How And Why Consumer Brands And Healthtech Startups Partner To Bring Innovations To Market

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CEO of Baracoda, Executive Chairman of CareOS, former Google and Microsoft executive focusing on big ideas in connecting objects.

The healthcare sector is currently undergoing significant transformation as a result of the emergence of healthtech startups. Revolutionary products and services like wearable devices, mobile applications, telemedicine and artificial intelligence at scale hold immense potential for public health. As a result, large consumer international brands and brand-new startups alike are eager to offer innovation to the market. But it isn’t always easy. In their efforts to do so, these very different company archetypes struggle with uniquely different challenges. But if they combine forces, they can create powerful pathways to serving the consumer—and public health at large—at new levels.

Why should healthtech startups work with established consumer brands?

Partnering with a consumer brand can provide startups with several advantages that can help them succeed in the market. Despite their innovative capacity, startups often lack the resources, know-how and reach of large consumer brands. One of the biggest advantages a brand partnership brings is access to a larger audience. Well-known consumer brands bring a significant customer base that startups can tap into, key for startups trying to gain traction and build awareness.

Startups can learn from big brands’ best practices and gain valuable insights and knowledge that can help them improve their own operations. Bringing a product to market can be a complex process, and startup entrepreneurs often struggle to navigate the various layers, forces and stakeholders involved.

First, established brands fully understand the compliance issues, trade laws and supply chain realities within their segments which can help startups forgo costly missteps and painful mistakes otherwise discovered only through experience. This is especially important when considering products related to healthcare.

Collaborating with consumer brands can also offer startups valuable knowledge about how customers engage with similar products. This insight can be used to refine and enhance existing products, set product development roadmap priorities and make informed design decisions, including creating user interfaces that are more intuitive.

Consumer brands also provide access to valuable resources for startups like marketing and distribution channels, research and development capabilities and manufacturing facilities. And partnering with a well-known consumer brand increases a startup’s credibility and legitimacy in the eyes of consumers, which can be essential in a crowded market.

Why should established consumer brands work with health-tech startups?

Big brands go to market carefully. They bear a lot of responsibility to protect their brand, given the huge audience that trusts them. They are focused on meeting brand requirements and are careful to avoid any false or misleading claims. They need to ensure that their products are backed by data and testing and are frictionless before going to market.

But this means they move a bit slowly. Meanwhile, competition is fierce and often these brands can feel the urgency driven by new trends like digital health. They need fresh sources of innovation and teams that move fast to capitalize on it. Healthtech startups often bring instant access to deep expertise in specific areas like biometric sensors, artificial intelligence or gamification. This can swiftly enrich larger brands’ R&D process.

Established consumer brands use partnerships with startups to increase their proximity to early adopting customers, or other attractive segments, such as when Target partnered with Care/of on a new product line of personalized vitamins or when Proctor and Gamble partnered with Hello Bello to launch new diapers at Walmart. In this way, startups help established companies not only with technology level-ups but also with a means to refine their future branding and messaging to better resonate with these customer sets. They can help big brands to anticipate trends and proactively apply new processes and technologies to their own systems and product roadmaps. Sometimes startups even open up access to new niches that can accelerate growth or create new competitive advantages.

In healthtech in particular, new approaches to healthcare problems like monitoring for heart disease (Bayer and Huma) and chronic gastrointestinal conditions (Aetna and Oshi Health) are already improving patient outcomes. Companies like CVSHealth are partnering with startups to bring their customers digital tools that enhance medication and therapy adherence, sleep and weight loss, because they improve the effectiveness of their products and services, and, ultimately, patient and public health outcomes.

What makes a good partner, and how do partnerships come about?

Healthtech startups may experience “not invented here” syndrome—big brands’ tendency to reject ideas, solutions or products because they were not developed in-house. Or they themselves may be hesitant to collaborate with other businesses due to the fear of competitors stealing or copying their ideas. Finding a willing, earnest partner is therefore paramount.

Healthtech startups should identify companies that agree upon the market opportunity, role and benefit for each. They should consider their individual needs, lay out the objectives and rewards and reach out to CPG brands, insurance companies or pharmaceutical companies with a clear, concise pitch. Target partnerships with complementary products or services.

The financial model should also be addressed upfront. Questions to consider include how much each party will contribute, if there are any shared costs associated with developing or implementing the product or service and what revenue split would make sense for both parties. This requires evaluating the types of products or services being developed by each party and how they fit into each company’s overall strategy. This assessment will help assure the partnership aligns with each company’s market space and if there is sufficient potential for growth and success for all parties involved.

In all, collaboration between consumer brands and healthtech startups can advance innovation while bringing access to stakeholders via distribution channels that are already in place. The future of healthcare will be characterized by the cooperation among healthtech startups, consumer brands and eventually, large traditional healthcare organizations. With digital healthcare on the rise, it is clear that these seemingly different sectors will continue to draw closer together in the future, creating new opportunities across the board.


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