19 Common Mistakes To Avoid When Launching A Healthcare Startup

Launching a healthcare startup can not only be lucrative for a business owner, but it’s also a rewarding venture. 

Whether it’s making healthcare more accessible or improving the processes for healthcare practitioners, people who’d use your product will enjoy better medical services. 

However, unlike other startups, it’s much harder to successfully launch one – especially since it’s a heavily regulated industry. 

That’s why in this article, we’ll be reviewing 19 common mistakes you should avoid when launching your healthcare startup. 

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These Common Mistakes Put Healthcare Startups Out Of Business

Common Mistakes  to avoid

To ensure that your healthcare business will be successful, you should avoid these 19 most common traps:

1. Not Conducting Enough Preliminary Research

This is pretty much applicable to all startups. However, if you’re looking to build a business in the healthcare industry, you have to at least know the industry well. 

Your understanding of how it works and the ecosystem will not only influence your business idea but help you stand out. 

You also don’t want to create a solution that already exists without any unique features. Else, your competitors won’t have to bother with kicking you out of the playing field. Your research will also educate you on where best to focus on. 

For example, as a startup, you have a better chance of succeeding in telemedicine or health tracking. 

Pro Tip
Academic journals like health affairs are a good place to start your research.

2. Failing To Comply With Health Regulators

Since you’d have to deal with a lot of confidential patient data, there are security measures the health industry has put in place. This means you’d have to comply with certain standards like HIPAA, FFDCA, PCI, DSS, and more. 

These rules state how medical records and patient data should be handled, stored, and managed. 

Until you’re compliant, you don’t have the license to process patient information or data. So if you’re not, launching a healthcare startup might be the wrong move for you. 

Pro Tip
Conduct a risk assessment to get an overview of your current security measures.

3. Getting A Lawyer That Isn’t Health And Tech-Inclined

It’s mandatory to have legal aid when starting a business. However, if you’re in health tech, you need a lawyer that has experience in both the health and tech sector. 

This is because sometimes, there might be loopholes or intersections between both industries. 

When this happens, you’d need industry experts to give you good legal advice. They’d be able to foresee certain changes or immediately understand new regulations and protect your business.

Pro Tip: 
Be wary of legal advertisements – if you do hire a lawyer via this method, conduct thorough research

4. Designing A Product That Doesn’t Integrate With Health Care Systems

No matter how unique your solution is, the medical industry is changing. Medical practitioners now use digital technology for examinations and other treatments. 

This means there are some leading healthcare systems you have to take into account.

At some point, your product will need to exchange information with some of these systems. 

That’s why you have to ensure that your product can seamlessly integrate with them. Because when you start to pitch to your users, they will want something that makes their existing processes easier – which includes hassle-free integration. 

Pro Tip
Find out what top medical software health tech businesses integrate with the most.

5. Forgetting That The Sales Cycle For Healthcare Can Be Lengthy

lengthy Sales Cycle

Launching a healthcare startup can be exciting, but what happens when you’re not recording good net revenue after months? 

Many business owners make the mistake of losing confidence in their product simply because they forget that the sales cycle in the health industry isn’t like other startups. 

Before comparing yourself to a competitor who has probably spent years in the game, note that you might not record impressive sales at the beginning. And that’s because people need to build trust before buying a health-related product. 

So you have to spend time convincing medical practitioners to use and recommend your product. This can take months. However, if you offer a good service, you’re sure to retain your clients over a long period. 

Pro Tip: 
Be clear about pricing early on so you can have high-intent leads from scratch.

6. Not Carrying Out An MVP First

MVP in this context means a minimum viable product. Think of it as a beta version. Here you’re creating a simple version of your software, service, or product to test how it works. 

With this, your first customers can provide feedback for future developments or improvements. 

You’ll get insights into what they look forward to using in your product, along with what they want to solve. It’s interesting that you can often end up creating a different solution based on what your customers want from you. 

Your MVP or beta is also a great way to raise funding and impress your prospective investors. You can show them what you’ve been working on and tell them of your plans to scale. They’d be more willing to invest in scaling an existing product than funding a product that doesn’t exist. 

Pro Tip: 
Add short surveys in strategic locations so you can gather feedback.

7. Not Promoting The Product Long Before Its Release

Not Promoting The Product

This is related to the long sales cycle you’d have to face. Rather than spending months after post-launch to sell your products, start the process way before. 

When you start pre-launch marketing, you can build interest and momentum for your healthcare business. 

After launch, people will already have an idea about your service, and they’d be more willing to give it a shot then. Build a website, and create social media pages. Add countdowns and coming soon posts. 

Pro Tip
You can publish content around your company, like its vision and mission. 

8. Poor Relationships With Medical Professionals

In the healthcare industry, it’s all about who knows who. Referrals are highly valued and used often. This means you need to build relationships with medical professionals and industry experts, even if they aren’t your direct users. 

Since the industry is a bit complex, build relationships with key players like physicians, insurance companies, hospitals, and others. 

If your target audience consists of patients, these people will most likely recommend your service to them or convince them to opt for yours instead of a competitor. 

This also applies when you need help outside of users. Maybe on a regulation, prospective partnerships, and so on. You’ll need someone rooting for you to succeed. 

Pro Tip
Identify popular healthcare communities in your industry and join them.

9. Having Unreliable Technology Partners

You’re going to need partners and integration with APIs to succeed in the startup world. It’s important to carry out enough research, so you don’t commit to an unreliable partner. 

The problem with such partnerships is that you’d record multiple downtimes. And while your product isn’t the problem, your users will automatically see your offering as unreliable too. 

Before signing a contract or committing full-time, undergo a test period where you observe how well their processes are. 

Do they communicate effectively with you? Are they helpful? These are just a few things you’d want to look out for. Bad partners make bad business. 

Pro Tip: 
Look out for documented case studies to know whether they have reputable clients.

10. Not Having A Medical Advisory Board

Working with a medical advisory board gives a competitive advantage when you’re forming your healthcare startup strategy. 

Asides from offering excellent health industry advice, they help you select team members, contracts, and other essential internal processes. That’s why you need people who have a rich experience in the sector. 

Having these industry experts on your board also helps investors take you more seriously. Because they know you’re thoroughly reviewing your operations and taking compliance seriously. 

Pro Tip
In addition to medical experts, get people with business and marketing backgrounds.

11. Getting A Rigid Staffing Model

While it’s important to have C-level executives and other full-time staff, you don’t have to make your team as rigid at first. While launching, you can work with contractors and freelancers more. 

This is so you’re not confined to setting up payroll for employees who aren’t essential workers. Making your team a bit flexible at first and then easing up to full-time employees will do you a lot of good. Better still, hire a few experienced workers who’ll streamline your processes. 

Pro Tip: 
Consider outsourcing other tech-related issues to a third-party company. 

12. Not Having A Short And Long-Term Financial Plan

Since you’ll have a couple of operational costs and expenses, it’s important to set up a financial plan for your business for at least one year. 

The chances that you’ll record tremendous sales in the first year are low, so you’ll want to ensure that this plan doesn’t involve your profits. Create estimates and make sure you stick to them. 

The short-term plan could be how your business will be sustainable without profits, while the long-term plan can focus on your monetization model. 

With a financial plan in place, you can survive the first few years of your healthcare startup after launch, not worry about financial implications and focus on your business growth. 

Pro Tip
Always pay off your business debts on time to build your credit.

13. Failing To Understand Your Competitors

You’ll have a lot of responsibilities to take care of. However, don’t forget to check in with your competitors to gauge your industry performance. Look into the progress of other healthcare businesses around you to see what’s changing. 

Are they adding new features? Are your customers switching over because of a better experience?

Understanding your competitors can also help influence when to stop considering them as direct competition. 

For example, they may expand to a market that you have no interest in moving to. You’ll also know why they are choosing certain strategies and whether it’s beneficial for you to do the same or not. 

Finally, knowing their value propositions, pricing, branding, and other things can help you position your business better. 

Pro Tip: 
Conduct a SWOT analysis for a clear action plan.

14. Blindly Following Your Business Plan 

While business plans are a great way to keep you on track, a common mistake business owners make is blindly following the plan. You have to constantly look out for market dynamics that can often modify your plan. 

This is because, as a startup, you can take advantage of your current flexibility. If there are any changes, you have to be able to adjust to them easily. This could mean adding new features, expanding your audience, or even switching up your marketing messages. 

Pro Tip: 
Widen your business network and subscribe to relevant blogs in your industry.

15. Only Having Technical People On Your Team

You need technical skills to help build your product. However, while it’s possible to outsource technical help, you can’t outsource empathy for your business. 

You need people on your team who are dedicated, passionate, and genuinely understand the healthcare industry. 

With this, they’ll be able to bring growth suggestions and tips for navigating the industry when you need them the most. 

Pro Tip
Since you’re a startup, hire employees that can wear multiple hats.

16. Trying To Solve All Problems

If you have a vision, it’s easy to get sidetracked due to all of the problems in the healthcare market. You might think this product you’re building can solve more problems. And while it can, it takes slow and steady growth to get you there. 

For example, if you’re starting as a telemedicine solution and you start cramming in features for appointment bookings or AI predictions, the average user might find your product confusing. There’s also the likelihood of too many things going wrong in production. 

So, narrow your focus first. This will allow you to stand out in your niche. Once you’ve built a host of users and evangelists, you can then scale that success by expanding to other products. 

Pro Tip
Figure out if there’s a market for your niche before narrowing your focus there.

17. Forgetting To Review The User Experience

At the end of the day, you’re building a healthcare startup for people. So whether it’s the next big thing or a revolutionary product, if it’s not user-friendly, you’re bound to close down. Your interface has to be simple, smooth, and efficient. No one wants a buggy app handling their healthcare. 

With subsequent releases, you want to look at your reviews, answers to surveys, and other feedback. This should help shape your next course of action and product development. 

Remember to always find the intersection between the problems you’re trying to solve and the problems your clients consider pressing. 

Pro Tip
Double down on your customer experience and get insights from your conversations.

18. Not Choosing The Right Branding

Your business name is essential to people’s perception of your expertise and solution. As a healthcare startup, you want to opt for a branded business name that neatly ties your offerings and industry together. 

This also applies to your brand colors, logo, and typography. You generally want to go for cool, reassuring elements. 

Imagine you walk into a hospital, and the walls are red. How would that make you feel as opposed to having white walls? 

This is how important having the right branding is to your healthcare business. Having the right branding will also make your business memorable and easy to recommend. 

Pro Tip: 
Create a detailed brand guideline so it’ll be easy to reference over the years.

19. Waiting Too Long To Launch Your Startup

It’s okay to want to have your business at a perfect level before launching it to the general public. However, perfection is subjective, and it’s possible that while you wait, your competitors beat you to it. 

So we recommend launching first and then over time, releasing updates that address certain concerns, bugs, or new features. 

Also, have a detailed marketing strategy and sales processes ready. Regularly reference it, so you don’t make any GTM mistakes. You want to establish yourself in the industry as soon as possible. 

Pro Tip
Regularly ask your customers for their desired features.


Launching your healthcare startup requires precise planning, leveraging the connections you form, and having a great brand that’ll retain customers over time. 

Start by getting the right business name with a healthcare business name generator. 


Adaline Lefe

Adaline Lefe

Adaline is in charge of organizing and maintaining content for all of our websites. She is a fantastic researcher and creator. She has over ten years of experience in content creation and management.

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