3 Reasons Why Digital Health Apps Fail
90% of healthcare startups fail within 5 years. But that's not all.
90% of healthcare startups fail within 5 years. But that's not all.


There are 325,000 health and fitness apps on the market, yet only 41 of those apps boast more than 10 million downloads on Google Play. And 50% of those apps never get more than 500 downloads in total.

Those numbers are pretty dismal, even for startups. But why is digital health so tricky? Of course, you can deduct a myriad of reasons why these companies fail. But there are a few patterns that tend to be recurring across a large share of the spectrum.

The first is inherent in the complexity of the industry.

1. They’re Not Simple

One major issue with a lot of these apps is pretty straightforward: They’re not simple enough. Healthcare in itself is a complex area, and there are plenty of opportunities to reduce the friction. But very often, this fails.

Digital health applications need to be as simple and user-friendly as the most user-friendly of B2C-apps. Being a health or wellness app is not an excuse to bring in additional complexity.

You need to meet the patient where they are at, in a simple and convenient way. Often times, this means taking a holistic approach to a problem. Healthcare, being a fragmented industry in itself, requires holistic thinking when providing new solutions. There’s no use in adding to the fragmentation in an already scattered ecosystem.

Digital health app-developers must tailor to their demographic and ensure that they can successfully engage users, just like in strictly commercial apps.

However, there’s one potential risk of taking the consumer-centric focus too far…

2. They’re Not Addressing a Real Issue

This is likely the biggest issue facing digital health applications today: They fail to provide any clinical value. Regardless if they are B2C or B2B focused. Many times, those that create digital health apps come from outside of the healthcare ecosystem. And healthcare is a world where “move fast and break things” simply doesn’t work, hence the MO doesn’t quite apply.

Healthcare is a conservative industry, where things move slowly in complex environments involving multiple stakeholders. Again, here’s the importance of adopting the holistic approach in order to ensure that you bring value to each stakeholder in the chain.

Simply because you simplify the process for one stakeholder, doesn’t mean that you simplify across the chain. Say you make the patient’s journey simpler — great. But what’s to say you’re not making the job more complicated for the physician?

If you’re offering a telemedicine solution that would make for a convenient phone call for a patient, the doctor might have to redesign their entire work-flow to fit it into their schedule, ultimately making the system a burden, rather than a solution.

Furthermore, a limited understanding of how healthcare systems actually work might miss the real problems. Because the fact of the matter is, that pressing problems might not be very sexy. Instead, they might lie in managing logistics via an interconnected patient-management system, rather than offering video-calls via a consumer-facing wellness app.

The real issues are often not visible from outside, even for patients. Instead, they are spotted by those inside the system, who notice these points of friction after years of struggling with inefficient processes. So instead of fixing the real issues and creating tangible value-add to the ecosystem, many apps focus on cosmetic issues that either miss the point or complicate things further.

3. They Work with Short Time-Horizons

Healthcare isn’t Facebook. Or DropBox. Or Spotify. Healthcare is a complex industry, and it moves slowly. Some might say too slow for its own good, but it’s an inescapable fact nevertheless. Consequently, many of those that attempt to tackle problems within the industry take a too short time-horizon.

Changes in healthcare take a long time. Potential sales cycles are extended, and they require approval from multiple stakeholders. Due to the complexity of this industry, those that attempt to disrupt it must be patient. And being patient also means you typically need more capital.

Conclusion

As stated, these three reasons are not the only reasons why digital health startups struggle. But they constitute a challenging trinity of common reasons for digital health failure. By taking these aspects into account, future digital health players might be able to tailor their approach in order to make a tangible impact that adds real value.

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