Dr BS Ajai Kumar, Chairman & CEO, HCG Enterprises and Devang Mehta, Partner, Anthill Venturesshares insights on theright strategy for health startups
The term Ayushman, with its roots in Sanskrit, is synonymous with longevity. Applied to various contexts, longevity is a state everyone aspires for – be it in personal life or in the context of an organisation. Businesses operate on a ‘going concern’ basis, a premise that presumes functioning of the business without the threat of closure or failure for the foreseeable future. Over the last few decades, the increasing advent of disruptive forces enabled by rapid innovation, fast-reducing barriers to entry across multiple industry verticals, rise of the digital economy, easier access to capital, free markets among others have resulted in numerous survival headaches for established companies. Early stage companies face even more trying circumstances, on a regular basis, to sustain and survive in brutal competitive environments.
Specifically, in the healthcare industry, tech-enabled businesses are redefining solutions to existing and new problems. The healthcare market in India is expected to grow to nearly US$300 billion by 2020. Specific impact of technology has been witnessed in medical record systems, telemedicine software, connected medical devices and digital therapeutics that enable patients manage chronic conditions at the comfort of their home. There has been a strong focus on Big Data & Analytics, Internet of Things (IoT) and AI in India. According to a NASSCOM report, 37 per cent Indian health-tech startups have built, or are building, IoT-enabled products and over 50 per cent have or are building AI-enabled products. Buoyed by this tremendous business opportunity in a market that is starting to take flight, the health-tech industry has become the cynosure of venture capital in India. With heightened investor interest and increasing transaction values in this decade, there is a strong confidence with the technologies, business models and the market opportunity. The public markets also echo this trend – with successful IPOs of Thyrocare, Narayana Hrudayalaya, Dr Lal PathLabs and Health Care Global (HCG).
Startups that lie between Pre-Series A and Series A rounds of funding often require tremendous knowledge and assistance in multiple areas, in addition to pure money. The founders may be brilliant and innovative; however, they may find themselves with limited experience in growing their business and achieving scale.
Startups will need to create processes that involve both people and business operations that can springboard their scaling efforts. Refining customer acquisition strategies, constantly enhancing engagement models, monitoring feedback and continuous improvement are crucial as startups begin to accelerate. Startups need to carefully assess the market and competition, articulate brand and positioning strategy, undertake changes in their product design and make it ready for scale, develop IP strategy, understanding unit economics, inculcate financial prudence and compliance among other essential aspects core to their business. Often getting access to market opportunities can appear daunting for early stage companies – and a savvy investor can make those connections with potential customers. Further, the startup leadership team can benefit with executive coaching from seasoned professionals who can lend advice on scaling up and sustaining larger organisations. Perfecting their investor pitches and developing readiness for future funding rounds is another key area where skills need to get developed or refined.
The guidance provided by state-of-the-art speed scaling ecosystems and corporate partners often is the difference between dazzling success and abject failure in the early stage ecosystem. Mentoring provides the right levers that, when utilised correctly, can guide people and processes in the direction of rapid growth. The right guidance can mean the difference between capturing market share with consummate ease versus eternal struggle to get POCs and to convert POCs to customers. It can mean the difference between a precise, data-driven pricing policy that perfectly captures customer segments versus leaving money on the table and/or ceding markets to competitors purely on price points.
Startups striving for longevity constantly need to fuel their innovation and growth story with smart capital – capital that catalyses growth both with true value addition. They need to prioritise on securing smart capital that will enable rapid growth through speed scaling. With a good strategy in place, these startups can utilise investments from such value-added investors to rapidly accelerate and become truly Ayushman.