Music may still be the entrepreneurial heart and soul of Nashville, but health care companies are also striking a resounding chord in the Southern city — to the tune of $38.8 billion.
That’s the annual economic benefit Music City’s health care industry generates annually, to go along with more than 250,000 jobs, according to estimates by the Nashville Health Care Council and the Google-supported Nashville Entrepreneur Center (NEC). In all, about 4,000 health care-related companies — approximately 18 large-scale, publicly-traded enterprises included — have operations in the soon-to-be-Google-Fiber-equipped urban hub, and that high density has bred innovation and new entrepreneurial ventures in and around the city.
“Nashville has long been a hotbed for industries like healthcare and music, so to see strong technology-based startups now being built in those industries is very exciting,” Bridgette Beam, Google for Entrepreneurs’ head of global programs and operations, told Free Enterprise.
Nashville — which ranked 13th out of 25 rising American tech hubs for healthcare-specific tech startup activity in the latest Innovation That Matters study (a joint project between Free Enterprise, the U.S. Chamber of Commerce Foundation and 1776) — is one of nine U.S. tech enclaves in the Google for Entrepreneurs network. The Mountain View, Calif.-based Internet giant works closely with the NEC, providing the downtown accelerator with “technical content, business tools and infrastructure upgrades so they can support increasing demand from developers and startups and help grow their local economies.”
Home to 21 accredited four-year and postgraduate institutions, along with two medical schools and teaching hospitals, the city is the third largest college town in America, according to Nashville Technology Council communications director Alex Curtis. “Studies have shown that academic medical centers serve as ideal locations for startups to test health care innovations,” he wrote in an email.
One of the rising startups locally testing healthcare innovations — and contributing to the Greater Nashville healthcare economy in the process — is Dose Healthcare. Through its mobile app and online hub, the telemedicine newcomer offers in-home healthcare professional visits to customers throughout Tennessee to treat a wide range of symptoms, illnesses and conditions.
Co-founded in late 2014 by CEO Cole Hawkins and COO Jade Preis, the 15-employee company is anchored out of the heart of Nashville, just about halfway between The Gulch, a buzzy business, retail and restaurant hotspot, and the legendary Music Row.
“What we wanted to do was leverage modern, on-demand technology to quickly, conveniently get people the health services they need, even urgent care,” Hawkins, a Nashville native, said in a phone interview. “If you can have a pizza or a bag of Skittles delivered on a whim, or Uber come pick you up or bring you lunch, you should be able to have a doctor come to you on your schedule and turf, too.”
Hawkins says Nashville felt like a natural place to launch a pioneering digital health venture out of, given its widely recognized history of firsts in the healthcare field. He credits the 1968 Nashville launch of Hospital Corporation of America — one of the first for-profit hospital companies in the U.S. — for paving the way for up-and-coming health-tech startups like his. The corporation, now called now HCA Holdings, Inc., continues to foster early stage healthcare venture growth today through its investment fund, Health Insight Capital.
“HCA really started it all,” Hawkins said. “They turned the country’s healthcare system into an industry, opening it up to players of all sizes across the spectrum.”
While Hawkins was inspired by HCA’s lasting impact, he did not, however, launch out of its investment fund. He followed a different path, at first bootstrapping his business and, later, accepting $150,000 in seed funding (in exchange for 7.5 percent equity) from a similar Nashville healthcare innovation fund called Jumpstart Foundry. Not only does the fund invest in nascent health-tech ventures, he says, it also provides them with the resources and mentorship needed to achieve long-term success.
“There are a lot of issues facing the healthcare industry today and the healthcare leaders in Nashville are starting to look at innovation to solve their problems,” Jumpstart Foundry program manager Eller Mallchok told Free Enterprise in an email. “Lots of money and big problems = innovation ecosystem.”
Speaking of money (and money problems), Mallchok added that she’s noticed a significant gap in “smart money” for local early stage healthcare tech companies. It’s a gap she and her Jumpstart colleagues intend to bridge, one local seed investment at a time.
She explained: “There are angels who get in early and may have a few good connections, and then there are venture capitalists who want to fund companies once they hit $1 to $2 million in revenue, but there’s not a whole lot in between. We aim to be strategic early stage investors, and when we say early, we really mean it. It takes time for healthcare companies to show significant revenue due to lengthy sales cycles. That’s why we focus on the core product and a team’s ability to take it to market when investing, not revenue numbers.”
In addition to Dose Healthcare, Jumpstart Foundry has injected growth capital in some two dozen digital health startups to date. Among them, some of the standouts to watch are: Nicotrax, Inc., an online and mobile smoking cessation solution marketed to employers and health plans; CaredFor, Inc., an online and mobile platform that provides long-term sobriety peer support to addiction treatment center alumni; Spiras Health, a patient-facing clinical solution to help payers manage uncontrolled asthma and COPD patients; and AkibaH, Inc., creator of GluCase, a groundbreaking smartphone case embedded with a blood glucose reader for diabetics.
The above is but a small sampling of a booming wave of innovative, millennial-driven health tech startups hatching in Music City these days. Neither Hawkins nor Mallchok see the tide subsiding anytime soon, not as long as Nashville maintains its fresh identity as a magnet for young, motivated, tech-savvy innovators.
“Nashville is fun. There’s no getting around that,” Mallchok said. “We’ve got great food, great music, really nice people, and I think the city inherently attracts young, driven and creative people. When you have young creatives clustering in a fun city like this, it doesn’t take long for it to start resembling a tech startup and innovation hub.”