Ain Aaviksoo: Health tech is booming right now

Piret Hirv, the Manager of the Connected Health Cluster, and Ain Aaviksoo, the Chief Development and Partnership Officer at HeBA, took the stage on sTARTUp Day to discuss the key points in building a health tech start-up. Here are some thoughts from that conversation.

Ain Aaviksoo has had several roles in health tech – a doctor, a public servant, an internationally active consultant, an employee in a cybersecurity company and now a start-up founder – and he says that each role has taught him something valuable which is actually universal.   

“Health technology innovation requires different perspectives to be successful. If you have all of them aligned for your cause (doesn’t matter if you try to build a unicorn, or you’re trying to establish the most successful health tech incubation environment in a country). If you have all stakeholders sharing the same vision, it’s the ideal, but you need at least two or three to get anywhere (e.g. an engineer must have some health-savvy partner because it is not sufficient to have entrepreneurs incubating world-changing ideas, if there are no healthcare providers in the room).”

“In order to be a successful health tech start-up, you must be focused on the problem you are addressing and then, at least in the beginning, be ready to fix only part of the problem, because too disruptive solutions will be rejected, until you give time for the system around your focus area to adapt. Hopefully, you’ll have patient investors who understand that the gains will be slow and not always under your or even you immediate customer’s control.”

“In all domains, most of the innovation is incremental and only some of it can be disruptive. Angels and VC-s are always looking for the next globally dominant tech solution to invest in. In healthcare, the market is huge – a 10 trillion dollar market worldwide – that even seemingly incremental innovation can pay off in monetary terms. For example, if a new cancer drugs can improve the life expectancy of a patient by 2 months, it is a plausible candidate for sales in hundreds of millions, if not billions in total. And since the barriers to market are relatively high, it also means that once you are in the game (for example approved by the health insurance), then your revenue is potentially quite stable. Experienced investors in health space know that one has to be patient.”

“The good news is that all aspects of healthcare are potentially highly disruptable by health tech and medtech. Just that it cannot happen all at the same time, which means that not ALL great medtech ideas can possibly succeed in within the same timeframe and it’s almost impossible to predict which of them will have an impact so big that some other “solutions” that are relevant within current state of the art will become obsolete or just cannot be absorbed at the same time.”

“It is not possible to build successful health solutions if you cannot play with the health ecosystem participants (doctors, providers, insurances, regulators, existing tech providers like pharma) and at least to some extent by their rules.”

“A message to the public bodies – if you want health-tech to thrive in Estonia and provide Estonian people early access to world-class innovation, you MUST take more risk with the support of public money.”

“A comforting message to start-ups is that in many developed, but even in less developed countries, smart governments have realised the value of health and life sciences’ industry to the whole economy. This means – go quickly with your solutions where there are favourable conditions. It’s not worthwhile to try to “pilot close to home” for too long, if the health ecosystem is not capable of rewarding your efforts – the world is open and good health tech is and should be efficiently localised where there is hunger for better solutions.”

“To sum it up – health tech is booming right now. Incubating ideas is possible everywhere – growing them to companies requires an international approach from day 1: both in terms of team and markets. Incubators, clusters, access to universities, access to high quality specialists in various technical skills and smart public money are important success factors to seek, in addition to the start-up’s own world-class capabilities (which do not differ in health tech from other sectors).”

Photo: Mana Kaasik / sTARTUp Day