How Fred Wilson’s Megatrends Are Transforming Healthcare

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In 2010, eight nerdy college students took a simple card game they created (now known as Cards Against Humanity) to a platform called Kickstarter.

They set a goal of raising $4,000 – hoping to make just enough to create professional prints of their game to sell. They surpassed their goal by more than $10,000 and printed 2,000 copies of the game with their earnings.

The Cards Founders have since sold more than 500,000 copies of the game since their debut on Kickstarter. Despite their newly earned millionaire statuses, all eight of the founders continue to work at the same jobs they were at before their unexpected card game explosion of success.

A decade or two ago, this would have been an entirely different story. In reality, there probably wouldn’t have even been a story.

Kickstarter has made it possible for individuals or groups of people with a good idea to “make it” through crowd funding – even if they don’t have any cash to invest in the project themselves.

This story highlights a much bigger trend that continues to drive business and sales across multiple industries. The trend involves a transition from bureaucratic hierarchies to technology driven networks (like Kickstarter), and is one of the things that Venture Capitalist Fred Wilson looks for when considering new business ventures to support.

The Trends

Fred Wilson said that technology is not a major focus of his when considering future investment opportunities. He’s more interested in the overarching trends that successful businesses will naturally gravitate towards in order to thrive in today’s marketplace – particularly in healthcare.

As one of the most sought after investors in America today and the founder of Union Square Ventures (a firm with investments in an impressive list companies including Twitter, Tumblr, Kickstarter, Etsy, and more), Wilson puts an enormous amount of focus into watching trends in order to be sure that his carefully selected investments will pay off.

Here are 3 “megatrends” that Fred believes will impact healthcare over the next few years:

1) Transitioning from Bureaucratic Hierarchies to Technology-Driven Networks: People are relying more on one another to accomplish goals (instead of turning to giant corporations or government entities for assistance).

2) Unbundling: “Package Deals” are a thing of the past. People today are more interested in paying for what they want or use – and nothing else.

3) Nodes on the Network: There are nearly 6 billion cell phone subscriptions worldwide. 91% of all people on earth have a mobile phone. 50% of mobile users use their phones as their primary internet source – enough said.

We are beginning to see many different facets of healthcare take after one or more of these trends – some of which are outlines below.

Technology-Driven Networks Changing the Face of Healthcare

Just as Kickstarter has transformed the lives of numerous aspiring entrepreneurs, technology-driven networks in healthcare are doing similarly big things.

We see the largest example of this with Doximity, a new social network exclusive for physicians that allows them to collaborate online in order to tackle difficult cases and provide the highest quality of care for their patients. Doximity has received $27 million in funding and has garnered an impressive list of board members including Konstantin Guericke, the co-founder of LinkedIn. He explains:

“Doximity provides a very useful collaboration service for physicians. By focusing on a specific segment of the professional market, Doximity is well-positioned to deliver a user experience and value that is second-to-none for physicians in the US and worldwide.”

As the largest professional network for physicians with one in every three doctors registered as members, Doximity is already well on its way to becoming the standard for physician collaboration.

A healthcare start up called Human Dx (one of Union Square’s latest investments) is also utilizing evidence of this trend to fuel their vision of “enabling the medical community to collectively contribute to knowledge to an open machine learning system that could benefit people everywhere.”

These are all examples of the shift that will soon take place in healthcare towards technology-driven networks. As networks such as these continue to grow in popularity, doctors will have the ability to easily share ideas, methods, and best practices with one another.

The Unbundling of Health Insurance

Young people especially don’t like paying for health insurance and effectively subsidizing the old and decrepit. It comes with too many services and options that most of these people never need or use.

Renowned healthcare economist John C. Goodman has a similar stance on the issue. In Priceless: Curing the Healthcare Crisis, he argues that individuals need to have more control over their choices. We should be given the option to opt out of any number of unnecessary pre-paid services while still having the opportunity to purchase health insurance only for financially and physically devastating events or illness.

We are already seeing this trend play out. Many people are choosing to pay out of pocket to see doctors who don’t accept insurance instead of paying an insurance company to dictate which doctors are and aren’t part of their plan.

How Cell Phones are Transforming Healthcare

A post on cnn.com claims that a world where, “whether you’re sporting an iPhone 5 or a Nokia 3100, you can remotely access your medical information, reschedule doctors’ appointments, monitor loved ones’ vital signs, receive secure lab results, compete for “best blood sugar control,” manage tailored medication reminders, etc.,” may not be that far off.

New smartphone apps are paving the way in providing patients with access to new tools and technologies that aim to increase personal health responsibility and cut down on doctor visits. Many of these apps are geared towards promoting health, preventing disease, and monitoring pre-existing conditions.

According to legendary Venture Capitalist Vinod Khosla, founder of Khosla Ventures,

“80% of what doctors do can be done at a fraction of cost at substantial better quality,” by using smartphones.

Khosla himself has invested in a number of these applications, including AliveCor, an iPhone app that monitors heart electrocardiogram (EKG) and CellScope Oto, an app that takes a photograph of the ear and ear temperature to diagnose ear infections and other illnesses.

The Future of Healthcare

The trends listed above will continue to play out in big ways – in healthcare and beyond. And Fred Wilson is not shy about expressing his interest in investing in healthcare ventures that disrupt the status quo by capitalizing on these trends.

Whether we want them to or not, Wilson’s trends are dictating the future of healthcare.  

So instead of fading away into the background, it would be wise to adapt accordingly along with the changing industry. Pay attention to how these trends will affect your realm of expertise and capitalize on the change as much as possible.

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