When an entrepreneurial venture, nurtured by a large parent, ‘goes sideways.’
Management and directional changes at Happtique, a subsidiary of the Greater NY Hospital Association (GNYHA), have rocked the still rather insular, and small scale, New York health tech world. Background talk has been in the air for some months. Reading through the exclusive report from Brian Dolan at Mobihealthnews, followed by GNYHA Ventures’ statement, plus your Editor in NYC, several shoes have officially dropped.
- Well-known co-founder Ben Chodor is no longer CEO, but according to GNYHA remains with the company as co-founder, focused on strategic growth as well as an outside evangelist of sorts. He will continue to host the mHealthZone on BlogTalkRadio and will be at the WLSA Convergence Summit on 29-30 May. Also already departed is Chodor’s leadership team. Lois Drapin, who had been a long-time marketing consultant and then brought on board as Chief Verticals Officer in charge of developing non-hospital sectors, stayed in that role for only a brief five months through April. Marketing chief Tammy Lewis remained for an even shorter four months. The latter departures seemed tied to the finalization in late February [TTA 27 Feb] of the lengthy Health App Certification Program headed by the highly regarded David Lee Scher, MD; this Editor learned around that time that he was likely to depart with the project’s conclusion.
- Happtique now appears to be a division, not a independent subsidiary, of GNYHA Ventures. Their head Lee Perlman is now Happtique’s new CEO. Corey Ackerman, a GNYHA veteran, remains as President and COO. Other executives on their roster are all from GNYHA/GNYHA Ventures.
- Happtique under Chodor had also established, in addition to certification, a pioneering ‘mRx’ app ‘prescription’ program for physicians [TTA 18 Sept 12] and was planning to use the app certification plus prescribing programs to extend even further into non-hospital healthcare professional areas. According to Dolan,”The association recently made the decision to re-focus Happtique just on hospital customers and strip upwards of $1 million out of Happtique’s budget”, leading to Chodor’s resignation. In a statement to Mobihealthnews by GNYHA’s spokesman Brian Conway, the budget reduction was denied and termed a repurposing to software engineering and clinical resources, with Chodor’s status now termed a transition to a strategic growth role. What was not denied or even addressed was the redirection (or in Silicon Valley lingo, ‘pivot’) to hospital customers only.
Happtique’s value proposition had been centered around certifying–essentially curating–apps for consumers, giving them some means of judgment other than ‘user reviews.’ It also sought to change the app distribution model to a vetted one through trusted providers: hospitals, doctors and other healthcare professionals. Yet it was over before it had scarcely begun, much less tested in the wider world.
One wonders if a hospital-based association with for-profit ventures in hospital purchasing and consulting was perhaps the best fit for the Happtique enterprise from the start. The provider-to-consumer vetted health app model was certainly unproven, but that was the point–to fill a perceived ‘job to be done’ for consumers, to structure some objective professional criteria on evaluation, to enable a new mode of app distribution, to enable providers to get a handle on health apps and also (and importantly) create a revenue stream. Yet apps are exploding, and health tech change is outpacing even developers (witness Zeo’s demise and the rise of Fitbit, Jawbone UP). Certainly there was a loss of faith somewhere, a situation all too frequent when large parent companies take a flyer on entrepreneurship or a ‘skunk works’, then ‘think better of it’. It also demonstrates the potential conflict in culture points between the cautious priorities of an association, even with a venture arm, and an entrepreneurial venture with a high-profile founder.
Exclusive: Happtique refocuses on hospitals, CEO Ben Chodor resigns (Mobihealthnews), Ben Chodor steps down as Happtique CEO amidst changes (MedCityNews)