So you want to change the world and help people — and you’ve started a healthcare startup.
You know it will take a great team to pull it off, and you’re starting to build the initial group that will mold the company’s DNA. You’re (hopefully) spending time thinking about the kind of people, culture and environment you want to permeate the office and define your young enterprise’s DNA.
This article came about after reading How Google Works by Eric Schmidt and Jonathan Rosenberg. In the book, Eric and Jonathan talk about the kind of talent, processes and culture that Google developed over time — with the sole purpose of attracting, motivating and retaining the best talent.
As I read the book, I reflected on the differences between a consumer-focused technology company and an enterprise-focused healthcare company, and how those differences might affect the people and the processes needed to succeed.
All (or most) tech startups look for the same kind of people Google does — extraordinarily smart and creative engineers who can take leaps, not just incremental steps forward. Reading the book, I noticed, however, stark differences between the two industries, which made me wonder — is it really the same type of smart-creatives? Or do adjustments need to be made — and if so, which ones? How do the differences in industries affect the culture and environment in a healthcare startup?
“Don’t look for faster horses.” — How Google Works
Google focused on building a product strategy based on technical insights — technical innovations that are significantly different and create a new experience for users (not just a faster horse…). While this is true for healthcare IT startups as well, I can’t help but think about the different path that is taken from development to commercialization.
Healthcare products that have direct clinical impact are regulated by the FDA, which categorizes products according to the risk they pose to patients. For patients, that is good policy. Products are placed in low, medium or high-risk categories. However, nearly all new innovation carries more risk than existing technology. “De novo,” or completely new products, face an extremely high regulatory hurdle.
To build a great company, you need great people.
Many companies don’t have the capital or time required to make it — even if they have great technology. Therefore, the name of the game for many healthcare startups is “substantial equivalence.” If a company can show that its products are only slightly better than an existing, approved product, and therefore pose no additional risk, the regulatory path becomes significantly easier, faster and cheaper.
For some companies, that can mean the difference between life and end-of-cash death. They will choose to enter the market with a “watered down” product, gain credibility and clinical evidence and only then strengthen their regulatory claim.
How does this affect people and culture? Have you tried telling a team of amazing data scientists and product mangers that has spent several months developing something that you need to claim it does the same thing as the product they wanted to replace?
“Are you serious!? It’s not the same! It’s not even close — it can do so much more! Why bother with such high specifications in the first place? What good is it if we can’t say what it’s really capable of?”
They understand the strategy. They understand it’s a small step on the way to bigger ones. But from an HR perspective, you need to manage expectations properly and hire engineers who have a longer-term view of technology and understand the specific constraints of the industry — without mounting frustration along the way.
“For years…the company was managed with a light touch…projects were documented in a spreadsheet and there was no concept or recognized need for longer range planning.” — How Google Works
This might be the greatest difference between the two industries. Everything in the medical field is about process. To be compliant with regulatory bodies, each product developed must have volumes of documentation accompanying it. Every version needs its own distinct documentation from start to finish, and every new capability added to a product must pass the regulatory filter.
This dynamic completely changes the decision making process. If a new version exists, companies think long and hard about when to release it, and the resources it will take to do so. Requirements, QA, validation and test procedures need to be completed for every feature of every product.
But you need to make sure you’re hiring the right kind of great people.
This also affects tolerance for failure. Google and many other consumer tech companies strive to succeed — or otherwise fail fast in order to reach product-market fit quickly. In healthcare, the time and cost associated with releasing a product and failing is significant, which adds a healthy dose of risk aversion to the product life cycle and planning.
I once read with envy how Facebook engineers release multiple versions per day, and conduct QA on-the-fly as users encounter bugs in the product. What a difference in development philosophy! And that difference is felt daily.
On the one hand, companies need to keep the innovative spirit of creative-thinkers alive — allowing them to continuously improve their product. On the other hand, they know most improvements will take many months to be implemented — and sometimes certain features might not be implemented in full!
Reaching your customers
“There was no channel strategy or discussion of how we would sell our products.” — How Google Works
It is very unwise (at least in my opinion) to develop a medical product without understanding how and to whom you plan to sell it. Pushing your company to create a great technological product without a discussion of how you will ultimately implement it in a real clinical setting is almost surely a fast road to failure.
This dynamic requires a more methodical approach to product development, similar to “traditional” methods. It is difficult to “let the engineers loose” as many consumer-focused tech companies do. It is also very difficult to “bypass” the system (think Uber). The system — for better or worse — is rigged to ensure slow adoption, for patients’ sake.
From an HR perspective, this means people who are more methodical in nature and can accept a different approach. They need to be comfortable with the pace of their industry, all the while seeing some of their friends working in very different consumer-oriented product companies.
Last but not least
At the end, we circle back to the beginning. To build a great company, you need great people. But there are many different kinds of great people out there, and, as a healthcare company, no matter how ground-breaking and innovative, you need to make sure you’re hiring the right kind of great people. The ones who are in it for the long term, who have the patience and maturity to understand that despite the technological edge they live on, they operate in an industry with different rules.
Healthcare is an industry that moves at a slower pace; it’s built on clinical evidence and quality of care, and is less influenced by hype or trends. Those are the smart-creatives who will take you forward and help you make a positive impact on the health of millions of people.