Are wearable/IoT health and fitness startups unfit?

SAN JOSE, Calif. — Forget all those crowd-funded startups promoting wearable health and fitness products, says Gregory Kovacs, a serial entrepreneur with degrees in electrical engineering and medicine. The big opportunities belong to major players who can create broad ecosystems around what ultimately will become FDA-approved devices, the Stanford professor said.

“There are many opportunities in consumer health but there is no startup model that has the scope and scale it will take — this won't be a Kickstarter project,” said Kovacs who has co-founded two medtech startups. “The major medtech companies are all looking at this area carefully, but the people who build mobile devices have the most to lose, so I am hoping for joint ventures between medtech and consumer companies,” he said.

Kovacs poked fun at consumer health startups in a talk at an IEEE symposium here. “Strap your Fitbit to your dog or cat for a few days, and it will report something incredible like 15,000 calories burned,” Kovacs said.

The Endomondo app which works with several devices recently reported he ran 50.9 MPH, but credited him zero calories for the effort. “It could not figure out I have a new car — it's absolutely ridiculous,” he said

Today's products “create awful data without validation” in part because many measure from the wrist which is a relatively poor area to choose.

He lampooned the health startup market as “a ridiculous space.” For example, he noted Intel bought watchmaker Basis for an estimated $150 million, and patch maker Quanttus raised $22 million earlier this year although it's not clear either company has any significant patents.

“These startups are built to sell their companies not products,” Kovacs said. “They think a Google or Apple will buy them” whatever they do, he said, predicting “financial carnage” in the sector.

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