kind of, the last two domains to be touched by this. And I think those types of conversations are sparking a lot of interest.

That being said, there aren’t a lot of great models for success in outcomes and exits. There’s not the Facebook of health care that these investors are getting excited about. So we see more shopping prying and, you know, VCs that are coming. Our demo day was, you know, packed with VCs, and they’re interested in the space, but there’s certainly more people that are looking and shopping and learning, than investing at this time.

That being said, you know, we work with Excel, NEA, MDV, which are some of the most well known tech investors that are committed to space, and they’re actively making investments here itself, and that’s helped.

And my last question, out of the last batch of start-ups that came out and with that you announced recently, which ones are you the most excited about? Are there some that stand out? I know if might be hard to choose.

You can’t ask us to pick favorite children. Its too hard. I think that’s one of the things that make Rock Health really special, is that we are a family. And we have a culture of inclusion. We all help each other out. We solve problems together, so, I mean, yeah, it is really, it’s like asking to choose your favorite child.

We’re excited about all the work that they’re doing.

I think so, there are some that are definitely more, have like a wall factor definitely unusual uses of technology.

Can you give an example of that?

Yeah, so I’ll give you two examples. So one is a team that just graduated from a cult called Cell Scope and they’ve built a plug-in for the smartphone that sits over the camera and actually turns your smartphone into an otoscope, which is what parents use, or what doctors use to diagnose ear infections, so now you have a smartphone, any parent anywhere can diagnose the child’s ear infection from home using just this easy device that sits over their iPhone.

So that’s something that definitely when we tell people about that one its just a big leap from where we are today and then there’s another a team that has been getting a lot of buzz lately called Bichim, which came out of…it sounds like bitchin’…but came out of Rock Health as well, and they’ve built a really cool iPad app that, it’s hard to explain, but it actually sits on your exercise equipment and uses the motion that it detects to go through a game that you’re going through like outer space or Italy or wherever it is.

It makes exercise fun.

And it’s making exercise fun using that as well as face recognition. So it can see you move. So you can like move to the left and move your little cart. So, it’s just making it more of like a video game while you’re on your exercise machine.

They’ve been getting a lot of us, ‘ cause it’s a really unique use of technology.

All right, well, thank you so much for joining us today.

Thanks for having us.

Few people are satisfied with the current American healthcare system. It gets more expensive while innovations that actually improve the patient experience are rare. While there may be innovative new treatments and surgeries, basic functions like tracking health-related expenses or dealing with insurance companies to pay a hospital bill are still a pain.

Some well known investors are getting more interested in health startups. Marc Andreessen thinks healthcare is up next for transformation. Fred Wilson is more skeptical but says he’s in the “looking and studying” phase and compares healthcare to education, which he recently started investing in.

Rock Health is an SF-based incubator for health startups that was founded on the idea that there is a huge opportunity to improve the experience for health consumers. Last week, the company announced its newest batch of startups. Their goal is to assist health startups with issues the average non-healthcare, consumer tech company doesn’t need to address, like government regulations and institutional sales to health providers.

What are some examples of health startups? Omadahealth uses group-based programs to prevent chronic diseases like diabetes. Bitgym turns boring exercise into a fun game. Cake Health, a Disrupt SF 2011 Finalist, tracks your health care expenses and catches billing errors.

In the interview above, Rock Health co-founder Halle Tecco and program director Leslie Ziegler discuss what kinds of challenges health startups face and how they can help. Halle tells the story of what inspired her to start Rock Health. And they share thoughts on the biggest opportunities in the space.




  • ROCK HEALTH
  • HALLE TECCO
  • LESLIE ZIEGLER

Rock Health is a seed accelerator targeting health-related mobile and web applications. By bringing together the brightest minds in technology and health, Rock Health provides crucial funding, mentorship and operational support to selected high-potential, early stage start-ups, nurturing the next generation of the digital health ecosystem.

Founded in 2011, Rock Health is funded by top health, technology, venture capital and consumer product companies, and is backed by a wide network of mentors, advisors and partners, including leading hospitals. Together,…

Learn more

Halle Tecco is the Founder and Managing Director of Rock Health. She recognized the potential – and the need – for supporting interactive health while working at Apple’s App Store covering the health vertical. Through a combination of thought leadership, business acumen and a background in non-profit work, Halle assembled Rock Health’s team of sponsors, mentors and advisors from the technology and health industries.

Halle’s work in the social sector began when she founded and grew Yoga Bear,…

Learn more

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Article source: TechCrunch http://feedproxy.google.com/~r/Techcrunch/~3/89FWeSNp22E/

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