One out of every two digital health startups are forecasted to fail within two years of their launch, finds a new report from Accenture. However, these companies aren't destined for a complete shutdown — larger companies could make use of these resources for talent and innovation.
Here are five things to know about the potential failure and potential re-appropriation of digital health startups.
1. In Accenture's analysis of 900 health IT startups, 51 percent were determined to be in danger of failing within 20 months.
2. However, the startups that are in danger of failing collectively have $4 billion in investment funding.
3. Accenture deems these startups "zombie startups," as they are faltering but bigger companies — vulture capitalists — could mine their talent and innovation, bringing pieces of them back to life.
4. Accenture offered three key benefits for larger companies acquiring elements of the zombie startups: a gathering of top talent, increased innovation and enhancing current solutions.
5. "In a period of disruption, leading organizations understand that they cannot keep doing the same things and expect to succeed," said Kaveh Safavi, MD, managing director of Accenture's global healthcare business. "They must become disruptors instead of being disrupted. Acquiring a failing health IT startup with excellent people and promising intellectual capital could be just the prescription for achieving that goal."
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