Why digital health apps don’t need efficacy data


Great piece from Josh Elman, who’s worked at most of the big consumer tech companies. His basic point:

You don’t need to have a money-making business model to create a valuable consumer-directed product. Elian says that companies should focus on:

How do you get to be a long-standing durable network and define a new set of behaviors or verbs?

Translation: Get solid, get big, invent new behaviors that people enjoy doing (e.g. “tweet,” “google,” “check-in”).

Rather than focusing too much on business models, Elman asks 4 questions of new consumer tech products:

  1. Is there a new behavior here that you can see 100M+ people doing?
  2. Is the product evolving in a way where people are getting more and more engaged and committed over time?
  3. Will the growth be sustainable?
  4. If the product succeeds at scale, can you monetize the key behaviors?

According to Elman, products that achieve a “yes” for each of these will be easy to [ultimately] monetize and valuable anyway.

The entire piece is worth a read (even if you suspect — as I do — that Elman’s arguments are heavily biased by his talent and the great fortune of landing at some of the most successful startups in history).

Throughout, I found myself thinking about digital health products. I’ve been as staunch as anyone about the need for digital health to be demonstrated efficacious in well-designed research trials. I’m very concerned, for example, that we have no idea whether the weight loss apps (that tens of millions of Americans use each day) actually work!

But really — does a digital health product that meets each of Elman’s criteria really need efficacy data to become valuable?

Nope.

But they should.

Today, your best bet for creating a successful digital health product is to follow Elman’s rules — just like the big kids (e.g., Twitter, Facebook, LinkedIn, Tumblr). Get an audience, get them engaged, grow your users, keep them engaged, syndicate, and monetize. But, digital health apps aren’t like other consumer products. I’m silly enough to think that products that purport to improve health should actually have some evidence that they work. Tangent alert — I’m surprised that there’s been limited discussion about digital health’s exposure to false advertising litigation, given the limited evidence base.

I’ve been really encouraged by the increasing number of VCs and angel investors who are asking about efficacy data when evaluating digital health startups. This is an important step, but it’s also critical that the startup community has easy access to experts who can help them conduct efficient research trials (and we’re working on that). Ultimately, like most things, I suspect that we’ll see change when consumers demand it.