The Lean Startup Model for Healthcare

Day 2, 5th November 2015, Morning session 10.00am-10.30amMatrix Level 4, Breakthrough+Discovery Theatres

Hugh Mason, Co-founder and CEO, JFDI.Asiahugh@jfdi.asia @hughmason

79 Ayer Rajah Crescent #03-01 Singapore 139995

With thanks to:JFDI Clients & Colleagues, Stuart Smith and Alex Danco for inspiration.

This presentation includes numerous borrowed graphics, to which I hope I haveincluded attribution. If not my apologies - please allow me to correct any omissions

Coming Up

Introducing JFDI1. Why Lean Startup Matters for Healthcare2. How Lean Startup Does and Doesn’t Work3. What are Some Opportunities for Singapore?

Suggestion: Q&A at panel 10:45

● First ASEAN startup accelerator, backedby IIPL, Fenox VC, Family Offices, HNWI’s

● Accelerator has attracted over 2,000 startup teams from 80+ countries.

● Pre-Accelerator has supported 250 teams comprising 900 people via MOOC

● USD2m pre-seed capital deployed into69 startups, >50% raised median USD550k

● No exits yet but 48% IRR (unrealized).

● Over 300 jobs created, >50% of which arein Singapore and >50% filled by SCPRs.

● Team of 16 split Singapore-Philippines.

● Pioneered Lean Startup and disciplined entrepreneurship methods in Asia

JFDI.Asia

1Why Lean Startup Matters

for Healthcare

Macrotrend 1 - Demographics

Macrotrend 2 - 42% of internet users are in Asia

Macrotrend 3 - Weightless Giants

Process of Serving

1

Creation of Goods

Intangible

2

Tangible

DynamicResources

3

StaticResources

Symmetric Information

4

Asymmetric Information

Conversations

5

Propaganda

Value

Proposition

6

Value Added

Relational

7

Transactional

Financial

Feedback

8Profit

Maximiza

tion

Macrotrend 4 - The Service Dominant Mindset

Macrotrend 5 - Unbundling

Macrotrend 6 - New Innovation Frameworks“Plan & Perfect v. Launch & Learn”

“Plan & Perfect” - Vision Based Innovation

“Launch & Learn v. Plan & Perfect”

“Launch & Learn v. Plan & Perfect”Discovery Based Innovation“Launch & Learn” - Discovery Based Innovation

● Design Thinking● Lean Startup● Agile Methods

ProblemCustomerDiscovery

Problem-SolutionFit

Market-Solution Fit

Individuals

Teams

Problem Statement

Minimum Viable

Prototype

Traction

Seed Stage Startup

Series AStage SME

Startup Weekends, Hackathons

Product Development

Customer Discovery

Growth Hacking

Demo Day

“A startup is a temporary organization designed to search for a repeatable and scalable business model”- Steve Blank

Two of the Risks in InnovationM

arke

t Ris

k- S

houl

d it

be d

one?

Technology Risk - Could it be done?LOW HIGH

HIGH

Business Model InnovationM

arke

t Ris

k- S

houl

d it

be d

one?

Technology Risk - Could it be done?LOW HIGH

HIGH

Mar

ket R

isk-

Sho

uld

it be

don

e?

Technology Risk - Could it be done?LOW HIGH

HIGH

Tech2Market - Vision Driven

Mar

ket R

isk-

Sho

uld

it be

don

e?

Technology Risk - Could it be done?LOW HIGH

HIGH

Tech2Market - Vision Driven

“Teams that pursued traditional methods of starting a company had an 18% success rate in receiving SBIR Phase I funding”(Blank 2013)

Mar

ket R

isk-

Sho

uld

it be

don

e?

Technology Risk - Could it be done?LOW HIGH

HIGH

Market2Tech - Discovery Driven

“Teams that … took the Lean Launchpad class ... had a 60% success rate”(Blank 2013)

2How Lean Startup

Does and Doesn’t Work

“Launch & Learn v. Plan & Perfect”

← Solution ← Value Proposition

Horses?Faster?

How the 19th Century ‘Bundled’ Mobility

“If I’d asked people what they wanted,they would have said: more hospitals”

3What are the Opportunities

for Singapore?

“The assumption that the pursuit of drugs, diagnostics,

devices and digital health is all about the execution of the

science is in most cases a mistake.” (Blank 2013)

Conclusions - 1

• Healthcare is a business

• Business model innovation matters as much as science.

• We can choose how we bundle components of healthcare.

• New frameworks for innovation let us test critical

hypotheses relating to regulation, customers and funding

before we commit significant resources to science.

Conclusions - 2

The way forward is to:

• assess regulatory risk before we design and build.

• gather data essential to understand customer purchases

before we do the science.

• define clinical utility now, before we spend millions of

dollars.

• identify financing vehicles before we need them.