By Elliot Menschik MD PhD (GR’99, M’00), Managing Director of DreamIt Ventures and founder of Venturef0rth
Editor’s Note: For more on the Wharton Entrepreneurship connection to DreamIt Health, check out our recent post.
This summer marked the inauguration of the DreamIt Health accelerator, a startup boot camp focused on healthcare IT run by DreamIt Ventures and powered by Penn Medicine and Independence Blue Cross. In four short months, ten extraordinary teams of entrepreneurs, including four from Wharton, were brought together from around the country to achieve significant milestones going from concepts to prototypes, products, pilots and revenues. As the program wound down, the investor, startup and healthcare community turned out in force for Demo Day to see a snapshot of each company’s progress and plans for the future.
Why an accelerator for Healthtech?
It’s hard launching and growing a company to bring new products to market in any industry. But in healthcare, the stakes are just that much higher, with added complications from the sensitivity of patient information to the entrenched business interests carving up a $2.8 trillion pie. The customers are that much more conservative. The regulatory and legal hurdles are daunting. Success for a nascent company is more elusive but, arguably, more important than in any other industry.
The crux of an accelerator is to remove risk from the most promising ventures at their most vulnerable stage of life. We do that by giving them unfair advantages wherever we can and removing as many obstacles as we can.
The most important thing we do is give the companies access typically out of reach for a startup: Access to one-on-one mentors who have been there before, done it before, and have domain expertise that is a custom fit to their needs; access to executives, subject matter experts, and leading practitioners within providers, payers, biopharma, and other key stakeholders; access to prospective investors; access to clinical and operational information systems, and access to sensitive data. We enable these startups to forge deep and meaningful relationships with the market leaders who will likely become their first adopters and referenceable customers.
So why Philadelphia?
For 250 years, Philadelphia has been at the forefront of medical innovation including the first medical school, first hospital, first children’s hospital, first college of pharmacy, and the first biomedical research institute. The advances and innovations emerging here are legion, from vaccines to devices, diagnostics, procedures, software and services. Today, within a 100 mile radius of Philadelphia lie the nation’s densest set of healthcare resources: world class providers, market-leading payers, global biopharmaceutical companies, industry titans, research universities, medical and nursing schools, and a wealth of startups that are growing up around and among them. Where better to launch?
The secret sauce
Prior to this program, DreamIt Ventures had put 102 companies through other cycles over a five year period in Philadelphia, New York, Austin and Tel Aviv and had learned a lot about how to optimize for their success. But what really made the healthcare program soar was the unusually strong relationship with the region’s leading provider and payer, Penn Medicine and Independence Blue Cross.
As the industry transforms over the next several years, coordination and collaboration between payer and provider are increasingly at the center of the biggest problems and largest business opportunities. It’s no accident that so many of the companies in the inaugural class were tackling problems faced by both payer and provider from hospital readmissions to patient engagement to cost transparency to patient access. Penn and IBC served as a proving ground for these ventures and it’s no accident that so many emerged from the program with significant pilots under way and even revenues—four months earlier some of these companies were nothing more than an idea on the proverbial napkin.
It’s also no accident that four companies in the inaugural class spun out of Wharton, where students in the healthcare management program are exposed to the fault lines and opportunities in the industry and inspired to take the initiative. And where the other six companies came from cities around the country, it’s no accident that 8 out of the 10 have decided to make Philadelphia their home and carry on the tradition of solving significant problems in an industry that touches us like no other.
We can’t wait to see what the next class holds.
Bio: Elliot Menschik, MD PhD (Gr’99, M’00) is a repeat entrepreneur and investor. He is a managing director at DreamIt Ventures where he founded and leads its healthcare arm. He is the founder of Venturef0rth, an urban campus and co-working community for tech startups in Philadelphia. He also teaches at Penn where he is an adjunct associate professor in the Engineering Entrepreneurship program.