It may seem counterintuitively, but one of the reasons some entrepreneurs are attracted to healthcare is the rules. No industry outside of defense has been so much researched, and for good reason: When dealing with people, extra caution is crucial.
Rules, requirements and regulatory complexity can be barriers to access to a world of digital healthcare startups, but they also provide opportunities.
Founders often find creative ways to unite the additional oversight, such as saying that their launch is just a proof of concept, or that they can not justify the cost of spending hundreds of thousands of dollars a month on advertising to attract new users.
Since venture funding was scarce, there was an urgent need to prioritize speed and maximize the runway provided by smaller seed rounds. However, the environment has changed – growing investor interest and ample available capital have meant that there is an even greater need to allocate a significant budget for compliance.
Speed and efficiency can be crucial for startups, but compliance with legislation does not have to be a bottleneck or a financial drain.
If compliance is not a consideration from the start, founders will sooner or later end up in a situation where they have to struggle to sort things out behind the scenes and spend huge sums on legal costs – and that’s the best case scenario. In the worst case, an agreement can blow up.
It is understandable how these concerns can be overlooked in the beginning. There is a certain amount of creativity and dissatisfaction with the status quo that is necessary for founders to imagine building something that does not already exist.
But when building a digital healthcare company, the ultimate end user is someone in need of medical attention. The stakes are higher than creating the next puzzle or food delivery app.