‘We Don’t Move Fast and Break Things’: Why the Traditional Tech Ethos Doesn’t Work in Digital Mental Health

Four venture capital principals in the health tech space called out and condemned the VC-backed startup ethos of growing at all costs in digital mental health.

The principals, who spoke on a panel during the 2022 Going Digital: Behavioral Health Tech conference, also said bad actors in digital health reveal the need for industry standards that better protect patients, lest they damage the space.

Facebook founder and CEO Mark Zuckerberg is widely credited with coining the culturally impactful phrase “move fast and break things” and used it as an in-company motto.

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“You can move that fast and break things in tech,” Deena Shakir, partner at Lux Capital, said. “But when it comes to health care — if you move fast and break things — there are lives at risk if you’re misaligning investor-fueled growth at the expense of actually improving health outcomes.”

Without specifically naming the company, several members of the panel made thinly veiled references to digital mental health startup Cerebral as an example of a business portraying the startup ethos they condemned. 

“There’s a company out there that’s getting investigated by the DEA and the DOJ that’s not what I think is representative of what’s happening in the digital health space,” said Aike Ho, a partner at ACME Capital.

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Cerebral is under investigation by the U.S. Justice Department.

It has also come under heavy scrutiny by the other health care businesses, the public and by officials following a meteoric rise to startup stardom, landing $462 million of venture funding and a $4.8 billion valuation in about two years.

Allegations of inappropriate marketing and prescribing of controlled substances for mental health conditions are at the heart of much of the criticism against the company. The DOJ investigation is a review of whether or not Cerebral broke federal prescribing standards.

“Who knew that the next drug cartel would be VC-backed?” Ho said.

Cerebral’s new CEO, David Mou, last month acknowledged that Cerebral had “made mistakes, … and I’ll also admit that we will continue to make mistakes and learn.”

Alyssa Jaffee, a partner at 7wireVentures, said that digital health, digital mental health especially, stands apart from the rest of the tech ecosystem at a fundamental level, a sentiment shared by other panelists, too. 

“Many on this panel have advised against it for years — we don’t move fast and break things,” Joffee. “We really are different from the rest of tech.”

Jaffee and others described an environment that presented vast opportunities for investors and operators in the digital mental health space over the last two years. The global pandemic revealed and exacerbated the imbalance between mental health supply and demand.

Investors reacted to that and poured huge sums of investment into the space. Further, the pandemic forced a higher level of acceptance of digital health, especially around telehealth.

This has led to at least $29.1 billion of investment in the U.S. digital health segment in 2021 alone — mental health saw $5.1 billion of that — and to a proliferation of virtual behavioral health companies.

Digital mental health companies and others have benefited from loosened regulations around telehealth and the prescribing of controlled substances via telehealth.

The bad press Cerebral and others, including the defunct virtual ADHD treatment startup Ahead, have generated around the online prescription of controlled health has caught the eye of lawmakers.

A U.S. House of Representative committee on June 6 demanded information from the Drug Enforcement Administration illustrating how they are prosecuting and preventing abuse of COVID-era regs around controlled substances that may harm patients.

“I would not be surprised if regulators come knocking on our doors to ensure that there are guardrails that are put in place to make sure that no one is exploiting patients,” Ho said.

Ho also said that the direct-to-consumer model — the approach Cerebral tried to use — has a high potential to produce superior products and services

“Direct-to-consumer is an incredibly powerful tool in aligning incentives with patient outcomes,” Ho said. “But there are some guardrails that we need to think about as an industry to put in place as well as long-term sustainability in quality and reputation.”

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