Only 13% Of Partnerships Between Startups And Healthcare Companies Are Successful
New report by Research2Guidance about partnerships in digital health revealed low success rates of partnerships between digital health startups and incumbents. Main reasons for failure are missing partnership strategy, slow processes and a mismatch of expectations.
R2G released a new report summarizing how companies are managing their digital health activities and partnerships. The report Partnerships in Digital Health 2023 is based on a global survey and interviews among 790 digital health decision makers conducted in March 2023. The global survey wanted to find out how healthcare companies like pharma, MedTech, or health insurance companies organize their digital health business and partnerships with startups. Additionally, the study analyzes changes in company’s approaches to partnerships in digital health over the last 3 years.
Corporates are still experimenting with their approaches to how to best manage their digital health activities. Driving innovation through partnerships have become the new norm. 55% of corporates report that they prefer to partner as opposed to “make” digital health solutions themselves (34%). Investment is only seen by 9% as the preferred approach to drive innovation.
Most companies have closed up to five partnerships (62%) in the last two years. 11% have managed to start more than 10 partnerships in the same timeframe. Despite the relatively high number of initiated partnerships, only 13% are observed to be successful. Since 2019 it seems that companies still have not found the right way to make partnerships successful (success rate in 2019 was also at 13%).
Since 2019 partnerships have become the number one approach to manage innovation in digital health. 55% of corporates prefer partnerships over their own developments to drive innovation in digital health. Still companies have not set up project management best practices to make partnerships work. Companies are still improvising while initiating and managing their partnerships.
Although 49% develop the partnership strategy together, 48% have expectation setting sessions, and 47% apply constant progress monitoring during their partnership operation, but notably, more than 50% do not. Tools like team member rotation (5%) or a standardized partner onboarding process (12%) are rarely used.
Other reasons for failure are a lack of a clear partnership strategy (55%), too slow decision process (46%) and mismatched and unrealistic expectations (43%) on both sides.
Results also show some positive trends. It seems that corporates improved in their operational models for the partnership (only 25% in 2023 versus 32% in 2019 mentions for partnership failures), better management involvement (10% vs. 22%) and an improved access to resources and funds (7% versus 15% in 2019).
To get your copy of the “Partnerships in Digital Health 2023” report, please click here.
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