KEY IDEA: As the money continues to flow into digital health start-ups there is a vast disconnect between what consumers want and what Silicon Valley thinks they want.
Think about this for a second: According to The Economist “as we report this week, a dozen unicorns that have listed, or are likely to, posted combined losses of $14bn last year. Their cumulative losses are $47bn. Their services, from ride-hailing to o$ce rental, are often deeply discounted to supercharge revenue growth. The justi!cation for this is the Silicon Valley doctrine of “blit scaling” to conquer “winner-takes-all” markets—or in plain English, conducting a high-speed land grab in the hope of !finding gold”.
There are 88 privately held startups worth more than $1bn each in the San Francisco Bay Area, more than in any other region in the world, and a fair few of them, including Slack, a corporate messaging service, and Instacart, a delivery firm, is hard by the Transbay terminal. You can’t quite see the headquarters of Lyft and Uber, two ride-hailing services, from its leafy roof, but were you to climb the swanky Millennium Tower next door you could.
Now Uber is getting ready to go public even though recent studies show that Uber drivers make poverty wages — about $10 an hour after their vehicle expenses are deducted from their pay. Drivers’ fortunes might only worsen after the company goes public. Uber lost nearly $2 billion in 2018, and the best long-term hope for Uber’s business is that drivers disappear altogether, replaced by cars that drive themselves. In rushed pursuit of that profitable vision, one of Uber’s self-driving cars killed a pedestrian last year.
This should scare the daylights out of you.
Money is still pouring into digital health in the Valley. I have spent the last 90 days embroiled in a studying digital health for a NY agency. We first started with expectations versus reality and decided that we had better go to consumers first to listen to what they wanted in digital health. Here are some of the non-confidential findings:
1ne: Consumers want, first and foremost, is complete access to their medical records and the ability to both access test results and eMail their doctor.
2wo: They want their online medical records to follow them from doctor to doctor and don’t like that they often have to follow up with their HCP’s when they go to a specialist.
3hree: Patients believe, for certain conditions like the flu or bad colds, that they should be able to email their doctor for an Rx rather than wait for an appointment or go to the office when they are sick.
4our: Online consultations via a pay model do have some allure but they worry about an accurate diagnosis.
5ive: Patients do NOT want to be reminded that they have chronic health problems via apps or email.
6ix: Patients, more and more, feel that they are “customers” and want to be treated as such. They want their HCP’s to listen more to their concerns.
In my opinion, a lot of digital health start-ups will be gone along with the money within the next 2-3 years. This is especially true a group physician practices become more