Inspired by success of the likes of Y-combinator, a number of incubators have sprung up in last few years. Its encouraging to see that some have chosen to focus on Healthcare. With a trillion dollar market and a dire need for innovation seems like a right way to go. There has been a lot of optimism on an increased VC presence in healthcare IT.!

Few notable incubators -

  1. Healthbox – Chicago based incubator, powered by Sandbox industries.
  2. Blueprint – NYC based incubator started by Brad Weinberg founder of Shapeup. Blueprint is focused more on enterprise startups
  3. Rock health – A San Francisco based incubator. Most of the startups in the program are consumer focused.

Why are healthcare startups hard?
I’ll highlight few of very well known facts about the health industry that serve as a big barriers for the startups –

  1. Regulations – There are a plethora of law’s regulating the industry – HIPAA, FDA etc.; and that in turn puts a lot of tax on a healthcare startup.
  2. Long sale cycles – Enterprise sales in the industry have very long sales cycles.
  3. Complicated economy – Someone has to give-up a dollar for startup to make one, its very hard to “generate” wealth in the Healthcare economy; it’s a very much a zero-sum economy. Additionally, the payer equation many times doesn’t align up well with other players in the system.

So what are the characteristics of the winners?
Lets take example of very of the well-established healthcare startups and see if there are themes for success.

  1. Disruptors – Patients like me fundamentally challenges the current curing methodologies and introduces the social aspect to finding effective treatments using the power of social interaction.
  2. Enablers – Zocdoc enables convenience for scheduling appointments and finding physicians. The service has seen a great uptake owing to fact that most folks like the ease of online scheduling.
  3. Cost Savers – Given that the health care economy is zero-sum a lot of companies fit this bill. Most enterprise companies playing in the re-admission management, pre-registration, public health reporting, meaningful use etc. play in this realm.

Dear reader – anything else you as an obvious wining characteristics? Please comment below..

Most of the above incubators are still taking applications for their next set of companies, and if you have been pursuing a health care venture what better time to apply!! Act on your innovative ideas..