Health startups and connected networks

Jan 29, 2014

Table of contents:

1. Power of connected networks
2. Faced with a situation, a network can help
3. What can be done to improve health care?
4. Quantified self and crowdsoucing big data
5. Current health based startups
6. Conclusion

The last 10 years of technology innovation and the rise of the Internet have created and destroyed many industries. The shift from atoms to bits and the revolution of enabling connected technology like the smartphone have changed the landscape of some of the most rigid and incumbent industries.

Music, publishing and physical retail are just some of the industries that have been left in the wake of upstarts like Napster, Amazon and eBay, and many more are perilously close to the edge.

However it has been said that we are still not making significant progress in the industries that really matter. Peter Thiel famously said, We wanted flying cars, instead we got 140 characters.

One of the biggest industries that is still pretty much untouched by the technology revolution of the last 15 years is healthcare. The medical industry is highly regulated by the government and tightly controlled by the big pharmaceutical companies. Medical records and patient history are also very sensitive to privacy, but also stuck in legacy systems that are distributed and fragmented in such a way that we can’t leverage aggregate data and insights.

I believe part of the reason why there has really been little innovation in the healthcare industry is because it is extremely difficult to get started. In order to truly see an opportunity, you need to be entrenched in the industry to understand how things can be improved. It is much harder to do the whole Lean Startup thing when you are dealing with people’s health and medical records.

However, I believe that we will see vast innovation in the healthcare industry within the next decade. Whilst it’s hard to see that the incumbent medical bodies will make much change, the power of connected networks does offer exciting opportunities to improve the lives of the average patient.

Power of connected networks

One of the truly great things about the Internet and the connectivity of smartphones is the power of networks. A while back I wrote about the huge opportunity of resource allocation in connected marketplaces. When technology and the Internet can enable serendipitous connection between people, we can see a dramatic improvement in efficiency and scale of once disparate opportunities.

Whilst it seems unlikely that Government policy or the strangle hold of pharmaceutical companies will change any time soon, the power of connected networks does suggest that we could be on the verge of something special within healthcare.

Faced with a situation, a network can help

Of course in many ways, the Internet has already had a big impact on the individual lives of people who are facing problems with their health. When diagnosed with a condition you are unfamiliar with it is only natural that you would go to the best source of information to try and understand it for yourself. This leads to millions of people using Google to read more about their diagnosis from websites or patient support groups online.

Whilst in many ways the Internet has been a blessing for people who need an anonymous source of instant information on their medical diagnosis, this disorganised and fragmented network of information can also be a bad thing. Websites will often have inaccurate information, raise false hope or offer miraculous cures in order to pray on vulnerable individuals.

But due to the regulation around health care, the only network that can flourish are these decentralised websites that publish this kind of information.

I think in the aggregate, the wisdom of the crowd is usually a good thing. Whilst there are many websites that publish inaccurate information or are looking to scam vulnerable people, I think the overall benefit of websites that publish accurate information, advice and offer support is a big benefit to society.

What can be done to improve health care?

As I mentioned at the top of this post, I think it is highly unlikely that the current Government will significantly change anything about the current system. Large bureaucratic organisations are almost impossible to shift course and will never completely rethink their approach because it would be just too much of a risk. In many ways I think you can’t blame existing organisations for lack of innovation when they find themselves in this situation.

Instead I believe that it will be a collection of new organisations that break down the monolithic services of the health care industry to provide focused individual services.

The highly regulated financial services industry is already facing this kind of reorganisation as new companies attack the big financial institutions by offering individual services. In the very near future you will not go to a bank for your current account, to lend money or to ask for a mortgage as there will be individual companies that specialise in each of these areas and offer a much better solution.

Quantified self and crowdsoucing big data

An interesting trend that has been growing over the last couple of years is the quantified self and crowdsourcing big data. Now that intelligent devices are commodities it makes it very viable to collect the kind of data that would of been unimaginable just a few years ago.

Products like the Jawbone Up, Fitbit and Nike Fuel have put this kind of technology into the hands of consumers around the world.

Companies like CrowdMed are building upon the collaboration and communication of the Internet to offer crowdsource diagnosis. Instead of keeping this kind of data and information behind closed doors, we can fill the gaps and leverage the knowledge to help more people.

Current health based startups

Two of the most interesting current health and medical related startups are Fitocracy and ZocDoc.

What makes these two companies particularly interesting is, they are attacking the incumbent health industry in two very different ways.

Fitocracy is a fitness social network looking to gamify and build a community around the personal health and fitness niche. Fitocracy allows you to track your workouts and tap into the collective knowledge of half a million experts in the field. By using Fitocracy to record your workout data you as an individual benefit from this wealth of your own statistics to measure your improvement, but Fitocracy can also start to offer advice by looking at the past performance of other people facing your situation and the bumps in the road you will face on your path to getting fit and healthy.

ZocDoc is a service which is aiming to connect the disconnected medical systems of Doctor’s practices with the convenience of the Internet. By connecting these disconnected systems, ZocDoc is able to offer an unrivalled user experience for locating and booking an appointment with an accredited doctor.

I think both Fitocracy and ZocDoc show in two very different ways how the incumbent medical industry will be broken up into smaller, dedicated connected services.

Conclusion

Whilst I believe we will see radical change in how the medical industry operates, I think the changes will seem almost obvious in retrospect. When you have huge bureaucratic organisations it becomes almost impossible to change how something works for the better. Large organisation are a breeding ground for inertia and so I really believe that it will be impossible for the current establishment to turn things around.

By breaking existing monolithic structures into individual components, you get the benefits of a more dedicated and specialised service. When one part of an organisation does not have to support the broken other part, good things happen.

I think Fitocracy and ZocDoc are two important early companies, and CrowdMed, Jawbone Up, Fitbit and Nike Fuel are democratising the access to tracking and accessing aggregate health data. I think companies like Foursquare show the power of the collating big data and how it can be used to predict the future and offer advice based on the experience of others, or Github and the way we can move forward faster by collaborating instead of working behind closed doors.

Whilst there are a lot of important privacy, regulation and confidentiality issues to tackle. I think big things will happen in this industry over the coming years that will really move us forward and benefit society as a whole.