What do mental health startups need to succeed?

For Mental Health Awareness Week 2020, we want to share our learning from our recent work in understanding the needs of startups that are seeking to prevent and tackle mental ill health.

In this blog, we cover five of the key takeaways from our learning on business models, funding needs, non-financial support needs, research needs, and NHS engagement.

Published

Written by

Robert Williams, Engagement Officer
Shauna Jordan, On Purpose Associate

Mental ill health is a complex issue affecting many people across the UK. Emerging evidence suggests that the coronavirus pandemic is exacerbating mental ill health and has the potential to widen mental health inequalities.

At Big Society Capital, we believe that preventative approaches are key to improving health outcomes. We’ve been exploring the role social impact investment can play in supporting innovative, preventative solutions to scale – while listening to lived experience and embedding rigorous research practice. In particular, we think there are roles for digital and tech-enabled solutions in enabling preventative action. The current social distancing has brought these solutions to the fore.

Last year, we partnered with Bethnal Green Ventures and Zinc on a programme funded by The Wellcome Trust, which brought together the worlds of research, social impact investment, and start-up development. Following this initial research, we delved deeper into enterprise models and their needs through a roundtable, a survey, and a programme of interviews with mental health entrepreneurs.

Here are our five key takeways so far:

1. Business models evolve along the spectrum of preventative health care

At one end of the spectrum, prevention of mental ill health means maintaining ‘mental wellness’. Interventions here can have large target markets and a relatively low bar for evidence or proven efficacy. Models here include self-care services like guided meditation, and are often distributed directly to consumers.

Further along the spectrum, prevention is about limiting the progression of common problems such as anxiety and depression to more acute conditions. Models here include online peer support, virtual counselling, and talking therapy. Distribution models are more varied, often working through government or employers, as well as directly with consumers.

We believe there is a key impact role for services further along the spectrum of prevention. However, enterprises can struggle to secure funding because their business models often speak to smaller target markets, complex revenue environments, and a higher bar for evidence. Pathways to scaling are, therefore, often longer and shallower.



2. Funding needs vary by stage, with specific gaps on the journey to scale

As we have learned more about the funding journeys of mental health enterprises, three specific gaps have become apparent:

  • Growth and adoption: Startups experience a funding gap after research grants have helped build proof of concept, and before the point of demonstrating sufficient revenue for equity investors to engage. Similarly, there is little funding to support implementation and pathway transformation that might enable this revenue generation.
  • Research engagement: Funding to engage researchers and embed rigorous research practice in the critical early stages of product development can play a valuable role in shaping products and services; however, there is a gap for funding that both enables this engagement and gives space to act effectively on the insights they generate.
  • Early product development: While there are grants available for product development, at this early stage, enterprises want grant application timelines to be shorter, amounts to be larger, and programmes to be more responsive.

“I underestimated the funding required to build an app and was constantly chasing money to fund design and development.”
Mental Health Entrepreneur



3. There needs to be a balance between commercial and clinical support

Mental health entrepreneurs shared with us the many aspects beyond funding that are required for a successful business:

  • Startups need different skills to prove a mental health intervention academically compared to developing a business strategy, and often founders are coming from one side and need support in the other. Building the right team is critical, but who to look for and where to find them is something entrepreneurs need support with.
  • Results of our survey with mental health entrepreneurs showed that clinical expertise, investment readiness, and help with a sales strategy were the most important support areas.
  • Guidance navigating a complex commercial and clinical environment came through as an important aspect – from help securing funding, to choosing research methodologies and partnerships, to understanding NHS payers.

“As a founder I felt I couldn't share day to day problems … I could have done with a mentor who had 'been there done that.”
Mental Health Entrepreneur



4. Building evidence is vital, but comes with challenges

Our conversations reveal a clear need for enterprises to demonstrate a solid evidence base for the efficacy of their intervention and to involve users in its design. This can be challenging to do in a proportionate way as an early stage organisation:

  • The usual approaches to generating evidence typically aren’t a good fit for early stage innovations. To be most effective, we need to explore ways to involve research practice earlier, test quickly, and encourage adaptive learning based on emerging evidence.
  • There is a visibility ‘gap’ between enterprises and researchers – both groups have much to gain from working together, but making the connection is challenging. What is needed is a relationship-building mechanism, supported by appropriate funding, that lets enterprises engage with relevant research expertise to support product development.
  • User engagement and testing, particularly with disadvantaged groups, is both critical and challenging. Enterprises could benefit from charities and mental health organisations supporting them by enabling access to user groups for product testing and development.

“A key barrier was the reluctance of charities and NHS organisations to engage with a startup - we weren't trusted because we weren't established.”
Mental Health Entrepreneur



5. For effective NHS engagement, enterprises must be able to navigate the complexities of commissioning

To achieve scale and broad impact, many enterprises aim to have their intervention adopted by the NHS. Yet understanding the complexity of the NHS commissioning landscape can be a challenge for innovators:

  • It is important that entrepreneurs can access support in moving through the complex NHS tendering system, as navigating the different needs and willingness to pay of different customer groups within the NHS is challenging. Entrepreneurs might benefit from codified information on processes and systems or in-person coaching and support.
  • Enterprises also need the opportunity to collaborate directly with NHS actors to ensure their innovation aligns with NHS priorities. Such collaboration should also extend to providing clinical guidance, supporting compliance with regulatory frameworks and accessing patient user groups.
  • NHS commissioners could be supported to make long-term judgments around cash savings and effectiveness; they need to consider backing more expensive preventative interventions that achieve greater impact over cheaper, lower impact models.

“The NHS should be the ideal channel - but the fragmented commissioning landscape and pressures to reach performance targets created challenges.” Mental Health Entrepreneur



As we build on this work, we have recently made two investments that touch on mental health - in Bethnal Green Ventures and Eka Ventures. In addition, we are currently exploring options to develop a dedicated mental health fund alongside partners, as we have in the past with the Fair By Design Fund and the Good Food Fund. We’d welcome any thoughts and feedback on these findings, especially if you are working in this area or would like to collaborate with us.

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