Behind the Curtain: Redesign Health's Company Creation Process
It's easy to say healthcare is broken. It's much harder to fix it. At Redesign Health, we’re up for the challenge.
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It's easy to say healthcare is broken. It's much harder to fix it. At Redesign Health, we’re up for the challenge.
We partner with leading healthcare institutions and investors to ideate, build and scale new operating companies that drive meaningful impact across the healthcare ecosystem. Our disciplined method of de-risking and launching startups comes together with healthcare incumbents’ deep expertise and scaled distribution. Then, we accelerate each company’s growth through the Redesign Health platform, which compounds learnings and accelerates speed to market. Together, we’ve launched 40+ operating companies since 2018.
Here are the four phases of company creation at Redesign Health.
1. Research and Ideation
- Ideation starts by collecting and evaluating ideas from our investors, partners and employees. Our research teams scan the market for emerging trends in healthcare, fintech, and technology–fueled by regulatory and market forces. Here, we identify market gaps and opportunity zones where we can improve cost, quality or patient experience. This top-of-funnel research, supported by a robust network of external advisors, infuses healthcare market and industry expertise into the company creation process. Only the most promising concepts move into the more intensive company-building process.
2. Hypothesis Development
- The hypothesis phase includes a “breadth over depth” approach to intensive, hands-on research. Here, we focus on exploration, while conducting ongoing research on the desirability, feasibility, and viability of existing business models. Our team conducts multiple workshops with relevant stakeholders and industry experts to understand their level of dissatisfaction with current market solutions and their willingness to pay for something new. Concepts require attractive economics and positive market signals for the idea to move into the next phase.
3. Initial Diligence
- The initial diligence phase informs our understanding of each opportunity space and its risks, validating (or invalidating) our initial hypotheses. We focus on what the problem is, why it’s compelling enough to invest in right now, and how to address it. We also look at the size of the market and realistic opportunities for us to capture market share, and examine what’s currently working and failing in the space. We then pressure-test our idea with stakeholders to understand which solutions and partnerships we need to have to win business and build legitimacy behind our model. Our in-house subject matter experts deliver real-time insights into the estimated time and cost needed to build out capabilities, which ensures our process is grounded in reality.
4. Final Diligence
- For a concept to reach final diligence, we need to have a strong understanding of client acquisition funnels and distribution channels within the space. In tandem with ongoing desktop research, we conduct intensive in-field surveys with customers. Our goal is to ensure the ratio of a customer’s lifetime value-to-acquisition cost will be at least 3:1, and that we can make enough money across our customer base to validate the time and cost to build. This final diligence phase is essential to codify both the process workflow of the service (or tool) we’re providing and the quantitative metrics we’ll use to measure success along the way.
- We believe that our intensive diligence process sets our companies up for success and front-loads identifying sources of risk. However, we seek to ensure sustainable growth by mapping out “crawl, walk, and run” capabilities and requiring a business to reach certain milestones before it can scale from “v1” to “v2.”
Next Step: Funding
- We have a high bar for deploying investors’ capital into our businesses. For a concept to receive the green light for funding, it must score favorably in categories including market dynamics, competition, product-market fit, value proposition, and unit economics — among many other factors.
- Throughout the entire process, we keep the following principles top of mind:
By streamlining the complex process of ideating, developing, funding, and launching companies, we’re able to start market-ready companies faster than ever before. Each time we launch a company, we apply the learnings from the dozens of businesses we’ve previously brought to market. The more companies built at Redesign, the more high-quality experiences we can bring to people and patients, and the more likely we are to have a tangible impact on our broken healthcare system.
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