There is an ambitious new player getting started in the healthcare IT space. Recently launched Rock Health is taking a completely different approach to developing healthcare technology by offering funding and business incubator services to start-up healthcare IT companies.
This is a model that has been in use for years, most recently by Y Combinator in the web space, but this is the first business incubator I’ve seen specifically for healthcare. In the basic incubator model the incubator company, in this case Rock Health, provides small amounts of initial funding with significant amounts of business guidance and expertise in hopes of generating a number of successful technology companies.
Y Combinator has been in the business incubator business since 2005 and since that time they’ve funded over 250 companies. The most successful start-ups to have grown out Y Combinator have been web applications that provide targeted, specific business functions that are easy to understand and to use.
If Rock Health is using them as a model, and it appears that they are, we can expect them to begin launching companies offering tightly targeted web-based and mobile healthcare applications that initially offer a single valuable function. I wouldn’t be surprised to see several new apps from Rock Health companies being actively marketed in both the iTunes and Android Market App Stores by the end of this year.
Rock Health Founder Halle Tecco told TechCrunch that some examples of potential products were healthcare monitoring apps via the iPhone that can update physicians on chronic conditions or iPad games that can be used as hospital therapy for sick kids.
According to the TechCrunch article Ms. Tecco has raised $500,000 for Rock Health which will be used to initially fund at least a dozen start-up companies. In addition to the cash Rock Health companies will gain access to the Rock Health contacts at hospitals, healthcare organizations and the FDA to help overcome the barriers facing most start-up companies.
The incubator model generally targets the use the initial funding and business expertise to reach the product launch phase after which additional funding is often sought. Since some of the initial backers of Rock Health are Venture Capital firms opportunities for additional funding of Rock Health companies with viable products appear to be positive. According to the website Rock Health’s investors include Accel Partners, Mohr Davidow Ventures, Aberdare Ventures, New Enterprise Associates, the California HealthCare Foundation, Fenwick & West LLP, Microsoft HealthVault, Nike and Qualcomm.