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How To Scale Your Digital Health Startup

scale digital health startup

All digital health companies go through three general phases of growth – start up, ramp up, and scale up. All three are important, but this article specifically focuses on how to create scalable income growth so you can successful scale.

The reason for this emphasis is simple – 9 out of 10 startups fail because they don’t create long-lasting revenue engines. In digital health, we can’t let that be us. People’s lives depend on startups who push the envelope and create a better health care ecosystem for us all.

Common misconceptions

Before we get into the “how,” let’s first eliminate some common misunderstandings about going to scale. For one thing, just because your company is growing and landing new customers doesn’t necessarily mean that you’re scaling.

If your revenue and expenses increase at the same rate as each other, then you’re not scaling. Scalable businesses can handle a larger workloads while maintaining efficiency and low costs. This allows company revenue to grow exponentially while keeping expenses down.

What does it look like if you’re scaling?

There are several common signs that a company is or will be achieving scale.

  • High customer retention

  • Diversity in income streams

  • Steady and foreseeable revenue

  • Procedures and systems that help employees navigate new client experiences

However, not all companies may want to go to scale. And while that may be okay for some, you need to be aware of the risks that mindset can create for health tech startups.

For venture-backed startups, you run the risk of not getting to your next capital raise simply because you can’t grow the company fast enough to prove the worth and longevity of your innovation. Since the majority of funding for digital health comes from VCs, this isn’t something to take lightly.

Plus, even though health care systems are typically slow moving, if you’re not ready for your next growth point, medical systems and individual practices aren’t going to wait around for you to get your ducks in a row. That’s why most digital health startups need to achieve scale, and they need to do it fast. Thus, the impetus for this blog post.

Here are five steps you can take to help you prepare to go to scale and avoid becoming a statistic.

1. Understand your inflection point

Inflection points matter because these are the time periods where a company must make strategic changes in order to maintain revenue streams and forward momentum.

Most of the time this involves preparing for the next round of capital raise. For instance, without a marketing plan, you may have difficulty persuading investors to fund your innovation.

Often, however, startups get so stuck in the moment – landing the first client, getting FDA clearance, designing HIPPA compliant software – that they don’t look towards the future. That’s why startups need a go-to market plan that sets them up for their next inflection point… and the one that follows after that.

Ultimately, a market plan helps you enter and exit each inflection point as smoothly as possible. The result? You never fully exhaust your funding while allowing your company to grow to scale.

2. Understand your customer

To continue to raise capital for scaling a business, you must delineate your ideal customer persona (ICP). The reason for this is simple: VCs often think they want to know your Total Adjustable Market (TAM), but in reality they want to know your projected revenue. However, the only way to map out future earnings is to narrow down your ICP.

What is your ICP?

For more background on establishing your TAM and narrowing down your audience, check out this guest post by Dwight French. Suffice it to say, if you’re ever going to discover your ICP, you need to pinpoint your TAM, SAM, and SOM first.

In that hierarchy, your Serviceable Obtainable Market (SOM) are the people who feel the pain the most AND have the budget to purchase your product. Your ICP goes a step further:

  1. They feel pain points more frequently and more severely.

  2. They have the budget.

  3. They’re willing and able to buy

How to establish your ideal customer

There are two important aspects that make up your ideal customer. First, you need to know the target organizations. For instance, if you’re pinpointing IDNs or private practices, which ones are you specifically going to reach first?

Secondly, you need to narrow down the characteristics of your ideal customer. These are some specific demographics you should know:

  • Title

  • Job description

  • Team size

  • Role as a buyer

  • Budget

  • Tech and tool stack

How to build your customer persona

The next key to creating an ICP is to put yourself in your customer’s shoes. Do you truly understand what a day in their life looks like? For instance, how do they measure success and failure?

Beyond that, you need to understand how they buy. Are they the primary decision makers in the buying process? Or do they have to convince regulatory boards and committees to purchase new products?

Lastly, you need to grasp their motivation:

  • Why they’re motivated to buy?

  • What would motivate them to invest in a new solution?

By defining your ICP, you have solid data that can convince investors that your solution has a market and, even better, has a promising future. All of this ties right back into your health tech marketing, making it possible for you to rise above the competition in the long run.

3. Understand how policy and regulations affect your customer

Government policies, CDC reporting, FDA policies, MACRA and MIPS reporting, value-based care incentives, and enabling scalable medical progress – all of these external pressures affect your customers and end users. On the flip side, your customer may be facing internal pressures from clinical teams, the C suite or board, new technology, or financial dilemmas.

The fact is that we live in an era where 100 year old health care organizations go out of business because they don’t change. For medical systems to fit in and flourish, they need to adjust to new regulations and meet goals such as the Quadruple Aim.

But you can’t help them get there unless you know where you fit in the whole picture. For instance, how does your digital tech solution help your customer fulfill these four roles:

  • Cost efficiency

  • Better outcomes

  • Patient experience

  • Clinician burnout

This is a major step towards making a good tech solution an invaluable innovation to health care. If you can verbalize how your solution helps your customers reach the Quadruple Aim, your digital health marketing can easily pinpoint what they really want and need to survive and thrive.

4. Test, test, test

Before you fully launch your business model and messaging hypothesis, you need to validate them. The best way to do this is through testing.

To begin, establish a clear hypothesis. This can’t just be in your head. It needs to be on paper so you can test it out on your friends and family. Do they agree with it? Do they have concerns? What would they change?

Once you’ve tested your hypothesis with a friendly audience, move on to your target audience. There are several ways to do this. Consider getting in person interviews so you can listen to those who have experience in your field.

Beyond that, you can verify your hypothesis through paid ads through social media. On Facebook, for instance, you can run two ads against each other so you can see which one relates better to your target audience. Plus, you can also get comments from viewers, giving you further insight into buyers’ needs.

And, lastly, you can use growth experimentation tactics. This method allows you to try strategies and messaging so you can understand what works and what doesn’t. All this to say, your business model and messaging strategy should be 20% hypothesis development and 80% market insight. That’s how you make sure your strategy can go to scale.

5. Understand your competition

Both direct and indirect competitors are competing for the same budget and mindshare. But if you don’t know who the contenders are, how can you ever expect to differentiate yourself and draw the most brand awareness?

However, many startups don’t have the bandwidth or resources to conduct a comprehensive analysis of competitors. That being said, here’s what young companies can do. They can create a competitive registry and process for collecting market data. Then they can use these metrics to guide marketing strategies, sales, and product roadmap prioritization processes.

By addressing all five points mentioned in this post, startups can adjust to each inflection point and continue to raise capital, allowing them to scale and thrive for the long run.

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Whitney is a consultant, speaker, and writer on a mission to help life-saving, life-changing technology break through the noise and achieve mass user adoption. Learn more about her here.




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Discover how to plan content that optimizes your marketing funnel and nurtures prospects through the buyer journey.


Create a targeted marketing strategy that will put you on the path to results-driven marketing.


Whitney is a consultant, speaker, and writer on a mission to help life-saving, life-changing technology break through the noise and achieve mass user adoption. Learn more about her here.