Last month we were pumped to learn we would be joining the TMCx Digital Health 2019 cohort. Now that we’re heading into the third week at TMCx, here are ten takeaways that I’ve gathered during my time here so far in rainy Houston, TX.
#1: Texas Medical Center (TMC) is the largest medical center in the world, with over 10 million patient encounters and 750,000 unique patient visits per year. TMC represents 62 total institutions, 21 of them being hospitals like Memorial Hermann, MD Anderson, Texas Children’s, Houston Methodist, and CHI St. Luke’s.
As one of the leading medical complexes in the world, TMC is the perfect place for Luma Health to learn more about the specific pain points that large hospitals and health networks experience. Having conversations with physicians and decision-makers in the TMC network helps us expand our company and our mission to get more patients access to care faster.
#2: Group Purchasing Organizations (GPOs) play a huge role in the decision making of Integrated Health Delivery Networks (IDNs) like Memorial Hermann and MD Anderson. Nine out of ten of hospitals are represented by GPOs Vizient and/or Premier.
Understanding and working with GPOs is critical to Luma Health’s next phase of growth into the hospital and IDN market. As most buying decisions go through these organizations, it will be important for us to learn how to best navigate the GPO space.
#3: The number one goal for hospitals is to reduce costs.
Lowering healthcare costs is one of the three components of the Triple Aim of healthcare. With costs rising quickly at large hospitals, it makes sense that their primary goal would be to implement solutions and strategies to improve their bottom line. Luma Health was designed to lower healthcare costs in the long-run by getting patients to care sooner rather than later, thereby preventing more serious and more costly health conditions in the future.
#4: CVS is going to be a real game changer in the healthcare market.
With over 10,000 stores and locations, CVS has already accessed the healthcare delivery market through various employer agreements. More importantly, their massive scale gives them the ability to keep prices low while also being innovative. As the way healthcare is consumed in this country changes, CVS will be a key player to watch.
#5: Physician champions are crucial to pushing technology adoption through a large health network or hospital.
Having a physician champion on the ground that understands your solution and the need for it is an effective strategy for technology companies looking to get their foot in the door of a large hospital or health system. These champions are better able to navigate the complicated hospital decision-making process and add credibility to companies and products.
#6: Hospital budgets are very well defined when they are set.
It’s important for technology vendors (like us) that are looking to introduce a solution and gain adoption within hospitals and hospital networks to gain familiarity and carve out space within existing hospital budgets. Working outside of a hospital’s budget is extremely difficult.
#7: Customer motivation is addressed by market disruption.
For a solution (the what) to truly be a real opportunity for disruption, it must have clear customer motivation (the why). This is product market fit, and it is one of the most essential qualities for a successful venture.
#8: Successful companies are able to define their customer and their end unit.
Are you an enterprise play? What is the actual end unit that you will be selling? It’s essential for companies to determine and define these as soon as possible. While companies do pivot and do change their business models from time to time, the faster they can detail their market, the faster they can see successes.
#9: Investors look for the 6 Ts when evaluating new ventures:
- Team (expertise and credibility)
- TAM (total addressable market)
- Technology (the product itself)
- Traction (customer traction; story of business)
- Trends (timing of opportunity)
- Terms (valuation and cap table)
#10: The three things that matter to VCs when they make an investment are ownership, exit size, and risk management.
When venture capitalists look to make strategic investments in companies, they are most interested in how much ownership percentage they are getting, how much the exit size will be, and how much they are mitigating their risks. They won’t mind putting in more capital early on if that means a higher ownership stake in the long run. Understanding how VCs think and how funds are managed is vital for companies as they grow and evolve over time.