TL;DR: Nope. Not in the UK or USA anyway. Go make fart apps instead.
Why would someone ever want to be an entrepreneur in the first place?
Life as an entrepreneur is hard. Most people get their impression of entrepreneurs from massive success stories like Mark Zuckerberg (Facebook), Larry Page & Sergey Brin (Google), Bill Gates (Microsoft), or Richard Branson (Virgin). To the outside world, it can seem like all you need is to have a good idea for an app, then a cloud of investors and smart engineers will whisk you away to the multi-millionaire mountains.
Others form their opinions from shows like The Apprentice: Wannabe entrepreneurs are picked based upon how
infuriating entertaining they are on screen. They prance around like self-deluded dickheads, bumbling their way through tasks which might have been relevant back in the 1970s where Sir Alan Sugar still lives. To the viewer, it can seem that the only way to be successful is be so densely lacking in insight, that you’re unaware of your own incompetence, so as to dupe everyone entirely by your confidence.
Neither reflect reality.
What you don’t see is the bread and butter of being an entrepreneur: long hours every week for years, many spent alone, furiously working on something you so passionately believe about while everybody goes about their usual business, ignoring you or telling you that whatever you’re doing can’t be done. A view only reinforced by an endless stream of “no thank you”s from prospective customers.
You don’t see the huge sacrifices: turning your back on a stable job and source of income, having to skip holidays because of lack of money, saying “no” to social events because you need to milk every minute, putting off having a family (potentially forever).
You literally bet years of your own life as well as your own money when you become an entrepreneur. You live with massive uncertainty, forever standing on ground which quakes and shifts, where the only strategy is to keep moving with it.
There are no overnight successes. Every single success at the top of this rant followed years of hard work in the shadows just as described.
So why do it?
I tell you why NOT to do it: money. If all that motivates you is money, then go and join a city investment banking firm and spend your 90 hours weeks perfecting spreadsheets and Powerpoint presentations.
All successful entrepreneurs do it for one reason: they see a missing (or poorly provided) product / service and passionately believe that their version of this product/service will make the world better. Money is simply a byproduct of this work, a happy bonus, not the primary driving factor.
So here are a few reasons why you might want to be an entrepreneur:
- You can see something missing in the world and are convinced you know how to fix that
- You are creative, and you need an outlet for that creativity
- You can learn quickly and rather enjoy picking up new things
- You can zoom in and look at something in detail, then zoom right out and see the big picture effortlessly
- You hate working for someone else
- You hate rules and the status quo
- You prefer the type of work which is cumulative, like building something, rather than where your work just keeps a production line moving
- You are tenacious
- You thrive in uncertainty
- You’d rather spend a free weekend building something than binge-watching Netflix
Ok, that suits me, why be a health technology entrepreneur?
Health technology / medical technology / human life sciences is an attractive area for self-motivated people. This is probably because it means your work will have a real impact. You’ll get up each day knowing that your creative project is, at some point in the future, going to save lives or make thousands of people’s lives better.
Humans are complicated, the health economy is complicated. Complicated things are interesting. There are all sorts of products and services for all sorts of health needs you can imagine. Health is something that is always in demand and always will be. Curiously enough it is a sector where many people feel dissatisfied with what’s on offer, so there is plenty of scope for improvement.
Sounds perfect, right? Lots of apparent opportunity, big meaty problems to crack, guaranteed ongoing demand and a clear humanitarian benefit at the end of the day.
There are just three small issues that stand in the way. Three little bullies that ruin the playground for all the other kids:
- Healthcare is controlled by people who like figures and reports, not by customers
- Healthcare is conservative and regulated. The regulation is a nice idea, badly executed.
- Healthcare is a political football, so has massive government interference
1. Healthcare is controlled by people who like figures and reports, not by customers
The major developed world healthcare markets are now controlled by managers. MBA types, many of whom have never touched a patient.
In the USA, these managers are found both in the health insurance companies, and on the boards of healthcare providers (hospitals and hospital chains). The insurance companies are interested in risk, so it’s people who like RAG matrices and financial risk management. They are and have been increasingly influencing what treatments patients receive by what things they decide to include in their policies. Hospital management tiers are now all about the financials, ensuring patients can pay, and putting pressure on doctors to “increase patient revenue” by performing tests and procedures which generate income but might not be necessary.
In the UK, hospital boards care mainly about hitting targets (aka “Clinical Indicators”), about inpatient bed availability, and about how they are portrayed in the local media. The job of an NHS hospital manager is verging on impossible: they have been asked to do more with less every year for the last decade. They have been handed an ever lengthening register of targets each getting more stringent every year, while having their budgets cut and swiped away by fines for failing to hit those targets. The targets are dreamed up by figures in the Department of Health, many of whom have never touched a patient, and tend to focus on things which are easy to measure, but are not necessarily closely linked to patient outcomes. The only way an NHS hospital can survive in such an environment is to bring in people who have a head for targets and finances. Patient safety and clinical outcomes are an unrewarded distraction, and proponents of those are booted out the board room accordingly.
Who doesn’t control the healthcare market? Patients, i.e. the customers. Patients are pawns in this game, whose only relevance is how the contribute to the financial bottom line or target statistics. They have almost no choice of hospital: it’ll be the nearest one that their insurance provider works with. Once in the doors of a hospital or clinic, all the processes which go on inside are geared around the financial bottom line or hitting those targets.
This means that the people who can write the cheques for products / services that us Health Entrepreneurs so passionately create, are usually people who are not motivated by patient health.
The people who end up in these positions are extremely risk averse. Being seen to have made a “bad decision” is far worse than making no decision even if the status quo is undeniably terrible. They do not like to buy from young companies, even if buying is a no-brainer. It’s safe however to go and buy something mediocre from a big supplier, or because the hospital down the road also bought one, even if the hospital down the road says it’s total shit. They’ve got someone they can point to and say “well they bought one too, so don’t blame me”. This is a market which doesn’t just practise “look before you leap”, it practises “look before you leap, then look again to see if someone else has already leapt, then wait a bit for a few more to leap, even if the land is on fire behind you”.
You can argue entrepreneurs who want to make medical devices to sell directly to the consumer are putting themselves in a customer-controlled market. I’d agree with this, so long as your device is affordable with the average person’s disposable income, and you can deliver decent volumes at that price point to make your business viable. As your unit price increases, you reach a point when patients need their healthcare insurer or the NHS to subsidise / buy your widget for them. Then you’re back to a provider-controlled market.
Now there are exceptions scattered across the world’s health markets. In the UK I’ve met some managers who really “get it”. These are the really smart guys will look at patient outcomes, look at the targets and are able to map a pathway between the two. They see how your product / service translates into the thing they really care about (patient health), and the thing they are told to worry about (the targets). They create win-win situations where doing good for the patient means the targets get delivered. They are often under-recognised by the establishment, but are unreservedly brilliant. Go find them, they are your route to success.
2. Healthcare is conservative and regulated. The regulation is a nice idea, badly executed.
Healthcare has attracted the attention of regulators for decades. Quite rightly so. It’s not acceptable for any medical device / service to have the capability of maiming or killing a person. There needs to be some level of screening to keep badly designed and badly built things from harming patients.
The problem is the regulatory processes themselves are badly designed, just like the rogue devices regulation tries to stop. They don’t stop bad widgets from harming patients by analysing the widgets identifying risk of harm and blocking those that are too risky. Instead they work by tying every supplier up in bureaucratic knots such that most widgets never make it through the tangle to patients, even the good ones. Put a roadblock in front of 90% of the traffic, and you’ll find that the total number of accidents beyond that roadblock will reduce.
So many of the regulatory requirements I have worked on boil down to filling in paperwork to say “we will plan to analyse aspect X of widget Y and this is what we’ll do if the analysis says it’s dodgy”. It sounds okay in principle, but that is often the subtotal of the regulatory requirements: most marks are for stating that you’ve got a plan to plan to do something, rather than actually having done it. Only a minority of regulation involves actual examination of the product / service you’re providing by someone who knows the clinical scenario it’s designed for, how the widget works works, what the possible outcomes are and how these compare to the status quo.
For some of the standards we’ve met, you could effectively say:
“our analysis shows that this widget in 15% of cases would accidentally tattoo a knob on the patient’s forehead with a dotted line emanating from its crown. In those circumstances we would give the patient a leaflet and a hat to wear.”
It’ll pass. The widget is stupid, but so long as you’ve got paperwork saying you’ve realised that and have a plan, even if the plan is daft, hey go right ahead! Don’t worry about actually fixing the problem in the first place.
Regulation often focuses on the wrong things. I spend a lot of my time explaining the tens of ways we have mitigated the 1.5% theoretical extra risk caused by my company’s medical software, yet the colossal 45% reduction in risk using the software offers over the status quo is never taken into account. They’re blind to the massive benefit because of a tiny extra risk. In patient terms, patients are made to put up with 43.5% more risk of harm than they should have because someone was worried about that 1.5%.
Countless amounts of regulation has built up over the years as more and more quasi-government agencies emerge to “take responsibility” over some aspect of healthcare. Each has a raft of bureaucrats keen to justify their jobs by creating even more badly-designed regulation.
We desperately need to pare the bullshit back to basics:
- What is the product / service?
- What are the ways it could harm a patient (likelihood & severity)?
- What are the ways it could benefit a patient (likelihood & magnitude)?
- Do the benefits of this widget outweigh the risks in the eyes of a clinical expert?
- Are there any extra reasonable things that could be done to reduce the risk further?
As a health tech entrepreneur, you’ve got to wade through the BS. That’ll cost you time, money, and probably the will to live.
3. Healthcare is a political football, so has massive government interference
The perfect market for an entrepreneur is one where there is lots of demand, where customers vote with their feet, where the incumbent suppliers are behind the times, and where you can get to a point of supplying something better with the humble resources you’ve got available.
The problem with healthcare is that: people care deeply about it. Scratch that… that’s not the problem, the problem is that governments have realised that people care deeply about it.
This means that governments have sought to keep influence over healthcare. They like to be in control of health budgets, because it’s voter food. They will make promises, create laws, pull funding and generally distort the healthcare market in order to buy themselves votes.
In the UK, five senior Westminster
fuckers MPs pranced around the country in a giant red bus (the Brexit Bus) with the words “We send the EU £350 million a week, let’s fund our NHS instead”. It was a major influence and probably tilted the UK public to vote “leave” for the referendum. Now that referendum has taken place, Britain is leaving the EU, is there going to be an extra £350m per week for the nation’s health service? Nope.
The healthcare market gets hit by a government generated storm every few years there is a major election (or referendum). Established companies with influence over politicians can ensure changes are favourable to them and at the very least have a weather radar telling them what’s ahead. Deep pockets mean that the big corporate tanker can cut through the few months of choppy water. Startups have to ride the storm in a fibreglass dingy.
If you are drawn to healthcare as an entrepreneur because you are motivated by patient benefit, then that’s a perfectly good reason to get into the game. However it’s a market currently controlled by bean counters and target chasers, not by patients.
You are not going to be able to sell on the strengths of how your product or service benefits patients. That’s unless you are selling something cheap and unique to patients directly.
You will find yourself tripping over regulation, much of it will seem ineffectual, and all of it will consume your precious limited resources.
You’ll find that every few years market priorities will shift as yet another politician interferes to score some cheap votes.
You’ll find that healthcare providers don’t want to know you, unless you can prove yourself once in a place where there’s a rare maverick manager, in which case they might consider you.
But if you can navigate all these complications, if you can find a way to sell your stuff to meet the targets and the numbers while delivering the benefit that patients need, then you’ll do alright.