Calling health technology a challenging field is an understatement. Entrepreneurs and venture capitalists find themselves held back by the industry's natural complexities. And large organizations, despite access to seemingly infinite resources and a thorough understanding of the medical field, find themselves lacking the technical talent necessary to build innovative solutions to problems.
"We started Prebacked for two reasons. The first is that startups are building solutions to nonexistent problems—like Instagram for animals," Edell explains. "The second is that enterprises struggle to understand how the new, disruptive technologies out in the market can help solve their problems. In bringing both together, we make amazing things happen."
Value in Real Problems
Prebacked follows a hackathon model in which corporate partners—like Wellmark Blue Cross Blue Shield—pitch problems for entrepreneurs to solve. Over a period of 48 hours, teams consult with health-care leaders, medical experts, consultants and VCs to develop their core ideas. Teams then finalize prototypes, ultimately pitching to Wellmark, which then handpicks the winners that align best with the company's most pressing needs.
"Prebacked's mission is about giving the tech-savvy generation the opportunity to build solutions that previous generations have struggled to solve," Edell says." Startups are given freedom to start a company, innovate a solution and have it assessed by enterprises, VCs and top industry players. Exceptional startups could land a revenue generating contract with a major enterprise company, as well as funding opportunities."
Reversing the Norm
Edell and Dunham have taken the traditional accelerator model and reversed it.
"Traditional accelerators help startups build a solution and get funding with the long-term hopes of finding an enterprise customer," Edell explains. "We reverse the process by bringing together large enterprises to pitch broad problems to startup teams, who innovate solutions and potentially gain a revenue contract with the enterprise customer."
According to Edell, Prebacked is aiming to set new business precedents—with a higher priority on revenue.
"Funding has become an 'addictive drug' that startups are chasing, without a care for coming up with a revenue model," Edell says. "Funding has been confused for revenue, which is not sustainable. We emphasize that startups should seek revenue and become self-sustainable first. This will naturally attract funding, helping them scale when the time is right."
Solving Entrepreneur Pain Points
From the perspective of an entrepreneur, Prebacked's reverse model provides a tangible alternative to a major challenge.
"Startups typically work for many months to raise money and try to find a technology to customer fit," says Akhsar Kharebov, co-founder at Infometers, a company aiming to connect the fragmented medical device market. "This is hard. Most ventures never get to a point where they have a product they can sell to a large customer."
Prebacked helps entrepreneurs find customers first. "This saves a lot of time and effort," Kharebov says. "It lowers the risk for entrepreneurs and creates the iterative design loop necessary to create a lean startup."
Although Kharebov was not a Prebacked participant, he is a regular volunteer at events. "It is important for Silicon Valley to have these events to continue innovation. It helps gather steam for the community," he says.
Promoting Creative Freedom
Prebacked has now completed its first round with Wellmark. As Edell notes, most of the winners did not enter the program with a pre-built solution.
"They heard the problems at the program, and built an innovative solution after discussions with the enterprise client and other startup teams," Edell explains. "We believe they were 'winners' because the enterprise felt that they weren't trying to force-feed a solution—in other words, a round peg in a square hole."
A counterpart to this design process is creative freedom. Sponsors facilitate innovation by limiting their control.
"From our first event round, we learned the importance of telling enterprises that 'less is more,'" Edell says. "Explain the broad problem, and let startups use their intellectual horsepower to innovate. The more details enterprises add to the problem, the less exciting and adaptable it is for the market."
As Edell explains, energy and passion are crucial to Prebacked. "Our success has been telling enterprises to keep the problems broad, so the entrepreneurs can truly leverage their talents, build amazing solutions and feel passionate about their company."
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Ritika is a San Francisco-based blogger who writes about trends in business, Internet culture and marketing. She's inspired by the intersection between technology, entrepreneurship and sociology.