Recently, my colleague Mark McConnell and I hosted a breakfast meeting with around 40 local C-Suite executives within the life sciences sector. Paul LaViollette, Managing Partner and Chief Operating Officer of SV Health Investors, joined us from Boston to share his thoughts on where the life sciences and healthcare industries are headed in the next 24 months. As the year draws to a close with M+A activity and deal pipelines progressing slowly, Paul shared his insights and key focus areas for 2024.
1. Sustained Demand for Healthcare: Delivery + Technology as Growth Drivers
Overall hospital activity and demand for healthcare services, procedures, and care remains incredibly strong and will continue to be a driving force for life sciences in 2024. In terms of industry growth, this demand will continue to challenge the status quo and require deeper innovation, disruption, and advancement, specifically around the delivery of healthcare. Companies can expect to see a continued push for innovative solutions, technologies, and products that will help further close these gaps and inefficiencies. As technology continues to evolve at such an accelerated pace, companies will need to keep pace to raise capital and remain competitive as incrementalism becomes less attractive for investors. In terms of innovation, cash flow in this area will remain strong into 2024.
2. Stay Focused on Funding + Alignment
Paul emphasized the importance of maintaining strategic alignment with your investor’s purpose and value in 2024. Recently, we’ve seen more start-ups strategically raise funding and target PE firms that align more closely with who they are as an organization and their value proposition. Staying hyper-focused on your company’s identity will clarify opportunities and achievable goals, helping to identify the most suitable partner.
3. Your Team + Talent is Your Greatest Asset
Lastly, Paul shared that any company’s greatest asset is its strong leadership team. In the post-pandemic era, talent mobility reached unprecedented levels due to the Great Resignation and Great Reshuffle. As a result, investors learned that performance and return on investment were highly dependent upon retaining senior executives for the longer-term. Once a key leader left the organization, the product or team would quickly and easily slide backward or stall. With the right leaders in place, the strategic direction, momentum, and vision for the organization remain core focuses for everyone, and this stability helps guide and push innovation forward. Investors are finally realizing that ROI cannot be based solely on the valuation of a product or service, but has to be tied to supporting the right team that can transcend growth and results across the organization.
As a search consultant and executive recruiter, I partner with startups, venture capital firms, and publicly traded companies in the life sciences sector. With today’s economy at a crossroads and scarcity increasing as legacy leaders retire from the C-Suite, I advise investors to look and hire for these key traits in senior leadership teams, especially looking forward to 2024.
An Adaptive Mindset
Overall hospital activity and demand for healthcare services, procedures, and care remains incredibly strong and will continue to be a driving force for life sciences in 2024. In terms of industry growth, this demand will continue to challenge the status quo and require deeper innovation, disruption, and advancement, specifically around the delivery of healthcare. Companies can expect to see a continued push for innovative solutions, technologies, and products that will help further close these gaps and inefficiencies. As technology continues to evolve at such an accelerated pace, companies will need to keep pace to raise capital and remain competitive as incrementalism becomes less attractive for investors. In terms of innovation, cash flow in this area will remain strong into 2024.
Realistic Goal-Setting
Leaders in life sciences and healthcare must be strategic and realistic in every aspect of the business and organization. Risk mitigation will remain a challenge for many start-ups, but a strong leader will be able to identify, prioritize, and triage short-term risks while keeping a firm eye on long-term goals. This ability to strategically weigh and balance these decisions for better outcomes will enable innovation, keep teams focused, and propel the organization forward. Additionally, demonstrating this strategic mindset and leadership approach at investor-level conversations will signal confidence, stability, and viability to PE and VC firms.
Strategic Partnership + Alignment
For many PE and VC-backed start-ups in life sciences and healthcare, C-level executives and leaders are driven deeply by purpose and belief in their mission and organization. As we move into 2024, leaders will need to emphasize and encourage this purpose-driven mindset across the wider organization to create a stronger alignment between value, performance, and results. This reinforced value-driven purpose will motivate teams to innovate more intentionally and generate stronger results and returns.
With 2024 approaching and funding remaining tight, having the right leadership is the key to setting your start-up up for success and driving results. Even with limited resources, the right talent can transform any organization, as departments like R+D and compliance remain critical for growth and development. Whether you are actively recruiting for a C-Suite leader or executive for your start-up or portfolio company, I would love to hear from you. Remember that a strong relationship with a trusted search advisor is a must for any start-up looking ahead to the next 24 months.
Jake Vander Zanden
Partner
Jake Vander Zanden serves as a Partner and leader of McDermott + Bull’s Technology + Life Sciences Practice.
Jake spent over 25 years as a turnaround and growth leader completing business transformations as a senior executive at companies like Allergan, Medtronic, and more. He has lived and worked throughout Asia, Africa, and Europe, and managed businesses in all the major regions of the world. Jake’s success has come from his ability to quickly and continuously develop high performing teams and guide their achievement of company changing initiatives, regardless of country, language, culture, or product group.