Our Guiding Beacons in Digital Health and Health I.T

In 2013, we made our first investment in the digital health sector in a company called Misfit Wearables. This was the beginning of a great collaboration with Misfit cofounder’s Sonny Vu, Sridhar Iyenger and John Sculley to create a new product segment within a rapidly growing wearables category. The Company was acquired by Fossil in late 2015 but that experience, combined with the insight from our Asian strategic corporate partners and broader Asian corporate ecosystem, was the beginning of our journey as a firm into the digital health and health IT sectors.

We learned one important lesson from Misfit. If you design an elegant, fashionable device for the practical world we live in (make a wearable in fact wearable- no charging for 6 months and waterproof) that can tell a consumer something about themselves, consumers will be attracted to the value proposition, buy and actively engage. It turns out that activity level, defined by the number of steps we take in a day, was interesting but not sufficiently meaningful enough to consumers, beyond the initial fitness enthusiasts, to drive long term interest and engagement.

Our takeaway was that the issue with the first generation of devices was not whether a consumer would wear something on their body to learn about themselves (they will) but the perceived value of that device. That prompted us to think about the wearable of the future, about the technologies yet to be invented in order to deliver meaningful value to the user. This included novel sensors, processors, power management, algorithms, and data analytics companies. We invested in Sensifree, a Cupertino-based company developing a sensor/algorithm platform based on a highly accurate, miniaturized, 1 dimensional imaging sensor that can measure a user’s blood pressure continuously, non-invasively with performance equivalent to an inflatable blood pressure cuff.

We also believe that such novel technologies that enable the collection of data from our analog bodies and translate that to the digital world will also enable a wide set of cost-effective, remote monitoring opportunities in the world of value-based care. In July, FCC Commissioner Brendan Carr and Senator Roger Wicker (R-MS) in an op-ed published in the Clarion Ledger in July commented on the FCC’s $100m telehealth proposal. The officials wrote, “The trend is towards connected care everywhere. Remote patient monitoring and mobile health applications that Americans can access on their smartphones or tablets while at home or work are part of a new and seamless way of delivering cost-effective, direct-to-consumer healthcare.”

From Misfit, we also started thinking about the value of the data collected. On the one hand, we were investing in companies such as Sensifree that bridged the analog to digital world with new technologies that could be used to collect new health data sets about our bodies. We invested in Noom where diabetes patients could now have a solution to manage and centralize the monitoring and care of their condition and begin to leverage the value of the longitudinal data set that they collected.

However, we also realized that there is a tremendous amount of meaningful data collected day in and day out in the health care setting from medical devices. The issue was whether a startup would be able to get access to those data flows. The key to success in this area is not technology but vertical industry knowledge and network. Business development skills are paramount. One must understand how to define and build a business that places a startup at the cross sections of meaningful data flows within the health care system. When placed at those cross sections, there is an opportunity to collect meaningful data, normalize the data and make the data available to access from a central repository. Analytics, machine learning, AI can follow but without the data, the analytics will not follow.

This led us to an investment in Somnoware, led by Subath Kamalasan. Subath brought a decade of experience from the sleep space as an owner of sleep centers, as a durable medical equipment (DME) supplier to the sleep space, and as a software provider. He determined that his path to placing himself in the data flow was to provide a SaaS-based workflow product to health care providers running sleep practices. That foot in the door has enabled him to capture a provider’s sleep patient data from the initial consultation/testing through diagnosis and prescribed therapy. Having this normalized, centralized data has enabled Somnoware to provide insights and tools to their provider customers around their sleep practices, patient engagement and care management. We are just at the tip of the iceberg in utilizing this data to deliver on the promise of better care, more engaged care, and at lower cost to the benefit of providers and their patients.

In the US, health care spend will grow to close to 20% of its GDP, significantly more than the percentage spent by major OECD nations. We are not buying more health care overall than other countries. But what we are buying is increasingly expensive. At TransLink, we believe that the key to managing this cost down while improving quality of care lies in the data. We need good, clean, normalized data sets to analyze. Therefore, we believe the opportunity today lies in the front end of this process. The opportunity is to invest in the companies that have either invented new ways to collect meaningful health care data or those who have developed businesses that solidly place themselves at meaningful data aggregation points within the current health care ecosystem.

It is also important to emphasize that we need enough data to analyze to provide true signal fidelity but also enough data to understand the individual variability of the conditions. We humans are analog creatures that come in infinite variety. Any analytics platform will need to consider this from the base foundation as part of a viable solution. That’s a challenge but for those that are able to deliver on this value proposition, the opportunity set will be enormous.

These are our guiding beacons as we row ahead and invest in the future of digital health and healthcare IT. As the former principal of my high school, Principal William Saltanstall said, we keep that bright beacon in clear view at the stern to keep a steady course, all the while “bending our oars toward the future.”


Eric Hsia

Sep 16, 2018