What makes my health tech startup a business?

Building a health tech startup may sound glamorous and sexy.

Imagine raising millions in investor money, hiring a team of brilliant minds (doctors or scientists), and crafting the best product and service on the market. It’s the kind of story we see glorified in TechCrunch every single day.

We all look for the limelight of big funding rounds and flashy launches, trying to live the dream many want, (I'm not going to lie, even I want that). But here’s the harsh truth: none of that makes your start-up a business.

There is only one thing that matters. A paying customer.

Without a paying customer, your startup isn’t a business.

It doesn’t meet the first and only requirement of being a business. No matter how cool your product looks or how much money you’ve raised, without revenue from customers, you’re simply burning through cash, not building something the world wants.

The hard lesson I learned

I learned this lesson the hard way.

My first business idea was to build a postural device to help people improve their back pain. Years of slouching over a computer had left me with massive lower back pain, and I thought I had stumbled upon a great idea. A quick Google later I realised, this could be huge! So full of enthusiasm, I dove in.

I spent months building a flashy website, creating the perfect pitch deck, joining an accelerator program, raising money, and even developing a mock device. I also found a mentor who believed in the idea, who joined the "company board".

Despite all this, one critical piece was missing: A CUSTOMER.

Eighteen months later, I didn’t have a single paying customer. Not one.

Why? It doesn’t matter.

Eventually, I had to face reality. All the effort and resources I poured in, my “business” was nothing more than an idea. And so, I gave up.

The truth about health tech startups: No customers, no business

Sometimes in health tech we love to live in “development land”.

“Development land” is the all important place where you are still getting things together, whether it be testing the product amongst your peers, speaking to experts, figuring out regulatory matters, etc

But ultimately, if a customer (whether it’s a patient, provider or payor) doesn’t pay you for solving their problem, you don’t have a business. You have an idea.

At most, you might have a flashy "research project".

A customer’s willingness to pay is the ultimate litmus test for the problem you’re solving. If they won’t open their wallet, the problem might not be significant or painful enough for them.

This might sound brutal, but it’s better to realize this early than to spend years chasing something that won’t work.

I've seen many health tech startups fall into the trap of focusing on everything except the customer. They raise millions in funding, build great looking products, start the process of getting something regulated, and hire teams, all before securing a single paying customer.

But here’s the catch: that investor money runs out fast, if customers aren’t paying.

The "fact" that most startups fail because they run out of investor money, is a fallacy.

It's actually because the money they had was never from customers.

Customers will pay if they truly want it

The good news is that customers who really want something will pay for it, sometimes even before they have it. That’s the concept of a pre-order.

In my second health tech business, we had an idea for a pair of headphones designed to help people sleep better. These weren’t just any headphones; they were highly complex and would take years to develop.

But we didn’t let that stop us. Instead of waiting until we had a finished product, we went directly to potential customers and asked them to pre-order.

In just 30 days, we had over £2 million in sales.

Let that sink in: we didn’t have a product yet, but the problem was so significant that customers were willing to pay upfront.

That was all the validation we needed to know we had something real. We used the pre-order revenue to fund production and deliver the product.

That’s what solving a real problem looks like: it’s so big and painful that people are willing to pay for it immediately.

Selling before building: No excuses

No matter what kind of health tech startup you’re building, you can find a way to get your customer (or potential customer) to pay. For example:

• A patient could pre order an annual membership to a personalised longevity programme

• A hospital could pay upfront for an AI-powered radiology assistant before the product is developed by signing a paid pilot agreement

• A health insurer could pay upfront for a diabetes management app if the programme projects to reduce hospitalisations by 15% in the first year

As a founder, your ultimate responsibility is to figure out how to sell your solution, even if it’s not fully built yet.

If your idea truly solves a problem, you’d be surprised who will buy it. And you'll be more surprised with when they are willing to part with their money too.

The act of selling is itself a test of your business’s viability. It forces you to articulate the value you’re providing and validate that the market exists.

In summary: focus on what matters

The startup world is full of distractions: funding rounds, team building, and product development.

Don't get me wrong, these things have their place.

But none of them matter if you don’t have a paying customer.

Shift your focus to solving real problems for real people who are willing to pay for the solution, even before you have it.

Building a health tech startup is hard enough without wasting time on the wrong priorities. The sooner you make a paying customer your north star, the faster you’ll build something truly useful.