Next Things First

More thoughts on Health 2.0, drummed up by our 10/23 post below. This one from Tobin Arthur, CEO of iMedExchange.

When Rob Coppedge, a colleague at iMedExchange and Founder of Faultline Ventures, placed the challenge to submit thoughts regarding the value and future of Web 2.0, I decided to add my two cents.

Having recently participated on a panel discussion at the Health 2.0 Conference in San Francisco, I had the opportunity to learn firsthand what some industry leaders and industry contenders are up to. This, and my interaction with dozens of other Web 2.0 companies and their management teams on a regular basis, provides the framework for my Top 5 Things Too Many Health 2.0 Companies Forget. The fact of the matter is that, while this list is little more than common sense, most companies that give Health 2.0 a bad name are butchering one or more of them.

1) Failure Is Healthy. In order to achieve progress, we have to be willing to try and fail. It’s healthy to have a broad range of solutions being tested in the marketplace. The market will vet the winners from the losers and the healthcare marketplace is the better for the process.

2) Don’t Do Just Because You Can. While the Web and a myriad of development tools now available enable new sites to be rapidly and inexpensive proto-typed and introduced to “the market,” this does not mean that every new tool or site introduced has merit. There are far more losing propositions in the marketplace than eventual winners. Just because you can do it, doesn’t mean it should be done … the market eventually figures this out. The ability to register a domain name on Go-Daddy.com for less than $10 is not a license for every entrepreneur-wanna-be to start frittering away the hard-earned money of family and friends.

3) There Isn’t a More Powerful Communication Tool Than the Internet. The Internet is the most enabling communications platform ever created! As such, I believe we are just beginning to harness some of that power and there is far more to come. Factors like security, trust, etc. that are limiting or slowing adoption in some potential areas are not insurmountable characteristics of the Web.

4) Where Is the Business Model? What’s the sustainable business model? Too many entrepreneurs, and frankly too many venture capitalists, don’t have a true understanding of how their venture is going to make money in the marketplace. My eyes roll back in my head every time I hear a “company” purport to change the way healthcare fundamentally works with their new whiz-bang business model. Healthcare, as a wise businessman once told me, is like a battleship. You cannot expect to turn it on a dime. If your model relies on “changing healthcare,” go ahead and throw your money straight into the toilet. The industry is far too vast with far too many political, economic, legacy and other issues to contend with. Rather, you can build a valuable enterprise with the much more humble objective of making an incremental change in the market. Nothing wrong with shooting for the moon, but do so with underlying fundamentals to be successful if you hit the lamppost instead.

5) Do What You Know. Stick to what you know. I know technology. More specifically I know how to leverage technology to the benefit of physicians. There are plenty of things I don’t know how to do: practice medicine, suck management fees off LPs (I hear it’s pretty easy), defuse a bomb, successfully manage investment portfolios in Bear Markets, and the list goes on. I am building an innovative online community for physicians. It’s in my wheelhouse. The moment I attempt to do any of the other items listed above, and expect to make money off of them, my wife has permission to kick me in the ass. This made the list because in almost every case where a business doesn’t have an air-tight business model, I can probably find Founders who shouldn’t be doing what they are doing.