When we said we were launching a health tech startup, our friends, family, and contemporaries asked us if we were crazy. After all, the medical sector is one of the most heavily regulated there is. Couldn’t we have picked an easier road to entrepreneurship?
The typical template for a technology company adheres to Facebook’s “move fast and break things” playbook—beta testing, minimum viable products, iteration, reliance on data, user-centered design, and a hubristic disdain for the involvement of humans.
This is a far cry from the model followed by medical services. “Move fast and break teeth” isn’t a slogan a health tech startup can take to market. When your development environment is a patient’s body, hands-off risk-taking isn’t the right move.
The Startup Environment
Many medical professionals have launched startups that have struggled to function as digital businesses. On the other hand, many tech entrepreneurs have proved to be a poor fit in a regulated industry like health.
This inability to cross-pollinate is regrettable, although it is now clear that the Silicon Valley playbook is broken. What does Facebook illustrate today if not that unfettered innovation truly can break things?
The world has finally opened its eyes to the negative impact digital services have had on the human mind. For example, anxiety, dysmorphia, and bullying are becoming increasingly prevalent because of social apps. If startups in my sector made an equivalent mess, we would see symptoms like horrendous drug interactions, teeth falling out, neurological damage, or worse.
That is why healthcare providers must operate under strict regulations. The United States Food and Drug Administration serves as a regulatory body providing careful oversight to help ensure patient safety. Careful testing and documentation are required to earn approval for dental appliances. And while this can be time-consuming and costly, the oversight of these regulators results in greater patient confidence and optimal clinical outcomes.
The high bar of customer responsibility enforced on operators by regulation can be a good thing, especially with companies that deal in medical issues, where the line between customer and patient is very thin. There are three benefits to today’s environment, too.
First, only difficult spaces remain. Three decades into the web explosion, many of the main digital problems have been solved, and most of the software categories that can exist already do. These achievements have been relatively low-hanging fruit, but the remaining white spaces are the ones that many entrepreneurs have avoided—the difficult ones, the regulated ones, the ones that require access to skin and bones, not just apps on phones.
Next, the prize is bigger. The journey may be more arduous. But the reward to companies that can break through higher barriers to entry, solving physiological problems with a digital mindset amid the constraints of responsibility, may be larger than ever. Such solutions are not a code that can be easily replicated by competitors.
Finally, regulation breeds resilience. To grow strong roots, a sapling must be buffeted by wind. Likewise, exposure to regulatory standards can be a forcing factor that helps startups to build a foundation for resilience. It is also a standard that ensures the safety of the consumer in a sector where it cannot be ignored. The mouth is the gateway to a variety of other things, after all.
Lessons Learned
There are important lessons here for all types of technology companies. Most of all, for the best chance of success, it’s time every company began operating to meet the same high bar of responsibility that already has to be met by those in regulated environments.
Governments and regulatory agencies are increasingly closing the gap on sectors that have enjoyed a free run. The moral of Big Tech’s tale is that any founder who aspires to be successful should anticipate that enforced responsibility may also become a consequence of that success. Anticipating regulation should become a risk factor every robust business considers. Not to do so will be considered a negligent oversight by smart investors.
We are seeing a battle brewing around online providers that are carrying out procedures on patients without licenses. The rise of direct-to-consumer (D2C) is growing in all business sectors, from Warby Parker’s optometry to Dollar Shave Club’s personal care. In healthcare, we have seen the emergence of companies like SmileDirectClub, offering “at-home” teeth aligners in a category dubbed teledentistry.
But invasive, regulated procedures like orthodontics don’t fit well with providing a hands-off service. That is why 36 states have sued SmileDirectClub for practicing dentistry without a license, why three states have restricted its operations, and why the American Association of Orthodontists claims it is illegal and creates medical risks.
I admire every new innovation that can be brought to healthcare. Digitally minded providers are introducing product convenience and service expectations that most traditional healthcare providers can only aspire to. Usually, they don’t even bother aspiring.
But even those of us who aim to fuse the best of both of these worlds must be mindful to meet the high bar that patient care and responsibility requires of us. It doesn’t have to be like pulling teeth.
Toni Oloko is the co-founder of Dandy, a venture-backed digital health tech startup. Before starting the platform, he ran special projects at goPuff, where he helped scale the company from 12 to 85 markets over the course of two years. Before goPuff, he built and sold a software as a service company called PracticeGigs.
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