Women’s health startups in healthcare face a special overlap of underinvestment, lack of data, regulatory complexity, and cultural stigma. Scaling women’s healthcare businesses requires founders to obtain specialized funding, establish strong evidence, reimbursement design, and stakeholder education from day one. It is important to know why women’s health startups fail to grow in order to execute efforts to prevent failure in women’s health startups.
Underinvestment and Funding Bias
In spite of an expanding femtech market expected to grow to $60 billion by 2027, less than a fifth of global health-tech investment is directed towards healthcare startups that target women’s health, and female entrepreneurs frequently find it difficult to obtain insurance support.
Root Cause
Venture capital is still dominated by men. Investors are not familiar with women’s health issues, a main reason why healthcare startups in this sector struggle, resulting in lower valuations and smaller rounds of funding.
Solutions
- Target specialized femtech venture capitalists and angel networks to fund healthcare startups.
- Tap government women’s health research grants (e.g., the U.S. Women’s Health Research Initiative).
- Crowdfund or create syndicates of patient-advocate investors who can see the value of the product, a key step to scaling women’s healthcare businesses effectively.
Action Plan
Action to stay away from women’s health startup failure includes actively seeking those funding sources that share the mission of women’s health.
Data Scarcity and Evidence Gaps
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Women’s health startups tend to lack benchmarks or endpoints, which makes it difficult to prove the effectiveness or cost value of their solutions. This is a big reason why women’s health startups find it difficult to scale, frequently as a result of women’s historic exclusion from clinical trials.
Root Cause
There is a paucity of epidemiological data and a scarcity of long-term studies of conditions like endometriosis or menopause, which makes it difficult for healthcare startups to demonstrate their value.
Solutions
- Create real-world evidence programs early in development, including the capture of patient-reported outcomes.
- Collaborate with academic centers for pilot studies to assist healthcare startups.
- Publish results in white papers and present at conferences to establish credibility within the industry, an important strategy for successfully scaling women’s healthcare companies.
Action Plan
These strategies to prevent failure within women’s health startups are centered on developing a strong evidence base to overcome data deficiencies.
Reimbursement and Insurance Barriers
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Most femtech startup founders in healthcare startups find it challenging to get insurance support, and this decelerates patient uptake and commercial development. Payors usually lack coding structures for emerging digital solutions for healthcare.
Root Cause
No clear CPT codes or DRGs exist for most women’s health interventions, a central reason why women’s health startups find it challenging to scale.
Solutions
- Get payers involved from the prototyping phase to assist in designing reimbursement pathways.
- Work to prove cost savings, like reduced ER usage for menstrual issues, to validate new insurance codes for healthcare startups.
- Pilot programs with self-insuring employers or big health systems to collect necessary data, allowing scaling women’s healthcare businesses effectively.
Action Plan
Earlier payer engagement to help guarantee reimbursement avenues is one way of implementing strategies in order to prevent failure in women’s health startups.
Regulatory and Compliance Complexity
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Women’s health startups usually occupy the space between wellness, medical device, and pharmaceutical categories, and thus have overlapping regulatory challenges.
Root Cause
Unclear product classification will hold up approvals and raise operational costs, a frequent cause of women’s health startups failing to scale.
Solutions
- Plot out the regulatory course as early as possible with professional advice for healthcare startups.
- Implement “compliance by design” — design systems to comply with standards such as HIPAA upfront and document all quality procedures.
- Seek early device classification (de novo or 510(k) submissions) for digital devices to enable successful scaling of women’s healthcare companies.
Action Plan
Proactive regulatory planning for ease of compliance is one of the strategies used to prevent failure in women’s health startups.
Cultural Stigma and Market Education
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Most women’s health topics like menopause, sexual health, or incontinence are stigmatized. Online advertising around these themes is censored on the most prominent platforms, and it becomes more difficult for healthcare startups to connect with customers.
Root Cause
Social norms may make frank discussions challenging and programmed algorithms tend to censor sensitive content, partly accounting for the difficulties women’s health startups face when trying to scale.
Solutions
- Invest in partnerships with professional societies, patient advocates, and community groups.
- Utilize your own communication platforms (such as email, podcasts, and forums) to provide accurate and unbiased information for healthcare startups.
- Develop ambassador programs spearheaded by peers to break down stigma, which is a key strategy for successful scaling of women’s health businesses.
Action Plan
These failure avoidance strategies for women’s health startups highlight education and community-building to overcome stigma.
Leadership and Team Gaps
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Healthcare startup founders are often inexperienced in scaling in the healthcare industry, particularly in partnerships, research, insurance negotiations, and dealing with complex systems.
Root Cause
Core teams tend to have technology or wellness-focused skills but lack skills relating to the entire healthcare ecosystem, one of the main reasons for women’s health startups failing to scale.
Solutions
- Recruit C-level executives early on who have a track record of scaling healthcare startups successfully (in regulatory, reimbursement, and clinical functions).
- Establish a board of advisors that includes clinicians and payers to assist with healthcare startup decision-making.
Action Plan
Avoidance strategies for failure in women’s healthcare startups include establishing a leadership team with extensive healthcare experience to facilitate the successful scaling of women’s healthcare businesses.
Five Frequently Asked Questions (FAQs)
1. Why is VC investment in women’s health more difficult than for other healthcare areas?
Female-founded femtech health startups tend to be perceived as niche by the majority of investors who have no experience or knowledge with women’s health, thus reducing the number of potential investors and leading to reduced investment amounts.
2. How do I prove ROI to payers for a new femtech product?
Gather real-world data that indicates better health outcomes and reduced costs, such as fewer hospital stays. Use the data to collaborate with payers on healthcare startup reimbursement pilot programs, an important step in successfully scaling women’s healthcare companies.
3. What regulatory pathway should a femtech wearable device take?
Decide if your device is a medical device or a general wellness tracker. Speak with regulatory specialists to select the appropriate pathway (like de novo or 510(k)), create a robust quality system, and prepare for clinical verification if necessary for health-related startups.
4. How can I break through digital ad censorship for sexual health products?
Emphasize building communities in owned channels like newsletters and podcasts, engage with patient groups, and invest in SEO and organic social media efforts that showcase educational content, tackling one of the reasons women’s health startups can’t scale.
5. At what point do I hire healthcare-veteran executives?
You should hire executives with healthcare experience as soon as you have established product-market fit through a successful clinical pilot. Preemptive hiring in reimbursement, compliance, and clinical operations is instrumental in scaling women’s healthcare businesses successfully and executing strategies for preventing failure in women’s health startups.
