Forget invention, necessity is the mother of adoption.

Black Swan moment, game changer, Darwin on steroids for modern business – there are too many people out there making very bold proclamations on what the Coronavirus pandemic will mean for the world. We have heard everything from suggestions that people will no longer want to live in cities and the role of the office being completely redundant (sorry WeWork), through to the moment that the world collectively made a binary choice to prioritise short term lives lost over long term unemployment and the economy.  We hope some of these are vaguely right, but as ever with major events we can be sure none of the extreme predictions will ever become reality and the inbuilt human urge to return to old habits will prevail for most.

That said, like many of my peers in the healthcare sector, there is overwhelming agreement that the last three months, and the next three, will undoubtedly be seen as the defining milestone for technology in healthcare. It would therefore be remiss not to make a few observations on what we have seen, the ones who have got it right, what we need to learn, and a few predictions. Needless to say in unprecedented times there is no such thing as an expert, just advisors. But hopefully this will give some food for thought as you boil the overworked kettle or log into Zoom for the 1000th time.

Things we knew already, but those outside of the sector needed a reminder:

• The NHS is brilliant and provides the societal glue that we need at times like this. Just when you thought we would never surpass the peak of national pride during the opening ceremony of London 2012, someone comes up with the idea of a national clap. It relies upon brave hard working people that are the very lifeblood of our society. These people will never be replaced by technology, but they have historically been let down by it.
• Healthcare is awash with brilliant innovation, the issue has always been adoption. Risk averse regulators, politically motivated lobby groups, a pathological fear of working with the private sector, change resistant leaders and a lack of meaningful funding. These have always been the traditional barriers to improving the quality and accessibility of healthcare in the developed world, particularly the NHS.
• With the right urgency and permission, the private sector is an incredibly powerful asset in the delivery of care. Despite always being pushed aside and politicised, we have seen huge numbers of private healthcare providers step forward to provide capacity, manufacturers creating products at short notice and technology companies responding to a completely new problem statement through new digital channels. Sadly though, even in the middle of the biggest healthcare crisis we have ever seen, we have still witnessed a few ridiculous cases where anti-private sector sentiment is winning over any form of common sense, in the PPE crisis for example.
• Supply chain and procurement is like driving, everyone thinks they are an expert from the back seat. Judging the performance of the NHS supply chain upon the availability of an unprecedented world shortage of PPE and ventilators is akin to saying Mo Farah is no good at the 100m – it’s something the system has never had to do. There would be public and political outcry if we had spent the kind of money needed to prepare for something on this scale. There will be plenty of time for a political and managerial post mortem, now isn’t it.
• Always contentious but often helpful – the added bandwidth of consultants and contractors has been pivotal in working with the military and the NHS to ensure the various field hospitals around the UK have been set up in record time.

The ones who have got it right

One of the fascinating subplots to the crisis has been the role of technology startups – at their best, we have witnessed the beautiful agility of businesses who have the critical mass of skills and technology to make a real difference but are not the bureaucratic oil tankers that take 6 months to respond. To the lay observer, there is a temptation to say that this is so big that all healthtech startups will win just from the rising tide. And to some extent this is true, particularly in the short term in the sweetspot subsectors of digital primary care and remote diagnostics where new ways of working should become rapidly embedded into business-as-usual. Babylon, Pushdoctor and Kry should all now be jumping at the opportunity to become the default providers whilst commissioners have the budgets and freedoms to try new models. The smartest of them will be using this as their bridge to accelerate tech roadmaps that are becoming increasingly hard to differentiate and to expand across borders.

But outside of the sweetspots of digital primary care, across the wider health tech ecosystem the winners have been those with the following characteristics:

1. Founders who are not desperately trying to retrofit their prior product can roll their sleeves up to start with the basics and develop a bottom-up, pragmatic, response to the pandemic. Take a bow the likes of @AdviseInc, with their regional PPE stock tracker, @Zesty with their patient comms capability, @Pando with their instant C19 comms platform and @Lantum with their support to national primary care workforce deployment.
2. Take a closer look at these four and you will see businesses who have seen the opportunity to fill an important need across regions, not just solving problem statements within individual providers. You will see businesses who have demonstrated real agility in leadership, strategy, market engagement and most importantly the tech capability to establish a C19 proposition quickly with the end customer in mind.
3. Goldilocks in size, we need scale-ups not startups. Those with enough prior momentum and funding to give them enough runway to focus on responding to the opportunity to make a real difference, at a time like this healthcare leaders don’t (or shouldn’t) have time to trial MVPs from scratch.  Those who were already poised geographically. Whilst the pace of this crisis is unprecedented, the patterns of adoption are not. We often see a regular debate around how best to scale internationally and sadly too many people try to boil this into a binary question – global or local sales teams – when the answer is both. Whilst the problem statements are invariably global, the nuances of local regulation and reimbursement mean that every country requires a thin local presence, developing early brand awareness and relationships either directly or through a third party. The real winners in the UK have all had some kind of existing footprint from which to build, sadly we are now getting approached by too many who will have missed their best opportunity for UK expansion.
4. Founders who can see the bigger picture. Specifically that this is a time to maximise the most important currency - Trust and social purpose.  - not squeezing out profit to shore up the rest of their portfolio in freefall. The ones who stand by their customers now will be the most profitable in three years time.
5. And finally, investors who also recognise this point and prioritise the right investments. We have heard some horror stories of many founders being badly let down at key stages over the past few months. With their portfolios in freefall, investors are having to take some very difficult decisions because they are over exposed in sectors they didn’t understand well enough in the first place, adding further momentum to the need for sector specific investors on cap tables, not just tech generalists.

What can we learn?

Some of the grey haired amongst us will be familiar with the ‘Rubber windmill’ approach to policy development and simulation in healthcare, and in some ways the last couple of months have been a fascinating real-time version that we need to learn rapidly from. It is early days of course, but some of the most interesting lessons we are seeing from C19 are those we intuitively knew but needed more evidence:

1. Leadership is paramount – in the investment world there is a saying that you choose the jockey (the founder) not just the horse (the business), , many VCs are now finding out whether they chose the right jockeys. This is not just based on their tactical actions but their emotional and leadership response – have they shown the leadership to stay calm and drive the business forward? 
2. Clinical governance & evidence – the speed with which professional and clinical regulators have responded to the crisis has been impressive, with the likes of the GMC stepping up to the plate to reassure GPs that they have full support to use digital tools to conduct diagnoses. Time and data will tell us how many diagnoses were missed or delayed, but what we do know is that with the right regulatory permission a significant number of clinicians have recognised they can do more than they thought using digital channels, which many will hope saves us from the torture of a decade of expensive RCTs.
3. Prioritise the last click, focus on the small details in the sales process and user journeys. Whilst change champions and national cheerleaders are all necessary, they are not sufficient. Adoption of health tech will always be reliant upon a value of chain of indirectly linked stakeholders and founders need to think through the entire sales and mobilisation process to ensure they haven’t missed the apparently leftfield influencers – the most vocal general managers on the ground, the disgruntled Cinderella user groups outside of the organisation in social care or public health, they can all be blockers without the right planning and engagement, even in a crisis.
4. Regulation is ever present, and growing. Even at times of crisis, regulatory requirements can’t be ignored, both in terms of todays requirements in areas like patient identification and in rapidly emerging requirements like FHIR and SNOMED standards.

So from what we have seen, what can we expect over the next six months? Four predictions:

1. You can’t hide forever. We will now see even more unsustainable businesses go to the wall. This is where we do subscribe to the slightly Darwin view of technology businesses. Even if they were backed by the biggest of big name investors, an over hyped, ‘hypergrowth’ business with no line of sight to profitability is always going to be unsustainable. So whilst no one could have predicted the actual trigger for the global downturn, we were entering the end of an economic cycle that few of the high profile casualties we seen so far would have survived anyway. Equally, the high street was doomed before this crisis, businesses like Amazon with the most insights into their end customer and best fulfilment were winning anyway, this has just accelerated the process by around four years. We are also starting to see that even the end customers of these businesses are now much more mindful of the need for sustainable commercial structures, a sensibly priced but reliable proposition is more useful than a tech proposition that is cheap and lasts a year.

1. Political and managerial fallout. Just as the nation was overwhelmed with the positivity of sentiment towards the frontline NHS, there will be an inevitable backlash. British society, particularly when it comes to the NHS, always needs a release valve, whether it’s justified or not. Clinicians have seen things, decided upon things and had to communicate things they never thought they would. We will be going through a national grieving process and the transition from shock to anger will be like nothing we’ve seen before. On a personal level We sincerely hope this is mainly political rather than the lazy missiles fired at the management ‘overhead’. They might not need PPE, but there is an army of managerial heroes out there in the NHS, DH and cabinet office trying to keep the lights on, the rosters full and the technology running. They are pulling nightshifts and working 30 days straight to sift out genuine offers of help from the thousands of morally bankrupt fraudsters trying to sell fake tests and shoddy masks. Whether fair or not, those in health tech need to be ready for changes in leadership and ensure their relationships span as many bases as possible and their structures are ready for what will be an inevitable moving of the regional deckchairs back to something resembling an SHA.
2. Standby for the explosion of devices / peripherals. As consumers we have largely plateaued on the use of wearables for proactive health, but in reactive health and diagnostics the crisis has also shown that video and smart phones can only take us so far when it comes to providing care outside of traditional settings. As profitable as they are in the short term, we can no longer afford purist strategies that focus only on software. Backing it up with an enabling and complementary physical supply chain will significantly expand the range of available data feeds and brings the added benefit of reinforcing far greater public trust. There is a reason Amazon remains one of the most trusted tech brands, they deliver, literally. Sadly the niche peripherals space in isolation rarely offers the global scale for institutional levels of investment, and it’s easy to understand why when you look at the clunky, standalone, high redundancy hardware of the past. But things have changed, the cost of device manufacturing and rapid prototyping has plummeted, suppliers recognise the value of user-centred design and interoperability standards are becoming widespread. So when the core business is software combined with innovative fulfilment strategies like low impact single use hardware, 3D printing or smart phone integration, the outcomes will be compelling, provided start-ups can jump into the opportunity before Apple and big pharma get there first.
3. A flood of talent. The recent snapshot eport from dealroom on the impact of C19 makes grim reading for generalist tech investors. Revenues in most sectors hasn’t just declined, it’s fallen off a cliffedge. Aside from the obvious short term impact, the shock of this experience will last for a very long time in the minds of the worlds best founders, CTOs, product developers and data scientists. Combine this with the relative lack of social impact that so many tech companies have and you have the perfect window for the health tech sector to use this precious window of opportunity to recruit the very best at an affordable burn rate. Based upon the founders we speak to, this exodus has already started.

Most importantly though, if we take nothing else from this crisis we need to ensure we don’t waste it and allow horrendous human sacrifice to have been made in vain.

For nearly a decade now we have been hearing about the need for a ‘grown up’ debate about trust and privacy in health data, with far too much of the discussion centred on scaremongering and the risks of sharing data, not what the access to properly anonymised data will actually allow us to achieve. Call us optimists, but we think the counterfactual case has just been made. If we had access to more healthcare and genetic data we would have developed a response strategy based on accurate population analysis not always looking in the rear view mirror of death rates. With wider genetic data we would have been closer to a personalised immunisation strategy, not the blanket approach that we can expect as soon as the drug is developed in a few months time. It will be equally fascinating to compare the death rates between countries with very different attitudes to data sharing and privacy. Will the use of geolocation and targeted profiling in Israel and China still be seen in the UK as infringing human rights, or just a sensible response to save lives? We all know that public trust in healthtech is paramount, but when the total impact upon lives and livlihoods is calculated, we think the bar for what is deemed proportionate use of data has changed, for the better.

Joe Stringer & Dr. Pooja Sikka, General Partners at TenX Health