2019 J.P. Morgan Post-Event Thoughts — 3D Printing Off the Menu
J.P.Morgan Healthcare Conference attracts thousands of healthcare startups and investors from all over the world to San Francisco each January and is possibly one of the most impactful healthcare technology investment forums in the world. The city is overwhelmed with a slew of startup founders, investors, and service providers, each with their own ambitions and hopes and their best games in networking. Every SF bar is occupied by corporate receptions, and even hotel lounges start to charge a hefty hourly fee so that people can simply sit down and have a meeting. (Secret: The Westfield Mall food court is free.) In addition to the main conference hosted by JP Morgan, many other conferences with related themes also took place with the same goal of connecting healthcare startups and investors, and in between service providers. Some of the notable events include RESI (Redefining Early Stage Investment), many medtech events organized by WSGR, and high-level healthcare forums by McDermott Will & Emery. By Tuesday, I was already exhausted from all the networking, conferencing, and receptions, but I took as many notes as I could, and here are some trends and tips I observed. Hopefully, these will be helpful to the 3DHEALS community, which also hold our first successful JP Morgan reception with our partners at Nixon Peabody.
1. Less “Disruption” and more “Integration”.
Throughout all the conferences I attended, there is a definite trend towards a change in presentation. In the homeland of Disrupt SF (TechCrunch) and rebellious history of the bay area, the switch of attitudes shows a new level of humbleness and wisdom after years of attempted, and perhaps unsuccessful, “disruptive” healthcare innovations. There is a growing trend of startups being more “inclusive” towards healthcare providers throughout product development and a lot more emphasis on technology integration with existing healthcare workflow. This is especially obvious in the realm of AI (artificial intelligence) based startups, since replacing the healthcare workforce used to be a more touted endpoint.
2. Artificial Intelligence, or “Neural Learning”?
No, not 3D printing (or bioprinting). A.I. remains to be the buzzword in healthcare this year. But people in industries focusing on decentralized manufacturing, automation, and robotics should all take notes.
As one investor tweeted, “ After hearing “We use AI” 4,345,812 times at #jpm19, I just got told by a company “oh no we’re not just another AI company…we use neural learning” and my eyes rolled so far back in my head they popped out the back and rolled down market street. If seen please return them to me…” (@geoffclapp)
The fervor is fueled a general dissatisfaction with existing healthcare systems (anywhere in the world), a number of tech giant’s involvements lately, an economic drive of democratizing high-level skills to lower-skill workers, and a more well-defined FDA clearance pathway. An A.I. based startup can now reportedly get FDA 510(k) clearance 5–8 months. Reportedly. The main challenge to investors will now be over-valuation. The main challenge to startups will be real returns, from reimbursement to non-incremental clinical benefits.
3. Money from Asia
During JPM19, there appears to be a sudden surge of Chinese and Asian investors. Even in a city like SF, it is unusual. There were several sessions during RESI focusing on fundraising from China or Asia. China/Asia clearly has a surplus of capital, and U.S./European based startups seem to be the safer bets due better-defined political, legal, and economic structures. However, not all money is equal. Notably, CFIUS was repeatedly mentioned during several of my meetings. It is a government entity authorized to review investment/transactions involving foreign investment in the United States, in order to determine the effect of such transactions on the national security of the United States. Given the current volatile China-US relationship, and volatile international relationships in general, tread carefully is probably the best advice to startups and investors alike, since no one seems to know where the world is going next.