For all the handwringing over corporate influence and overcrowding and prohibitive expenses, the annual South by Southwest festival still draws thousands of attendees to the state capital each year. This year’s conference, which wrapped up on Sunday, was dotted with more than a few Dallas-area healthcare entrepreneurs who fled south for a few days in the hopes of getting word out about their companies to folks who would’ve never heard it otherwise.
And a few walked away with rewards. Health Wildcatters, the Dallas-based startup accelerator, learned on the first day of the festival that it had been ranked as one of the nation’s top healthcare incubators, as chosen by researchers at MIT, Rice University, and the University of Richmond. Dallas’ Mend, which provides on-demand urgent care services through an app, topped thousands of applicants to win a pitch competition judged by a pair of tech company CEOs and the director of the U.S. office of Innovation and Entrepreneurship. Noninvasix, a Health Wildcatters graduate now based in Galveston, came in second place in a similar pitch competition.
Others, like Plano’s pediatric on-demand healthcare tech company PediaQ, said the exposure alone was more than worth the trip—a number of hospital system representatives from outside North Texas made their way to the company’s booth. CEO Jon O’Sullivan said his inch-and-a-half stack of business cards vanished by midway through the first day.
“It’s an annual conference that brings together a lot of the innovators in our region, so it’s very relevant for us to go and for our startups to be there,” says Hubert Zajicek, the co-founder and executive director of Health Wildcatters. “I think it is quite expensive but, gosh, this has been expensive ever since we started going 12 years ago.”
Quite expensive: meaning that the Interactive portion of the festival cost upwards of $1,300 for a badge, plus an additional $1,800 to $5,000 for a space on the Health & MedTech trade floor. Health Wildcatters brought nine of its past graduates. This is the second year that South by Southwest has dedicated a floor to healthcare and biotech companies. Officials haven’t announced total attendance, but last year brought more than 5,000 and north of 70 booths and presenters. Some of those walking in jeans and Polo shirts were really from the innovation department of Walgreens, a company that has dedicated much time and resources to building their in-store clinics. Zajicek says those moments don’t happen often out in the world, which makes the event worth a gamble.
“You don’t know who’s going to walk up to you,” he said. “And you don’t know who they are because they’re all wearing jeans and T-shirts. People will chat you up and say something about working for a big (venture capital) firm. Like, what? Really? People really are coming down.”
O’Sullivan, the CEO of PediaQ, said he met with representatives from about 10 pediatric hospitals, including Texas Children’s Hospital in Houston and the Dell Children’s Medical Center in Austin. The company, which launched last year in Plano, has a goal of partnering with health systems that would be able to use its software. Currently, he says the startup has succeeded in providing after-hours urgent care to patients in Collin County. Its nurse practitioners have logged more than 1,500 house calls with “very, very high patient satisfaction” marks that O’Sullivan and his staff are able to show potential partners. Mostly, these reviews are public, primarily posted to Facebook. PediaQ is in-network with Blue Cross Blue Shield of Texas, O’Sullivan says, which the company is using as leverage in contracting with other plans.
“Part of the strategy will be to really approach a wide number of children’s hospitals across the country and release our model to them,” he said. “There were a number of people who came by (the booth) looking at different ways to innovate the delivery of care.”
Mend and Noninvasix went beyond the booth, participating in pitch competitions during the early days of the conference. Noninvasix took second place in the $50,000 pediatric pitch contest held by Impact Pediatric Health. Mend was one of three winners of the 2016 ReleaseIt competition, which pitted the year-old startup against 10 others who had stood out of the pack of more than 4,000 applicants. The judges included Venture Hive CEO and founder Dr. Susan Amat; Julie Lenzer, the director of the U.S. Office of Innovation and Entrepreneurship; and Marc Nager, the CEO of UP Global. Jonathan Clarke, the founder and CEO, got three minutes to tell a standing room only hotel conference space why it will be profitable, what problem it’s solving, what its market strategy is, and how the leadership team can pull it off.
Mend offers urgent care services to adult and pediatric patients using a smartphone app. They recently partnered with Children’s Health and are on pace to turn a profit by 2017.
“This is really more about the concept and bringing to life these innovative ideas,” Clarke said. “You have panels that are talking about how healthcare is being disrupted and how companies and physicians are disrupting things to make healthcare better for consumers, more convenient and more affordable. This was a common thread throughout so many of the (SXSW) sessions: The home is going to be the hub of healthcare in the future.”
And Health Wildcatters, what many consider to be the region’s chain linking healthcare innovators and investors and mentors, got a nice kudos as well to start the festival. The Seed Accelerator Rankings Project—judged by Yael Hochberg of Rice University and MIT’s Innovation Initiative Lab; Susan Cohen of the University of Richmond; and Daniel Fehder also of MIT’s Innovation Initiative Lab—placed it on its list of the 23 best accelerators in the country. It was placed in the silver category and was one of only three healthcare-related to make it.
The judges invited 150 accelerators to participate and weighed them based on valuation, whether one of its companies has cashed out in a qualified exit, whether its startups have raised $200,000, and the percentage of its startups still in business. Health Wildcatters has graduated just three classes of young companies, which have raised more than $12 million. Zajicek brought nine of those companies with him to SXSW.
“It’s a positive thing to be exposed to different people and different approaches and innovative new ideas,” he said of the festival. “It has its relevancy in healthcare innovation, and it’s a good thing. But it may be a little bit worn thin on new for new’s sake. But it’s clear that people are sending the big outfits and their folks out there.”
