Jimmy Ahern

Open source resources are paving the way for discovery and innovation across countless disciplines. Scholars, scientists and software developers alike are realizing the benefits that this type of collaboration can have for their respective industries and the world as a whole, as they work toward making open source a standard practice. Numerous verticals have demonstrated how open source software allows developers to balance customization. The seamless integration creates better products and more satisfactory user experiences, yet the healthcare industry has proven to be more apprehensive. In order for healthtech companies to get the maximum benefits of the open source community, they’ll need to address these three concerns.

Regulation

The beautiful thing about open source software is that the transparency and reduced barriers to access make the programs universally attainable and infinitely pliable. Developers can realize great potential if foundational software become public commodities, but there need to be systems in place that ensure open source software are regulated and reliable.

In the world of healthtech, regulation is a difficult and compound issue. In addition to the standard concerns of regulating open source software, such as licensing practices and reliability of the program, the primary concern of healthcare providers is that the tools they use give results that are medically sound. Many software solutions in the healthcare industry optimize hospital workflows or facilitate communication between providers and patients, but others affect treatment or medication management directly. Individual providers will be reluctant to use any software that isn’t vetted by the medical community as a whole. Open source software in healthcare also presents a dilemma of culpability. In the event that a program built on open source software fails and results in adverse effects for a patient, who can be held legally responsible? The medical and tech communities have to intersubjectively determine the criteria that open source software has to meet and a body that can make sure regulations are being followed.

Compliance

Few industries have compliance guidelines as rigorous as in the field of healthcare and the software that providers utilize have to pass a litany of security standards. No matter the size of the organization, or whether the information is stored in on-prem servers or in the cloud, the sensitivity of the information requires a heightened response to security risks. Robust endpoint protection, comprehensive backup and disaster recovery plans and end-to-end encryption of all information in transit are fundamental qualities of a secure system. Within institutions there are also regulations that determine who has access to certain patient information, which means that healthtech companies need to prioritize access control functionality as well.

In the United States, HIPAA is the foundational piece of legislation for compliance regulation and supplemental medical privacy laws can vary from state to state. Software that’s developed with the intention of being open source needs to take into account the fact that compliance regulations aren’t a static issue. Legislation is constantly evolving and isn’t homogenous across territories. In order for the medical community to get on board with open source, they need to be assured that they can easily rewrite software or integrate with APIs to adhere to current compliance standards without leaving their programs vulnerable or creating bugs. Currently, only enterprise-grade open source software facilitates HIPAA compliance. Developers looking to get into the healthtech space need to keep that in mind when building their product roadmaps.

Incentivization 

At a high level, the possibility of collaboration and innovation are exciting qualities drawing people toward the open source movement, but developing software isn’t something people typically do just as a hobby. Even if many people enjoy writing, editing and improving code, they need to be incentivized to put in the time and effort. Historically, money is a great motivator in both the tech and healthcare industries. There is a well-paved path showing how people can profit from licensing proprietary software, but the ways to make money off of open source software are more obscure. In that way, convincing people to invest in open source is much more cumbersome. 

While a devotion to the well-being of others is a guiding value for healthtech businesses, they’re also selling products and services just like in any other industry. Leaders in this field are beginning to recognize the potential of making large returns on investments when developing open source software. Individual developers list altruism, community recognition and potential for professional opportunities as reasons to write and contribute to these programs. The challenge of the open source movement is to either think of how businesses can be monetarily incentivized to develop open source software, or to expand the non-monetary benefits that individuals see in a way that motivates larger organizations to participate. Others suggest that it’s not the healthcare institutions rather than the developers who should be incentivized to invest in open source software because of how it can ease the burden of IT infrastructure costs overall. 

Innovation from open source software has the potential to revolutionize the healthtech industry, strengthen our healthcare system and increase access to medical care globally. Resolving the questions of regulation, compliance and incentivization are the steps in bridging the gap between the spheres of open source and healthtech. Technological advancements in health and medicine have boundless capacity, which makes the entire world—not just software developers and medical providers—stakeholders in integrating these practices.

Business incubators serve a function that is sometimes overlooked in the birth of a startup, but for a fledgling company they can be the difference between success and failure. They can be defined as organizations that support the development of start-up companies in their very earliest stages—effectively, they turn an idea into a functioning business, transforming an embryonic startup into a confident and independent company.

A business incubator might provide a range of services or assistance, from management training to initial funding. But how does a business incubator help in practical terms—and how does it differ from other forms of early-stage business assistance?

What’s the difference? Incubators and Accelerators, Venture Builders and Venture Capital

Business Incubator

The purpose of a business incubator is to stimulate innovation, and thereby create successful new enterprises. It’s a role they play at the most embryonic stage of a business, when it is at its most fragile but full of pure potential.

Business incubators are likely to collaborate with founders or entrepreneurs from a range of fields, with a variety of different business concepts. The incubator will assist the founder in developing their initial idea (or business offering), helping to fine tune or craft it so that it meets the demands and requirements of the market.

Assistance will be offered in the form of mentoring and other types of support but can also include more tangible resources, which might be physical space, staffing, or equipment, depending on requirements. It may involve an injection of capital. All assistance is likely to have a laser-like focus on the individual needs of the company.

Business Accelerator

Business accelerators, by contrast, assist companies which are further along their development journey than those aided by incubators. They are most likely to invest in companies with a proven business model and perhaps demonstrable market presence or customer base. Although there will be an element of coaching—and perhaps provision of infrastructure—the main purpose of an accelerator is to help startups grow by connecting them to investors and/or providing direct funding.

Business accelerators are most appropriate for a company from the stage of pre-seed to Series A funding and it is likely to be a short-term relationship lasting several months.

Venture Capital

Venture capitalists (VCs) will invest in companies which show, above all, clear potential for rapid growth. Individual ‘angel’ investors or pooled investment funds will seek out private equity opportunities to invest with the hope of turning a profit.

To get any support (beyond funding) from angel investors or a VC fund, companies will need to have secured a very significant financial investment (so there is more at stake for the investor).

Venture Builder

A venture builder has a far deeper and longer involvement with a company than any other organization mentioned here. It first ‘synthesizes’ concepts or ideas for new businesses, and then headhunts individuals to develop them. In a way, it combines incubation, acceleration and venture capital—but significantly, a venture builder takes on the role of co-founder. The relationship is likely to last a number of years and will only end when the startup is sold, with maximum ROI as the ultimate aim.

Although venture builders offer fascinating opportunities for business development from ground zero, if the wheels of a company are already in motion, an incubator is a more appropriate proposition.

The Importance of Business Incubators for Startups

The reasons why business incubators in particular are so important are myriad. The environment provided by an incubator will be hugely supportive, inspiring innovation within the firm and supplying insights and knowledge from without, to help companies evolve and generate solutions rapidly.

From a mentoring perspective, a business incubator can provide experience, as well as state-of-the-art technologies and equipment (as needed), new ideas and diverse skillsets. They are also instrumental in helping new startups navigate challenging markets—or perhaps enter new markets that they may not have considered relevant.

They also present opportunities beyond the purely commercial or business focused. In terms of involving staff in the process of development, a culture of innovation can be nurtured at the company. They might be able to encourage new directions for research and development. Overall, they can expand the vision of a company in ways that capital alone simply cannot.

As with any business relationship, the key to a successful incubation is setting goals, and defining a scope and focus for the process. The incubator and startup should be completely aligned and communication must be excellent. Ideally there will be a clear timeline for the relationship—and above all, there should be a long-term plan for the moment when the startup ‘hatches’ and takes flight on its own. 

Incubation + Venture Capital: A Recipe for Success

Venture capitalists and business incubators are equally important to a startup and leveraging the benefits of both can maximize the chances of success.

Incubators are there to offer guidance to a new business in that delicate early ideation stage, helping to create business strategies, providing validation of those very first concepts and ideas. Following that, VC assists with the next stage of a startup’s development, with pooled investment funds offering a significant financial boost, propelling the startup to fulfil its potential.