VCs Should Back Gadgets For The Sick, Not The Healthy, Doctors Say

Investors have been lining up to invest in consumer-facing health products, as wearable trackers and health apps have taken off with consumers.  But these digital-health products—widely used today by people who are already healthy—are subject to the same boom-and-bust cycle that has become the norm in other areas of technology. The sector may cool down significantly in the next couple of years, doctors attending Health Tech Capital’s HealthTech Conference in San Mateo, Calif., said.

“There’s a lot of noise, and a lot of money. But it won’t last,” said Adam Schlifke, a practicing anesthesiologist who has also worked for several years fielding pitches at HealthTech Capital from entrepreneurs looking to raise funding.  “In another year or two, you may see big companies with very high valuations that can’t go public,” he said. “The long-term, sustainable business is lacking.”

Rather than chasing the next gadget or service that could catch on with fitness fanatics and early adopters, investors should turn their focus to companies serving an exponentially larger group of consumers: the chronically ill, the elderly and people worldwide suffering from more than one health condition.  “There are a lot of shiny new gadgets for the rich, and not enough for the sick,” said Wen Dombrowski, a doctor of internal medicine and geriatrics who has spent years advising health-care organizations and digital-health startups...