By Teresa Murray, freelance writer for Healthtech & Giant Health Conference Team Writer
Pilar Fernandez Hermida of I-Expand started her early career as a translator and interpreter. She has an impressive academic background that includes Stanford, and a consolidated international business background that spans over 20 years. Incredibly, she also speaks 9 languages. Pilar moved around a lot in her international career track and picked up languages as one might pick up souvenirs!
Today Pilar specialises in taking companies’ solutions to market and helping them to scale successfully. She still sees what she does today as like translating and interpreting, because often businesses need help explaining what they do, and support in translating what they do into effective go to market strategies that monetise.
Pilar sees major change on the horizon in the healthcare space, not only because of the rapid rise of health tech and data analytics capacities converging to deploy new digitalised solutions, but also because of the incursion of new actors, especially consolidated consumer players, into the healthcare sector.
This is happening, she explains, because in today’s markets, the lines that previously separated patients from consumers are being erased and patient journeys are merging and intertwining with consumer ones. As Pilar points out, patients are consumers at the end of the day, and consumers are sometimes patients. Increasingly, patient’s expectations are mimicking consumer trends.
“People are beginning to expect the same streamlined, frictionless service provision in healthcare that they receive from Amazon” Pilar says
This means getting what they want, when they want it and not having to wait.
Healthcare systems are becoming increasingly overburdened, not only because of the pandemic, but due to changing demographics. People are living longer, but not necessarily more healthily. As the chronic disease burden increases and is shown to be closely linked to behavioural and lifestyle habits, so too increases the healthcare systems’ openness to more digitalised solutions that can monitor and manage this burden from peoples’ homes.
Pilar explains that converging contextual factors are driving change in how business is done and how companies hustle for markets. For Pilar, this means a progressive replacing of the more traditional product-driven pipeline dominated market strategies with platform solution development and market strategies. These trends are paving the way for new types of actors becoming key players in the healthcare sector.
Pilar talks of this, and many other aspects of launching and monetising digital health care businesses in her aptly named upcoming book Cash or Crash - an essential read for any tech innovator or business looking to market to the healthcare sector.
But what are platforms exactly and why do they matter?
Pilar explains that thinking about business launches and go-to-market strategies in platform terms transcends the traditional practices of partnerships, strategic alliances or acquisitions.
Platforms matter says Pilar because they are one of the most important trends of the 21st Century and bring a new paradigm. By being engaged in diversely populated platforms, new actors can scale exponentially at pace, even in the hard to navigate, complex regulatory landscape that is healthcare.
Platforms, are in effect, becoming the new markets, spurred on by the Internet of Things and Cloud solutions as well as new ways of collaborating forcing traditional healthcare players to step out of their comfort zones.
When Pilar speaks of platforms, she is not talking about technical platforms, but rather spaces where diverse companies and businesses get together and collaborate to develop and commercialise solutions that target multiple pain points across the patient/consumer journey.
Think Amazon or Cisco but in health.
This can mean platforms where pharma rubs shoulders with tech start-ups and consumer players in spaces where they all work together to bring a solid value proposition that transcends the concept of a product produced to compete with a different company’s similar product.
Platforms are essentially the coming together of multiple collaborators in a coalition of the willing, and the able, to co-create and produce solutions for different stages of the patient/consumer pathway or journey.
It’s where the dots get joined.
For clarity, Pilar engages the orchestra analogy where different instruments play together in harmony under a talented and well-resourced orchestra director to make
the magic happen.
Pilar goes on to explain that there are three different types of platform. There is the “by invitation” where an already major player selects the platform members to fit their overarching strategy goals. On the other end of the spectrum, you have the fully open platform where any company or start up can participate and collaborate, even competitors. And then there is the middle ground of the semi-open platforms.
There are different roles to be executed in platforms too. There is the orchestra director role which requires time, energy and significant resources to ensure harmony and that added value is generated within the platform. Key also to avoid cacophony that brings value to no-one.
Then there is the complementary role, often more suited to smaller companies and start-ups who lack the necessary resources to govern and where the relationship is more of a give and take.
For the sake of illustration, a small digital therapeutics company can benefit greatly from the data sets that a large company can leverage, something that would be cost
prohibitive for a start-up on its own. In return, larger companies benefit from the innovations being developed inside the platform without having to invest so many R &D resources itself.
Platforms, when configured and governed in the right way, can leverage innovations and scale exponentially, something very difficult for stand-alone, product driven business to do.
For Pilar, it is essential that companies understand that platforms are forming already and they should take stock and observe what their competitors are doing in this sense.
Eventually she says, platforms and ecosystems will compete with other platforms and ecosystems. So, if a business is a stand-alone, has not sufficiently consolidated its market value and position over time, and invested a small fortune in branding and so on, it will find it tough to compete.
Particularly, if it is still stuck in pipeline competitor mode.
For companies already looking at their platform options, the burning issue is choosing the right platform, or platforms, and is akin to the complexities of dating. Given the
high mortality rates of companies, and start-ups, one must tread carefully and analyse their potential partners and collaborators even more assiduously.
Key aspects to consider advises Pilar are how the platform is configured, to what degree it is open or closed and how its governance is being managed.
It is also important to analyse the typologies and causalities behind the mortality rates in each platform or ecosystem. Important too to examine the quality of the collaborative environment and its interactions and interdependencies. Investors, says Pilar love platforms, better ROI and less risk.
Investors analyse these same factors before opening their purse strings.
So, the key question for the company considering platforms should be the same as the investor’s - “How is the platform going to make me money?”. Partnerships or strategic alliances, where often agreements are more one sided or proprietary rather than win-win, or platforms that do not invest in the financial success of the complementary members in the platform should be avoided.
Easier said than done perhaps.
However, Pilar articulates a key strategy option for smaller companies and start-ups. They can start their own micro platforms.
They can do this by first bringing together their own complementary collaborations that combined bring scalability, which in turn will give them a more advantageous position when negotiating entry into bigger platforms later.
Also, companies can be complementary actors in more than one platform at time, thus benefiting from different platform types, innovations and developments whilst distributing their mortality risk more effectively by not having all their eggs in the one basket.
For Pilar, when the platform mix and intentions are right, the magic happens, but at the same time, she cautions that successfully scaled platforms could essentially wipe the playing field clean of competitors and make it very difficult for challengers to have a chance.
Yet, unlike other sectors, platforms in healthcare will not generate “winner takes it all scenarios”. The healthcare market is far too niched and fragmented for that to happen. There will however, she says, be powerful platforms like Teladoc and livongo that will join up end-to-end journeys, and by doing so, occupy dominant positions in many markets.
In the end, there will be fewer companies with bigger market shares.
McKinsey estimates that by 2025, the 100-plus industries and value chains that make up today’s industry landscape will be driven down to a dozen or so multi-trillion-dollar platform ecosystems accounting for up to $60 trillion in revenues. We will see more consolidation in healthcare too.
For start-ups in healthcare, care must be taken to avoid phagocytic relationships and to ensure that the platforms they participate in generate a healthy and innovative diverse playing field geared to improving health and well-being outcomes for people. Also, competition is healthy and benefits the consumer.
For Pilar, ensuring this healthy balance is critical as it is key for her that start-ups and entrepreneurs have the space to innovate and disrupt, and to continue to shake things up and move humanity forward.
In any case, for Pilar, no matter what happens, platforms are here to stay.