Massive hype — and hope — for digital health in Silicon Valley

CT scan by

The initial reports from the Valley were breathless: upstart digital health company led by accomplished and charismatic design-focused entrepreneur (Forbes 30 under 30; 2012 invitee to exclusive Founders Fund Hawaii retreat) was acquired for “tens of millions of dollars,” according to the (original) TechCrunch headline, conservatively reflecting a 10x return to the company’s gold-plated VC investors.  Exultant congratulatory tweets (including from partners at some of these VCs) were joyfully exchanged.  Another Silicon Valley success story.

Very shortly after the original news broke, however, I started to hear another story: in this version, a brilliant design team (that part doesn’t change) struggled for a few years to figure out what they wanted to do, launched a much-anticipated, well-designed but fairly trivial app along the way, made some elegantly designed graphics, was unable to raise additional capital, and ultimately were tucked into another portfolio company of one of its leading investors, in a “big talent acquisition,” as the revised TechCrunch headline stated.

While it’s unclear to me which version is right (if either), I strongly suspect the second version is much closer to the truth.

The details of the individual company seem less important than the two key lessons I propose taking away from this experience.

First, the Silicon Valley hype machine is unbelievable, and you really have to be careful about what you read.  For all the talk about celebrating failure, it’s perhaps not surprising to learn that VCs and other stakesholders are far more interested in pumping up their big wins (see this NYT story from today) than in talking about the vast majority of struggling portfolio companies.

I wouldn’t fault either a struggling small company or a VC backer for focusing on the bright side, and the new potential opportunity, but at some point, the disconnect between the reality and the massive hype seems almost absurd.  It’s easy to understand how aspiring entrepreneurs following the field could get a warped view of both the success achieved by others (often lower than you’d think) and the risk of failure (almost certainly higher than you’d imagine).

Second, while it’s important not to overgeneralize from a single case, it’s hard for me not to look at the challenges faced by this design-focused health company and see it as more symptomatic of Silicon Valley’s overall bias in digital health towards cool, consumer-facing technology, rather than pragmatic solutions to defined medical problems.

I was reminded of this contrast during a recent experience I had as a digital health advisor for a team within a UCSF program whose focus includes stimulating innovation from front-line clinicians.  While I’m not sure whether the idea proposed will turn into any kind of business (though frankly, I hope it does), the problem the physician was trying to solve was both real and pressing, and the innovation, developed by a real clinical expert in the field, focused squarely on helping out a specific group of afflicted patients.  (Disclosure: I’m also co-founder of the Center for Assessment Technology and Continuous Health [CATCH], a MGH/MIT digital health initiative that also seeks to link front-line clinicians with sophisticated technologists, in effort to turn improved phenotypic measurement into better care and deeper science.)

I’m also following the efforts of Rock Health graduate Reify Health with interest; their goal is to bring the technologies of digital health to the sort of folks Judah Folkman would call “inquisitive physicians.”  While it’s hard to see this as a significant, scalable business at the moment, it wouldn’t surprise me if this initial focus on motivated, front-end users ultimately enabled them to discover a particularly compelling opportunity that they could subsequently pursue – an opportunity less visible to other would-be entrepreneurs.

My takeaway: while Silicon Valley adores design and technology (and adores itself for adoring design and technology), there’s a critically important role for field discovery in medical innovation; imagine how powerful it would be if the Valley’s most elegant design principles were brought to bear on a specific, compelling clinical need.

The initial reports from the Valley were breathless: upstart digital health company led by accomplished and charismatic design-focused entrepreneur (Forbes 30 under 30; 2012 invitee to exclusive Founders Fund Hawaii retreat) was acquired for "tens of millions of dollars," according to the (original) TechCrunch headline, conservatively reflecting a 10x return to the company's gold-plated VC investors.  Exultant congratulatory tweets (including from partners at some of these VCs) were joyfully exchanged.  Another Silicon Valley success story.

Very shortly after the original news broke, however, I started to hear another story: in this version, a brilliant design team (that part doesn't change) struggled for a few years to figure out what they wanted to do, launched a much-anticipated, well-designed but fairly trivial app along the way, made some elegantly designed graphics, was unable to raise additional capital, and ultimately were tucked into another portfolio company of one of its leading investors, in a "big talent acquisition," as the revised TechCrunch headline stated.

While it's unclear to me which version is right (if either), I strongly suspect the second version is much closer to the truth.

The details of the individual company seem less important than the two key lessons I propose taking away from this experience.

First, the Silicon Valley hype machine is unbelievable, and you really have to be careful about what you read.  For all the talk about celebrating failure, it's perhaps not surprising to learn that VCs and other stakesholders are far more interested in pumping up their big wins (see this NYT story from today) than in talking about the vast majority of struggling portfolio companies.

I wouldn't fault either a struggling small company or a VC backer for focusing on the bright side, and the new potential opportunity, but at some point, the disconnect between the reality and the massive hype seems almost absurd.  It's easy to understand how aspiring entrepreneurs following the field could get a warped view of both the success achieved by others (often lower than you'd think) and the risk of failure (almost certainly higher than you'd imagine).

Second, while it's important not to overgeneralize from a single case, it's hard for me not to look at the challenges faced by this design-focused health company and see it as more symptomatic of Silicon Valley's overall bias in digital health towards cool, consumer-facing technology, rather than pragmatic solutions to defined medical problems.

I was reminded of this contrast during a recent experience I had as a digital health advisor for a team within a UCSF program whose focus includes stimulating innovation from front-line clinicians.  While I'm not sure whether the idea proposed will turn into any kind of business (though frankly, I hope it does), the problem the physician was trying to solve was both real and pressing, and the innovation, developed by a real clinical expert in the field, focused squarely on helping out a specific group of afflicted patients.  (Disclosure: I'm also co-founder of the Center for Assessment Technology and Continuous Health [CATCH], a MGH/MIT digital health initiative that also seeks to link front-line clinicians with sophisticated technologists, in effort to turn improved phenotypic measurement into better care and deeper science.)

I'm also following the efforts of Rock Health graduate Reify Health with interest; their goal is to bring the technologies of digital health to the sort of folks Judah Folkman would call "inquisitive physicians."  While it's hard to see this as a significant, scalable business at the moment, it wouldn't surprise me if this initial focus on motivated, front-end users ultimately enabled them to discover a particularly compelling opportunity that they could subsequently pursue - an opportunity less visible to other would-be entrepreneurs.

My takeaway: while Silicon Valley adores design and technology (and adores itself for adoring design and technology), there's a critically important role for field discovery in medical innovation; imagine how powerful it would be if the Valley's most elegant design principles were brought to bear on a specific, compelling clinical need.


Also Visit
AEIdeas Blog The American Magazine
About the Author

 

David
Shaywitz
  • Dr. Shaywitz trained in internal medicine and endocrinology at MGH, and conducted his post-doctoral research in the Melton lab at Harvard. He gained experience in early clinical drug development in the Department of Experimental Medicine at Merck, then joined the Boston Consulting Group’s Healthcare and Corporate Development practices, where he focused on strategy and organizational design. He is currently Director of Strategic and Commercial Planning at Theravance, a publicly-held drug development company in South San Francisco. He recently wrote Tech Tonics: Can Passionate Entreprenuers Heal Healthcare With Technology? 

  • Email: davidshaywitz.aei@gmail.com

What's new on AEI

image The Census Bureau and Obamacare: Dumb decision? Yes. Conspiracy? No.
image A 'three-state solution' for Middle East peace
image Give the CBO long-range tools
image The coming collapse of India's communists
AEI on Facebook
Events Calendar
  • 21
    MON
  • 22
    TUE
  • 23
    WED
  • 24
    THU
  • 25
    FRI
Wednesday, April 23, 2014 | 12:00 p.m. – 1:30 p.m.
Graduation day: How dads’ involvement impacts higher education success

Join a diverse group of panelists — including sociologists, education experts, and students — for a discussion of how public policy and culture can help families lay a firmer foundation for their children’s educational success, and of how the effects of paternal involvement vary by socioeconomic background.

Thursday, April 24, 2014 | 12:00 p.m. – 1:30 p.m.
Getting it right: A better strategy to defeat al Qaeda

This event will coincide with the release of a new report by AEI’s Mary Habeck, which analyzes why current national security policy is failing to stop the advancement of al Qaeda and its affiliates and what the US can do to develop a successful strategy to defeat this enemy.

Friday, April 25, 2014 | 9:15 a.m. – 1:15 p.m.
Obamacare’s rocky start and uncertain future

During this event, experts with many different views on the ACA will offer their predictions for the future.   

No events scheduled this day.
No events scheduled today.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.