3 Reasons Entrepreneurs Should Consider the Opportunities in Healthcare
It's one-sixth of the US economy and it's only getting larger.
There’s been a lot of uncertainty about the possibilities for startup entrepreneurs in the healthcare sector. Biotech is too slow and too risky, the naysayers complain, to be a solid venture. Luckily, such old school cowardice is gradually being debunked. In an age where consumers are increasingly in control of their health, the potential for startup success in the industry has never been more real.
Dr. Tonmoy Sharma didn’t come to the United States to be an entrepreneur. By the time he joined the American Psychiatric Association in 2004, he had already studied medicine on three continents and had almost 20 years of experience as a physician. Dr. Sharma opened a six-bed facility to treat addiction in 2009, and now he’s CEO of a booming healthcare business, Sovereign Health, that’s changing the way addiction is treated. And it’s surpassed the national average in clinical effectiveness. "With all of the recognitions Sovereign Health has received over the past few years,” says Veena Kumari, Sovereign’s Chief Scientific Officer, “I wasn't surprised to see such impressive clinical outcomes for Sovereign Health's programs.”
But many are still surprised to see that successful healthcare and innovative entrepreneurialism have such a fertile overlap. Here are some reasons you should be thinking about making a move to the medical economy.
VC funding is burning holes in pockets.
There’s venture capital looking for the next great startup right now. That money will find someone, and it could be you. The last quarter of 2015 saw 172 VC deals in the biotechnology and medical devices sectors, to the tune of $2 billion in investment capital. How quick is your math? That’s an average investment of about $11.6 million per deal.
If you’ve got a big idea for the world of medicine, and can organize a team of crackshot scientists (or maybe you have medical background and want to go into business), now’s not the time to hold back. Get out there and start pitching for startup capital.
The world needs healthcare.
Let’s be honest, we don’t need another Snapchat. What we do need are better vaccines, more cost-effective medicines, customer friendly healthcare systems and preventative medicine for the underprivileged. There’s a humanitarian element to this, but there’s also the fact that it’s simply good business. Before anything else, all successful businesses meet a need.
Consumers are increasingly interested in preventative maintenance and personal wellness. This presents myriad opportunities for nonmedical health sectors like the $16 billion yoga industry.
Innovating on the ground floor in wellness doesn’t require a PhD, it just takes good business sense and a willingness to help people look out for their own health. How about an app that helps you find healthy options when you’re dining out? HealthyOut beat you to that one, but keep thinking in that direction. The next great health and wellness idea is right around the corner.
It’s a stable industry.
The medical economy is stable. Healthcare expenses for the average American family are starting to level out. They’re up by just 4.3 percent this year, the smallest increase the post-9/11 era has seen. This is good for consumers, although health care expenses still put a lot of pressure on most Americans and their employers.
It’s also good for entrepreneurs, who can help consumers find ways to make their dollars work for them more efficiently. With good businesses working in their favor, costs don’t need to be so high, and innovative companies can still be lucrative. The days of exploitative big pharma preying upon sick Americans are finally on the wane, and that means the little guy can step in and help clean up the mess.
We may not know what the future holds for Snapchat and Silicon Valley tech, but people will always need healthcare services -- which means the healthcare industry isn’t going anywhere either. It’s a good sector to stake your claim in just for that. So when you’re thinking about your next big idea, consider the possibilities in this overlooked dark horse of a startup sector. If you put your efforts to work in the healthcare industry, you just might find it rewarding in all the right ways.