VR Physio is a Boston and Israeli based startup attempting to tackle the challenges of the physical therapy industry by leveraging a combination of virtual reality (VR) hardware and software and gamification.
Founder Eran Orr thought of the startup idea as a potential solution to a personal problem. Eran had neck problems, while working for the Israeli army . Sharing with a local newspaper, Eran realized that his musculoskeletal injury could have been prevented through exercise and therapy. Digging in to customer discovery mode, Eran discovered that neck injuries are common and could be caused from a variety of reasons from working prolonged hours in front of a computer to external force events, such as a car accidents.
Figure 1: VR Physio hardware 
VR Physio raised approximately three quarters of a million USD from Israeli seed crowdfunding platform Exitvalley.
Traditionally, the physical therapy industry prescribes a set of increasingly challenging stretching and strengthening exercises. The patient is required to perform sets of repetitions anywhere from a few times per week to a few times per day. The exercises can be boring, time-consuming and disengaging. Patients do not receive feedback on the proper form of their exercises, while performing exercises from home . Even while at the therapist’s office, it is difficult to track, provide feedback to and institute changes to a physical therapy routine.
VR Physio provides providers medical providers such as clinicians or physical therapists with a piece of VR hardware, optional biofeedback sensors, optional weights. The combination of VR hardware and software enables a gamified physical therapy experience, which shift mindshare away from boring, repetitive tasks towards entertaining and rewarding physical + virtual experience.
Figure 1: In-app view. 
The company is pursuing FDA medical device approval.
The device is designed to prevent neck injuries from occurring and to help rehabilitate patients who have neck injuries.
Remote data collection and diagnostics allow for remote treatment and feedback from medical and physical therapy professionals.
The company indicates that data collection by the app also generates value through correlation.
In it’s crowdfunding campaign trailer, VR Physio also advertises a social component of doing exercises together with friends .
VR Physio has two part business model. First, the company sells the hardware and optional sensors and weights at a fixed cost (the author most guesses a cost + model). The sale cost is on the order of $350/device. The client receives VR Physio app at no cost .
Second, the startup has selected a freemium app model, with additional features and gamification modes costing incremental to the base hardware + software purchase.
Although not confirmed, VR Physio also hints that providers can also charge physical therapy customers for access .
No concrete plans are laid out for monetizing the data stream generated by VR Physio.
Assessment and Future Direction
VR Physio has selected a tangible customer problem and beachhead market in neck injuries. The company has discovered that physical therapy can be boring, monotone and unproductive if patients do not follow up on exercise schedules.
The startup has chosen a hybrid business model. The cost/cost+ segment offsets capital hardware costs, improving cash flow. In-app purchases, allow for subsequent revenue stream. The revenue potential of subsequent in-app purchases is unclear. VR Physio would be wise to consider a subscription type model.
While tackling neck physiotherapy as a starting point is a great beachhead market, the potential of VR + physiotherapy to solve anything other than neck problems is limited at best.
VR Physio’s test beyond solving for neck problems will be expanding their tech + physiotherapy knowledge beyond VR and neck injuries.
 Time of Israel. VR Physio uses virtual gaming to help pain in neck http://www.timesofisrael.com/vrphysio-uses-virtual-gaming-to-help-pain-in-neck/
 Exitvalley.com. VR Physio https://www.exitvalley.com/VRPhysio?a=1&WebLang=EN
 VRPhysio.com http://www.vrphysio.com/