The Digital Health Business Canvas

I have been a healthcare entrepreneur for about 15 years.  I have started clinical practices and venture backed digital health companies.  I have ridden the ups and downs of poking on institutions to drive innovative models of care that empower the individual to better manage their health.  But building a product or service is not building a business.  We tend to spend 999 miles on what we are building and the last 1-mile we just "believe it will get adopted" and poof....we have a business.  Usually that doesn't work. 

The Business Model Canvas popularized by Alex Osterwalder has gone a long way toward approaching business building with a design mindset and it has worked really well.  Ash Maurya produced the Lean Canvas to get even more actionable specifically for an entrepreneur.  But I have struggled with both of these because I think they miss some fundamental considerations for digital health start-ups, specifically selling into the complexity of healthcare (selling to insurance companies, employers or health systems).  So I created the Digital Health Start-up Canvas based on my experience.  Here are the boxes that I added shaded in yellow(ish):

Russell Benaroya -- Digital Health Start-Up Canvas.  Click on the image to download

Russell Benaroya -- Digital Health Start-Up Canvas.  Click on the image to download

Here is what I added/modified:

Consumer Value Proposition:  I broke out the value proposition between the customer and the consumer (the Business Model Canvas does not delineate).  While healthcare certainly wants to impact the health of the consumer, they are typically not paying for it (insurance companies, employers, health systems often pay).  That said, consumers need a reason to use it.  If they don't use it, you aren't going to successfully sell to a paying customer.

Prove It:  What is the market telling you that you need to prove to get credible "non-pilot" traction?  Is it showing measurably lower cost, increased engagement, revenue for your customer, integrations into workflows, command of the regulatory environment?   Buyers in healthcare want to de-risk their decisions.  How will you help them do it?

Customer Population Served:  Typically health insurance companies, health systems, and employers write the big checks in healthcare.  You might be building to serve them but who are they trying to serve?  Are they rich, poor, high risk, healthy, old, young, managing a chronic condition, dealing with end of life?  Peel the onion back on who is the consumer profile you are trying to impact via the sale to the customer and build for that profile.

Ideal Pilot Targets:  The early customers must be the "right customers".  Who is that?  Have them in your sights at the outset.  Are they industry influencers?  Are they the ones with the budget or stated objective to innovate?  Are they in your backyard?  Do they need to play "catch-up" in their market?  By knowing the characteristics of the customers you want to pilot with will help you focus the value proposition.

Customer Measures of Success:  It is easy to get caught up in how you want to measure success but what is the metric or perception that your customer will evaluate?  Sometimes it is not what you think.  It might be ease of use, quality of reporting, ability to configure for multiple clients, positive feedback from consumers.  It may not have anything to do with saving healthcare costs in the early phases (even if the promise of doing so is core to your vision).  Figure out what your customer(s) really care about and spend time optimizing for that.

Here are the sections of the The Original Business Model Canvas that I removed:

Customer Relationships:  This was a tough one to delete because it speaks to how the customer wants to interact with you.  The reason I left it out is because the modes of interaction are pretty simple to define in digital health service delivery.  

Channels:  The channels in digital health at the outset are pretty well established and fanciful thinking about how you're going to leverage some other party to sell on your behalf (a la a third party sales channel) tends to be a pipe dream.  I think once the customer segment is identified the channel is redundant.

Key Resources:  I typically see the same things here and it's usually engineering, sales, marketing, capital, tech infrasx, etc.  It seemed like one that we could leave off as it tends to be the one box that notoriously gets the least amount of attention.  

I hope that digital health entrepreneurs find this canvas useful and whether you are just starting a business or incubating within a larger institution, the considerations are the same.  These additional questions in the canvas will force a level of customer and consumer discovery that will help start-ups bridge better to the last mile, so that the solution they are building actually can make the impact they set out to achieve.