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“Moving fast and breaking things” is a bad idea for health tech startups – TechCrunch

It would seem counterintuitive, but one of the reasons some entrepreneurs are drawn to healthcare is the regulations. No industry outside of defense is so scrutinized, and for good reason: when dealing with people, extra caution is key.

Rules, requirements, and regulatory complexity can be barriers to entry into the world of digital health startups, but they also present opportunities.

Founders often find creative ways to balance the extra oversight, like saying their launch is just a proof of concept, or that they can’t justify the cost of spending hundreds of thousands of dollars a month on advertising. to attract new users.

When venture capital funding was scarce, it was imperative to prioritize speed and maximize the lead offered by small seed rounds. The environment, however, has changed – growing investor interest and an abundance of available capital have meant that there is an even greater need to allocate a significant budget to compliance.

Speed ​​and efficiency can be critical for startups, but regulatory compliance doesn’t have to be a bottleneck or a financial drain.

If compliance isn’t a consideration from the start, founders will sooner or later find themselves in a situation where they have to scramble to fix things behind the scenes, spending huge sums of money on legal fees – and c is the best case scenario. In the worst case, a deal can blow up.

It is understandable that these concerns may be overlooked at first. There is a certain amount of creativity and dissatisfaction with the status quo necessary for founders to conceive of building something that does not already exist.

But when you’re building a digital health business, the ultimate end user is someone in need of medical care. The stakes are higher than creating the next puzzle game or food delivery app.


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