Some year-end thoughts on healthcare entrepreneurship from Sachin H. Jain
Sachin H. Jain, President and CEO of SCAN Group and Health Plan and an Adjunct Professor of Medicine at Stanford University School of Medicine, shared a post on LinkedIn:
“The year 2024 saw a lot of hot healthcare companies stumble and fail.
Some year-end thoughts on healthcare entrepreneurship:
1) Almost anything worth doing in healthcare is hard and will take twice as long as you think it will when you set out to to do it.
2) If it looks too good to be true, it almost always is. Sometimes if you’re in the right information flows, you’ll hear the real story. More often than not, you won’t.
3) Some healthcare “unicorns” are actually get rich quick schemes with unsound fundamental economics. The greater the hype, the bigger the fall. There may be unsound valuation practices at play or, worse, unsound accounting practices.
4) Beware expert bias. Fancy names or fancy firms attached to something often doesn’t mean very much. They are often easier and cheaper to get than you think. There are more Theranoses than anyone cares to admit.
5) Some founders succeed financially despite their companies ultimately failing. Subsequent financing rounds enable founders to “take money off the table.” This trend represents an insidious distortion of the venture model.
6) If after hearing about a company for a long time, you still have no idea what they do, listen to your gut…and run. These “all things to all people” companies are a type that should be avoided.
7) The more boring the problem a company aims to solve, the greater likelihood of commercial success. Most of our most vexing problems are very very boring (provider data accuracy, anyone?).
8) Healthcare is complex. And experience matters. Being new to healthcare just means you are likely to spend a lot of time making mistakes others have already made. Beware the shiny arrogant outsider.
9) Large incumbent companies and leaders make ill-considered big strategic aquisitions that subsequent leaders then spend years struggling to make work. Big media splashes don’t often translate into big success.
10) Every big new trend (AI) will attract a lot of new players, making it very hard for the average buyer of services to make good choices. Industry relationships will almost always drive buying decisions more than fundamental differences between offerings.
Do you agree with these thoughts? When am I missing?”
Sachin H. Jain is the President and CEO of SCAN Group and Health Plan and an Adjunct Professor of Medicine at Stanford University School of Medicine. He also serves as a Board Member at The Paul and Daisy Soros Fellowships for New Americans, an Academic Hospitalist (WOC) at the U.S. Department of Veterans Affairs, and a Board Member at America’s Health Insurance Plans (AHIP). He is also a board member of Omada Health.
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