Anyone operating as a startup in Munich in the field of digital health cannot ignore one person: Dr. Jochen Hurlebaus. He is project manager and Head of Innovation & IP Management at Roche Diagnostics. At the same time, he is also the person who, together with the cooperation partners, Plant1 and Plug and Play the Digital Health Accelerator early 2018 launched. An interview.
Jochen, in your opinion, how strong is the Munich ecosystem in the field of digital health? What is special about the local eHealth scene?
In general, Munich is still too often underestimated as a startup location, even though we've had a very agile startup scene for years. Because it's more focused on the B2B sector, it may not be as much in the public eye as Berlin's startup scene, but the solutions are often very well-founded and unique.
“Digital Health: Munich offers an unbeatable ecosystem”
In the area In my opinion, Munich offers an unbeatable ecosystem for startups in Digital Health: Many of the major technology companies such as Google and Microsoft, as well as numerous pharmaceutical and diagnostic companies, are headquartered here. In addition, there are two internationally renowned universities, the Technical University of Munich (TUM) and the Ludwig Maximilian University (LMU), which are not only leaders in technology and medical research, but are also heavily involved in funding programs for startups.
The accelerator scene has also grown rapidly: In addition to Werk1, which built the first Digital Health Accelerator in Munich with us at the beginning of the year, the world's largest accelerator Plug and Play is now our partner for the currently running Batch One (now running under the name Startup Creasphere) – with a Munich office focusing on digital health.
Last but not least, digital health is increasingly becoming a focus of Bavarian state policy. The Bavarian Ministry of Economic Affairs is setting a good example in creating better conditions for startups in this field.
What advantages or disadvantages do digital health startups have compared to other industries?
The strong demand for digital health solutions and the high degree of specialization are a clear advantage: Startups with the right idea and the medical or technological know-how have little to fear from competition. On the other hand, the path to market readiness is more lengthy and costly than in other industries; therefore, many startups with good ideas fail due to a lack of experience in regulatory requirements or lack the financial staying power required for the approval phase, which often takes several years.
What could attractive business models for eHealth startups look like?
While the self-pay mentality is certainly present in many other markets, such business models are proving rather difficult in the German healthcare system. Therefore, more and more startups are trying to enter into partnerships with health insurance companies or gain a foothold in the occupational healthcare sector.
What's crucial is that the developed solution delivers a health economic benefit, meaning that the improvement for the patient is balanced with the costs. With the health insurance company on board from the start, you can jointly determine which data needs to be collected to demonstrate the health economic benefit.
Business models with great future potential
What are the challenges facing the German healthcare industry and how are startups bringing about change?
Digitalization represents one of the greatest upheavals the healthcare industry has ever experienced. To successfully set the course for the healthcare of tomorrow, it is essential that diverse players with different strengths collaborate. While established companies bring a wealth of expertise, for example, in the area of regulatory requirements, that startups lack, the latter, in turn, bring the dynamism and new ideas necessary for the development of digital solutions.
Many startups also distinguish themselves by directly approaching patients, doctors, and other healthcare stakeholders to test new solutions and business models. This allows them to identify new niches where business models with great future potential can mature. Such an approach is often not readily possible for a large corporation. Through collaboration, promising ideas and technologies can be jointly developed within a short period of time.
In our view, collaboration between companies and digital startups is therefore an important building block for successfully setting the course for tomorrow's healthcare and thus advancing personalized care for patients worldwide.
“The dynamics of the startups have provided valuable new impetus”
And how do players like Roche and the Digital Health Accelerator support the industry?
There are very different approaches here. As the initiator and main sponsor of the Digital Health Accelerator in Munich, it was important to us from the very beginning to provide more than just financial support, in-kind services, and infrastructure.
Our primary focus was on direct interaction with the startups, and we emphasized the topic of co-creation. Each startup worked with a Roche business owner on a pilot project. (Editor's note: In Batch Zero, for example, Inveox In the current batch, among other things, cosine part). The actual project work allowed us to best convey our expertise on topics such as market access, design, production, and validation of mobile devices. The Roche mentors also taught the startups how the German diagnostics market works in a very practical way through joint customer visits.
In our opinion, this type of mentoring program has proven beneficial for both sides: The startups were able to further develop their projects, acquire business know-how, and establish new contacts in the industry. We at Roche found the change of perspective very exciting, and the dynamic nature of the startups provided us with valuable new inspiration.
What’s next for the startup Creasphere, the health accelerator?
Batch One is currently underway with seven international and national startups that were successful with their pitches at the Selection Day in mid-September. As in Batch Zero, we are again focusing on intensive exchange between startups and mentors, or rather, co-creation: In each twelve-week program, the startups not only gain helpful market insights and expertise, but also work directly with Roche business owners on their digital health projects and business models.
Our goal is to conduct two batches per year in the future. Roche has entered into a multi-year partnership with Plug and Play for this purpose. We are open to additional partners and hope to be able to announce this soon.
Thank you very much, Jochen Hurlebaus, for the interview!
