The medical health industry is all bubble: VC has become the "death" of entrepreneurs

Jay Parkinson's career began in 2009. At that time, he created a Facebook-like doctor-patient communication platform Hello Health. After that, a fast-growing company, Tumblr, earned him income and wanted to provide better health services to his employees. It was this collaboration that made Parkinson shine and founded Sherpaa.

On the Shepaa platform, employees of companies such as Tumblr receive an email address and mobile number, and can contact the doctor if there is any discomfort. In 2012, a national TV show introduced Sherpaa's service model, calling it simple and efficient. Soon, Sherpaa ushered in the first senior corporate executive; less than six months later, Parkinson hired a senior executive with HR experience from New York and received $1.85 million in financing. Everything goes smoothly.

However, in the past less than five years, Sherpaa’s investors have left, and only the founder Parkinson has struggled in the same place. In the end what happened?

医疗健康行业全是泡沫:VC成了创业者的“催命符”

For many investors, the introduction of new technologies in the relatively backward health and medical fields of software and services to attract market attention is the main reason why they are eagerly awaiting.

In 2014, the total financing of health technology – also known as “Digital Health”, was $4 billion, and the total amount was so high that venture capital fund Rock Health said “it’s incredible in every way” .

At first, the emergence of the financing boom, so that entrepreneurs have more chips in the face of investors, it seems to be a good thing. Even today, three years later, the founders of health care are still “not bad money”, and industry investors and Silicon Valley investors are always looking at them with their bulging wallets. However, the founders tend to welcome Silicon Valley investors not only because of the high amount of investment, but also because they can arrange more media coverage and win more conference speeches.

However, not all investors are very savvy. Many health investors who have been through the battlefield have concluded from the experience of the past few decades that most health technology startups will never be able to usher in the rapid development comparable to high valuation technology companies. Five years after the financing boom in digital health, Nikhil Krishnan, a technology analyst at CB Insights, said, “In the health technology industry, we have hardly seen a successful venture out of the market. The more successful companies in the industry, such as ZocDoc and Oscar Health are still private companies."

These circumstances have prompted us to think about what happens when health care companies get financing from technology companies. In the following, Jay Parkinson, founder of Sherpaa Health, shared his story with us.

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