Why a Silicon Valley Mindset Won’t Fix Healthcare

Let me start out by saying that I’m a fan of Silicon Valley. (The place, not the HBO show.) This isn’t to say that I’m a fan of every company, or every product, or every billionaire. But you can’t deny that the region has been a hotbed of technologic innovation for over 50 years. Take Steve Jobs for example. I don’t get the impression that he was a particularly nice guy, but the fact that I’m typing this newsletter on a MacBook Air should give you a hint that I admire his technologic legacy.

I’m also a huge admirer of the late Clayton Christensen, the Harvard Business School professor who supplied the Valley with its “Disruptive innovation” meme. Like Jobs, Christensen was an brilliant storyteller. 

But here’s the thing: When you have a compelling story, such as Silicon Valley’s, it can be tempting to try to apply it to, well, everything. Including domains where the story simply isn’t the right fit. Sort of like this Chinese chili sauce that my wife bought based on reviews on social media. The website says that it’s “Good on everything.” But trust me, it’s not. Any more than truffle aioli or Worcestershire sauce or Frank’s Red Hot Original is good on everything. A condiment only succeeds when it’s matched to an appropriate style of cuisine. The same thing also applies to entrepreneurship.

The basic Silicon Valley concept is pretty simple: pair a new technology with a story (i.e. hype) in order to gain a foothold against some less tech-enabled industry, and then scale like mad to try to disrupt. Sometimes this approach works brilliantly, e.g. Jeff Bezos vs bookstores. Or Netflix vs Blockbuster. But digital tech companies keep racking up failures when they turn their attention to healthcare. I told the story of Healtheon in a previous newsletter. Both Google Health and Microsoft HealthVault failed in their attempts to consumerize medical records. Elizabeth Holmes failed to miniaturize laboratory testing. Apple failed to make home-based diagnosis of atrial fibrillation mainstream, . I heard last week that Google just got FDA clearance for an wrist sensor alarm that goes off when your heart stops beating. None of these “innovations” have been medically useful, even if they tend to impress laypeople and journalists.

So what makes healthcare a bad fit for Silicon Valley-style entrepreneurship?

1. Complexity favors human experts over random trial and error alone. Silicon Valley fetishes rapid experimentation (move fast and break things) as a solution to just about everything, but experiments within complex settings work better when paired with both human creativity and sound theory. Think of this as the Shakespeare-and-Monkeys-with-Typewriters problem. Everyone knows that given enough monkeys typing randomly for a long enough time, they could produce all of Shakespeare's plays. Right? Except that when you do the math, even if you had as many monkeys as there are atoms in the known universe, and if they had been typing ever since the Big Bang, they would not yet have produced even a single Shakespearean page. The way to get interesting plays is to start with a bunch of really talented writers and then put them in settings that are supportive of their careers, not to start with mediocre writers and massively scale up their output.

2. Medical ethics requires that people don’t get hurt during the experimentation process. This is the “break things” problem with Facebook’s former motto. Elon Musk seems to get away with blowing up rocket after rocket, but even a single loss of life in a clinical research program can set that program back years.

3. Most importantly, healthcare isn’t a technology. It’s a technology-enabled service, in which factors such as affordability and human connection count just as much as the technical outcomes. The healthcare entrepreneurs most likely to make a lasting impact will be humanists in the tradition of Jonas Salk and the Mayo brothers. Not the crowd of technology-enthusiast anti-humanists who seem to dominate Silicon Valley these days. (Representative quote from Elon Musk: “The fundamental weakness of Western Civilization is empathy.”)

Having read down to the end of this newsletter, you might be wondering whether the theme was motivated by what’s going on in Washington DC these days. And you would be correct. Governments, especially democratic ones, have a lot in common with the healthcare industry, both in their complexity and in their human impact. But since this is a healthcare newsletter rather than a political one, let me just end on this thought: In Austrian economist Joseph Shumpeter’s theory of creative destruction, which is also a Silicon Valley meme, the creativity comes before the destruction. Destruction when you don’t have anything to replace it with is simply nihilism.