According to a 2010 report, the World Health Organization (WHO) estimates that “more than half of all medicines are prescribed, dispensed or sold inappropriately, and that half of all patients fail to take them correctly.” You don’t need to be a doctor to realise that this is a major medical problem. What good is a clinically proven medicine when a doctor prescribes it incorrectly, or perhaps not at all? The results are horrifying not only in terms of potential harm to patients, but also in terms of wasted resources of governments and their citizens. Especially worrisome is the incorrect use of antibiotics, which increases microbial resistance and ends up prolonging illnesses and hospital stays, leading to billions of euros in costs in Europe alone.
“There are some 13,000 drugs on the market in Austria. As a rule of thumb, every five years medical knowledge doubles. It’s hard for a physician to make evidence-based decisions because there is so much evidence available,” says Lukas Zinnagl, co-founder of Diagnosia, an Austrian startup company that believes its products will help solve this problem. Zinnagl should know: he is a medical doctor, though he gave up practicing medicine about five years ago. Since then, he has become an experienced and successful startup entrepreneur and also the co-founder of MedCrunch, an “online magazine covering health, medicine, entrepreneurship and technology all centred around new trends and the challenge of being a physician.”
The medical entrepreneur: not part of the public mindset
“I found medicine, as a topic, very interesting. But it’s not necessary to become a doctor after studying medicine, only about a third do so and the others usually go into pharma or research. The public mindset is fixed on the idea that someone who studies medicine shouldn’t be anything other than a practicing doctor. I think there are many doctors who would like to switch but are afraid to because they never have learned anything else other than medicine.”
Zinnagl recalls why he changed his career course: “When I started working at the General Hospital in Vienna, I remember that when I came home, I wasn’t reading the New England Journal of Medicine or Nature, but rather TechCrunch. I thought that if I really wanted a career as a doctor, I shouldn’t be doing that.” He got involved with (Tech startup incubator/investor) i5invest at its early stages. “In the mornings I was in the hospital and in the afternoons I went to a startup’s office. I asked myself where I’d rather spend the next ten years? I decided it would be more fun working for a technology startup than in the hospital.” Well, certainly less depressing and you don’t have to wear a white jacket every day.
A combination of naïveté, optimism, freedom from debt and no family obligations helped Zinnagl make the jump from practicing doctor to startup entrepreneur. Through i5invest, Zinnagl started doing business development and marketing for Tupalo.com in 2009. It was then he first encountered Diagnosia co-founder Marco Vitula, who was then busy launching his successful startup, arztsuche24, an online directory of Austrian doctors that was eventually sold to Herold in 2011. Along with another doctor friend of Vitula’s, Fritz Höllerer, and Stefan Weixelbaumer, discussions about Diagnosia got under way.
The four of them soon realised thatthey had complementary skills and backgrounds necessary to get Diagnosia going. Zinnagl concentrated on the web-platform, Vitula on being the link between the developers and the business side, and Höllerer on the mobile apps product development that eventually became a daughter company called Aeskulapp. Weixelbaumer served as CTO through the founding, but later left operations to pursue other ventures.
Armed with their vision to be a solution provider of clinical drug tools, they applied for and received grant funding from the Austria Wirtschaftsservice (AWS) and more from the Austria Research Promotion Agency (FFG), enabling them to form an Austrian company (GmbH) in 2011.
Diagnosing the Problem
The 2010 WHO report on inappropriate use of medicines cites “lack of skills and knowledge” among medical professionals as a major factor contributing to the problem. It’s not that doctors are idiots, but rather that they are overwhelmed with too much information—drug information and clinical guidelines from independent, official authorities can run up to 200 pages long—and have no simple way to access data in aggregated form. Instead, many doctors may receive their information on drugs directly from the pharmaceutical companies,who may be less than scrupulous in promoting their products.
Diagnosia’s founders believed they could provide a solution. The first step was in creating the technical backbone to support their planned applications. Named “Diagnosia Brain,” this proprietary technology is able to process and aggregate all of the up-to-date drug data (mostly in pdf format) from European medical agencies and product leaflets. The result in a mammoth drug database that can be tapped for web-based and mobile applications. According to Vitula, “It sounds easy, but in fact it’s quite complicated. Every European country has different drugs, regulations, and studies. Diagnosia Brain can aggregate and link this information together, independent of country or language.”
The next step was to build an application layer to tap into the “Brain.” Diagnosia Index was created, allowing both patients and doctors to access product leaﬂets and contextual meta information for all medical drugs authorised in Europe, in more than a dozen languages, at no cost. The Index allows a user to search by brand name, substance name or classification. Diagnosia Index also has a premium subscription service for doctors only, which provides additional information in a customisable, user-friendly interface on web-based and mobile apps, which are also readable offline.
1,4 million monthly visitors and looking for investment – in Austria or anywhere
Though there are some 1,4 million visitors per month to the website, the premium paywall service is available only in Austria as a test market. According to Vitula, Diagnosia Index has “about 200 customers in Austria at the moment, and we got them without hardly any marketing, we only sent out some emails. Within the next month we’ll provide a tool, Diagnosia Check, for assessing drug interactions, side effects from using two or more substances simultaneously. Over the next two years, we want to provide an indication-based search, meaning you can search for diseases and find the relevant medical treatment, based on current official studies.”
In 2011, Diagnosia won the Doctors 2.0 conference Startup Award in Paris. Perhaps this recognition helped get the attention of Austrian Business Angel Johann (“Hansi”) Hansmann, who soon became an invested partner. “We were one of his first Austrian investments,” says Zinnagl. Vitula adds, “Hansi not only provides capital but also his great experience. He was with many pharmaceutical companies in Spain and so he gave us a lot of contacts and help with our internal structure. Almost all the money he invested was applied toward the Diagnosia Brain and very little for the application layer. Now he helps us to raise funds for our next round.”
Diagnosia is now seeking more investment. “We want to roll out in six countries and will use the next investment round for technical roll-out and for marketing and distribution,” says Vitula. He regrets that “in Austria, it’s really hard to raise more than 500K. The banks are not providing and there are few VCs and Angels. If we really face the problem of not being able to raise capital in Austria, we’ll have to move even though that would be really disruptive to our company and team.”
Their goal is to capture 10% of the some 2 million potential customers (doctors) in Europe over the next ten years. But it’s not just the business success that is the goal. “When we achieve success, we will have saved thousands of lives because of better doctors’ decisions,” says Zinnagl. “We can really contribute to reducing the errors in prescribing incorrect or incompatible medications. If our tool can help guide them in their therapeutic decisions, it will all be worth it.
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