Why Health Start-Up Fail In India and How to Dodge the Hurdles
A medical start-up means a nascent idea thought to works in the health care industry. It may produce medical devices, pharmaceuticals, informatics solutions, consumer products, mobile apps or medical services. There is a wide range of health care companies with different business models and ideas. These start-ups generally utilize technological and scientific advancements to provide cutting edge medical solutions. These start-ups can be applied to both diagnostic and treatment procedures and can allow patients to access the best care at a low cost.
Health care start-ups do everything to stays and grow in the market. Still, the failure ratio among Indian start-ups is very high. In India, 80 – 90 per cent of the start-ups fail in first five years of their inception. Here we try to figure out the reasons why healthcare start-ups fail and how can we stop this.
Low Wages on R&D
Healthcare start-up founders tend to bite off more than they can chew when it comes to R&D. They think their technology or service is innovative enough and ends up reducing their focus on research and development. Many of these start-ups fail because they fail to plan for wages for research and development (R&D). Failure in anticipating how much amount is needed for R&D can lead to disastrous consequences. The key here is planning well in advance and getting realistic about how much time and money will go into developing the product before it hits the market.
Although the health care industry has been booming for decades now, with tens of thousands of new businesses created annually, the number of start-ups that fail each year remains staggeringly high. Approximately 60% of them go into debt within five years.
Choosing the Wrong Direction
There are a lot of ways to "fail" when starting a company, but choosing the wrong director is probably one of the most common. A start-up that goes in the wrong direction will quickly lose traction and find it hard to get back on track. Getting traction in the niche will help you grow faster and keep your start-up agile.
When we talk about the importance of choosing the right directors, it's not just about finding people who are capable of handling all the complexity that comes with launching a business. It is also about finding individuals who are willing to devote their time, energy and expertise to make sure your start-up succeeds.
Less Popular Strategy
Thousands of start-ups have been created in the healthcare industry but only few of them are successful. A majority fail because they target everyone without understanding who their true customers are. They did not understand that thein order to succeed in business you have to have a product or service that solves the real problems of your customers. They begin by targeting a new market. Usually, they do not understand the users and their needs, and this leads to failure.
The problem with health start-ups is that so many people want to get into them. This leads to a very competitive environment.
Too Much Relying On D2C
Many start-ups fail because they don't have a viable business model. As a result, they fall into what we call "the edge trap" — they work on products that might be great for consumers, but do not address larger public health issues. Most start-ups in this category fall victim to the common habit of trying to create an "ideal product" without considering whether such a product would resonate with customers and meet their real needs (and pay off for the company).
So, before you even begin thinking about the design or development of your product, it's important to fully understand what problem you're trying to solve and how you can help people who want to solve these problems. The best way to do so is through strategic planning and product development.
Wrong Products
Any start-up needs to address the market need with products or services that are in sync with the constantly evolving market trends. This is especially true when it comes to health care, which is constantly evolving due to advancements in technology and consumer behaviour.
The biggest reason for the failure of health start-ups is that they find it difficult to get the right product-market fit. The market they tried serving did not exist or was not ready for the solution that they offered.
