Typically, building a unicorn company is super challenging with odds being against the founders every single day. This difficulty magnifies ten times more, when we are speaking about building a unicorn in the land of healthcare, given its regulations and archaic systems that are established and hard to change.  

Despite all the challenges, some entrepreneurs have actually succeeded to build unicorns in healthcare. Given my entrepreneurial spirit and can-do attitude, I would like to believe that in the next five years we will see a lot more digital health unicorns born and scale.  

Here, I would like to give you some tactical tips to help you build a unicorn digital health startup that delivers high value and that changes healthcare for better:    

1) Understand the current healthcare system: The best entrepreneurs and founders have great understanding of their sectors; healthcare is no exception. If you don’t understand the current system well, how you want to lead your company to offer something better than others, something that it’s guaranteed to be adapted and used by different players in the healthcare system, will it be the physicians, insurance companies, or consumers/patients!?   

While a clear understanding of the current healthcare system is essential, you also need to be aware that changing the status quo will always face resistance. You need to be ready to address those resistance you will face in healthcare quickly in order to scale your business. To give you an example, physicians have an established process when they see a patient. Many of them would show resistance to introduce a new step in their workflow such as reading wearables’ information to better understand their patient’s 24/7 health performance.

As a healthcare entrepreneur, it’s your job to understand these types of hurdles, resistances, and biases in the healthcare system in advance of your product launch and find ways to navigate through them.

2) Know your customers: Getting into your customers' head and understanding their psychology behind any purchasing decision is key for success of any company. Despite success of on-demand businesses such as Uber, Airbnb, and Instacart and their explosive growth, on-demand healthcare companies still are in a much slower growth trajectory. You may ask why...

One reason is that when it comes to health, consumers aren’t as open to try new and unknown services. Additionally, many users may perceive the quality of health services that can be provided at an established, full-on health center to be much higher than what can be delivered via video-chat or from a doctor-on-the-go, who will visit you at your home. How do you design your product, brand, and company, so that you can overcome such perceptions and challenges?

3) Have product hooks: In order for your product or service to be successful and deliver atypical growth needed to build a unicorn, you need to build “hooks” that bring your users back over and over to your platform. (If you haven’t read Hook from Nir Eyal, I highly recommend it).

In my view, Facebook has done this better than any other company. Each new feature is a strong hook that contributes to the product stickiness and increases user engagement. That’s why over one billion people go to Facebook in a daily basis. It’s addictive and filled with hooks. What are your product hooks for your digital health company?  

4) Have a clear monetization strategy and understand your customers’ willingness-to-pay: At the end of the day, cash is king! Businesses that succeed in the long term pump revenues (and ideally profits) like no others. As a founder of a healthcare company, it’s super important that you have a clear monetization path from early on and rigorously test your monetization assumptions. Given that historically payers and consumers/patients have been different entities in healthcare, building a direct-to-consumer business with expectation that consumers instead of insurances will pay for your service now has its own challenges.

Additionally, if you offer a B2B product or service, consider how you help businesses “save money”. That’s the best way to easily convince enterprises to pay for your product or service. If all you have to offer is a “better” product or service, but not per se a more cost effective one, your sale cycles will be much longer, and it will take you more time to become a unicorn if at all.

5) Know the rules and regulations: Healthcare is filled with rules and regulations. Some reasonable, some totally archaic and non-sense. At the end of the day though, as an entrepreneur in this sector, you need to know those rules really well and find ways to navigate through them. You may decide to push the boundaries on some of the rules, but make sure that you do them smartly. Zenefit is a good example of a healthcare unicorn that’s now struggling and getting hit for not following the rules; Theranos is another multi-billion dollar healthcare company under the scrutiny due to the lack of transparency and for providing misleading information.  

6) What’s your unfair competitive advantage? As an entrepreneur in any sector you need to have a competitive advantage that allows you to build your company faster than other founders. How can you do that? If you answer “yes” to more than one of the questions below, you probably have a competitive edge:

Do you have an unique knowledge into the healthcare sector that allows you to build a right product with the best hooks faster than others?

Do you have unfair access to a pull of talent and can hire best people faster than others?

Do you know the right investors with big pockets who are willing to invest in you and your idea?

Are you a hustler and ruthless executor like no-one else?  

Are you a visionary and a solution finder?

Given that it’s really hard for any entrepreneur to be outstanding in all the dimensions mentioned above from product to regulations, I highly recommend that you surround yourself with top notch advisors (more than one) who have great understanding of the healthcare system. They could help you stay out of trouble and succeed building a long-lasting unicorn.

If you are a healthcare entrepreneur, please share your views and experiences in the comments below. If you are an aspiring entrepreneur, I hope this spark some ideas and give you useful tips to apply to your next venture.