Where I Would Invest (Part 1 of 2) 11/7/12

DISCLAIMER: I’m not a investor, nor have I ever been an investor, in startups. I’ve also never worked at an investment company. In fact, I’m currently on the other side of the table trying to raise money from investors. Also, this space is so huge that there are inevitably areas I will not list. In writing this disclaimer, I realized I didn’t list tools for pharma and device marketing, both areas that I think are great investment targets. Now that my lack of qualifications and experience are clear, I’ll talk about the areas that I’m the most excited about from an investment standpoint in the healthcare startup space. Also, I have no affiliations with any of the companies listed.


Apps and Services for Moms and New Parents

I often mention how much I like apps that target engaged users. I think some non-engaged groups need solutions as well, but I’m a lot more confident in apps that target engaged groups, especially while we’re still mostly appealing direct to users and not working through providers to prescribe apps. In healthcare, certain diseases, moms (expectant and new and almost all others), and adult children caring for elderly parents are my prime examples of these groups.

The reason I particularly like apps for moms is that moms are usually young, tech savvy, and are familiar with social features from using Twitter and Facebook. Some of the apps here don’t even really focus on the health and wellness side, instead focusing on things like connecting moms so they can share kid milestones or recipes or anything else. If you can get users engaged and hooked with those features, adding in tools for tracking and med education is easier.

kidfolio

Alt12 Apps is a very good example. It is focused on the social side of things right now, which is great, but I think it can easily move the other route to be more valuable for health and wellness. Alt12 started with a pregnancy app and now it has a mom type of mobile social network for logging and sharing events related to kids. I could easily see integration of things like pediatrician reviews or even med reviews and advice. It could almost be like PatientsLikeMe but for parenting.

asthmapolis

Asthmopolis is another example, though definitely more health-focused than Alt12. The company offers a connected tracker that fits on an inhaler for patients with asthma. I’m not sure how focused the company is on targeting moms to sell its product, but obviously I think that’s where it should be focused, at least until it has more payers and providers pushing it to patients. For parents with kids that have asthma, this seems like a great way for both the kid and the parent to stay up to date on the condition, and also to bring some peace of mind. The other thing I like about Asthmopolis is the appeal to patients, providers, payers, and even researchers (public health).


Apps and Services for Family Caregivers

Similar to moms, adult children with elderly parents are a great market. About a year ago, IBM came out with a report that found that 25 percent of US households are remote caregivers, and the majority of those households care for elderly parents. Ironically, most of the caregivers that I’m talking about are also moms. I’m curious to see a company launch with one service (say to track kids health) and then launch another service to help keep track of elderly parents. The next offering would inevitably be to keep track of spouse health.

Some people call this space aging in place or aging at home, which speaks to the potential of technology to help people remain independent (and ideally out of nursing homes) longer. While I think there is value in these services for the elderly user, I like the tools that add value for both the patient and the remote surrogate caregiver. Text messaging, integration of social networks and updates, reminders, and weekly reports are great value add for surrogate caregivers, solving problems they have in keeping on top of remote loved ones.

This is a crowded area, but the market for this is going to be huge, especially as most of these companies are offering (or soon will) services both direct to consumers as well as through home health and nursing homes.

BeClose

The company I know best here is Independa, but there are lots of others like Ideal Life, Robert Bosch, and BeClose. I think most of the companies offer monthly services plus a basic hardware setup cost.


Apps and Services for Disease Communities

Rounding out the engaged user buckets, this is another area that I think is ripe for fast growth. People with certain conditions are eager to find a place online to share experiences and learn from others. In fact, some communities already exist on networks like Facebook, but Facebook wasn’t designed to collect the sort of structured data (like adverse events or detailed med history profiles) that can turn the interactions into meaningful insights and actionable advice. I’m not talking about chronic diseases like diabetes or hypertension, but I’m also not limiting it to very rare conditions, either. I think there is a middle of the road for conditions like epilepsy.

PatientsLikeMe is the best example, has been around for a while, and has a business model that works. I like PatientsLikeMe a lot for several reasons, including the trust it garners from its user.

I also really like the newer entrant Healthy Labs, which launched a network for patients with Crohn’s disease this past spring. I’ve heard it had tremendous organic growth through user invites and now has plans for several new networks, including one for MS and one for rheumatoid arthritis (RA) These are very strategic choices and I think MS in particular will see very fast growth.


Quantified Self

I feel obligated to mention this area because the market — at least in terms of new products being developed and funded — is moving incredibly fast. I’m also excited about the pilots of Fitbit and LoseIt! for payers and health systems. I’m not sure how many more standalone exercise games can succeed, but soon I think we’ll start seeing some clear device and data storage winners emerge (I’m betting on Fitbit myself, and maybe Nike). From there, we’re going to see lots of cool value add services built on top of that data using APIs, sort of like Zynga on top of Facebook.


Virtual Clinics

This is an area I don’t read much about, but I’ve been obsessed with its ever since hearing about some companies creating these virtual clinics. My definition of these are disease-specific services, backed by physicians and requiring some liability coverage, that make it fast and easy to get care, lab tests, meds, or basic advice. The services offered are very basic and do not require much if any physician interaction. Users pay out of pocket for the convenience, and sometimes the privacy.

analyte

The company I first learned about here was Analyte Health, which does online, private STD testing. Users go to the site and choose the tests they think they need, paying online or even through Western Union to hide the transaction. Analyte puts the order in to LabCorp and pays for the test. The user gets the test, the results go back to Analyte, Analyte makes the results available, and then provides prescriptions or referrals if needed. A couple of other companies are also now doing this exact model, including PinpointMD. Analyte has had tremendous growth since launching less than two years ago. STDs are a great target as people desperately want privacy in addition to convenience. Unfortunately for me, having done research on these STD companies, my banner ads have become rather embarrassing.

The list of possible niche clinics is huge, and I’m sure both PinpointMD and Analyte will soon be launching new services. One other interesting example is Novi Medicine, which is doing the same thing as Analyte but tailored to acne. Instead of the privacy need, Novi is addressing the challenge and cost associated with seeing a dermatologist. Acne is pretty low risk too, not like melanoma screenings.


More to Come

I’ve got five other areas that I’ll cover in my next post. I really had no idea how much was here, but kept thinking of more areas as I wrote.

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

  • Mobile Man

    LOVE the new format!

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