COVID-19 has had a detrimental impact on the mental health of young people. Healthcare providers and insurers are turning to startups to help them meet this growing demand. Yet, with so many startups working in this space, if you’re a healthcare provider or insurer, where do you start? How do you identify the right startup for your organization and set up a mutually beneficial collaboration?

For some advice, I turned to Telosity’s Managing Director, Faye Sahai, who previously ran Kaiser Permanente’s Internal Innovation Fund and Lab. In this role, she was responsible for identifying disruptors, promising innovation, and startups and piloting these within the Kaiser Permanente system. A few weeks into her job at the Innovation Lab and Fund, Faye was amazed at how many digital health startups there were and quickly realized her biggest challenge would be finding the right one to meet Kaiser Permanente’s needs. Starting from scratch, Faye and her team built the processes to identify new startups, assess their fit with the organization’s goals, and pilot their technologies.

Based on her experience, she shared the following recommendations for the three different phases of working with startups—before you seek out startups, engaging with startups during the vetting process, and during the pilot.

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• Before you work with a startup:
• Know the problem you’re solving: There are a slew of great startups solving different challenges in mental healthcare. To help you identify the relevant ones for your organization, you must understand the problem you’re trying to solve. To start, be focused on a very specific problem and make sure you understand how this problem impacts different stakeholders.

• Define what success looks like for your organization: It’s essential to know what outcomes you’re trying to achieve. If you have a good understanding of the problem, you should be able to come up with metrics that will tell you whether the startup is having the desired impact.
• Align your internal stakeholders & streamline processes: For organizations that might be new to working with startups, there are things you’ll want to consider to enable a smooth process for your internal stakeholders and the startups you choose to work with. This will require cross-functional collaboration. For example, streamlining contracting can make piloting less of a lift for both the startup and your organization, but this will require support from procurement, legal, and other functional areas. If there is already a team doing investment into startups, it’s also helpful to clarify from the beginning how investments and piloting work together (or not). In order to effectively identify potential process-related bottlenecks, you must understand how the involved business units currently operate and their preferences on engaging with startups. While you’ll likely be advocating for and educating internal stakeholders on why the work you’re pursuing with startups is important for your organization’s goals, it’s important to listen to each business unit’s concerns and questions to ensure you are designing processes that work for all.
• Develop a systematic vetting process: Have a clear idea of how the vetting process will

• run from the first meeting with a startup to the decision on whether to pilot. Best practices include the following:

• Have a cross-functional team provide input;
• Verify the startup is compliant with HIPAA and other standard cybersecurity practices;
• Validate the startup has enough support and funding to see the pilot and related process to completion;
• Gather third-party validation of the product and/or team, including talking with other customers and reference checks on founders;
• Understand the startup’s business model and identify a method to build the internal business case for working with the startup; and
• Be aware of the startup’s current limitation on scale and how that might change in the next 6-18 months.
• Engaging with startups: Once you know the problem you’re solving, how you’ll measure success, and have the buy-in from key stakeholders across the organization, it’s time to start engaging and vetting startups. Below is some advice to guide you through this phase:

• Finding startups: Chances are you are already hearing pitches from startup founders, but how do you make sure you have a broad reach and are seeing the volume of companies needed to make an educated decision on which one is best for you? There are several options:
• Create an online submission form on your organization’s website and discuss these during weekly or biweekly internal check ins.
• Connect with investors, accelerators, or other startup support organizations in your community.
• Host an innovation challenge where you identify a problem statement and have relevant startups apply for a chance to pilot. While these can be managed through your organization, it is often a good idea to enlist the help of those with experience and expertise in launching and managing innovation challenges.
• Be transparent about your expectations & timeline for approval processes: Startups don’t have time to waste. A single contract can make or break a company and the startup team likely has a lot riding on the contract getting signed. To manage expectations with the startup team, it’s imperative that you communicate your approval process, timeline, and success metrics. Identifying things such as who will be the primary point of contact or how much access the startup team will have to those using the technology are critical to ensuring the startup team and your internal users have a positive experience.
• Ensure the product is easy to use & the value proposition is strong for any stakeholder who will be using it: Have the actual stakeholders who will be using the product test the product before committing to any sort of pilot. While this is (hopefully!) an obvious step, it’s important that the test group be reflective of the average user at your organization, not just those that are most excited about new technology, a.k.a. early adopters. While you’re conducting these tests, make sure you also understand the value proposition for each stakeholder group. As you roll out the pilot, you will likely find yourself reiterating these to ensure maximum buy-in.

• During & post-pilot: By now, you’ve found a startup that is a good match for the problem you’re solving and the size and geographic location of your organization. To make sure all of your effort and time in the previous phases isn’t wasted, consider doing the following:
• Conduct regular check ins: Even though the paperwork might be done, it’s important to keep the lines of communication open with the startup. One of the best ways to do this is to host check ins on a regular cadence. By making these meetings recurring, you eliminate the back and forth on scheduling and have peace of mind that you’ll get updates at the frequency you need.
• Determine how you will want to capture and share lessons or outcomes garnered through the pilot: Sharing the benefit of using a startup’s product can have a tremendous impact on the startup’s trajectory. Additionally, disseminating lessons learned during a pilot can position a provider or payer organization as a leader in innovation. To bolster both images, it’s important to think about how you will share details about your collaboration and the insights gathered through the endeavor. Nothing is fail-proof. Waiting until after the pilot is complete and it’s clear the startup had a positive impact is a good tactic to hedge against any reputational risk of a pilot that didn’t have the intended result.
• Determine what happens after the pilot: Hopefully, the pilot is the beginning of a long, mutually beneficial relationship. As the end of the pilot draws near and the outcomes are looking positive, it’s important to think about what’s next. Will you roll this out to all members or just a broader subset? If you plan to continue implementing, think about how you can adjust processes to make the next roll out even smoother.

Working with startups is a great way for provider and payer organizations to get promising, emerging products into the hands of members quickly. Getting started might be intimidating, but with planning and careful consideration, startups can augment your organization's existing efforts and improve patients’ experience and health outcomes.

Telosity is a Vinaj fund focused on investing in Pre-seed and Seed-stage companies improving mental wellbeing for 10 to 24 years old. Learn more at Telosity.co.