Learning From Failure in the Digital Health Business

You know the old saying, "You learn more from your failures than your success." But ouch, those failures can smart. At a recent Digital Health Summer Summit in San Francisco, three brave former CEOs from gone, but not forgotten companies, Zeo, HealthRally and Healthrageous took the stage to share their personal schools of hard knocks.

David Dickinson (pictured below), now the Chief Innovation Officer & SVP, Business Dev. at Optum Labs, founded Zeo, one of the first sleep monitoring systems. The company shut its doors in 2013. The monitor included a wireless-enabled, sensor-equipped headband that users wore while they slept. It communicated with a bedside display alarm clock that captured the data transmitted from the headband. Zeo spent heavily on marketing as competition from more general purpose gadgets like Fitbit grew. Zeo generated sleep data, but the data, Dickinson now understands, needs a practical, actionable advice.


Zack Lynch (pictured below), Executive Director & Founder, Neurotech Industry Organization co-founded HealthRally, one of the earliest social networking cum crowdfunding models. Betting that money was a good incentive to live a healthier life, groups were encouraged to create financial rewards for meeting health goals. HealthRally no longer exists but Lynch continues to harness the power of apps and products to foster behavioral change. "You just need to know that 99 percent of all health related startups will fail for various reasons," he says.


Healthrageous, an early company that combined wireless biometric sensors, smart phones, individualized coaching, incentive programs and social network support to help people achieve their personal health and wellness goals, was sold to Humana. Its founder, Rick Lee (pictured below), is now the Executive Chairman of M3 Information and still actively involved in the health startup space. He cautions that VCs need to be carefully vetted and scrutinized. As a general stereotype, they can also be a bit ADD he says. That said, "Treating consumers as consumers of their own healthcare is where the future is," he adds.


Lisa Suennen of Venture Valkyrie interviewed the three CEOs and summed it up like this, "Entrepreneurs don't spend enough time testing their assumptions and meeting their customers before they launch." Adding, "It doesn't matter if you think your idea is good, it only matters if the people who you hope will buy from you think it's good."

Here are ten tips from CEOs who learned the hard way, brushed themselves off and did it again.

1. Identify a problem that America has, not one that you have, and solve that problem. Remember, not everyone is a white 26-year-old guy living in Silicon Valley.

2. Go to market with an unfair distribution advantage. Launch with a TV show, have your partners push their channels, etc. A little bit of press coverage and a few tweets aren't going to do it.

3. Your business model is more important than your brand.

4. Technology is great, but psychology wins. There's so much seduction with the latest invention, but can you understand how to motivate behavioral change?

5. Beware of placing your bet on any one distribution channel. Be multifaceted.

6. Consumer digital healthcare is a mile wide and a mile deep. It's very complicated. You have to do a lot and do it well.

7. Innovation is inherently risky. Don't be afraid. Be bold, be brave, and whatever you do, don't be conservative.

8. If your board of directors isn't helping you achieve your goals, then build your dream board to advise you.

9. Beware of falling in love with early anecdotal data.

10. Know when to pivot and do it while you still have 12 months of burn rate. Whether it's a change in talent, business strategy or market focus.

Watch the videos from the conference to understand more about learning from failure:

Dave Dickson:

Zack Lynch:

Rick Lee:

Robin Raskin is founder of Living in Digital Times (LIDT), a team of technophiles who bring together top experts and the latest innovations that intersect lifestyle and technology. LIDT produces conferences and expos at CES and throughout the year focusing on how technology enhances every aspect of our lives through the eyes of today's digital consumer.