Another Giant Gets Serious About Startups 1/12/13

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This week was supposed to be all about CES, and as Lt. Dan highlighted in his weekly recap post, CES did serve as a launching pad for some cool new gadgets. But I don’t think any of the announcements at CES are as big as Athena buying Epocrates, something I discussed earlier this week. Additionally, two announcements by GE this week are big news.

startuphealth

The first announcement is that GE has partnered with StartupHealth to launch a program for startups in the consumer health space. The program, three years in length and not a typical accelerator model, sounds similar to StartupHealth’s current program for startups and entrepreneurs. The main different is that startups will likely be linked with relevant GE executives. I say “likely” because many of the details of the program haven’t been ironed out yet. Startups will give up 2-10 percent equity to both GE and StartupHealth. GE will use its access to both customers and data sources to help startups in the program. I’m curious what startups enter the StartupHealth/GE program on the consumer side. Guess we’ll see this spring.

I’ve always thought StartupHealth had an interesting model by creating a longer program for startups and not requiring them to hunker down in one locations for 3-5 months. I think the nature of accelerators, many of which are based on the success of the YCombinator and TechStars model, is to be short, intense and geared towards and a very specific goal – Demo Day. At demo day, companies typically launch their product or present their traction (hopefully up and to the right graphically) or announce their pilots. Healthcare, being more complex and challenging from an engagement and data perspective than many other sectors, is a hard market to learn, build, and iterate in –as well as sell and implement with customers — in 3-5 months.

This announcement makes me wonder if other well-established, large companies in healthcare might move down similar routes of getting involved more directly — and I imagine shaping — some of the new startups and entrepreneurs getting into health tech. Rock Health has a long list of established partners, Healthbox is funded with BCBS venture money, and both accelerators in New York have strong ties to industry, but this is the most direct I’ve seen any vendor in healthcare engage with the accelerators.

Maybe Epic, Meditech,Cerner, athena, or Siemens will announce new accelerator partnerships soon, or an accelerator of their own (I talked about athena’s More Disruption Please earlier this week, though that isn’t an incubator). I doubt it but who knows? It’s potentially a good way to help these giants do something innovative.

The other big announcement from GE this week was that Risa Stack, a life sciences partner at Kleiner Perkins Caufield & Byers (KPCB), will be joining GE as general manager of its Emerging Health Innovations. KPCB, for those that don’t know, is a massive and well-established venture firm in Palo Alto. Are they the biggest? I’m not sure how frequently partners leave big VC firms, but this is definitely an indication that GE is serious about connecting with new concepts and companies in healthcare. It also adds a general manager with lots of experience with early and growth stage companies in health. I think this is actually a much bigger announcement for GE than the partnership with StartupHealth.

GE had what I consider to be two pretty big announcements this week – it’s partnering with a startup program and adding a long-time venture capitalist as GM of its emerging health practice. I think both are great for GE and potentially good for startups. I wonder what real impact it will have for a company the size of GE, but if nothing else, both announcements clearly show an interest from a big player in new and emerging companies.

The other interesting thing about GE doing this is that it is the second company that’s partnering with a startup program. The first was Nike, which is really on the fringes of health in the fitness space, which partnered with TechStars. Microsoft also had a Kinect incubator, but I think it ran that itself. Interesting, Microsoft, GE, and Nike all touch on health in some way, though GE most directly in this case. We’ll have to wait and see if these announcements have any real newsworthy outcome.

It makes me wonder if I missed one of the trends of 2013 – big players targeting startups for innovation. What do you think?

TGphoto
Travis Good is an MD/MBA involved with health IT startups. More about me.

  • RNeutral

    Neal Patterson’s son is running Cerner’s acquisition operation.

  • Aaron–what you rally kinda got but kinda missed is that 2013 is the year when APis open to the extent that business development becomes “Open your API + Access your customer base + Store and interface your customers data”. That’s what AT&T, Aetna, Athenhealth, Allscripts et al are starting to do….and it;ll strike the rest of the alphabet too. Whether it gets to E any time soon is doubtful 🙂

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