2024 Trends in AI and Health Tech

Summary

In 2023, artificial intelligence (AI) is poised to revolutionize healthcare, a sector known for being labor-intensive and inefficient. Bessemer Ventures has heavily invested in AI, recognizing its potential to streamline healthcare operations, from clinical decision support to drug development. The firm sees significant opportunities for AI in healthcare, with telehealth emerging as a key area post-COVID. Despite high valuations, the potential for growth is immense, and exits are expected in the coming years, particularly in digital health startups. Bessemer's investments span globally, indicating that innovation is not confined to traditional tech hubs.

Takeaways

• 🚀 Artificial Intelligence (AI) is becoming increasingly relevant in the healthcare industry, with the potential to revolutionize various aspects of healthcare.
• 💡 Bessemer Ventures has made a significant commitment to AI, recognizing its transformative impact on healthcare, particularly given the industry's inefficiencies and vast data.
• 📈 Healthcare is one of the most data-intensive sectors, accounting for 30% of the world's data, which AI can help manage and leverage effectively.
• 🛠️ AI's capabilities in automating tasks are particularly suited to healthcare, which is labor-intensive and could benefit from technological advancements.
• 💊 The application of AI spans across healthcare, including administrative tasks, clinical decision support, and drug development.
• 🌟 Despite AI being a longstanding concept, it's now gaining traction as a 'bright, new, shiny object' in the market, indicating a shift in perception and investment.
• 💼 Bessemer has been investing in AI in healthcare for over five years, anticipating a surge in new opportunities and the enhancement of existing companies.
• 💼 The healthcare industry's laborious nature makes it ripe for AI-driven automation, which can improve service delivery and administration.
• 📈 Valuations in the AI sector are robust, reflecting the sector's potential for significant growth and innovation.
• 🌐 Bessemer's investments are not limited by geography, with a global outlook that includes startups from various regions, showcasing the universal potential of AI in healthcare.
• 📱 The digitization of healthcare, spurred by the COVID-19 pandemic, has opened up new opportunities for telehealth and remote care delivery, which are key areas of investment for Bessemer.

Q & A

What commitment has Bessemer Ventures made to artificial intelligence (AI)?

Bessemer Ventures has made a large commitment to AI, recognizing its potential to impact various industries, particularly health care.

Why is AI expected to be particularly impactful in the health care industry?

AI is expected to be impactful in health care due to the industry’s labor-intensive nature and inefficiencies, as well as the fact that health care represents 30% of the world’s data. AI is well-suited for automating tasks and improving processes within this data-heavy industry.

How might AI revolutionize health care delivery?

AI can revolutionize health care delivery by automating administrative tasks, providing clinical decision support to clinicians, and enhancing the design and delivery of drugs, improving overall patient care.

How long has Bessemer Ventures been investing in AI technologies related to health care?

Bessemer Ventures has been investing in AI technologies related to health care for over five years, applying these technologies to various areas within the industry.

What changes has AI brought to the way services are administered in health care?

AI has begun to shift health care services to be more software-based, automating tasks that are typically performed manually by humans, making services more efficient and scalable.

What effect has AI had on the valuations of companies in the sector?

While valuations in the AI sector are robust and considered high, Bessemer Ventures believes that the opportunities AI presents are equally significant, particularly in health care.

Which previous platform shifts in technology are comparable to the current AI revolution?

Previous platform shifts like the transition from on-premise software to the cloud and the introduction of the iPhone are comparable to the current AI revolution in terms of their transformative impact.

How has the adoption of telehealth impacted health care delivery, according to the transcript?

The COVID-19 pandemic unlocked the potential of telehealth, which allowed patients to receive care remotely. Companies like Headspace Health and Hinge Health have capitalized on this shift, offering mental health care and physical therapy through digital platforms.

What kind of care does Headspace Health focus on, and why is it important?

Headspace Health focuses on delivering mental health care. This is crucial due to the global shortage of mental health clinicians, and the platform allows people to access quality mental health care through their phones.

Where does Bessemer Ventures find opportunities for health care innovation in terms of geography?

While Silicon Valley and Boston are known for innovation in tech and biopharmaceuticals respectively, Bessemer Ventures finds opportunities for health care innovation globally, investing in regions such as Minneapolis, North Carolina, London, and Israel.

Outlines

00:00

🤖 AI's Impact on Healthcare

The paragraph discusses the significant role of artificial intelligence (AI) in revolutionizing the healthcare industry. AI is poised to address the industry's laborious and inefficient nature by automating tasks and handling a vast amount of data. The speaker from Bessemer highlights AI's potential in various healthcare sectors, including payment administration, clinical decision support, and drug design. The investment focus on AI in healthcare is seen as a response to the industry's need for innovation and efficiency.

Keywords

💡Artificial Intelligence (AI)

Artificial Intelligence refers to the simulation of human intelligence in machines that are programmed to think like humans and mimic their actions. In the context of the video, AI is highlighted as a transformative technology in the healthcare industry, with the potential to automate tasks, improve efficiency, and revolutionize various aspects of healthcare delivery, from administrative processes to clinical decision-making. The script mentions AI's role in automating mundane but important tasks in healthcare, indicating its broad application and impact.

💡Healthcare Start-ups

Healthcare start-ups are new businesses that focus on innovative solutions within the healthcare sector. The video script discusses how AI can be particularly impactful for these start-ups, as they often look for ways to disrupt traditional healthcare models with technology. The script implies that AI's ability to automate and improve efficiency makes it a valuable tool for these emerging companies, which are at the forefront of integrating AI into healthcare services.

💡Bessemer

Bessemer is likely referring to Bessemer Venture Partners, a venture capital firm that invests in start-ups across various sectors, including healthcare. The script indicates that Bessemer has made a significant commitment to AI, suggesting that they see it as a key area for growth and investment. The firm's focus on AI in healthcare aligns with their strategy to back companies that can leverage this technology to improve healthcare services and outcomes.

💡Clinical Decision Support

Clinical Decision Support (CDS) refers to the use of computer-based systems to aid healthcare professionals in making clinical decisions. In the video, AI's role in CDS is emphasized, suggesting that AI can process and analyze large volumes of data to assist clinicians in diagnosing and treating patients more effectively. This highlights AI's potential to enhance the quality of care and reduce the burden on healthcare professionals.

💡Data

Data in healthcare refers to the vast amount of information generated by patients, providers, and systems that can be used to improve patient care and outcomes. The script notes that healthcare constitutes 30% of the world's data, indicating the sheer volume and importance of data in this sector. AI's ability to process and analyze this data is seen as crucial for improving efficiency and outcomes in healthcare.

💡Telehealth

Telehealth is the delivery of healthcare services remotely through telecommunications technology. The video script mentions that COVID-19 has accelerated the adoption of telehealth, and AI can play a significant role in enhancing these services. Companies like Headspace Health and Hinge Health are examples of start-ups leveraging AI to deliver mental health and physical therapy services remotely, respectively.

💡Valuation

Valuation in the context of the video refers to the process of determining the worth of a company, particularly in terms of investment. The script discusses how AI has become a hot space, leading to robust valuations for companies in this sector. However, the speaker also suggests that the potential for growth and innovation in AI justifies these high valuations, indicating a belief in the long-term value creation potential of AI in healthcare.

💡Platform Changes

Platform changes refer to significant shifts in the way technology is used or delivered, which can lead to major transformations in industries. The video script compares the current AI revolution to past platform changes, such as the move from on-premise software to cloud computing and the introduction of the iPhone. These changes created vast opportunities for innovation and entrepreneurship, and the speaker suggests that AI in healthcare could have a similar impact.

💡Exits

Exits in the venture capital context refer to the strategies by which investors realize returns on their investments, typically through an initial public offering (IPO) or acquisition. The script discusses potential exits for companies in Bessemer's portfolio, suggesting that the firm anticipates significant growth and successful exits in the coming years, particularly in the digitization of healthcare.

💡Biopharmaceutical

Biopharmaceutical refers to the sector of healthcare that focuses on the development and manufacturing of drugs based on biological processes. The video script highlights Boston as a hub for biopharmaceutical innovation, suggesting that AI could play a significant role in this area, from drug discovery to manufacturing processes. The mention of biopharmaceutical innovation indicates the broad application of AI across various segments of the healthcare industry.

💡Entrepreneurs

Entrepreneurs are individuals who start new businesses or initiate new business ventures. The video script emphasizes that entrepreneurs can be found anywhere, not just in traditional innovation hubs like Silicon Valley. This suggests a global perspective on innovation and the potential for AI-driven healthcare start-ups to emerge from diverse locations, reflecting a belief in the widespread impact of AI on healthcare.

Highlights

2023 is a pivotal year for discussions on artificial intelligence's impact on healthcare startups.

Bessemer has made a significant commitment to AI, recognizing its potential in healthcare.

Healthcare is identified as one of the most inefficient industries, ripe for AI-driven improvements.

Healthcare accounts for 30% of the world's data, presenting a vast opportunity for AI applications.

AI is expected to automate tasks, improve clinical decision support, and revolutionize drug design.

The conversation around AI has evolved from a shiny new object to a serious consideration in healthcare.

Bessemer has been investing in AI in healthcare for over five years, focusing on various applications.

AI is anticipated to shift healthcare services from labor-intensive tasks to more software-based solutions.

Valuations in the AI sector are robust, reflecting the significant opportunities in the space.

Platform changes like cloud computing and the iPhone have historically created massive economic impacts.

AI's potential in healthcare is considered uncapped, with exits expected in the next 5-10 years.

Bessemer has a history of successful investments, including Pinterest and LinkedIn.

The digitization of healthcare, spurred by COVID, has led to innovations like telehealth.

Companies like Headspace Health and Hinge Health are leveraging telehealth to address clinician shortages.

The potential for telehealth to deliver mental health and physical therapy services is vast.

Bessemer is looking at companies that can provide exits in the near term, indicating a strong market opportunity.

Entrepreneurship and innovation in healthcare are not limited by geography, with opportunities worldwide.

Bessemer invests globally, recognizing the universal potential for entrepreneurial spirit and innovation.

Transcripts

Ultimately, what 2023 is shaping up being is a conversation around

artificial intelligence, but that can affect each and every health care start

up or kind of. We at Bessemer have made a really large

commitment to AI. And I would say that health care is

actually one of the industries where it's going to be most relevant, most

impactful. And the reason for that is, you know,

health care is the most laborious, inefficient industry in the economy.

It's also 30% of the world's data. And so if you think about that

combination, what is artificial intelligence good at?

It's good at automating tasks in all parts of our economy.

But we think in health care it's going to be really impactful basically

everywhere from how the payment in health care is administered on the back

end, how health care is delivered by clinicians in terms of clinical decision

support, for instance, A.I. can be very impactful and then also how

drugs are designed and delivered to improve human health.

And so we think all aspects of the health care economy are going to be

revolutionized by the problem in 2023 is suddenly we felt that I was this bright,

new, shiny object and ultimately artificial intelligence being an unsexy

topic for years. And I'm interested as to therefore, for

you, was it about starting to amplify the story amid the companies you've

already backed, or is it finding new companies that are being built out of

this sudden change that we did see with generative A.I.?

I think it's both. We've actually been investing.

You're right, it's been around for a long time, these technologies, and we've

actually been investing in five plus years in terms of how these technologies

are applied to health care. And I mentioned some of the ways that

that could be. And so I think there's going to be

plenty of new opportunities that come out over the next decade of how I can be

applied to health care. But I also think for existing companies,

as you point out, I talked about how health care is a very laborious

industry. A lot of it's services, you know, humans

doing tasks that actually can be automated, that are pretty mundane but

are very important. And so we actually think A.I.

is going to shift services to more software like in in their

administration. And how how care is delivered.

What is it done to the valuation story of the companies that you're looking to

invest? It already have done well as a hot

space, and I think, you know, the valuations, the AI sector are pretty

robust, but we also think the opportunity is equally as robust.

And it's if you think about it, you know, in my career in venture, there

have been several platform changes, you know, moving from on premise software to

the cloud. That was a huge, huge shift in our

economy and created hundreds of billions, trillions of dollars of of of

innovation, entrepreneurship, the iPhone.

Right. Huge moment is also a huge moment.

So while, you know, valuations are heady, I actually think the opportunity

is almost uncapped. And so we're excited and that applies to

health care. I can be still and maybe even some

exits. I mean, talk to us about when you

thinking of Bessemer Ventures, I think of, well, some of the unbelievable

companies that have been gone public through the Pinterest that you mentioned

from early days and and some of the other CEOs.

LinkedIn's who are they in your current source of of portfolio companies that

you've invested in? Where do we see those exits coming from?

Yeah, I think it's the I wave were early in it and so I think those exits will

come in in you know 510 years. But right now one area that we've

invested in is just the the digitization of the health care economy.

Again, it's often been experience where people get their health care in person.

But we saw that COVID actually unlocked the whole idea of telehealth.

And so we think all throughout the delivery of care, whether it be

companies like Headspace Health or Hinge Health, Headspace is obviously focused

on mental health care, which, as you know, has been an area where, frankly,

there's a lack of supply of clinicians in in in the US and in the world.

And so a company like Headspace that delivers really important, high quality

mental health care to all, if you have a phone and iPhone again, that's a huge,

huge opportunity that we think is going to run for a long time.

And and also a company like Hinge, which is doing the same when it comes to back

or knee or hip pain, being able to deliver that care like physical therapy.

You don't have to go to see your physical therapist in person.

You can actually do that care via your iPhone.

Again, a huge market opportunity. We think those are the companies that

we're going to see, you know, get two exits in the near term.

You're based on the East Coast, but up in Boston, Yes.

Where are those opportunities coming from?

Where are these companies being built at the moment?

Do you think that you're going to be looking to in 2024?

I you know, we at Bessemer have long believed that, you know, Silicon Valley

is obviously a hotbed of innovation, but Boston's a hotbed of biopharmaceutical

and health care innovation. New York But frankly, we've invested all

over the United States and all over the globe.

We have offices worldwide. And so we actually think entrepreneurs

can be anywhere. And frankly, one of the things that, you

know, remote work taught us is that, you know, entrepreneurs are everywhere and

people can work everywhere. And so we've invested in everywhere from

Minneapolis to North Carolina to London, Israel and all across the globe.

And so I don't think entrepreneurs are limited in where they live.

I think it's the the that spirit lives everywhere and the possibilities are

everywhere.