Angus Certified #017
The the ups and downs of the digital health industry (and the role marketing has played), growth marketing with zero budget, and a backwards way of getting to product-market fit.
It has been a little while. As per usual, summer has been busy.
A lot has happened in the brand marketing world over the past month or two. Twitter is now X. (I think?) The Barbie movie was the latest topic of Linkedin/Twitter ChatGPT-generated advice from my “fellow marketers.” (My quick take: nostalgia and a $150 million marketing budget can go a long way together).
Whether intentional or not, more and more of my work has been with digital health startups over the past few years. I have found efficiencies in having multiple projects in the same industry, but more of what has drawn me to this space is the opportunity. Everybody ends up spending money on health, whether upfront (preventive) or down the road (injury/illness). Who actually pays for it depends on where you live, though.
I began my startup journey in sports, and as a lifelong sports fan and mediocre athlete, that was a lot of fun (and still is whenever I get those opportunities). But health has always been right there alongside sport. In fact, the path of many digital health companies is to first launch in sport, get the accolades, press, and partner logos, and then pivot into health when realizing that sport usually isn’t a viable way to build an actual business.
Digital health companies have so many multi-billion dollar market opportunities, which is both a blessing and a curse. There are so many chasing the latest shiny object (anti-obesity medications being the trend de jour), and so many applying technology to a market that doesn’t want it, doesn’t need it, or can’t afford it (see 90 percent of technologies developed between 2020 and 2022). Thankfully the latter is course-correcting.
The articles covered today relate directly to digital health platforms, as well as general brand marketing. If you have any marketers at your company or in your world, please forward/share this with them. Let’s get to it.
Jeff
Digital health solutions - do they actually work?
This above chart is probably PTSD for any digital health founder, so apologies in advance. I’ve been in this space over the past five years, and can definitely attest to the fact that investment, pitches and general market sentiment has followed this graph, even for companies with great tech solving real problems.
I pulled this graph from Healthcare Huddle, a health newsletter written by Jared Dashevsky.
The startup pitches in 2020, 2021 and the first part of 2022 were all about opportunity: market size, scalability of solution, and so on. The pitches today are all about validation, outcomes, and ROI. It’s been a challenging shift for many companies, and from a marketing standpoint, it has meant smaller budgets and more granular, tactical strategies that are better aligned with commercial and financial company goals.
According to Rock Health, the companies that will continue to have momentum will focus on accessibility, affordability, and trustworthiness.
Trustworthiness means making sure the digital health solution is delivering on its marketed promises: a workflow company actually improves clinical efficiency and reduces costs; a mental health therapy app actually improves PHQ-9 scores; a metabolic health company actually leads to sustainable weight loss.
For patients/consumers (people), this is great news. Companies, even early-stage ones, need to make the investment and priority in actually proving what they say is true. This makes marketing more of a challenge, as it should be.
When you’re starting out, your dataset may be limited, but you can point to compelling qualitative customer testimonials or references. Over time, you’ll rely on more and more quantitative data like readmission, mortality, safety of care, and NPS scores. And getting FDA clearance or approval on your device and therapeutics, running clinical trials, and publishing results in academic journals can establish your clinical IP and moat.
This is an important point. Many early companies are in chicken-or-egg situations, as they need data to get customers, but they need customers to get data. Landing customers, working with them, getting their feedback (and using the good feedback in marketing to get more customers) is how to work towards that golden goose of quantitative, outcomes data that proves your product does what you say.
The takeaway: We are still in the early innings of digital health. With investment and budget constraints, the fluff has been and will continue to be weeded out. The companies that survive will not only have product-market fit, but staying power, too.
Speaking of product-market fit….
Getting to actual product-market fit
An interesting look at product-market fit. The quick summary - ex-Dropbox employees raised money without a business, tested many ideas and emerged with a $1 billion valuation.
Not everybody has the luxury of raising money before having an idea, but this is an option for people who a) have had previous successful exits and b) stints at high-growth, Bay Area companies like Dropbox (side note: I absolutely loathe Dropbox’s technology and am finally freed from it after heavy usage for way too many years).
What did I like about this post? It provided a tactical framework for creating a business once you have the people you want to build with in place. Many (most?) successful investors look at team before anything else, especially a team with successful founders on it.
If you are like me and claim to have a lot of startup ideas but don’t actually do anything with them, definitely give this a read. On an unrelated note, if anybody wants to help me build the next Spikeball with these things, let me know:
Growth marketing with no budget
Some great tips from the Giant Leap blog.
Daniel recommends building your profile in the market through publishing insightful thought leadership and relevant, topical content. How should you do this in a small team? Get your experienced leaders to sit down and give a thorough brain dump of what they’ve been working on to the marketing team on a regular basis, for marketing to then run with. This helps create a regular cadence of content to push out.
This is something that took me a few years to figure out, and now it is a staple of my marketing playbook. (I also like the term thought leadership because it sounds way better than ‘blog post.’)
This helps you build a bit of a brand for your founding team, which is important for fundraising and market validation, but most importantly is likely the most interesting and differentiated content you can come up with as a company. If the founder or one of the co-founders is a great writer, that helps, but otherwise scheduling time with some sort of frequency is a way for the marketing person to download from the brain of the founder/co-founders, the founding story, and compelling vision, and turn that into content. This should be the foundation of any early-stage content marketing strategy.
Some other great tips in there.
Thanks for reading. Catch you in a few weeks…? (Ron Burgundy voice).
Jeff
Well, hot diggity dog, Ron! Good reading as always :) 🎤📰🥃