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Investor Guide to HDO Product Market Fit for Digital Health / SaMD / Digital Therapeutics Solutions

Shahid N. Shah
September 24, 2022

Investor Guide to HDO Product Market Fit for Digital Health / SaMD / Digital Therapeutics Solutions

Delivered at MedInvest 2022, Shahid talks about how investors and innovators should think about Healthcare Delivery Organization (HDO) product/market fit for Digital Health / SaMD / Digital Therapeutics software solutions.

Investors must determine whether innovators understand the healthcare delivery innovation lifecycle and payer, benefiter, user (PBU) intersectionality and whether a solution can survive an HDO’s innovation purchase lifecycle.

Shahid N. Shah

September 24, 2022
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  1. NoBS Investor and Innovator Guide to
    HDO1 Product Market Fit for Digital
    Health / SaMD / Digital Therapeutics
    BLUF2: Investors must determine whether innovators understand
    the healthcare delivery innovation lifecycle and payer, benefiter,
    user (PBU) intersectionality.
    Can the solution survive an HDO’s innovation purchase lifecycle?
    1 Healthcare Delivery Organization
    2 Bottom Line Up Front
    @ShahidNShah Publisher, www.Medigy.com

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  2. Payer, benefiter, user (PBU) sweet spot
    determines product/market fit
    Payer
    • Who’s writing the
    check for the
    solution?
    User
    • Who’s actually
    using the
    solution day-to-
    day?
    Benefiter
    • Who’s
    benefiting from
    the use of the
    solution?
    Some rules of thumb:
    • If you know the payer (through actual
    1st party research, not conjecture) but
    not the user or benefiter, NewCo is
    worth starting – with appropriate
    investment, designers and BD
    professionals can help figure out the
    rest.
    • If you know the user but not the
    benefiter or cannot figure out the
    payer, don’t invest in code but
    consider “working backwards” style
    PR/FAQs and find out who will benefit
    the most and who might be willing to
    write the checks for that benefit.
    Ready for scale, larger
    investment(s) should be
    considered

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  3. “prove” sellability early
    Draft Press
    Release
    Should we build
    it?
    Prepare
    Roadmap
    Who’s going to
    be accountable
    for success?
    Build it
    ▪ In the modern software era, there’s very little that cannot be
    built.
    ▪ Assume, if you can describe it … someone can build it (who
    actually builds something is irrelevant).
    ▪ Assume, if it’s built right now and sitting on the shelf, how will
    you get users to use it and buyers to buy it (PBU intersection)?

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  4. How can
    investors
    spot
    “innovator
    BS”?
    The innovator can
    describe the outcome
    of their novelty
    without talking about
    the technology
    If an innovator talks
    more about their tech
    or their product rather
    than the product’s
    outcomes or sellability
    tell them to rewrite
    their pitch

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  5. For
    example,
    how can
    investors
    spot “AI
    BS”?
    Can the innovator
    describe the
    outcome of their
    novelty without
    saying “ML” or
    “AI”?

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  6. Why?
    AI is not a product you can buy, it’s an
    experimentation technique which
    allows for rapidly poking and prodding
    at huge volumes of previously
    untapped data to discover facts and
    relationships about the complexity of
    our world.
    Rather than poking and prodding at
    genes, cells or molecules to see how
    they interact in labs, “data scientists”
    use ML and AI to more rapidly discover
    relationships that would be difficult for
    humans to “see”.

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  7. How to
    Spot “AI BS”
    An entrepreneur that says, "we
    use AI for drug discovery” is
    just as silly as one who says,
    “we experiment with molecules
    for drug discovery.” It does not
    mean anything.
    If someone said “you should
    invest in my company because
    we know how to culture
    bacteria" you'd look at them
    like they were delusional.
    The same should be done with
    entrepreneurs who use “AI”
    and “ML” as if they are the
    ends, rather than the means to
    the ends.

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  8. How can
    investors spot
    “innovator
    BS”?
    The innovator can
    describe the outcome
    of their novelty
    without talking about
    the technology – they
    talk about the ends,
    not the means.
    Why? Because HDOs
    have an innovation
    lifecycle which doesn’t
    match an innovators’
    innovation lifecyle.

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  9. HDO Innovation Lifecycle (consensus at each step)
    Expectations Discovery Evaluation
    Consensus
    Building
    Pilots
    Decision
    Support
    Adoption
    Diffusion
    Insights Failures
    Return on
    Innovation

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  10. Quick and dirty stage gates for seed investors
    “Working Backwards” PR/FAQ
    Success Metrics & Buyer Consensus Building
    Strategy Workbook

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  11. Success Metrics Strategy Workbook

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  12. PBU intersectionality must meet HDO
    Innovation Lifecycle
    Payer
    • Who’s writing the
    check for the
    solution?
    User
    • Who’s actually
    using the
    solution day-to-
    day?
    Benefiter
    • Who’s
    benefiting from
    the use of the
    solution?
    • Innovators have their own
    innovation lifecycle (e.g., SDLC)
    • In a software era where anything
    can be built, an innovator’s
    lifecycle is useless if it’s not tied
    to the HDO’s innovation and
    procurement lifecycle.
    • Your job as an investor is to
    figure out whether the
    entrepreneurs, you’re investing
    in understand that.
    Did one or more of
    the PBU intersection
    tie properly to each
    HDO innovation
    lifecycle step?

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  13. HDO Innovation Lifecycle Ontology (HDO-ILO)
    https://www.medigy.com/research-ontology/hdo-il-ontology/ https://www.medigy.com/communities/innovation-lifecycle/

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  14. Conclusion:
    Investors must determine whether
    innovators understand the healthcare
    delivery innovation lifecycle and payer,
    benefiter, user (PBU) intersectionality.
    Any solution that cannot survive an
    HDO’s innovation purchase lifecycle is
    not worth investing in… yet.

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  15. Thank You. Help us build the HDO-ILO
    at www.Medigy.com
    Find this and many other of my decks at
    http://www.SpeakerDeck.com/shah
    NoBS Investor and Innovator Guide to HDO1 Product Market Fit for
    Digital Health / SaMD / Digital Therapeutics
    @ShahidNShah
    [email protected]

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