4 Things to Love & Learn About the American Heart Association’s Crowdfunding Challenge
On Valentines day, it seems fitting to discuss matters of the heart.
The American Heart Association (AHA) is doing something innovative to improve heart health by 20% by 2020. The AHA issued an Open Innovation Challenge to entrepreneurs in the medical marketplace to improve heart health. Currently they are in the final stages of selecting the winner and will announce the winners on March 6th. The AHA is using the crowdfunding site Medstartr to run the program.
What is the challenge
Here is the challenge the AHA issued to potential participants:
“Our Open Innovation Challenge invites you to create a solution and submit your early stage product that uses consumer technology to help people prevent and/or manage cardiovascular disease and stroke. We know the next big idea is out there in the crowd, and our challenge gives innovators the chance to win money and share their invention with the world.”
What entrepreneur doesn’t want to take on that challenge? “You mean to tell me I can share my invention with the world and get money for doing it? Awesome, I’m in!” said the medical entrepreneur. They even said “we know the next big idea is out there in the crowd”, for the optimist this is all they need to hear! This type of challenge stirs the competitive spirit. By putting up the funds for the challenge it allows the creators to concern themselves with what they do best: design solutions to existing issues. It also allows the investors to do what they do best: analyze an idea to see if it’s scalable. This challenge allows people to do what they do best and leave the rest to the others.
How does it work
Medstartr is a crowdfunding site dedicated to the medical profession. Medstartr’s website boasts that their model finally makes it possible to crowdfund in this sector. They also boast a 68% success rate with their projects. To put that in perspective Kickstarter is at about 44% while Indiegogo is at 34% according to the Canadian Media Fund.
Medstartr says their projects are too important to fail. They offer many benefits to those who campaign on their site such as editing copy, providing a mentor, promoting the idea and partnering with another expert just to name a few. The number of services offered to individual projects and the opportunity to partner are helping the success rate remain higher than the industry average.
Projects that tug my heart strings
Captureproof is an app that allows doctors and patients to use videos and photos to explain symptoms, track progress and get faster diagnosis with fewer appointments. It is compliant with health care laws like the Health Insurance Portability and Accountability Act (HIPAA). This idea is leading the way for the challenge at 39% funded.
WellTexts, a service that provides text message reminders when to take medication. It does not stop there though, patients must respond or the app sends a to other people who look after them. Talk about accountability! The online portal enhances the functionality because it allows the clinical staff to access who has taken the medication and who has not. Because the service has a well rounded group of interactive platforms it provides benefits to the patient, the loved ones and the medical professionals.
What’s to Love & Learn
Love: 3 Winners all get $25K then present to a panel. I love this idea because it includes more ideas that will get funding. As opposed to a winner take all mentality this idea will shine the light on many people with great ideas. I think of American Idol as an example of how this can play out in the “losers” favor. Jennifer Hudson was in 7th place in her season of American Idol, what about the other 6? They are not even close to her level of stardom. Her album won a Grammy and Hudson went on to win an Academy Award for Best Supporting Actress. Amazing! Somebody saw talent and tweaked it from singing to acting and here you have a star. The potential is here as well because the 3 finalists will all have a stage. Regardless of who wins it gives them all a chance to impress perhaps a different panel of judges.
Learn: A brand or an association can influence entrepreneurs in their market to run a campaign. Then they can fund the best ideas, as opposed to creating the idea on their own. Nonprofit organizations who are always looking to invest in innovative ideas can learn from a contest like this one to fuel innovation in their own industry. Watching the challenge grow to the popularity it has, tells me that it can work in other industries as well. Now as important as the heart is to the human body, there are other industries that speak to a consumer’s soul. The organization that has the capital may not be the most creative or solution oriented group. When you have entrepreneurs innovating out of necessity or passion you can have some rich ideas blossom. These larger organizations can use challenges to start a conversation in a marketplace and allow the crowd to bring out ideas.
Love: The top 10 all get to keep their money. So no matter what happens their time will not be fruitless. I know that we live in the “everybody gets a trophy” society, which teaches people that it is ok to lose. I am not ok with that. It is important to recognize that a good idea is still a good idea and deserves whatever funding they earn. Just like there is a person that “needs” an Apple iPhone there is also a person who needs the Kyocera Kona to make phone calls. For every person that “has to drive” the Mercedes Benz E350 sedan there is still a need for someone to drive the Kia Optima. Just because you are not the winner does not mean you do not provide value to the market. Allowing the top 10 submissions to keep their money and add value to the marketplace, helps achieve the AHA’s ultimate goal of bringing consumer technology into the fold to reduce heart problems.
Learn: The partnership aspect of the site is quite intriguing. They have over 50 partnerships with other organizations from venture capitalists to government entities to hospitals. This platform allows the larger organizations to place challenges in the marketplace for smaller companies. The smaller companies can operate with a great sense of certainty knowing that they are working on an idea that has an opportunity to be funded. This takes some of guess work out of the equation. As opposed to rolling the dice and hoping your idea is what an investor is looking for or vice versa where an investor is looking for that gem. The partnership aspect allows the attraction to occur without the chance. It is like the difference between going on a blind date from a random dating site or being setup by your best friend and you already know the other person’s preferences. While you might hit it off with the random encounter, chances are good that if a third party puts you together based on your needs it will be a better fit. Currently they have over 100 partnerships and have launched other types of campaigns to encourage these type of interactions.
On March 6th it will be interesting to see who does well and wins the contest. It will also be interesting to see how other crowdfunding institutions put in place a similar model to their campaigns.