Most health startups fail because they don’t understand health care payment models

As a partner at Norwest Venture Capital (NVC), Casper de Clercq has seen countless digital health startups try to get solutions off the ground. He’s also seen many fail.

According to de Clercq, 60 to 70 percent of digital health startups fail because they are unclear about their go-to market strategy, and don’t have a good understanding of who’s ultimately going to pay for their product.

With deductibles rising, there’s an expectation that consumers will take on a lot more health care expense. But that hasn’t happened yet, de Clercq says. For the time being, providers, payers and employers are still the primary customers for new startups, from a payment perspective.