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Building the infrastructure for successful digital health start-ups

2020 might go down as the year digital health truly began to boom – but to continue thriving, health tech start-ups will need a strong support network and an environment that fosters innovation.

With advanced tech becoming ubiquitous, healthcare stakeholders finally embracing digital, and patients rapidly shifting their preferences, there has arguably never been a better time to be a digital health start-up.

Dr Kath Mackay, managing director of Bruntwood SciTech’s Alderley Park – the UK’s largest single-site life science campus – says there are many positive signs for the sector.

“There’s a lot of investment in life science and digital health. Private and public stakeholders are keen to fund these companies, and many firms are growing. People are embracing digital technologies like never before, and awareness has never been so high.”

But Mackay cautions that while 2020 has been a boom year for digital tech, the sector will still need support in order to continue that into 2021.

“There might be longer-term issues with funding, especially as many of these digital companies are SMEs. They’re going to need some fuel in 2021, and we must ensure this is forthcoming.

“That has to be considered in government spending reviews. If we want to continue this digital transformation, there has to be investment.”

Mackay, who previously worked in Innovate UK, notes that much of the company growth she has seen before and during the pandemic has been driven by dedicated government investment in health programmes through initiatives such as the Digital Health Technology Catalyst.

“Initiatives like that can give a targeted boost to companies working in the field. It’s not just about money – the connections you acquire through that funding are also important. Quite often these schemes are a tool for much larger and more strategic relationships with the NHS, often linking innovators with potential first customers.

“This is important because the NHS is a huge asset in adopting new technologies, as well as in generating data that goes back to the innovators.”

As such, Mackay says that the digital companies that are seeing the most success at the moment are those with meaningful partnerships and collaborations with the health service. In fact, Chris Genders, director and co-founder of diabetes management app Gendius (see Navigating the NHS as a digital start-up) who are based at Alderley Park’s Glasshouse, says that while the NHS makes a huge amount of noise about tech, it can still be incredibly difficult for small digital companies to get any traction in the health service without these connections.

“CCGs are often still rooted in a pharma mindset – e.g. wanting to see randomised clinical trials and health economic outcomes. But that isn’t necessarily how small health companies work best.”

Meanwhile, Richard Westman, founder of employee wellbeing platform Kaido, based at Bruntwood SciTech’s Innovation Birmingham campus, says his company decided early on to work with both the private and public sector in order to lower the risks inherent in a small healthcare business.

“When we started, the initial plan wasn’t to be in workplace wellbeing at all,” says Westman. “It was to have a consumer application that public health would procure. We quickly realised that was far too ambitious for a small business.”

Westman founded Kaido in 2016 following a career in professional sport. He wanted to help more people proactively look after their physical and mental health and was fascinated with how technology and data could provide new and more personalised opportunities for population health management.

The Kaido Insights platform uses big data and professional health expertise to empower individuals and businesses to better understand their health, specifically through its ‘Health and Wellbeing Challenges’ that help teams make small positive steps in their health.

“I’ll never forget the day that the commercial director at the AHSN said to me, ‘If you’re coming into this expecting the NHS to buy you or your service outright, that’s not going to happen any time soon’,” Westman says. “That learning quickly pivoted us to always have the NHS in our sights, but to also have a private side to our business model.”

“The NHS is very fragmented,” adds Mackay. “It’s not one organisation, and it’s not like everyone is knocking on the same door in Whitehall. Although challenging, this can often be a benefit for companies trying to tap in.

“Because of the various routes in, digital start-ups need good connections to their local NHS and local clinical population. Reaching out to your local Academic Health Science Network (AHSN) is key – as is contacting other organisations like Innovate UK and the Knowledge Transfer Network.

“It’s not a perfect solution, but those organisations are specifically set up as the honest broker between industry and the public sector. They can help you navigate the system and make those connections.

The right environment for digital start-ups

Mackay says that this is why innovation districts like those in the Bruntwood SciTech network have decided to offer more to companies than just a space to work.

“Our companies are going to be successful if we help them make those connections,” she says. “Because of that, we invest heavily in business support in each of our regions – from Manchester and Leeds, to Cheshire, Liverpool and Birmingham – and we have people on the ground in every campus nurturing those relationships on behalf of the customer.”

For example, the AHSN Health Innovation Manchester is headquartered at Bruntwood SciTech’s Citylabs campus, but also has a satellite office at their Alderley Park campus in Cheshire. Likewise, the West Midlands AHSN is based at its Innovation Birmingham campus. What’s more, the company’s Citylabs Campus in Manchester is a joint venture between the University of Manchester and the Manchester NHS Foundation Trust.

Bruntwood SciTech also offers training to digital companies to help them develop a business proposition and pitch it, as well as providing links to funding, with venture funds on-site.

“It’s our role as operators of science and technology campuses to try and understand what companies need in order to grow, and provide that for them,” Mackay explains.

As an example, Gendius met and secured funding from venture capital firm Catapult Ventures through its connections at Alderley Park.

“We wouldn’t have achieved that without the Park’s network, and without having people there who liked what we were doing and seemed to almost adopt us,” says Genders.

When Gendius joined Alderley Park, they were one of the only digital health companies on the site.

“We were a bit of an odd creature at the zoo, but that didn’t get in the way of people introducing us to their contacts. There were a lot of people buzzing around and pointing us in the right direction. That’s the beauty of the dynamics at these kinds of places – the people that inhabit the sites really make a difference.”

Since then, Bruntwood SciTech has opened Glasshouse –  a tech hub at Alderley Park which now hosts 27 companies employing 300 people, and, perhaps in a sign of the promise of digital health in these times, has continued to grow despite COVID-19.

Mackay says that what really interests her is the “grey space” in the middle of life science and tech, which she hopes Bruntwood SciTech can foster through having both kinds of companies coexisting.

“That space is due to be a huge growth area. As life science companies grow in scale, they’re going to be learning a lot from what’s happening in the tech sector. We already have companies at Alderley Park who are working on artificial intelligence and various other data-driven approaches, so having people from the tech sector working beside them is going to be incredibly helpful.

“Added to this, we’ve recently announced our plans to develop Birmingham Health Innovation Campus (BHIC), in partnership with University of Birmingham. The campus will provide a world class hub for companies working in medtech, biopharma and precision medicine and bring together leading clinical and academic institutions. Digital health is at the core of our strategy and BHIC will also house the University of Birmingham’s Precision Health Technologies Accelerator, providing colocated companies with direct access to clinical trials and research capabilities.”

Meanwhile, Kaido’s Westman says there are both structured and unstructured benefits to working in such an environment – not least the fact that NHS Global Digital Exemplars University Hospitals Birmingham Foundation Trust and the Birmingham and Solihull Mental Health Foundation Trust are both situated in the city.

“Particularly when you’re selling into the NHS, which is actually quite a niche market, getting to know people in the sector through these networks and building confidence with them can be incredibly valuable,” he says.

“It’s also helpful to meet other tech companies that have all faced the same issues as you have in their journeys and are able to share learnings.”

He adds that being at a campus like Innovation Birmingham can help “professionalise” a digital start-up by giving it an office space to call home.

Through the Serendip open innovation programme at Innovation Birmingham, supported by West Midlands AHSN, Kaido was able to raise £150,000 in grant funds and gain access to its first clients.

“The first three NHS Trusts that ran Kaido were introduced to us through this programme, and some of the people we met in the NHS have since become consultants for the company. As someone who knew relatively little and had never founded a company before, that has been incredibly useful.”

Evidence-based digital health

The right environment is essential for digital start-ups to get a strong footing in the healthcare sector – but once they graduate from incubators, there are still many other factors that can determine levels of success.

When asked what advice he’d give to people starting a digital health company, Genders says it’s important to acknowledge that it will be a “long road”.

“It’s not just a question of writing an app. It’s becoming increasingly important to have evidence that the product actually works.

“There are thousands of apps available in diabetes alone. You’ve really got to be different to stand out from the crowd, and to do that you need endorsement from people in the clinical or academic space who get what you’re doing and back you.”

He adds: “Over the next couple of years, digital health is going to become a clinical evidence-based space. If you haven’t got evidence that stands up to scrutiny, you won’t even get on the app stores – the doors will be slammed shut, because as technology gets more sophisticated there’s a real danger of doing harm to people.”

Genders adds that businesses also increasingly need to have a “scalable, unique” proposition.

“It’s no good being a me-too in this sector. You’ve got to be brave, and you’ve got to go out and test the product and get people to tell you some harsh truths about whether it is actually solving a problem.”

Westman concurs that a start-up’s business proposition should focus on the specific niche problem they’re trying to solve, but he notes that this doesn’t necessarily mean every product needs to reinvent the wheel.

“I think at Kaido we probably came in thinking we were going to do that – but in reality, we’ve gone into an existing market and just tried to do it better than everyone else. That’s enough to be successful.”

Likewise, he says that waiting to create the “perfect product” before launching can only hold you back.

“If you wait for that you’ll never get it launched and you’ll never be able to get feedback from people who are actually using it.”

All said, though, Westman is keen to encourage anyone who might have an idea for a digital start-up to give it a go.

“It’s great to do it while you’re young and have fewer commitments that might increase the risks of launching a business,” he says.

“Over the next five to ten years I think we’ll see some real success stories in digital health that will encourage more people to take the jump.”

Likewise, Mackay says there is a lot to be optimistic about in the sector going forward.

“Public stakeholders want to invest in life science and digital health companies as part of their COVID recovery plans, because those companies are weathering the storm at the moment,” she says.

“That stresses the importance of having strong connectivity with the broader sector and investors and working somewhere with sector experts who can help build those connections.”

About the interviewees

Chris Genders is the co-founder and director of Gendius. As a diabetic, Chris had the idea to set up a business that would help people focus on their areas of highest risk. An experienced sales director within the pharmaceutical industry, Chris brings an understanding of what it is like to have diabetes and a view of how this can be improved – created from his own experience but also from working in the pharmaceutical diabetes area for many years with healthcare professionals and other people with diabetes.

Kath Mackay

Dr Kath Mackay is managing director of Bruntwood SciTech – Alderley Park, home to the UK’s largest single-site life science campus and award-winning tech hub, Glasshouse. Her responsibilities include stimulating new business ventures and managing further development of the Park. Mackay joined Alderley Park in 2019 from Innovate UK. In her most recent role there, Mackay was director for ageing society, health and nutrition, and part of the executive management team.

rich Westman

Rich Westman is the CEO and founder of Birmingham-based digital health company Kaido. Kaido supports businesses to make health and wellbeing an integral part of their culture, and works with clients such as Transport for London, KPMG, and the NHS. Prior to founding Kaido, Rich worked as a sport scientist, supporting professional athletes from Worcester Warriors, Leicester Tigers and the LTA with their fitness and conditioning. In 2019, Rich was the Technology and Innovation category winner at the Birmingham Young Professional of the Year (BYPY) awards.

About Bruntwood SciTech

Bruntwood SciTech is the UK’s leading developer of innovation districts, creating the environments and ecosystems for science and technology businesses to form, scale and grow.

A 50:50 joint venture between leading property company Bruntwood and Legal & General, Bruntwood SciTech provides high quality office and laboratory space and tailored business support, offering unrivalled access to finance, talent and markets, an extensive clinical, academic and public partner network and a sector-specialist community of over 500 companies.

Bruntwood SciTech has a portfolio of over 1.8m sq ft including Alderley Park in Cheshire, Platform in Leeds, Innovation Birmingham, a cluster in the heart of Manchester’s Oxford Road Corridor innovation district, Manchester Science Park, Citylabs 1.0 & 2.0 part of the Manchester University NHS Foundation Trust (MFT) campus and Circle Square – a joint venture with Vita Group and a development pipeline of 850,000 sq ft which includes Birmingham Health Innovation Campus.

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