Healthcare business ideas that sound good but never scale. Part 1: The all-in-one health app
Imagine one app that knows all your health data and actively manages your health journey. It's one of the most frequent pitches we get - let's discuss why it has failed so far.
Ever since mobile apps emerged, we’ve gotten used to super convenient digital user journeys. Consider shopping & fashion: slick apps have been around for over 10 years. You can now buy new shoes in 3 clicks on TikTok.
Unsurprisingly, many of us wish for one accessible place for our health data: right on your phone, always up to date, interactive, and all follow-on actions (scheduling an appointment, requesting a reimbursement) triggered by one click. As you know, that place doesn’t exist. Some have come close - like Apple Health and Oura - but none of them are holistic health companions.
It’s not because no one has tried. As VCs, it’s one of the most common pitches we hear. Let’s explore why these businesses struggle to scale and how to potentially fix it.
Many Roads to the Same Goal
First, we need to understand which type of players are taking a shot at this problem.
I suggest the following patterns:
Top-down personal health records via insurers: Many insurers build apps to store their patients’ data and communicate with them. In theory it’s the perfect place to start collecting health data, but insurers are insurers... most are slow and the app UX is often clunky (there are exceptions!). The same applies to state-driven initiatives - looking at you, German ePa. These are often just collections of PDFs and messages, not interactive or intelligent hubs.
Start with a wearable, then expand: Wearables like the Apple Watch, Whoop or Oura are in a great position to become the no. 1 health app. Their daily measurements act as a “trojan horse” to the patient’s phone - user engagement is their strength. We constantly see new sensor modalities (glucose, blood pressure, ...), new form factors (ring, earbud, ...), or a combination of them. All of them have ambitions to become broader health companions: They promise to add data from other wearables, add health services, … yada yada.
Start with cycle tracking: Cycle tracking apps like Flo Health have often claimed to become holistic health apps. As an essential part of many women’s life, it does make sense. Nonetheless, they tend to restrict themselves to female-health-related use cases.
Start with physical health services: Companies like Neko Health or Aware sell people a fancy screening, then onboard them to an app. Long-term, these apps are supposed to be the customer’s front door to the healthcare system. It’s a similar playbook for tech-enabled clinics like Avi Medical, who use apps to provide a smooth patient journey. These players have a great right to win, because they control physical touchpoints with the patient and enjoy a high trust status.
Expand from B2B SaaS: Companies like Doctolib - basically any B2B software vendor with broad distribution among healthcare providers - are in a great strategic position to solve patient’s needs. They have natural touchpoints. Nonetheless, they’ll never have consumers at the center of their interests.
Become the aggregator: Other apps just start outright as a horizontal aggregation layer. They build as many APIs to wearables and health apps as possible and try to position themselves as the super app on top. Apple has an unfair advantage here with Apple Health sitting on every iPhone. An interesting newcomer case here is YOUTH, who are combining multiple AI tools, like camera-based vital measurements, into one app.
So far, none of the approaches above have managed to grow into the dominant consumer health app. I’d argue Apple Health (extreme distribution, very comprehensive data set) and Oura/Whoop (almost a cult, high level of engagement) are the most advanced players.
Why It Doesn’t Stick
It’s hard to prove why exactly “personal all-in-one health apps” fail. All we know is there are always issues with unit economics and churn.
In cases we’ve seen, startups struggle with the 3 factors:
Access to live (and useful) data. For a truly useful app, users expect a comprehensive and exciting data set. A true one-stop-shop. Almost no startup I’ve encountered has managed to create one - not to mention keep it up to date. Think about it: Perhaps you can access some wearable data. But you won’t access the user’s insurance data, and you won’t magically ingest provider data like their latest bloodwork or MRI result. It’s almost impossible to close all those gaps.
The only option to ingest data at scale (besides wearable data) is manual user input - and good luck convincing users to insert their health data or upload documents manually every day or week. It’s too inconvenient.
Low app engagement. Most health apps lose people’s interest over time. They fail to create an “addiction” factor. Social media apps, Duolingo or Robinhood are excellent at this: You open those apps without even noticing. Unfortunately, I haven’t seen a single healthcare app re-create such user behaviour. The only ones that come close are wearable companies like Oura, Fitbit and Whoop, who benefit from continuous and live data streams. They achieve a “novelty effect”, giving users new information each time they open the app.
Lack of access to conventional care pathways. Consumer apps usually suck at interfacing with the conventional healthcare system. Some create a separate health journey intentionally. That’s a mistake - an all-in-one health app is only truly useful if it manages the entire health journey, including all touchpoints with hospitals, doctors and insurers. Unfortunately, my favourite contenders from above (Apple Health, Oura & Co) are especially bad at this. None of them tell you how to prep for your next doctor appointment or know about your medication plan. They can’t tell you how to navigate your insurance plan. To be fair, there are exceptions: Apple has made cool progress with their clinical smart watch features. Their FDA-certified Afib (arrhythmia) detection is starting to gain traction in the medical professional community. We need more of this.
All of the above eventually shows up in a startup’s traction and unit economics: if relevant data is missing or out of date, the app feels boring. User engagement drops. Churn increases and lifetime values shrink. CAC:LTV ratios become unattractive. Many players try upselling to blood tests or other services, but margins are rarely worth it.
Sure, companies like Oura are still impressive commercial success cases. Nonetheless, their success stems from a narrow use case they nailed. They’re not holistic health companions yet.
Is This Time Different?
I might have sounded pessimistic above, but I’m not saying it’s impossible. I do believe Apple, Oura, Whoop & Co have a realistic shot at goal here. If they manage to extend into conventional care journeys, they might build the ideal bridge between tech and healthcare.
Besides those giants expanding their market grip, I wonder if there’s room for new entrants. I could see 2 scenarios:
A game-changing new sensor technology might lay the groundwork for a leading consumer health app. I’m thinking multi-analyte continuous monitoring like SAVA. Or completely non-invasive CGM like Quantune. These sensors could be “entertaining” and insightful enough to attract and retain consumers at scale.
I wonder if a new LLM-based consumer app can change the game. As mentioned, most previous consumer health apps lack continuous user engagement. And don’t LLM chatbots excel at this? People tell ChatGPT their health problems all day. An LLM-based app that goes viral among patients could become a natural consumer health champion. Unless OpenAI just takes that spot of course… it’s a possible scenario.
Both options carry a great “why now” momentum. But no matter which entry you choose, you need to convince VCs of an attractive LTV with outstanding long-term user engagement.
DM me if find that viral consumer health hack.
Speak soon,
Lucas