Summary:
2024 was a challenging year for healthcare startups, resembling a Squid Game scenario.
Success in healthcare requires patience and persistence.
Many perceived successes in investments may not be as valuable as they appear.
Fraudulent practices are often normalized and hidden in the industry.
Founders can profit from failures due to distorted venture models.
Healthcare experienced its own version of Squid Game in 2024. The year saw many prominent digital health companies falter, yet the sector remained a focal point for investment and innovation. Here are key observations from this tumultuous year:
The Power Of Patience And Persistence
Almost anything worth doing in healthcare is hard and will take twice as long as you think. Startups often underestimate the power of incumbency and the regulatory friction they face. True success in this space is rare and often measured more by patient impact than profitability.
You May Have No Idea What Really Happened
If it looks too good to be true, it likely is. Many investors are unaware of the real story behind their so-called successful investments, which might be worth mere pennies today, illustrating that all that glitters isn’t gold.
Fraud Is Normalized And Masked
Some healthcare ventures resemble get-rich-quick schemes with shaky economics. Unsound valuations and falsified numbers are commonplace, often hidden by nondisclosure agreements. The cycle continues as no one benefits from revealing the truth.
Some “Experts” Aren’t Experts
Beware of expert bias. Just because a renowned company backs a startup doesn’t mean it has sound fundamentals. Always investigate claims and don’t take things at face value.
Failing And Winning
Founders can financially succeed even if their companies fail, thanks to subsequent funding rounds. This trend distorts the venture model, rewarding founders prematurely and undermining accountability.
So What Exactly Is It That You Do?
If a company’s purpose remains unclear after prolonged exposure, it’s a red flag. Focus on depth over breadth is essential; companies attempting to do everything often lack maturity and clear vision.
McDonalds or McDowells?
Many so-called innovative companies are merely copycats of previous models. The healthcare sector often forgets its history, leading to repeated mistakes under a new guise.
Beware The Arrogant Outsider
Experience in healthcare is crucial. Arrogant outsiders may promise innovative solutions but often lack the necessary humility and patience to navigate the complexities of the industry.
Not My Problem Anymore
Large companies often make poor strategic acquisitions, leading to long-term struggles for successors. These decisions frequently lead to after-the-fact finger-pointing without accountability.
I Have No Idea What You’re Selling, But I Like You
With the influx of new trends like AI, buyers often struggle to make informed choices, relying more on industry relationships than the actual offerings.
The turbulent landscape of healthcare entrepreneurship is likely to continue into 2025, with the eerie soundtrack of ongoing challenges playing in the background.
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