`

For Startup Founders: Domain Knowledge Outweighs Technical Skills — Why HomeHero Joined Techstars and Cedars-Sinai Hospital

We’ve received quite a lot of buzz over the past week after the announcement that HomeHero has joined the Techstars Healthcare Accelerator in partnership with Cedars-Sinai — it’s not often you hear of a startup working hand-in-hand with what is arguably one of the largest and most innovative healthcare systems in the U.S., if not the world.

   Me meeting with 100 cedars staff — opening night.


Me meeting with 100 cedars staff — opening night.

As I’ve been meeting with the staff and administrators from nearly every department of this nearly 1,000-bed facility, I’m more optimistic in our society’s ability to turn around our broken healthcare system.

Techstars and Cedars-Sinai have formed a collaboration to help today’s technology innovators turn their ideas into breakthroughs that can improve the lives of patients around the world.

Our goal with the launch of HomeHero for Enterprise in March 2016 was to start a movement that would improve the state of our nation’s healthcare system. We hired a Chief Medical Officer, Chief Nursing Officer, became HIPAA compliant, created the HomeHero Collaborative and began moving our caregivers from 1099 independent contractors to W-2 employees. We are breaking new ground in healthcare with the vision to help patients stay healthy, happy, and out of hospitals.

The HomeHero Collaborative leverages mobile technology and in-home visits to collect critical patient health data. Then, using an analytics engine, we triage patients to the appropriate care provider, saving massive unnecessary cost to the health system.

 

The Next Generation of ‘Bridge Accelerators’ is Coming to Connect Entrepreneurs with Industry

The U.S. healthcare system is going through foundational changes as it shifts from a fee-for-service to an outcomes-based model.

Historically, hospitals have been paid per service performed, or “fee-for-service”. This naturally led to a misalignment between financial incentives and patient outcomes. The more surgeries performed, days spent in the hospital and drugs prescribed the more doctors and hospitals are getting paid…

We spend more per capita on healthcare than any other country — including $500 billion per year for Medicare alone (14% of our national budget) — a major contributor to that is inefficient spending on care providers, i.e. sending a doctor to do a caregiver’s job.

This is a big deal for everyone.

 

Finding Our First Hospital

As we set off on our journey to integrate deeper into the healthcare continuum, we knew that our first hospital partner was especially important.Cedars-Sinai Medical Center was on the top of our list because they are the largest nonprofit hospital in the western United States, located in the heart of our backyard, Los Angeles, and are arguably the most prestigious and progressive provider in the country. Cedars has a unique culture of embracing innovation, and the leadership team has a reputation for setting the bar in the healthcare industry, making them the ideal partner to complete a successful case study for other health systems to follow.

Through their partnership programs, Techstars provides startups network connections to large corporations such as Barclays, Nike, Qualcomm, Sprint, Virgin Media, and Disney.

These partner programs roll out the red carpet and expose startups to large potential customers. The startups work with top executives and mentors from the Techstars community, and get exposure to investors on “Demo Day”, the final day of the accelerator where each company showcases its unique products and services. Because these corporations have an equity stake in these startups, there is unusually high staff support to see pilot programs succeed.

Sphero, for example, participated in Disney’s 2014 Techstars accelerator program. At the time, the company “kind of lived between three different industries: toys, robots, and mobile technology.” Day one of the accelerator they met with Disney CEO Bob Iger. Ten months later, they produced the $149 toy version of BB-8, the endearing spherical successor to C-3PO and R2-D2 in Star Wars: the Force Awakens. The company went on to raise $90M in funding.

Because of this special access, mentor network, and shared equity stake,90% of Techstars companies are active or have been acquired and together have raised over $2B. Compare this to a 10% success rate of startups on average.

 

Why ‘Bridge Accelerators’ Are So Important And Successful

Obtaining industry insight and realizing market opportunities traditionally has been very exclusive and difficult. Unless you are deep in corporate America, you probably don’t have special access to the problems these big institutions have… and if you are, you are statistically unlikely to leave and start a startup to fix them.

Luckily, a whole industry of bridge programs is popping up to connect and educate entrepreneurs with specific industry opportunities in a very structured way.

   Office wall inside the accelerator


Office wall inside the accelerator

Corporate executives want to stay ahead of the curve and integrate next generation solutions, but building in-house research & development teams is expensive and the risk of working with startups are high.

Occasionally, startups will be lucky enough to get a senior leader on board as an advisor, which can help build out product and sell into the system, but it is usually a hard uphill battle. Corporations often lead startups to the middle of the ocean and disappear, draining valuable finite resources. The specific knowledge required to build for corporations is high and generally requires more insight than your uncle Tony (a doctor) complaining at a backyard BBQ about his hospital’s Electronic Medical Record (EMR) system. So, how do entrepreneurs do it?

Historically, a startup founder would need to find a founding partner from corporate who understands these problems or works in corporate himself to see this issues first hand, two tough options.

Techstars has built an amazing program for bridging this corporate-startup gap by creating a vested and shared interest between entrepreneurs and corporate decision-makes, essentially stacking the deck for both sides.

Prior to Techstars, I had the unique ability to participate in a few bridge programs connecting problem-havers with problem-solvers, and I believe these programs will have a huge impact on the tech industry and our economy.

Prebacked connects executives in the Healthcare industry with startup founders over a period of 4 months. Entrepreneur Impact Day brings together startup and nonprofit ecosystems, carefully matching concrete problems with proven skill sets. Even the White House organized a bridge program, called the Open Data Conference, bringing together entrepreneurs in healthcare with problems in government.

 

Domain Knowledge Is The Blocker Now, Not Tech Skills.

You can’t fix what you can’t see.

There is a common theory that entrepreneurs should pursue problems they experience themselves. Back when the app store was exclusive, engineering talent was scarce, development tools were blunt, and ideas were commodities.

You didn’t have to look very far to find a business opportunity waiting for web disruption. The strategy was to work on the problem you knew best and for most tech nerds in their 20s (including Kyle and me) that meant photo-sharing, drink ordering, on demand food, transportation, and laundry apps.

However, the low hanging fruit has now been picked, and the next generation of successful entrepreneurs must find and conquer opportunities outside their world of familiarity. Engineering skills are still valuable, but they just are not the bottleneck to getting off the ground like they once were. The web development tools and resources available now can carry the basic code monkey to a product with real live users.

The bottleneck now isn’t your ability to build a minimal viable product, it is having the business intelligence to know what to build and how to sell it.

These accelerator bridge programs are going to define the next wave of innovation in the world and I am incredibly excited to be working on making that a reality.

Thanks to Tracy Kovach and Steven Richmond for editing.