There’s no denying the boom of capital raised by a number of healthcare and biotech early-stage companies in 2021. Starting a company is one thing, but scaling is a different challenge. How do you take a newly launched startup to the next level? How do you prepare to scale up? When are you ready to scale?
Scaling too soon or too fast can kill your growing business. About 74% of failures can be explained by premature scaling, according to a survey by Startup Genome.
Scaling life science platform companies can be particularly complex due to the unique challenges of the healthcare ecosystem. From regulatory oversight to a vast network of stakeholders, companies venturing into healthcare platforms need to launch and scale differently than pure technology or therapeutics companies. Consider all aspects—the product, the customer, the team and the funding—to ensure that you’re not diving in too early.
The first challenge is bringing on the core team. Unlike their therapeutics cousins, early-stage healthcare companies usually start with small amounts of capital. Hiring individuals with a combination of technical, software and scientific domain expertise—as well as knowledge of the commercial landscape in multiple healthcare sectors—is imperative.
These leaders need to understand how to combine technical language with biological data in the context of the practice of medicine for early product prototyping. This intersection of experience and wisdom needs to be encompassed in each of the initial hires of healthcare platform companies.
The second challenge for healthcare companies aiming to scale is partnering with the right external experts and consultants. Finding these counselors is like finding a needle in a haystack, and most have multiple engagements and demands on their time.
A company needs to articulate its vision in a compelling and concise manner. Looking for experts with analogous experience can help chart roadmaps for strategic decision-making. Investors must understand the capital raising journey in the right way, including how much money to raise and what type of milestones to set.
It is imperative to build a network of trusted advisors who understand the dynamics of its business from regulatory, market discovery, science development and commercial perspectives. Along with the right core team, advisors can help a company chart the course between market breadth to capture value and navigate the balance between when is the time to explore a range of technology and business options versus the time to focus?
Finally, scaling healthcare platform companies requires understanding a diverse range of industry dynamics at once. Companies trying to disrupt healthcare have no playbook to follow—this is very clearly unchartered territory in a highly regulated and traditional industry.
Instead, they need to think about how to work within the complex healthcare ecosystem. They need to think about how to create a new framework in which the current regulatory, distribution, payors and providers can work. They need to draw analogies from multiple different industries to scale strategically. These companies that work within existing frameworks, but are expanding capabilities and access while improving treatment paradigms, demonstrate how to scale within the complex healthcare ecosystem.
Assembling the puzzle of scaling up is undoubtedly challenging. However, with the right pieces in place to scale, including plans, processes, people and the proper funding support, you’ll be in a position to navigate the next stage of your journey—scaling to deliver products and services to more of the healthcare market, creating value and driving impact.
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