Investors work to place the right bets in health care

As an industry, digital health is at an interesting point, where smartphones and tablets allow consumers to create and upload massive amounts of personal data without expending much effort, and cloud computing allows them to track and share that data with doctors or the public in ways they’d never been able to before. But whether entrepreneurs are focusing their efforts and their funding on the right problems is still up for debate.

Some investors and casual observers have made the argument that investors are only interested in shallow photo-sharing apps or new social media products — not products that will cure cancer or tackle big problems. Rupert Murdoch tweeted his displeasure with Silicon Valley focus after a recent visit:

But incubators like Rock Health, which announced Tuesday a partnership with Kleiner Perkins that will bring funding for its individual companies in digital health to $ 100,000, are working to dispel the idea that Silicon Valley isn’t tackling the most important problems. It’s working with digital health startups using technology to address a wide range of issues in the health care arena.

Investor Esther Dyson said at Rock Health’s Health Innovation Summit in San Francisco on Tuesday that she thinks health care is one of the most rewarding areas of growth in tech, and that by pairing technology with existing human tendencies or behavior, companies can make huge strides in furthering personal health goals.

“That’s why I’ve stopped investing in video-sharing for rich white guys,” she said.

Dyson, along with Dave McClure of 500 Startups, noted on a panel Tuesday that sometimes it makes more sense for entrepreneurs to tackle specific, smaller problems that are important to a small subset of people, because they allow for easier wins and greater immediate impact, even if the solutions don’t seem like ground-breaking innovations.

“There are plenty of really small problems staring us in the face,” McClure said.



GigaOM