Citing his experience at AOL, Co-Founder Steve Case told attendees at the mHealth Summit this week that entrepreneurs in new markets typically will experience three phases as a newer field like digital health matures: hype, hope, and happiness.
Hype, of course, is one of the first phases when most everyone is excited about the potential, but "revolutions happen in an evolutionary" way, Case said, they don't happen overnight. The hope phase is when expectations crash for one reason or another and only the most passionate and committed entrepreneurs decide to stick it out. Case said at that time the passionate ones even "double down". The happiness phase is later when things are going well and the market is relatively established.
For AOL and the rise of the internet, Case said it took 20 years for it to become established and mainstream. Even by the end of first decade, Case said it appeared that the skeptics were right -- only about 3 percent of the general population was online and for only about one hour each day on average. It took that much time to get the infrastructure in place, however, and during the second decade adoption ramped up as services flourished.
Case said that by his count digital health is already about one decade in.
"A lot of things have happened in the past 10 years in [the digital health] space," Case said. "[Now] consumers are starting to embrace different devices and apps and the need to take control of their own health."
There are so many tools and services in the market, Case said we have a "shake the snow globe moment" upon us and the market will begin to sort out companies that will make it for the long haul. Incumbents are mostly playing defense while trying news things, while entrepreneurs are on the offensive. In this next decade we will see "real acceleration" as "new companies with new ideas begin to put pressure on larger players."
Case cautioned, however, that a good number of digital health companies today are actually not true companies at all -- they are "features". He noted that this is typical for an emerging market, but the eventual winners will grow their startup quickly from developing features to real products to platforms. This "inevitable" evolution will be coming to digital health in the next five to 10 years, he said. In the early days of the PC there were entire companies focused on developing printer driver software or word processors, Case told attendees. None of those companies are around today.
Dyson also pointed to a key difference between digital health and past technology booms: the need to prove efficacy.
"[In digital health] it's not just enough to change behavior, but also did it change outcomes?" Dyson asked. One of the companies in her portfolio, Voxiva, has a smoking cessation tool that "doubles the rate of quitting," she said. That's good, "but that's something like 10 percent instead of 5 percent. That's pathetic. [Digital health] still has a long way to go."