Why some healthcare startups start by selling to consumers — and how to know if you should
I was talking recently with a founder who’s spent the past few years trying to sell his product to pharma. After a long road of pilots and slow-moving deals, he’s now launching direct-to-consumer, with plans to renew the Pharma efforts later on. I mentioned to him that this is a common strategy, D2C and then B2B. He said, “I wish you had told me that a year ago, I could have learned faster, built more traction, and then gone back to pharma with real data.”
So in the hopes of helping the next startup down the road, I thought I’d lay out some thoughts on the reasons to go D2C first in healthcare.
In healthcare, the person using your product is often not the one paying for it. B2B models (selling to employers, payers, pharma or providers) are enticing because they often mean higher pricing and more stable revenue, but they can take years to build and come with their own challenges.
Sometimes it actually makes more sense to start with consumers first. You can get into the market faster, collect data, refine your product, and build credibility before going after enterprise buyers. For some companies, D2C becomes a pathway to B2B, but for others, it remains a viable business model in addition to (or instead of) B2B.
Why You Might Go D2C First
Generate Data and Refine the Product
Going direct gives you faster feedback loops. You can see what users actually do, where they drop off, and what features matter most. That data helps you make your product better and more engaging before bringing it into enterprise settings.
“The company chose this model to further its goal of product excellence — shortening the sales cycle and collecting user data rapidly, then applying the information into the product-development life cycle.”
— Erez Raphael, CEO of DarioHealth
Proof of Demand and Early Revenue
B2B sales in healthcare can take years. A D2C model lets you show traction and willingness to pay while you wait out those cycles, and also gets early revenue in the door. One company even added a “see if your employer covers this” button and then used the responses to show employers that employees were asking for it.
Regulatory Pathway and Speed to Market
If your long-term goal involves a regulated product, it will take you a long time to get to market. A non-regulated version (e.g. an early version of your product focused on wellness, education, or tracking) can get you into the market faster. That early launch helps you start collecting users, learning from them, and showing engagement while you work toward the regulated version that might be more suitable to B2B healthcare customers.
Build Brand and Credibility with End Users
When you’re early, large organizations might not take you seriously. Starting D2C helps you build brand awareness and credibility so that later, those same organizations come to you (or at least answer when you knock).
“We can’t talk about women’s success at work without talking about menopause … We are expanding rapidly to ensure that we can support employers and employees in all 50 states with Midi’s care.”
— Joanna Strober, CEO and Co-founder, Midi Health
Test Which Model Actually Fits
Sometimes you don’t know which model your product is really suited for until you try. Going D2C, while it requires a certain skill set, is an easier path to rapidly test and see if you find product market fit.
“We were B2C for a year, trying to get patients in the park. We realized the benefits market was taking off, and we got our first B2B client a year later.”
— Kate Ryder, CEO and Founder, Maven Clinic
Some companies use D2C as a bridge to B2B. Others keep both because each serves a different role. Oura Health is an example of that “We’ve already seen significant traction with enterprise customers and are excited to continue growing these offerings as part of the next phase in ŌURA’s evolution.”
— Tom Hale, CEO of Oura Health
Is DTC right for your business?
As you figure out the right model for your business, here are some questions worth asking:
- Is DTC a good fit for your product? For which group is it a must-have versus a nice-to-have?
- How much could you charge consumers? Is there willingness to pay? Would this business model sustain you long term?
- Can your team realistically manage both GTM approaches in parallel? (Or can you shut one down)?
- What changes would you need to make to the product for each audience?
- How concentrated or diversified is your revenue risk?
- Which model helps you get the data and validation you need for the next phase?
There’s no single right answer. For some companies, D2C is a short-term bridge; for others, it’s a core part of the strategy. The key is to be deliberate about why you’re doing it and what you’re trying to learn or prove along the way.
