It takes guts for former Zeo CEO Dave Dickinson to do what he did in a MobiHealthNews commentary last week, namely, share his lessons learned from the moderately popular but ultimately unsuccessful mobile sleep monitoring and coaching service. I think he realizes Zeo was on the verge of something big, but couldn't quite get over the hump.

"Early on, we realized that our ability to transcend our customer base, from highly-engaged, 'quantified self' early adopters to the mainstream world of the 'frustrated sleepers,' would require far more than just the raw data itself. It turns out that the gift wrapping matters as much as the present inside," Dickinson wrote.

I suspect by "gift wrapping," he meant the relevance of the data, not the physical design of the product. Elegant design helped Apple conquer the digital music world with the iPod and the smartphone world with the iPhone – at least until Samsung fought back with great products of its own.

But as I have spoken of before, direct-to-consumer has so far been a massive failure in digital health. Healthcare may be a $2.8 trillion industry in the US, but most of the spending is for hospitalization and care of chronic diseases. And most of the spending is through third parties, namely insurance companies and employers that sponsor health plans.

Zeo, however, was more difficult to categorize than the countless DTC fitness and wellness offerings that have failed to find market traction. It certainly was a consumer product, not meant for diagnostic purposes, but people also discovered potential sleep disorders with the Zeo system, which they then discussed with their physicians. How do I know this? Check out some of the comments below the MobiHealthNews scoop from March about Zeo going out of business.

"Because I have their device, first one purchased 2011 soon after I was diagnosed with sleep apnea -- I was able to tell my doctor that I was having significant problems, though my AHI was within normal limits. I could compare the data I received from the Zeo to my data from my CPAP machine and found that I was having clusters during both REM and deep sleep -- severe clusters that dropped my oxygen level to below 80 percent. I received a sleep study because of this important information and had my prescription settings adjusted. So it's fair to say, that this little ingenious machine saved my life," wrote one person identified as Photini McClain.

MobiHealthNews already ran a piece about reader reactions to the initial news, so I won't rehash the rest of the nearly six dozen comments. In the two months since we first broke the news, the link to the original story had been tweeted more than 900 times, shared on Facebook by nearly 450 people and posted to LinkedIn close to 300 times. The reaction piece has more than 500 tweets, while Dickinson's commentary has been tweeted upwards of 300 times in less than a week.

MobiHealthNews is a B2B publication, but it is clear that plenty of "regular" people – not the fitness freaks and techno-geeks who pump up otherwise meager sales for other direct-to-consumer offerings – were passionate about this intriguing product, something that also has proven to be rare in the emerging world of the quantified self. Many of these consumers, including McClain, also took the time to leave comments because they seemed to had grown to love Zeo products and were searching for answers about why the service was no longer working.

That demonstrates to me that there is a market for self-monitoring. It may not be a big one yet, but Dickinson has it right: data from such devices has to be relevant to "something else I care about NOW," in his words.

"Unfortunately, consumers are not motivated enough to take action when the resulting benefits are longer-term or too scary, like the prospect of getting a terrible illness one day in the future. This is one of the greatest challenges of preventative healthcare; however, other ideas may be able to help here. For example, we found that comparing your personal sleep data to others your own age was far more motivating," the former Zeo chief said.

I'll take it several steps further: make the data clinically relevant – but not overwhelming – so healthcare professionals will want to tap into the measurement system. Then make the devices compatible with electronic health records so data flows seamlessly to clinicians at the right point in the workflow.

Get to that point and you will start to see healthcare providers and payers investing in technologies that allow them to deliver better care at lower costs. That's where the real sweet spot is in digital health.