Ever been curious about how healthcare startups grow their business?
On March 7th, Nomad’s VP of Business Development, Justin Lambert, had the pleasure of being on the first 2017 NY BD Meetup panel discussion alongside the heads of business development at Zocdoc, Oscar Health, and Flatiron Health. Hosted by Alley, and moderated by Michael Saloio, Partner and Chief Operations Officer at Jakt, the event drew a crowd of over 100 attendees and featured a great, in-depth discussion on the ins and outs of business development in healthcare IT. The panel speakers were:
- Justin Lambert, VP of Business Development at Nomad Health
- Marta Bralic, VP of Business Development at Flatiron Health
- Katharine Moore, Business Development Director at Zocdoc
- George Spurling, Head of Business Development at Oscar Health
For anyone interested in startup growth strategies, particularly those in the healthcare industry, the conversation provided great insights as to how these companies find and grow opportunities to build business.
Here is an excerpt of the panel discussion Q&A with all speakers:
What is business development?
Justin at Nomad: “Business development at Nomad Health is about finding new ways to grow our business, and incubating those opportunities. Telemedicine is a great example where before we entered the market, we were excited about the space and we had some interest from some telemedicine companies, so we said “let’s try this.” Once we figured out that it worked, our traction led to sales. So really it’s about building new traction, new businesses, and expanding that across the sales organization.”
Katharine at Zocdoc: “I think business development can be a little bit of a catch-all sometimes at companies. You’re either looking to support sales, product, or marketing. I think it’s often confused with sales because at the end of the day you’re trying to build something you can operationalize that will help build the company. So having a background in sales where you’re moving from ideation, through negotiation, to launching a partnership, is absolutely something you need to do. But you do have to dig a little bit to see where business development sits in the company, who you’re reporting to, and where you are. Zocdoc is ten years old so we have a very defined product roadmap now, and we’re expanding and there’s a lot of things you can be looking at. A key thing with business development is that once you start to get larger, it’s not a matter of opportunity, it’s a matter of focus. You have to be really clear with the CEO, Head of Marketing, and Head of Product about what you need to get done.”
What makes a great partnership?
George at Oscar: “At Oscar, we very often have people reach out via email and LinkedIn requests, and we really need to focus on what’s important. So I started thinking about this in terms of a venn diagram. If someone approaches us and we are talking with them, and we think that there is something they can do to help us 1) increase our number of members or 2) better our brand or 3) improve our member experience, any one of those things are fantastic on their own — but when those start overlapping, and there are specific partners that can help us reach all three, that is where it starts getting to a middle point. If you can hit the middle point of the venn diagram, that to me is the ideal of a great partnership.”
Marta at Flatiron: “I think that’s spot on. One of the layers we add on top of that is “how much.” I think you can argue that most partnerships you could do will help you marginally in marketing or product development. So what we have a ton of discussion about is: “Does this save us a year? Does this save us two years? Or does this save us just two months?” and I think that makes a lot of the difference as well. In that one dimension, it has to be game-changing for us. One of the reasons for this is that it’s hard; it’s hard to work with another company. Especially as a startup, we’re often working with companies that are 30x our size – Fortune 100 companies that we’re trying to strike partnerships with – and it’s really hard to align incentives and collaborate with teams that are culturally very different often times. So we really want to make sure that we are maximizing at least one of our metrics to make it worth it.”
Justin at Nomad: “On the time dimension, I can share from the perspective of a really new company that’s building its business and gaining momentum that for us we are looking at really consistently increasing our speed-to-market. How can we get these [partnerships] across the line in the next six months? How can it come to fruition? We still think about the approach toward larger homerun opportunities, but they need to be coming before 12 months of actually seeing results at the topline in terms of growth in sales and new customers.”
How do you gauge success early-on in a relationship, when sales have yet to come in the door?
Justin at Nomad: “For Nomad, we operate in a marketplace, so it’s about how many new doctors or new jobs have been brought into our marketplace in the first couple months. If it’s not working right away, what you really need to think about is “How big is this opportunity?” When you’re trying to fix relationships, evaluate “How willing is the partner to work with us?” There have been times when we’ve had to walk away from some relationships that we were initially excited about. But in these times you have to be really honest with the partner about why you got into the partnership in the first place and be upfront and honest on whether it’s the right time to grow the partnership.”
Katharine at Zocdoc: “I’ll also weigh a business partnership deal by how many people I have to work with internally in order to get [the partnership] done. I have to think about how quickly it might take to get consensus, and how long the negotiation process might be to align. Also in healthcare there is a lot of regulation, so you have to consider what level of risk you’re willing to take on when you’re dealing with PHI, the HIPAA Privacy Rule, and pharma regulations, all of which can be very heavy and can take a lot of time. Bigger companies can be used to a six month legal process. So a partnership could be great, but the work to get it up and running could take 12 months. Internally if you are not willing to wait that long, the partnership may need to get put on the backburner for something else that you could do a little bit quicker.”
Can you talk a little more about how business development works with product development?
Marta at Flatiron: “Business development definitely has a sales component, so a lot of what we do can absolutely drive the top of the sales funnel and help us grow market share more quickly, but some of the really interesting stuff we’ve done lately at least is think about how business development can accelerate our product roadmap. I think the biggest stakeholder internally at Flatiron is the product team, and so one thing that we’ve done is actually structure the business development team to map one-to-one with product managers at the company. We pair up someone in business development focused on particular product areas with the product managers that work in the same product area. This allows us to diversify how we solve problems we have in front of us and ultimately get ahead on our product roadmap faster.”
For startups working on the healthcare payer/provider spectrum, how do you overcome stories coming from more established businesses that believe “We do it better because we’ve got more capital”?
Katharine at Zocdoc: “Providers are who Zocdoc has worked with from the beginning. We started with independent doctors, and I think they have have become more like business people than they needed to before when they were just seeing patients. Now they have marketing they can do, they need a website, they need an electronic management system, and they can text with their patients. Health systems are the same way; they have to care about their brand and how patients engage with the system. On the payer side, and I think this is true with any industry and why business development is really interesting, is that you have the big players – the guys that have been around for 100 years – and they have innovation groups whose job is to find smaller players. They’ve gotten smarter and smarter, and they’re doing the same cost/benefit analysis on “Are we really good at this?” or “Could we just partner [with a startup]?”. You have to recognize the benefit you’re bringing to them and how quickly they can move in comparison.”
Justin at Nomad: “Nomad works with a lot of providers, specifically doctors and nurses. I feel like they are often a group that’s left out on trying to innovate to make their lives a little easier. They are on the front lines of dealing with all of this transition onto electronic medical records (EMRs), between EMRs, dealing with all the impact of the new regulations that are coming down, and they’re really open and willing to work with new companies that are trying to make their lives easier and ultimately help them serve patients, which is what they all got into medicine for. The more you can help with them dealing with administration and taking care of patients the better they can deliver care. We’ve found they are willing to try almost everything and they’ve been really, really great partners.”
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