Launching a startup is difficult enough. Add on a tie to the health care field, and the entrepreneurial journey can get even more complicated – from long sales cycles to high costs to more hoops to jump through.
Perhaps the No. 1 thing to know when it comes to health care startups is that it can take several weeks ranging to several months to start the businesses.
“Western New York has a long history of successful health care, biotech startups,” said Jordan Walbesser, an attorney at Mattel who also co-founded Bootsector and helps startups. “But they take a long time, so the next successful one, if it started today, it could be 10 years before they really are a breakout hit.”
Here are four more things to know about starting and growing a health care-related startup, according to two local attorneys who have helped small businesses.
Think through regulations and approvals
In other words, ask permission, not forgiveness, according to Andrea Willis, attorney and owner of the firm Lawyer for Business.
“You do not want to assume that you have the ability or authorization to do something without getting that permission first,” she said.
Depending on the type of health care startup, there could be Health Insurance Portability and Accountability Act (HIPPA) information to keep protected, Food and Drug Administration regulations or New York State education department office of the professions approval needed, to name a few complications.
Intellectual property should be a consideration from the start, according to Walbesser. It’s a complicated problem, because filing too early means having to refile when you make incremental improvements to your work – which is costly. However, filing after any sort of public disclosure of a treatment or drug/therapy means you’ve filed too late.
Have good onboarding processes for workers
With potential health care field regulations, it’s extra important to have solid procedures in place for bringing on employees.
That means thorough background checks (people on your team could have access to sensitive information) and confidentiality, nondisclosure or noncompete agreements that prevent staff from sharing data if they exit the startup.
Customer discovery is key
Health care professionals might have great ideas for services or treatments, but their real customers may not be fellow health care workers. Their buyers are likely hospitals or insurance agencies.
“Actually figuring out who your customer is is critical to the success of any health care startup,” said Walbesser.
Get help from specialists
From accounting to legal concerns to insurance, both Walbesser and Willis recommended that founders get professionals input who specialize in health care businesses, especially when first launching startups.
“If you try to learn all of that at once while launching a business and providing great care, you likely won’t succeed because you’re relying on yourself to provide care, keep income flowing and in your spare time … learn all these other pieces and get those in place effectively,” said Willis.
