New York University’s Leslie eLab recently hosted Steven Krein, the co-founder and CEO of StartUpHealth, who discussed “Reimagining Health Care in the Startup World.” Speaking to an audience comprised of students, faculty, entrepreneurs, and medical professionals, Krein discussed how health care is slowly re-inventing itself in the startup world, using StartupHealth, which helps early stage companies develop and sustain themselves in the health care space, as an example.
When the Internet first emerged, according to Krein, it affected every industry except for two: education and health care. Why all but these two?
“The conditions had not yet been set,” he said. “There’s large regulatory issues, long sale cycles, there’s very little incentive for anybody to change in health care.”
For Krein, who was an entrepreneur with no prior knowledge of health care, it was close to impossible to transform that industry without an incentive. Eventually, one presented itself in the form of health care reform.
“If you’re an entrepreneur, it’s a treasure trove of opportunity,” he said. “Regardless of what you think about the health care reform, it’s shaken up the world, globally.”
It paved the way to discussions about changes in business models, incentives, and employers. People are now asking how this movement will affect them. Chronic diseases, aging, and costs are all accelerating, but technology is able to reduce cost in every other industry, except for health care. At the same time, entrepreneurs are now living a time where they have access to angel investors and crowdfunding sites that allows them to get the money and funding they need for their startups. Krein calls this the “Golden Age of Entrepreneurship.”
In 2010, funding to digital health care increased, closing in on the billion-dollar mark. Venture capital investors, angel investors, corporate ventures, and foundations began investing in the health care market. It allowed entrepreneurs to work on solutions that would lower the cost of health care, improve the outcomes, and solve the problems in the system.
“But nobody knows what’s going to work,” said Krein. “But you’ll see lots of companies now getting funding. You’ll see lots of investors investing. You’ll see the kinds of solutions that,most of which, could not have existed three or four years ago.”
But digital health entrepreneurs don’t just rely on investors for the success of their businesses. They also have to collaborate with different sectors of the health care field, such as pharmaceutical companies, hospitals, and health insurance companies, because those are the parties that have the control over this field. Krein says that although it will be a challenge for entrepreneurs to connect with these large companies, but it’s a big opportunity.
As a young entrepreneurs just starting out a business, Kreinseized on the concept of entrepreneurial coaching – the idea of getting coached through challenges and turning those challenges into opportunities. The coaching program changed his life.
“I saw the power of talking to other people about what you’re going through as an entrepreneur,” he said. “It makes all the difference in the world.”
After that, as his company grew, Krein was introduced to a CEO network, Young Presidents’ Organization (YPO), a global network of CEOs. It was then that he saw the power of what he calls the “Network Effect.”
“If you could connect people [entrepreneurs and CEOs] globally,” he said. “It’s very difficult to stop that global network.”
These experiences gave him and his team the idea of creating a model that combines a coaching program, peer network, and a stakeholder network into a platform that can transform health care.
So in 2011, Krein introduced StartUpHealth to President Barack Obama and Vice President Joe Biden. It would be an entrepreneurial platform to help entrepreneurs worldwide transform health care and build their businesses using a 3-part model.
- A coaching program: Focused on long-term development of companies through 3 years of coaching. Entrepreneurs from nine countries and 50 cities participate in this program.
- Peer networking: Entrepreneurs connect with each other and discuss what works and does not work in their various businesses and figure out solutions together.
- Stakeholder network: Entrepreneurs have access to a list of venture capitalists, angel investors, corporate venture capitalists, foundations, government agencies, and many more, dedicated to helping entrepreneurs transform health care.
“With healthcare – lives being at stake – we felt obliged to do everything we can do to reduce all of those obstacles and make it easier to transform health care,” said Krein.
Today, StartUpHealth is made up of 94 companies, 185 entrepreneurs, 9 countries, and 50 cities. Considering that Krein managed to accomplish all of this in just a few years, those are pretty healthy numbers.
Image credit: CC by 401(K) 2012
