A Post-Demo Day Look at Three Rock Health Startups-WeSprout, Pipette, and BrainBot
A confession: When I first heard that a recent Harvard Business School MBA named Halle Tecco intended to start an incubator for healthcare startups in San Francisco, I was more than a little skeptical. It seemed to me that all of the successful incubators, such as Y Combinator, succeed by picking Internet and mobile startups. Those are areas where the capital requirements and other barriers to entry are at a historic low, so budding entrepreneurs can get a lot done quickly. Healthcare is a completely different game: it’s an ossified industry plagued by huge inefficiencies, where doctors, insurers, hospitals, and patients are all resistant to change.
But I resolved to follow Rock Health closely, to see how the incubator model—typically built around a several-month period of intense product and customer development, entrepreneurship training, and mentorship with local executives and investors—would work for healthcare startups. I kept track of several of the startups during their five-month training period. And after attending the first Rock Health Demo Day last Thursday, when 13 graduating companies presented to investors last Thursday, I have to say that while not all of these companies are ready for prime time, I’m pretty impressed.
The amount of progress these 13 companies have made during their five-month residency at Rock Heath is nothing short of amazing. They’ve all got users testing (and in some cases paying for) their services, and one of them, Skimble, can already boast that more than a million people have downloaded its fitness apps from the iTunes App Store.
Of course, it probably helps that almost all of these companies are building products or services at the boundary between healthcare and Web or mobile services. When the main material for your product is code, and the main skill sets you need on your team are software engineering and business development, you can speed forward a lot faster than if you were trying to develop a new drug or medical device. Innovation in traditional therapeutics, in other words, is still just as slow and hazardous as it ever was (perhaps even more so, as venture investors flee the sector). But it’s a marvelous thing that the incubator spirit has caught hold around the edges of healthcare, where innovations in the way we monitor health data, communicate health messages, and administer healthcare organizations can make a real difference in the cost and quality of medicine.
I summed up all 13 Demo Day presentations in a series of live tweets from the event, which you can review on page 3 of this story, or over at Storify. Below, I want to give you a taste of the activity around Rock Health during its inaugural term by introducing you to three of the companies that presented last week: WeSprout, Pipette, and BrainBot. I first met with the founders of these three companies in late August, when they were at the halfway point in their Rock Health experience. It was fun to see how things had evolved in the final 12 weeks leading up to Demo Day.
WeSprout: A Crowdsourced Q&A Site for Parents of Young Children
WeSprout founder Jackson Wilkinson, a software engineer who’s done past gigs at Posterous and LinkedIn, says his team applied to Rock Health with nothing but a vague idea about connecting communities with medical data online. He says getting into the incubator program was what gave him and co-founder Keith Muth the courage to quit their previous jobs and “go whole hog” with the idea, which quickly gained specificity with help from Wilkinson’s fiancé Carol Peebles, a pediatrician at UCSF, who is the startup’s medical advisor.
Today WeSprout is a community question-and-answer site where parents can get advice about their kids’ health problems from other parents; it’s also got a medical history section where parents can track details about their children’s height, weight, developmental milestones, immunizations, allergies, and health problems. The startup, which will charge for access to the site, hopes to take business away from Babycenter, Babble, Cafemom, and other parenting sites, which Wilkinson calls “cluttered, generic, not that smart, and ripe for disruption.”
“We use the medical history as a backbone to help you find resources and answers,” Wilkinson explained at Demo Day. “When you ask a question, we look at the history, then find people in the network who are best able to answer your questions. How can I get my newborn to fall asleep? What’s a great daycare place in Berkeley? We know what questions parents like you are asking.”
The WeSprout interface is spare and elegant, taking a cue from popular consumer services such as Mint.com. “One of the inspirations was being able to witness Carol using the [electronic health record] tools she was supposed to be using at UCSF, and saying ‘Who the heck designs this crap?’” Wilkinson told me in August. “Folks like us who have worked on the consumer Web, who concentrate on design and usability, don’t work on that kind of product. That really drove the early conversation.”
In addition to Mint, Wilkinson and Muth looked to popular Q&A sites like Quora and Stack Overflow for inspiration. There’s also some overlap between WeSprout and HealthTap, another medical question-and-answer startup profiled in these pages in April, especially when it comes to the way both services use details from medical records to filter answers. But HealthTap focuses on advice from medical professionals, whereas “we are much more focused on parent-to-parent communication,” Wilkinson says.
Being surrounded at Rock Health by people with backgrounds in the healthcare industry was a big help to the WeSprout team, Wilkinson says. “We rely on Carol for a lot of things, but it’s also great to get gut checks from experienced folks, and to have partners like the Mayo Clinic and Harvard Medical School, and see if their eyes light up or if their brows furrow. We’re confident we will be able to develop a product as great as any Y Combinator or 500 Startups company—and they don’t have that healthcare depth, where Keith and I are the weakest.”
Pipette: Post-surgical Monitoring via Text Message
Founded by two former Microsofties, Jimmy Do and Ryan Panchadsaram, Pipette is taking on the problem of post-surgical care. Once patients are discharged from the hospital after surgery, a few pages of complicated instructions are usually the only support they usually get—and if they don’t follow them to the letter, they’re likely to be readmitted for complications, a problem that Panchasadram says costs the U.S. healthcare system $30 billion a year. Do and Panchadsaram have developed a system that lets doctors or nurses nip problems in the bud by coaching post-surgical patients daily via text messages.
Panchasadram says being in Rock Health helped him and Do narrow down the product to something manageable—and marketable. “If you look at the original description for Pipette, we wanted to monitor patients before, during, and after their hospital stay,” he says. “But while other incubators would have been able to help us with engineering or business strategy, being part of Rock Health we have had mentors who are payers or doctors who could say ‘You know what, that is not going to work.’ From conversations with mentors, with Halle, and with the other teams, we learned that the best place to start was recovery [after a hospital stay], because that is when most problems arise, and from that we focused even more after conversations with doctors at UCSF on recovery after surgery.”
Pipette sends post-surgical patients text messages asking them key questions like how much pain they’re experiencing, whether they’re taking their medications, whether they’ve noticed swelling in the affected area, and so on. When the system detects that complications are developing, it alerts doctors to follow up by phone. It also uses game features to nudge patients toward healthy behaviors, such as keeping a leg elevated after knee surgery.
Panchasadram says Pipette plans to charge about $150 for one course of monitoring, and he hopes insurers will be willing to cover that cost. Turning to payers is a risky strategy—and I talked to several investors at Demo Day who said they’d be worried about any startup that tied its growth plans to deals with insurers. But Panchsadram says he’s hopeful, given the huge costs payers face when post-surgery patients get readmitted due to complications.
For now, Pipette is starting small, negotiating with HMOs and private insurers over services for limited indications such as ACL (anterior crutiate ligament) surgery at two pilot hospitals (UCSF and the Mayo Clinic). Later it hopes to expand to knee replacement, then orthopedic surgery in general, and then gastrointestinal and transplant surgery. “For us, the big piece is getting the trials started and getting it in patients’ hands, because once that happens, it means there is an institution that believes that there is a possibility that this will work,” says Panchasadram.
BrainBot: Bringing a Moment of Zen to Mobile Devices
Until recently, EEG hardware for measuring brain activity cost $20,000 to $30,000 and was available only to hospitals and researchers. But now companies like Neurosky are selling EEG headsets for under $100, creating room for new consumer software applications that incorporate real-time brainwave signals. BrainBot is putting the technology to use in the area of mindfulness-based stress reduction, or MBSR. Its mobile app uses data from the Neurosky MindWave to monitor attention levels in people attempting to meditate.
Co-founder Rohan Dixit, a former researcher in the neurology department at Stanford Medical Center, says he took the Neurosky device with him on a recent trip to India, where he used it to measure the base EEG levels of monks during their meditation practice. Together with co-founder James Levy, a former engineer at Android app developer Stickybits, Dixit used that data to build an app that can tell the difference between a state of focus or mindfulness and the all-too-common counterpoint—the state of wandering attention that some have called “monkey mind.” When the app detects this wandering state in the user’s brain, it sounds a chime, and a gentle voice recites, “Notice what’s happening. Relax and gently return to your breath.”
Meditation can be as effective as antidepressants and cognitive behavioral therapy at treating anxiety and mood disorders, and Dixit says that a growing number of health plans are reimbursing patients for MBSR therapy. But the startup will probably opt to sell its app directly to consumers, rather than trying to work through healthcare organizations or insurers. “Everyone who can afford a smartphone can afford our technology,” says Dixit. “We have the luxury of being able to target people who are improving their health outside of the clinical context.”
Still, with all the contacts the startup has made through Rock Health, the company could go either way. “On one side, we could make it a game and focus exclusively on the consumer side, where it’s all about getting users,” says Levy. “On the other side, we could do clinical trials and deploy in hospitals. What Rock Health has been helpful with is helping us realize that we are at a point in history where you can actually walk the line between those two.”