Three Reasons I Haven’t Invested in Consumer Health — Yet

  1. Consumers don’t make most product or purchase decisions about their own healthcare. While patients are responsible for their health and wellness decisions on a day-to-day basis, when decisions are made within the healthcare system, they are driven by care providers and often influenced by payers. Individuals are trained to consume healthcare and aren’t searching to buy or adopt products. I’m not suggesting that patients replace doctors as the primary decision makers. However, because of this structure, products that rely on acquiring customers on an individual basis have a particularly hard time. Customers can be hard to find and acquisition costs can be very expensive, especially when multiple companies find the same niche and compete to pay for those customers.
  2. B2B business models are most common and well-understood, not B2C. Because of the “doctor as decision maker” paradigm, it’s more common for startups to target providers or payers as the primary customer, not direct-to-consumer. Businesses sell to doctors or insurance companies, who then push the product to their patients or members. Building partnerships with big healthcare companies is often challenging and takes a long time, but this can be a great business model. If an enterprise or SAAS strategy is right for you, then focus on it. It’s just not in our investment area as a consumer software fund.
  3. People don’t like to think about their health. That makes it hard to get them to adopt and use new health-related products, and might be the most challenging behavior pattern to shift. For most people, major healthcare decisions are infrequent. There are obvious exceptions like co-morbidity patients and chronic illnesses, but the majority of individual consumers don’t have a frequent use case for health related products. This makes it harder to build and sustain a consumer business, where we often look at long-term product engagement as a critical factor for success.

--

--

--

Consumer tech investor and startup supporter @mavenvc.

Love podcasts or audiobooks? Learn on the go with our new app.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Sara Deshpande

Sara Deshpande

Consumer tech investor and startup supporter @mavenvc.

More from Medium

San Diego: Five.Ten.Thirty

Why We Invested In TheGoodz

Fintech Cadence Announces Third Cohort of Their Financial Health Focused Startup Incubator

Why we invested in Sennen.