Give Wearable Health Tech Founders Time and Patience: Industry on the Brink of Breakthrough

“We don’t invest in hardware; we’re not optimistic about it.”—This is the response I have heard from numerous primary-market investors.

Indeed, in many of my previous studies, “wearable devices” have often been deemed “unreliable.” Specifically, I have identified several notable characteristics of the wearable device industry: (1) Truly medical-grade data is often not obtainable through wearable means, such as blood pressure, blood glucose (for which out-of-hospital monitoring still primarily relies on finger-prick blood sampling), and electrocardiograms (12-lead); (2) Data that can be collected via wearables often has relatively limited clinical value, such as step counts, body temperature, weight, and heart rate; (3) Wearable devices are often not worn consistently by users, such as fitness bands (although some tech enthusiasts may wear them continuously, current shipment volumes of fitness bands in China fall far short of expected penetration levels). These realities have created significant confusion for entrepreneurs in the wearable medical device sector, who have struggled to identify a “killer app,” leading to severe product homogenization and intense competition in a red ocean market. The latest Apple Watch also demonstrates a marked conservatism in its health data collection capabilities. If these features were truly “reliable,” would Apple, with its considerable resources, exercise such caution? All these phenomena have cast a shadow over the entire wearable device startup landscape.

However, I want to say to the entrepreneurs in the wearable medical device sector: stay strong and persevere. The direction is sound; we are simply in the darkness before the tipping point. Dawn will arrive soon. This is not mere platitudes; consider the following analysis.

Let’s first look at the data. In VCBeat’s 2014 statistics on digital health investments, we can actually observe that the wearable devices sector received the highest number of investment deals, a finding that contrasts sharply with the verbal assertions made by many investors. Moreover, in the most recent period, Q4 2014, the wearable devices sector led the digital health field by a wide margin in both total funding amount and the number of funded projects. So, is it really true that wearable device companies struggle to raise capital?

Moreover, entering the mobile health sector through hardware—specifically wearable devices—offers advantages in many respects.

First, many hardware devices have inherent use cases; for example, blood pressure monitors and glucometers continue to sell millions of units annually in China, even without mobile connectivity modules. Compared with health and medical apps, medical hardware often does not require users to change their existing habits, thereby eliminating user education costs and enabling smoother market entry.

Secondly, compared with apps, hardware possesses a stronger “time barrier,” also known as the first-mover advantage. Although, from a technical perspective, the entry barriers for most mobile health hardware products are not high enough to create a monopoly (as we know, many manufacturers currently produce internet-connected blood pressure monitors; internet-connected glucometers and ECG devices are somewhat fewer but still face considerable competition), it cannot be denied that the entire process—from product design and R&D, through medical device certification, to mass production and ongoing bug fixes and debugging—consumes a significant amount of time. Moreover, unlike apps, hardware cannot undergo true “rapid iteration,” necessitating greater caution before launch. In other words, if a hardware company faces competitors, it still benefits from a “time barrier”: copying or imitating its products takes considerably longer than replicating an app. In the internet era, where time is critical, even a modest lead can translate into significant advantages in user base size and brand reputation.

Third, compared to apps, hardware products entail higher switching costs for users, resulting in greater stickiness. Unless there is substantial differentiation and a marked improvement in user experience, users generally prefer to continue using the same hardware due to established habits and the consistency of measurement data.

Fourth, I believe that wearable medical hardware is also the most revolutionary form of mobile health product.For users, mobile internet-connected medical hardware can enhance scenarios for family interaction (this point needs little elaboration, as companies such as iHealth have already made it a key marketing focus). Moreover, in the context of traditional medical hardware (e.g., blood glucose meters), the test data obtained by users often lack effective interpretation, alerts, and intervention. By transforming into mobile internet-enabled products, however, cloud-based data storage and shared integration (while duly addressing privacy protection and other considerations) allow for the incorporation of real-time automation, human-led interventions, and health management services. This significantly improves patients’ user experience and expands the functional scope of the hardware, which no longer serves merely as a tool for generating data but also acts as an effective medium for connecting to medical services. On the other hand,For physiciansThe integration of mobile medical hardware can significantly reduce physicians’ workload and enhance work efficiency. Taking diabetes management as an example, without internet-connected glucose meters, considerable effort and time would be spent on blood glucose measurement and data acquisition between doctors and patients. This represents an inefficient use of medical resources, as physicians must individually review each patient’s glucose levels. In reality, many of these processes can be automated for identification and intervention, and normal glucose readings often require no physician review or intervention at all. Imagine the amount of time saved for physicians if millions of diabetic patients transitioned from traditional glucose meters to internet-connected devices, allowing more medical resources to be allocated to conditions that truly require manual diagnosis and treatment by doctors.Furthermore, for commercial enterprises, the key difference between traditional hardware and internet-connected solutions lies in their “collection and distribution” capabilities. “Collection” refers to data gathering capacity, while “distribution” refers to information push capabilities. Traditional glucose meter manufacturers, even with a user base of millions or tens of millions, cannot fully realize the value of these patients due to the lack of such “collection and distribution” functions. These companies cannot access the data nor deliver precise services. However, with internet-connected glucose meters, these patients become true “users” who can be managed and influenced. Therefore, from the perspectives of patients, physicians, and businesses alike, the transformation brought about by internet-connected medical hardware (i.e., wearable devices) is substantial. It simply takes time; why not give these entrepreneurs more opportunities?



Regarding the question of how to compete with industry giants, I believe that these giants primarily operate with a “platform mindset,” such as WeChat’s open hardware platform, Baidu Health Cloud, and Xiaomi’s hardware integration. In essence, hardware development should remain focused on specialized expertise. Furthermore, a focused strategy is a viable path for startups in the wearable device sector. By “focus,” I mean carving out niche markets across multiple dimensions: for instance, targeting specific disease categories such as diabetes, hypertension, cardiovascular and cerebrovascular diseases, or liver diseases; concentrating on specific geographic regions, such as certain cities or areas with distinct resource advantages; or segmenting by target demographics. After repeated segmentation, one might feel that they are “no longer doing internet business.” However, I believe this should not be a concern. While those seeking speculative financing may need to latch onto various buzzwords, for companies genuinely aiming for survival, a clearer and more precise business positioning and execution capability are far more important than any so-called “XX mindset.”

I used to be a securities analyst, so I can’t quite shake off some old habits. Let me share a chart with you—it shows the performance of Chinese companies listed on U.S. stock exchanges over the past year, reposted from Qiu Guolu’s WeChat Moments. It seems as if these companies, and even American investors, don’t fully grasp “Internet thinking.” Looks like we Chinese still need to do some educating.

Two final thoughts: Technology continues to advance. While investors may afford to be pessimistic, entrepreneurs must remain optimistic. People consistently overestimate short-term trends while underestimating long-term ones—a pattern observed throughout history and across cultures. Let these words serve as mutual encouragement for all entrepreneurs.

On another note, a quick plug: my current team is seeking talent with strong expertise in the internet healthcare sector and policy research. If you’re interested in joining us, please don’t hesitate to reach out. My email address isjtj_fd@163.com(Compensation is negotiable and higher than that of programmers and engineers with equivalent qualifications)



Jiang Tianjiao is a columnist for VCBeat and a researcher in internet healthcare, focusing on investment and entrepreneurship in the field. He formerly served as a Senior Analyst covering the internet industry at Founder Securities Research Institute, where his team ranked first in the small- and mid-cap category in the New Fortune Best Analyst Awards, he personally won first place in the Crystal Ball Best Analyst Awards, and second place in the Golden Bull Analyst Awards. He is a Guest Researcher at Tsinghua University, a Guest Researcher at the State Internet Information Research Institute, and a member of BioMan by Beike She. His representative reports include "In-Depth Series on the Internet Healthcare Industry, Part I: Enjoying the Industry Feast, Remembering Four Key Principles," "In-Depth Series on the Internet Healthcare Industry, Part II: Deep Verticalization, Closed-Loop Is King," and "reMed – Reconstructing the Healthcare Ecosystem: 2014 Internet Healthcare Industry Report." His research insights have been cited by mainstream media outlets such as Economic Daily, New Fortune, China Business Journal, and CNR Finance Channel.