It may seem counterintuitive, but one of the reasons some entrepreneurs are drawn to healthcare are the regulations. No industry outside of defense is as heavily scrutinized, and for good reason: When you deal with people additional caution is essential.

Rules, requirements and regulatory complexity may be barriers to entry in the world of digital health startups, but they also present opportunities.

Founders often find creative ways to reconcile the additional oversight, like saying that their launch is merely a proof of concept, or that they can’t justify the cost of spending hundreds of thousands of dollars a month on advertising to attract new users.

When venture funding was scarce, there was a compelling need to prioritize speed and maximize the runway provided by smaller seed rounds. The environment, however, has changed — burgeoning investor interest and ample available capital have meant that there’s an even greater need to allocate significant budget to compliance.

Speed and efficiency may be essential for startups, but regulatory compliance need not be a bottleneck or a financial drain.

If compliance isn’t a consideration from the start, founders will sooner or later end up in a situation where they have to scramble to fix things behind the scenes, spending huge amounts of money on legal fees — and that’s the best case scenario. In the worst case, a deal can blow up.

It is understandable how these concerns can be overlooked at the beginning. There’s a certain amount of creativity and dissatisfaction with the status quo necessary for founders to conceive of building something that doesn’t already exist.

But when you’re building a digital health company, the ultimate end user is a person in need of medical care. The stakes are higher than creating the next puzzle game or food delivery app.



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