The Consumer Electronics Show has increasingly become a showcase for digital health developers, investors and buyers.
The conference, with more than 100,000 attendees, took place in Las Vegas from Jan. 5-8, 2023. Here were four takeaways from the event.
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1. Emerging companies will utilize business-to-consumer as a training ground for a business-to-business pivot
A number of companies sharing their strategic blueprint for 2023 echoed a similar ambition to eventually market their products to businesses rather than consumers. Nearly all admitted they must first show value and interest with consumers before pitching to businesses.
“It’s definitely something that we will be looking at going forward.” said Ismene Grohmann, head of product for Lingo, an emerging line of biowearable devices from Abbott. “Employers and health systems are going after these wellness benefits because they realize they’re also preventative health benefits.”
Lingo connects a wearable device with a smartphone application to track a person’s glucose, ketones, lactate and alcohol levels.
The majority of entrepreneurs at CES said their ultimate goal was to show value to large-scale payer organizations.
This essentially follows Fitbit’s model of first winning over consumers and then utilizing the proof of concept to win over enterprise customers that often have far more scrutiny, but deeper pockets than intrigued consumers.
“We’re expecting a lot of those conversations to happen,” Grohmann said.
2. Age Tech could be at an inflection point
AARP and its AgeTech Collaborative of companies had a significant presence on the floor at CES. The collaborative features dozens of early-stage companies seeking to improve access to care for seniors.
The initiative aims to drive younger, caregiver-aged populations into AARP’s membership and highlight the growing market demand for digital health technologies serving older populations, said Rick Robinson, vice president of AARP’s AgeTech collaborative.
Companies taking part in the collaborative use everything from connected home technologies that help seniors age in place to augmented reality applications.
“This is a huge and growing market,” Robinson said. “Those who are in it, know it, but there are so many that don’t. There’s so much being left of the table.”
Other experts agreed that highlighting technologies focused on currently underserved populations will have an advantage over those targeting customers in more crowded spaces.
AARP and other established strategic partners provide early-stage investments in many companies while helping them define a business plan.
While many say age tech’s potential is high, it faces additional headwinds when compared to other products, said Carina Edwards, CEO of Quil Health, a joint venture of Comcast and Independence Health Group focused on helping seniors age in place. Quil is a part of the several dozen companies already participating in AARP’s AgeTech collaborative.
“Age tech is hard because the buyer is not the user. Seniors are [often] not buying this for themselves,” Edwards said.
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3. Raising money is difficult but necessary for many companies
There will be no shortage of companies looking to raise money in 2023. While that’s good news for investors hoping to capitalize on broader economic factors, founders and startup executives are anticipating a more challenging environment than last year.
“There’s still a lot left. The big trends we’re hearing is [return on investment]. Just focus on ROI,” Edwards said. While Quil’s financing is different from other companies given its relationship with Comcast and Independence Health Group, other executives admitted to holding onto their existing cash during this year’s anticipated downturn.
Nearly everyone agreed it is increasingly important to prove results when seeking funding. New companies—those founded since the market correction—might be better equipped for quick growth, because they’re generally leaner than more established peers, experts said.
4. Narrow approvals for medical devices likely to continue
While outliers exist, most companies producing or boasting Food and Drug Administration-approved technologies are seeking narrow regulatory approval for specific components of their devices.
This allows devices to be brought to market faster and cheaper than producing consumer-marketed devices with full-fledged regulatory approval. For example, the FDA has less stringent approval processes for wellness devices than those marketed as medical devices.
Still, to woo consumers and differentiate in an increasingly crowded wearables market, many companies are enduring the regulatory approval process strategically for specific portions or sensors of their devices.
This story first appeared in Digital Health Business & Technology.