In the connected health space, hardware is becoming less and less important as sensors become commodified, according to two panelists at HXRefactored, a conference held in Boston this week. Instead, companies should focus on software, user experience, algorithms, and data analysis.
“Dare to be a software company,” Propeller Health CTO Greg Tracy said, offering advice to other startups. “At the end of the day, most of those sensors are becoming commodities. Bluetooth is ubiquitous, it’s all over the place, everything is getting instrumented. It’s more important to find insight in all of that data, rather than obsess over sensors themselves.”
Another panelist, Aron Semle, is CEO of UpBed, a company working on a sensor platform that would monitor nursing home residents and alert caregivers when they’re out of bed wandering, with the goal of helping prevent falls.
UpBed is a sensor company that doesn’t make any sensors — they rely entirely on partners for hardware. Their main partner at present is smart textile company Sensoria.
“There’s a bunch of companies that are saying 'we’re going to manufacture wearable platforms, then we’re going to hand it out to the market and let people develop vertical-specific solutions like us'. So the benefit to us is it takes away a bunch of the risk of developing that hardware and that platform and we can focus on capitalizing the solution, which in my opinion is the real value of iOT,” Semle said. “These OEM companies are fairly new, so if you approach them with a vertically specific solution and you have a unique way to go to market and capture that market share, you can get some pretty good deals. They’re looking for those use cases so they can further promote their platform. Now’s a good time to get in. A few years from now, when they have some established customers, it might be a little harder.”
That said, Semle cautioned, it is important to protect yourself from too much dependency on a single hardware partner.
“We picked a hardware provider and work with them to accelerate, but under the hood we actually work with two others,” he said. “So we have three total we can switch to, because that’s a liability for us if they get bought or go away, or some new technology comes out and we want to be able to leverage it.”
Ana Maiques, the CEO of Neuroelectrics, was the final panelist and her product – a headpiece that combines an EEG and neural stimulation to treat mental health conditions – is pretty wrapped up in the hardware. But even Maiques agreed that banking on holding onto that edge is a mistake.
“Every time I go to an event I see a Chinese or Korean company copying some part of the device,” she said. “If I spend millions to get through the FDA, and the next day there’s another manufacturer, you have to protect the know-how of how you stimulate the brain, so even if they copy the device they won’t be able to get the same efficacy in patients. It’s the know-how you have to protect.”
Finally, Tracy said, his company has found that hardware isn’t the way to a patient’s heart either.
“It’s a mistake to just fall in love with your hardware and think that that’s the end of it, because truthfully the patients don’t care about your hardware. The patients want to play in the park with their kids. They want to go back to work,” he said. “… We started out as a technology company, thinking we could build a sensor and throw technology at problems. It turns out it’s a super hard problem. We’re really well known for our sensors, but … to actually deliver value in a complicated space like healthcare, especially respiratory, it turns out there’s a lot there that is unrelated to the wearables and the sensors.”