Navigating 2024 Headwinds for Medical Innovators Azury Mendoza 2 February 2024

Navigating 2024 Headwinds for Medical Innovators

Navigating 2024 Headwinds for Medical Innovators

In this third episode of our online series of workshops hosted by Digital Health Works (available on our YouTube channel), we talked about navigating 2024 headwinds for healthcare innovators in a casual, interactive environment. Ready to delve into them? 

2024 Headwinds for Medical Innovators: What to Expect 

Here are some predictions for the medical industry, and 3 tips on how to navigate these challenges this year. 

The main goal is defining the value of your product or service and demonstrating its impact. Then, delving into how to access the market through partnerships which ties in with our workshop’s first episode. Having said this, let’s start!

What is happening this year for medical innovators, and what is to be expected?

 

Venture funding last year was at its lowest 

In the past 4 years, the digital health industry itself raised a total of 10.7 billion over almost 500 deals. But again, this was the lowest that it’s been in the past 4 years, according to Rock Health.

2023 experienced more creative financing 

In parallel, we have seen a substantial increase in the number of deals that have gone unlabeled last year. We can interpret this as the rise of creative financing as evidence that founders are reluctant to label their rounds. 

High interest rates and a slower economy

We saw a lot of sort of bridge financing or pre rounds and in line with the generally challenging economic environment, increasing interest rates. 

Also, we witnessed that venture funds are also in turn struggling to raise their capital. We are expecting this panorama to continue into 2024. Of course, it will make it even harder for founders to raise their capital. 

Valuation adjustments and down rounds

We also saw the valuation adjustments that have gone down, in other words, a lot of difficult conversations between founders and investors.  Same, we found lots of down rounds, and this has particularly been the case for mid-stage companies who have yet to set up more substantial revenue incomes.

Ever-evolving regulatory landscape

Finally, the ever-evolving regulatory landscape. A lot more emphasis is being placed on compliance and data security. This is something that we are also going to see more of this year.

More changes are about to happen and this is something that could hold back, especially the digital health companies.

So what does this mean for you, exactly? 

 

Well, in general terms, it means that headwinds for medical innovators in 2024 are related to the economic climate, which is going to be even harder than usual for startups when securing funding in the field. This will lead them to push towards running leaner organizations, and a lot of analysts are predicting more consolidation.

For you, this means a lot of extra work in different areas both horizontally and vertically if you are planning to launch a new product, especially if your company specializes in technology, and you are now entering into the healthcare field.

 

Navigating 2024 Headwinds for Medical Innovators: Three steps to succeed 

 

Step 1: Defining Value

Defining value in the uncertain environment today for emerging Med-Tech and Digital Health means having a story to understand where that value comes in; understanding that health companies are going to be under increasing scrutiny to prove the value they are delivering. In short, being able to define and prove your value proposal as a Med-Tech and Digital Health start-up is going to be crucial. 

Where to start defining value?

Defining your value proposal starts with understanding:

      • Who is benefiting from your proposal.

      • What is the problem that you are solving for your end users.

      • How your end users perceive your value, meaning if they do it in the same way you do.

    When defining your value proposal, mind these takeaways: 

        • Make sure that your value proposal is clear and concise.

        • How are you different yourself from what is already on the market. This last aspect is crucial not only for the end buyers but also for investors.

      Having a clear perception of these aspects is crucial because it will lead you to a much more seamless integration of your proposal into the market. 

      Step 2: Demonstrating impact

      Defining value is the first part of demonstrating impact because you will need these aspects to, as a med-tech startup, prove your economic impact. This means you need to think in parallel in the business and regulatory paths to demonstrate impact.

      How do we demonstrate impact?

      We do it through the generation of evidence, meaning, being able to gather data from any source possible, and as early on as possible is going to be crucial. 

      Generating data means gathering information from different case studies or real-world evidence, or even creating health economic models — which is something we are going to talk about in future workshops. Those are good practices that will help you to demonstrate value. 

      How do I gather information to create a health economic model? 

      You need to be able to think outside the box to generate this data. For example, working with data banks or collaborating with hospitals are good ways to test out your products in advance. Same, these kinds of initiatives will additionally help you to get the necessary regulatory approval.  

      Next on your checklist is accessing the market. This is the last and a pretty daunting at times step, one of the most challenging headwinds for medical innovators in 2024.

      Step 3: Accessing the market

      Once you have accomplished the previous steps, you face the need for distribution channels. There, you realize the huge impact on a startup’s ability to gain exposure and scale within a given industry. 

      As carrying on this by yourself is extremely expensive and time-consuming, the best idea here is to look for a partnership with a distributor, which raises two fundamental questions: 

      What are the main features I need to look for in a partner? Where I can find it?

      You can find the tips to look for and benefit from a perfect partnership in our first workshop, The Importance of Partnerships. But if you need a summary right now, here you have it:

      The purpose of looking for a partnership to access the market after defining value and demonstrating impact is to generate benefit from a mutual perspective. 

      This means, your partner should be able to provide not only knowledge but experience to help you position your product into the correct market, while you provide your partner with visibility and other perks to be discussed in agreements equally beneficial.

       

      Navigating Headwinds for Medical Innovators Take-home Message

      This sort of infrastructure around your solution that you may not necessarily think about right at the start is key to feeding into the whole story of how your product is going to go, from a test product to a successful product integrated into the daily use in your target market.

      In short:

          • Have a clear storyline so that your people can understand the unique value of your product, your company, and your solutions. 

          • Gather as much evidence as you can, and be creative and methodic to do so. 

          • Work with partners to share this knowledge and to maximize the adoption through mutually beneficial partnerships.

        Take this to wrap up this workshop: Talking about defining value is one thing, but being able to put that on paper and go out and validate, it is another. We are here to walk you through the entire process, happily.

        Feel free to raise your questions and join us for our next workshops on LinkedIn. You can see our previous sessions here, and take a moment to leave your recommendations for topics you’d like you’d like us to address.