Lecture, Other
Two-Sided Networks in Healthcare - a Founder's Playbook
a16zVineeta Agarwala, Jay Rughani, Vinita, Arif Nthu, Andrew Adams, Iman Abouzeid, Thomas Closel, Doug Hirsch
- Digital health two-sided networks are projected to become large, impactful, and attractive businesses with durable go-to-market strategies, primarily addressing broken data flows, severe fragmentation, or highly elastic demand.
- Founders are advised to establish trust as the foundation for the first network side, starting with a narrow focus on a single core problem while prioritizing customer feedback and engagement over early pricing optimization.
- Strategic growth on the first side involves avoiding reliance on top-of-funnel metrics alone, optimizing for retention and efficiency, and adjusting north star metrics as the company evolves to secure lock-in.
- Building the second network side requires repeating the product discovery and iteration process used for the first side, ensuring the new side reinforces the initial user base while maintaining simple pricing and product complexity.
- Investor evaluation focuses on early indicators of product-market fit across adoption, engagement, retention, efficiency, and data access, alongside an understanding of defensible moats against disintermediation and margin compression.
- Incredible Health anticipates growing 300-400% in the current year following a 400% growth rate last year, with future plans to provide nurse continuing education, advice platforms, and robust B2B workflow software for employers.
- Oaken projects a revenue sharing model increasing to approximately 10 percent, designed to enrich the academic system rather than charging hospitals for software.
- Komodo identifies "moments of truth" as highly predictive outcome metrics and plans to deepen customer relationships through quarterly business reviews, with professional service providers eventually acting as system integrators for the last mile.
- GoodRx expects to maintain significant organic traffic driven by word-of-mouth value and plans to launch new products to expand its product surface area across the healthcare sector.
- There is a shared optimism regarding the scaled impact these multi-sided network businesses can have on the overall healthcare system.