Part 2: Four Ideas for 3.0
In Part 1 of this series, I wrote about the transition from 2.0 to 3.0 in mental healthcare technology and why we are paying attention to it. What might it look like to create a scalable, defensible, networked mental health 3.0 company? Four ideas:
The best mental health services might not look like mental health services. Just as so much online learning happens on TikTok and YouTube, mental health 3.0 companies will innovate in form and model. On the surface, they won’t look like mental healthcare companies, and may leverage a content studio, gaming, or AI in new ways. Mental health companies “in disguise” have a real opportunity to address a wider swath of the market than users explicitly searching for a therapy solution.
Narrow market wedge is > broad market entry wedge. Care by subspecialty (eg, LGBTQ-focused mental health, eating disorders, elderly care) might create more interesting defensibility than a commoditized general model where marketing spend creates a race to the bottom. This is especially relevant when less than half of those with mental illness receive the care that they need and underserved populations are disproportionately affected. Other narrow wedge examples include addressing medication needs or building enablement tools, such as a platform to empower anyone to build and lead a support group.
Video isn’t everything. Video-based telehealth is exploding, but it’s not the only effective model. Asynchronous text-based care functions at lower cost with greater scale and can effectively augment other modalities of care. Crisis Text Line crossed 100M messages in 2019 and 20% of its volume comes from areas with the lowest per capita income in the country. The National Eating Disorder Association reported a 78 percent increase in messages sent to their helpline in March and April compared to that time period last year. Asynchronous text-based care also gives an important feeling of control and consistency back to the user.
D2C2P. In my first post, I mentioned the importance of insurance coverage to broaden access to care. Tailwinds indicate that payers are increasingly open to covering digital solutions, but the most capital efficient way to initially scale is to go direct-to-patient. This model (see Nurx, Modern Fertility, Abridge) also works because it gives users control of their health at every step of the process. One strategy is D2C2P (direct-to-consumer-to-payor). First, build a strong direct-to-consumer product for a population inside of a payor, show efficacy and build a robust outcome data set, and then get the payor to cover more of the cost. It’s important to have proven and measurable outcomes here as payers won’t consider partnerships with a digital mental health company without a foundation of clinical and financial outcome data.
Mental healthcare sits at the intersection of several core themes for USV: access to wellbeing, unbundling healthcare, and trusted brands. The most exciting aspect of the shift to 3.0 is that these new platforms will bring affordable mental healthcare to more people than ever before. We are still at the beginning of this opportunity.
We’re eager to find opportunities to invest in companies working on this pervasive problem in new ways. If you are an entrepreneur building a 3.0 company in mental healthcare, we would love to talk to you.