The healthtech industry is serious business. Digital health is expected to reach $206 billion by 2020, primarily driven by the mobile and wireless health verticals.
Hailing originally from Moscow, Russia, Varvara Russkova knows only too well what opportunities lie ahead in the digital health market. A venture partner at GVA Capital, Russkova’s focus is on the confluence of AI, healthcare, and blockchain technology. Her move to the U.S. reflects her desire to help the right startups make an impact in this fast-growing industry.
“I used to be a founder, co-founding a medical device that offers 24-hour blood pressure monitor using technology created in Russian avionics,” Russkova told me. “The U.S. seemed a great healthcare market to me, coming from Russia. Little did I know how different it is from Russian or European markets.”
Healthcare is under the microscope in both Russia and the United States. According to many studies, the much-discussed possibility of universal healthcare in the U.S. is fiscally possible, but the country’s politics are holding the country back.
While in theory, every Russian citizen has healthcare provided by public funds, in practice everyone is required to have private insurance. The Bloomberg Healthcare Efficiency Rankings place Russia at 53rd out of the 56 countries measured. Interestingly, the U.S. sits at 54th.
Many cash-strapped consumers are turning to mobile and digital healthcare solutions to help when they need it the most. Artificial intelligence is playing a significant role in these new healthtech offerings, but Russkova believes the U.S. offers a better environment for innovation.
“I have always loved ‘creation mode’ and the launch phase, and for that, the U.S. is the best country,” Russkova said. “If one thinks of launching a new technology, do that in the US. The work ethic, the pace of development, collaboration, partnerships, and the competition that accelerates growth, means many things can be done here so much more quickly when compared to Europe or Russia.”
In particular, Russkova believes the ecosystem, contacts, and infrastructure provided by Silicon Valley makes the U.S. the perfect place to innovate in healthtech.
“The startup field, the small businesses, the love of entrepreneurship, and the approach to life from a ‘shaper’ or ‘creator of the future’ perspective is very inspiring here,” Russkova said. “You just feel that everything is possible here, as long as you put enough effort into it.”
In particular, Russkova believes in the emerging technologies that are shaking up the health care market. AI is powering many of the latest innovations and is producing exciting solutions that help to reduce costs, avoid misdiagnosis, and even use non-traditional and non-invasive techniques to determine illness.
“AI in all applications is possible,” Russkova said. “Think about pattern recognition in every data set, be that diagnostics, prediction of a diagnosis, or even identifying patient’s future diseases. In the next two years, I am looking forward to data and pattern recognition for prevention, bioengineering applications, and digital therapeutics. I am personally very excited about neuroscience and what can be achieved by different types of brain stimulation. There’s a real possibility of rewiring healthcare through seamless stimuli that aligns the body, relaxes tension, heals sicknesses, and keeps the body healthy for the long term.”
And while many solutions focus on creating a digital version of cures that already exists, AI, machine learning, and other newer technologies are producing surprising and innovative diagnosis possibilities.
“One of the craziest technologies I am witnessing the development of is voice recognition,” Russkova said. “Even with just 30 seconds of your speech, it is becoming possible to diagnose your health, and not only from a psychological standpoint. Voice carries so many biomarkers that reflect your sicknesses or the state of the body. The trick here is to correctly differentiate what the temporary is (just a reaction to a tough day) and what is a permanent state of health. I am very excited to see how this side of healthcare will develop as well as how sound can become a therapeutic tool in the future of health.”
While the current blockchain market is dogged by the volatility of the cryptocurrency market, and the lack of real solutions behind all those white papers, there is no doubt distributed ledgers have their place in health tech, especially when combined with AI.
“It’s about the alignment of incentives,” Russkova said. “Many things can be achieved by AI without a blockchain. One can apply federated machine learning and have pattern recognition without a distributed ledger and the long computations that blockchain results in.”
But blockchain technology does have its place.
“What could be very interesting is to structure a model where individual data owners can benefit from ‘renting out’ the data they’ve produced to the whole network and then spend these tokens within the network to further improve their health and produce more data for longitudinal studies,” Russkova said. “I’m very excited to help bring into reality an open-API for healthcare data, where not just big companies are harnessing the profits from owning the data, but real people are rewarded for both sharing their data and improving their health.”
The size of the marketplace is attracting a vast number of startups, all of whom are trying to take their piece of the billions on offer while helping citizens gain access to better services. So how does Russkova make funding decisions, and what are the key elements that need to be in place for her to invest?
“It comes down to exceptional people, market size, and the best solution — technology-wise — for the problem, combined with a viable business model,” Russkova said. “It starts with ‘why.’ Why do the founders do what they do? Seeing their passion, seeing that the market is big enough to produce a ‘unicorn’ company, and seeing a great business model is the fit that allows the company to be the winner in the field.”
And looking for winners is Russkova’s primary focus.
“We look for the winners, period,” Russkova said. “The percentage of startups that fail is so high that one has to be the winner even at the stage of pitching to investors. Otherwise, the market will not tolerate it, and you won’t bring the returns VCs are looking for.”
That being said, there is more to finding a winner that pure business models alone, or finding a real problem that needs a better solution.
“Eventually, evaluation always comes down to one important element — people,” Russkova said. “Like attracts like, so I look at the founder, and what type of people she or he hires. That’s key for me.”
So what is next for Russkova and her involvement in healthtech?
“I want to shake the market and remove the old paradigm of ‘sick care,'” Russkova said. “My goal is finding companies that truly solve the core of the problem, the core of the sickness, and take the person out of the patient paradigm and instead make them a healthy customer. We need to solve the sickness trigger, heal it and keep the person away from the hospital fully supported by technology at their fingertips, so that people can truly feel cared, covered, and the ‘CEO of their health.'”
That seems like a lofty goal, but the incentives are there, and emerging technologies are helping keep the pace of development high.
“It will take re-alignment of incentives in the industry, which may be very tricky, not to say challenging,” Russkova said. “But with the skyrocketing cost of healthcare I can, for sure, say that a win-win model is ripe and much-needed in this market. And that is ultimately what will save us, both literally and economically.”