What are the biggest barriers for Finnish healthtech startups going international?
While countries want to enable giving their residents the best health services – corporations and startups in the healthcare field want to reach out to customers globally.
To discover possibilities and barriers in cooperating between the parties, UK Trade and Investment brought together Finnish healthtech entrepreneurs with international ambitions, healthcare corporations and governmental institutions from both Finland and UK.
But how one can land to a new country with a healthtech solution in a market that is naturally strictly controlled?
Entrepreneur Lauri Sippola from NetMedi, a Finnish startup creating online platform for guiding patients through treatment and recovery, says great local contacts and getting credibility among the local community matter the most on healthtech scene.
“You need to find the right people in the right market,” says Sippola, who’s startup is providing their service for cancer patients in Finland, Sweden and Switzerland at the moment.
“With healthtech, we are on a field that you cannot just do anything you like. You need to have references, top quality service and you need to be able to show great results from your home market,” Sippola wraps up. While running their operations from Helsinki and international sales from Belgium, NetMedi aims next to the UK market where they have already done research with London Imperial College.
Obviously connecting with the local healthcare providers matter – and if the startup wants to apply for regional grants, it has to decide if it wants to run the business from the home country or register locally. Sometimes getting into connections with local influencers is a major challenge for startups if the startup does not have local workforce or brand ambassadors supporting their message.
As credibility is a major challenge for even established startups, Sippola would also encourage corporations to partner with startups while expanding in new markets. Anyhow, sometimes especially the perception of time becomes a barrier for the cooperation between startups and corporations, Sippola ponders.
“We can be agile if we want to,” says Susanna Korpivaara from global healthcare giant GlaxoSmithKline Finland, and emphasises that GSK has several ways to collaborate and fund products that serve the clients. At the moment, GSK operates in 150 countries.
While healthtech startups see great potential in co-operating with corporations, for health companies this means reaching out beyond the closed core business – which is covered with layers and layers of legal protection. “While handling sick people, the processes can’t be that easy,” Korpivaara ponders.
Localising business models
While the partners and connections matter, also adjusting business model to the local needs plays a crucial role, says the lead of tech-digital experience of Innovate UK, Tom Fiddian.
“UK is a massive market especially for healthtech companies providing preventive healthcare supporting solutions,” says Fiddian, and continues that startups need to understand what kind of short-term and long-term needs the healthcare providers have locally.
“Startup’s business model has to fit to the needs of country’s healthcare system,” he adds and states that especially in UK the healthcare sector is moving more towards on-demand services.
From this perspective fitting together the timing and business model is also extremely crucial – and Finnish provider of sleep tracking hardware and service, Beddit, has experienced that in several markets.
“We expanded through the consumer markets and are now concentrating on the service side in the established regions such as our home country Finland,” describes Ida Lönnroth, the Head of Communications at Beddit.
“We actually started from the medical side, but either the timing or the credibility was a challenge for us.”
This supported Beddit’s decision to scale up first in the consumer side.
“It has been a rough path to go back and forth, but we learned that getting accessibility not only through reselling but through partnering is crucial,” tells Lönnroth, who’s company has recently partnered with Apple, which has helped the global expansion especially in US and UK where the devices are sold in Apple Stores. Now the company is concentrating on the service side as well as pondering about possible product integrations in the future.
As hearing great stories about startups expanding their operations worldwide with the help of networks, brand ambassadors and local partners – the question raises while discussing about challenges:
Who’s responsibility it is to facilitate growth?
While the startups reach out to local partners – and the corporations are willing to cooperate with startups until a certain level is reached – Fiddian says in comparison that governmental supporters should kick in when more investments are needed.
“We should step in when there’s risk,” says Fiddian – and also emphasises the importance of momentum.