Why a Health IT Startup’s Crowdfunding Needs Many Small Contributions

From Anne Giles Clelland, co-founder of Cognichoice:

What our health IT crowdfunding campaign needs is 2680 contributions of $25 each. 

We've offered high-end thank you rewards for large contributions and would gratefully accept such generosity from contributors.

But what we really need is a lot of small contributors.

Why?

Because the final test of any innovation in any industry is if the market values it enough to pay for it.

Cognichoice - The App That Helps People Change

Startups who enter the health information technology industry, particularly in mobile health – mHealth – face almost dealbreaking barriers to entry literally from the start. Rick Morrison details top health IT industry challenges and I addressed challenges facing developers of  mobile health apps, but here's our health IT startup's particular experience with barriers to entry for our mHealth app, Cognichoice:

  1. Customers of health IT have conflicting payment systems, and, therefore, conflicting motivations about widespread use of remotely used applications that may decrease symptoms that will decrease direct pay-for-service care.
  2. Like health devices and drugs, health apps will need expensive, time-consuming, logistics-heavy research to prove their efficacy and safety before they will be adopted by health care providers. Developing the custom software to collect data for each research study in a way that meets regulations requires hiring software developers who command high wages in today’s economy. 
  3. Health IT has a long sales cycle. Over-worked, over-pitched, suit-weary and suit-wary health care providers have every reason to doubt the latest and greatest invention.

For a lean startup in health IT to hang on through the time and expense of overcoming these barriers is a real cliff-hanger in an entrepreneurial story.  I shared in What Is Crowdfunding? that we have just about burned through $55K from personal funds and friends and family investment.

Anyone can start a health app company or offer a health app – over 13,000 health apps are in the App Store already. But 95% of them haven't been tested and only 19% of smart phone owners have downloaded a health app.  And research on mobile app usage in general reports that users use apps infrequently, briefly, then delete them after 6 months or so. Offering a health app directly to consumers is barrier-laden as well.

And get this – if the app is for patients or consumers, most of the most expensive conditions to treat in the U.S. are behavior-related, i.e. if we changed or managed our behavior, we could change our health. Downloading an app and then using an app are behaviors.  If we weren't already behavior-challenged, we wouldn't have behavior-generated illnesses!

I think the only chance for a health app to become a financial success story is for it to be prescribed by health care providers, or purchased for mass distribution by a company or organization to its patients, clients, employees, and/or members.

In only three ways can a health app get the notice of those health care providers, companies and organizations and differentiate itself from its 13,000 competitors:

  1. be evidence-based.
  2. be research-backed.
  3. be market-tested.

We are determined to push barriers aside! 

Cognichoice is evidence-based, born of behavioral science principles. We are now intent upon making Cognichoice of merit-worthy notice by being research-backed and market-tested.

We are fortunate to have a pilot study in place with an academic research hospital and we are testing our app with the market – the "crowd" in "crowdfunding – right now.

That's why, for the story of this health IT startup to continue to unfold, our crowdfunding campaign goal is $67K.  The money is for paying software developers to support research studies to test the efficacy of our app and to continue our lean startup model of letting user feedback lead software enhancements.  Our budget is right here.  $67K  is 2680 contributions of $25 each. 2680 contributors should pique the interest of our target markets!

If you have already contributed to Cognichoice – The App That Helps People Change, thank you! If you haven't, I invite you to 1) be one of the 2680 and contribute $25, and 2) invite others to join you as one of the 2680 that fund an app that I passionately believe is not only a game-changer in behavioral health delivery, but a  way for people to profoundly help themselves and improve their health and their lives.  That's good and that's doing good, all at once.

. . . . .

We are crowdfunding Cognichoice on Health Tech Hatch.  Health Tech Hatch and Cognichoice jointly issued a press release on PRWeb just today.  Here's the link!

Questions, feedback, comments?  We welcome them!  Email me, anne@handshake20.com, or call me, 540-808-6334. 

For background on crowdfunding and Cognichoice, these posts may be of further interest:

We invite you to contribute to Cognichoice – The App That Helps People Change.

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