How Companies and Startups Can Collaborate for Healthtech Growth

Historically, governments and large companies have been responsible for economic growth and great leaps in innovation in industries; however, thanks to the culture of entrepreneurship promoted in recent decades, this trend has not only changed but has practically reversed. Now it is up to the entrepreneurial group to generate new value propositions that revolutionize the way markets operate.

Having said that, Mexico is no  exception: many new startups are attracting the attention of the most relevant players in the country due to the innovation of their business models, or the disruptive way of attacking the problems of their particular industry. This panorama has made more companies begin exploring ways to collaborate with startups in such a way that they can generate beneficial association models for both parties. Multiple examples can be found in the financial industry, where traditional banks are creating more and more partnerships with fintech startups.

Health companies in Mexico, led mainly by the pharmaceutical industry, and perhaps a little later than other industries, have joined this exploration, and although many of these collaborations are still in the early stages, some success stories can be glimpsed in the near future. Just to mention a few examples, we have witnessed the implementation of telehealth in pharmacy chains, the development of early diagnosis through technology with pharmaceutical companies, and remote patient monitoring models with insurers.

Despite the fact that these collaborations already exist, it is the opinion of yours truly that a lot of impetus is still required in the culture of associations between companies and startups to generate value for their stakeholders.It is possible to grow these ecosystems by breaking the paradigm in which the only way to operate is through the client-supplier figure, a figure that for decades has been the only legal player known by businessmen in the country and which, in turn, due to the financial conditions of the relationships, on many occasions ends up being detrimental to the cash flow of startups. 

Briefly in this text, and hoping that more than one businessman or executive in a health company is reading, I want to summarize some alternatives for collaborations to be successful, disrupting the traditional models of operation, and at the same time allowing for stability in the growth of startups

Bootcamps: There is nothing better to start a collaborative process like putting the company with particular problems and the startups with their technology and operating models in the same place. It requires an intermediate actor to regulate the process and define the rules and expectations of the relationships, and in most cases, it generates successful relationships in those proposals that can demonstrate their value.

Corporate venture: Companies, especially where their cash flow is sufficient, (which limits it to a select group of companies), can formally implement startup analysis mechanisms, which allow evaluating the potential of each company and the possible synergies in their value propositions. Once selected, the model intends to make direct investments that can benefit their positions in the future.

Mergers and acquisitions: Although on many occasions it is a model not very appreciated by startups due to the high risk of losing their culture of innovation and growth, the merger or acquisition of a startup by a company is another alternative to add a culture of disruption in corporate processes.

There is definitely no single recipe for establishing a successful collaboration model, and each scenario should consider as many variables as possible to increase the chances of success. Finally, relationships should not be created from a position of power, but from future growth and joint value generation.

It is necessary as a country to increase co-investments to increase the degree of country innovation and generate proven models that increase confidence in both types of companies. Only then will we be able to generate a higher survival rate for startups, and a significant change in the operating models of our industries.