A solid start, as our Readers have seen, does not guarantee success, but this fast fail is still fairly shocking. A concern at the time was the pricing for the full service model at $49/month, which later became the family price (individuals were $19.99/month). CEO/co-founder Geoff Clapp was among the most Grizzled of Health Tech Pioneers; he had been a co-founder of Health Hero/Health Buddy from 1998 to its sale to Bosch Healthcare, a very long pull in telehealth, and he had spent much of his post-Health Hero time generously advising other startups. Yet despite the involvement of blue chip Mayo Clinic as a service provider, its financial backing from their investment arm and socially-oriented VC Social+Capital Partnership, it managed to raise only its initial seed funding of $5 million (CrunchBase).
So what happened? No one from Better has officially commented, concentrating on the wind-down until later this month. However, the MedCityNews article rightly pointed to tweets by Christina Farr of KQED (@chrissyfarr) and Rock Health CEO Halle Tecco during the Rock Health Summit. For instance, Better’s co-founder and Social+Capital CEO Chamath Palihapitiya (@chamath), according to Ms Farr, remarked on Better’s demise “it was like crickets chirping when we tried to raise money for this thing.” Ms. Tecco: “We made fundamental mistakes in the execution of this business.” Yet he remarked about Social+Capital also via Ms Tecco, “Every board meeting starts with how many lives are saved. Making billions of dollars will follow.” Attendee Mamta Parakh (@mparakh) quoted him: “We take a moral stand on key issues.. Our focus is on long term gain.. If not us then who?” Which led to this Editor tweeting to Ms Farr and Mr Palihapitiya, referring to the unsuccessful fundraising, “and why was that? When you start board meetings about saving billions of lives, did you dig into why the resistance?” (I did get the billions in the wrong place, but if this is answered, I’ll update this article.)
What were the ‘fundamental mistakes’ made by some very smart people? Startups do this all the time with new ideas–that is why they invented the terms ‘pivot’ and ‘reboot’. (Best example: Validic) Better most certainly was attempting to make a market and in reaching out to the acutely ill–cystic fibrosis patients–was appealing to a high-need segment. The findings here would be most interesting not only to us, but also to healthcare startups (and not-so-startups).
- Was the ‘concierge medicine for the masses’ concept really not that compelling, or was the targeting not quite so ‘mass’? Better’s funding was unfortunately not anywhere near sufficient to build broad consumer market awareness for a subscription model.
- In funding, was it those unicorns taking up the field in the first half of this year? Pricey wearables (Fitbit), big data and its management (Health Catalyst, Validic), appointment setting (the doctor-churning ZocDoc, $225 million in funding to date and still reportedly underwater), telemedicine (Doctor on Demand) and med reminder/management (PillPack) proved to be more attractive to mainstream investors through the summer before the market weakened.
Could Better have found that pivot with more capital, including Mayo and Social+Capital seemingly giving up the ship early? (Update–see Mr Clapp’s comment below which disagrees with this observation). We’ll never know about that pivot, unless a white knight can be found.
We wish only the best to Mr Clapp (to this Editor, one of the true gentlemen in health tech) and the Better team.