Deloitte Consulting estimates that between 2017-2022, global healthcare spend will grow 5.4% annually to be a $10 trillion industry [1]. While healthcare accessories only make up small subset of that industry, the wearable industry is expected to grow to $48 billion by 2023 thanks to innovative companies who have embraced platform business models [2]. One company in particular that I believe has been innovative, despite a near complete financial collapse, is Fitbit.<\/p>\n
Smart Wearables + Enterprise Platform = New Opportunities<\/p>\n
Seemingly everything in our daily lives has become \u201csmart.\u201d From telephones and cars to doorbells and refrigerators, there\u2019s hardly a device in our lives that isn\u2019t connected to the internet and analyzing data in some way. Fitbit, founded in 2007, started as a consumer electronics company that tried to take advantage of that trend. Their smart fitness trackers were best sellers, until the more functional Apple Watch was released in 2015 and Fitbit lost 50% of market value over the next year. Realizing that Fitbit couldn\u2019t survive solely as a consumer electronics company, CEO James Park announced a transformation to a \u201cdigital healthcare company\u201d [3]. Then, in September 2018, Fitbit announced the launch of Fitbit Care, an enterprise healthcare platform for wellness, prevention, and disease management [4]. According to the company, Fitbit Care is \u201ca connected health platform for health plans, employers, and health systems that combines health coaching and virtual care through the new Fitbit Plus app, Fitbit\u2019s innovative wearable devices and self-tracking and personalized digital interventions to help improve wellness, disease management and prevention.\u201d<\/p>\n
Instead of selling Fitbit devices directly to consumers, Fitbit is using their new platform to sell through partnering companies and healthcare providers. Through this enterprise-only strategy, Fitbit released two new smart wearables, the Fitbit Inspire and Fitbit Inspire HR, that will only be available through the Fitbit Care platform [5]. Through the platform, users will get access to \u201cpersonalized digital interventions\u201d \u2013 which include social support tools, challenges, private social groups, and guided workouts. Users will also gain access to health coaches to create personalized care plans and virtual communication with healthcare providers. To gain users and jumpstart network effects, Fitbit partnered with Humana, Blue Cross Blue Shield, and United Healthcare.<\/p>\n
I think that Fitbit\u2019s shift toward an enterprise-only platform model is innovative because it shows how a platform can create more value when combined with a physical device than a physical device alone can create on its own. Without the platform, Fitbit (and just about every other fitness wearable) wasn\u2019t able to compete with all of the features that come with the Apple ecosystem. By partnering with health insurance companies and employers, Fitbit is taking advantage of the growing trend of employers trying to find ways to cut healthcare costs and shift toward virtual health. By going through enterprise partners, they don\u2019t have to rely on consumers to make the choice. Additionally, working with large employers allows them to sell a large volume of devices at once and set up a new stream of recurring revenue. By gaining large volumes of users through those enterprise partners, they\u2019re able to create network effects and scale much faster than selling to individual consumers.<\/p>\n
Fitbit Care is in its infancy and the jury is still out about whether or not it will be successful, but I believe the enterprise-only platform model was a smart pivot for a company that almost failed as a consumer electronics maker.<\/p>\n
[570 words]<\/p>\n
Sources:<\/p>\n
[1] Burrill, Steve, and Steve. \u201c2019 US and Global Health Care Industry Outlook.\u201d\u00a0Deloitte United States<\/i>, 25 Jan. 2019, www2.deloitte.com\/us\/en\/pages\/life-sciences-and-health-care\/articles\/us-and-global-health-care-industry-trends-outlook.html.<\/p>\n
[2] Research, P&S Market. \u201cWearable Fitness Trackers Market to Reach $48.2 Billion by 2023: P&S Market Research.\u201d\u00a0GlobeNewswire News Room<\/i>, “GlobeNewswire”, 28 Mar. 2018, globenewswire.com\/news-release\/2018\/03\/28\/1454453\/0\/en\/Wearable-Fitness-Trackers-Market-to-Reach-48-2-Billion-by-2023-P-S-Market-Research.html.<\/p>\n
[3] Stevenson, Abigail. \u201cFitbit CEO Reveals He’s Transforming the Mission and Purpose of the Company.\u201d\u00a0CNBC<\/i>, CNBC, 6 Oct. 2016, www.cnbc.com\/2016\/10\/06\/fitbit-ceo-reveals-hes-transforming-the-mission-and-purpose-of-the-company.html.<\/p>\n
[4] \u201cFitbit Launches Fitbit Care, A Powerful New Enterprise Health Platform for Wellness and Prevention and Disease Management.\u201d\u00a0Fitbit, Inc.<\/i>, investor.fitbit.com\/press\/press-releases\/press-release-details\/2018\/Fitbit-Launches-Fitbit-Care-A-Powerful-New-Enterprise-Health-Platform-for-Wellness-and-Prevention-and-Disease-Management\/default.aspx.<\/p>\n
[5] Truong, Kevin. \u201cFitbit Launches New Enterprise-Only Products as Part of New Strategy.\u201d\u00a0MedCity News<\/i>, MedCity News, 27 Jan. 2019, medcitynews.com\/2019\/01\/fitbit-launches-new-enterprise-only-products-as-part-of-new-strategy\/.<\/p>\n","protected":false},"excerpt":{"rendered":"
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