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Helping Companies Win The Talent War | Abhishek Poddar @ Plum
249 Plays3 years ago
In this episode of Founder Thesis, Akshay Datt speaks with Abhishek Poddar, Founder and CEO of Plum, the startup helping companies provide unique & affordable employee health insurance plans.
An alumnus of IIT Kanpur and Stanford University, Abhishek has had a glorious career working with global giants like McKinsey & Company & Google. Spotting a clear opportunity to reform the broken insurance system for businesses, he started Plum in 2019.
Today, this Tiger Global & Sequoia backed company is helping more than hundreds of businesses deliver quality comprehensive health benefits.
Tune in to this episode to hear Abhishek’s journey of building and scaling up Plum.
What you must not miss:-
- 3-part thesis for running Plum
- Customer acquisition strategies- Networking and Carpet Bombing
- Role of tech & data in underwriting insurance plans
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Transcript
Introduction and Zencaster Promotion
00:00:00
Speaker
Before we start today's episode, I want to give a quick shout out to Zencaster, which is a podcaster's best friend. Trust me when I tell you this, Zencaster is like a Shopify for podcasters. It's all you need to get up and running as a podcaster. And the best thing about Zencaster is that you get so much stuff for free. If you are planning to check out the platform, then please show your support for the founder thesis podcast by using this link, zen.ai slash founder thesis.
00:00:27
Speaker
That's zen.ai slash founder thesis. Hey Akshay, thank you so much for having me
COVID-19's Impact on Health in Startups
00:00:34
Speaker
on the podcast. This is Abhishek here. I'm the co-founder and CEO of Plum.
00:00:48
Speaker
One of the major impacts of COVID on the startup world has been an increasing focus on health. The ripple effect of this is that companies are increasingly looking at health and wellness of employees as a must-have rather than a good-to-have.
Abhishek Podar's Background and Plum's Inception
00:01:01
Speaker
And this was the opportunity that Abhishek spotted. Abhishek Podar is an IIT alumnus who worked with McKinsey as a consultant for two years before going to Stanford for getting an MBA.
00:01:12
Speaker
He actually started his first venture while still studying at Stanford. And though this venture did not scale, it gave him invaluable insights into entrepreneurship. Abhishek's previous learning has helped him launch and scale up Plum at an amazing pace, making it the leader in the increasingly crowded space of employee health and wellness services. And their leadership is further validated by the $15 million round of funding led by Tiger Global. Here's Abhishek telling Akshay Dutt about his journey of building Plum.
Identifying the Health Insurance Gap
00:01:42
Speaker
We started talking to organizations saying, what is the core problem when you think of people success? We started with very general problems and with a very open mind. And in that journey of around five to six months, before starting long, we spent almost five to six months just talking to customers. And we were met, I think 100 plus customers think of these as HR leaders and the founders, doing that discovery of what are the problems. And that's how we
00:02:12
Speaker
discovered this problem of health insurance and health benefits and how broken this is for companies of all sizes. That's when we started talking to some of the industry people as well. For example, we flew to Bombay and started meeting the veterans in the insurance industry. I think most of the times the answer was, hey, don't build it.
00:02:32
Speaker
Hey, that's good. Actually, these guys are not even thinking about this as an opportunity. So there is something that we can truly build here. So that was that was our six months of discovery. But why was health insurance broken? Why was health insurance broken?
India's Shifting Health Insurance Market
00:02:49
Speaker
So we have we had three
00:02:51
Speaker
the beliefs. So one is that we are going through a fundamental shift in terms of health insurance and health care in general in India. And multiple reasons, if you look at the kind of inflation of health care, it's almost two to three times of
00:03:09
Speaker
rest of the inflation, which is making healthcare really unaffordable for people. If you see the number of new diseases that are coming up, the number of new treatments that are coming up, it is exponentially rising. And each of the cost of the treatments are actually becoming more and more unaffordable. This now runs in 5 lakh, 10 lakh, 15 lakhs, where people have to take
00:03:32
Speaker
a decision that they didn't want, which is not getting admitted into a hospital and they're having an adverse outcome out of that. And then COVID is a great example. But when we started, COVID didn't exist. But let's say if you interviewed people two years ago versus now, you would see almost a 10X increase in awareness of people about health insurance.
00:03:59
Speaker
So, we strongly believe that India will reach a place where everyone will have health insurance in India, very similar to countries like US or countries in Europe or a lot of Asian countries. It's a matter of, it's a question of how soon it will happen, whether it will happen in 10 years or 15 years, that can be debated, but it will happen. The question is not whether it will happen or not.
00:04:27
Speaker
That was our first thesis, which is, this is a very large opportunity that is happening. Our number two thesis is that we are not a rich country where every single person in India will be able to afford health insurance on their own. Most 10% of the people will be able to buy health insurance on their phone because of how our per capita income is and how expensive health insurance is.
00:04:48
Speaker
A 4% is a huge number, right? 10% means 150 million people. Then we have close to 500 million people who will get health insurance from the government because government has taken a very ambitious target of sponsoring through Aishmaan Bharat kind of schemes up to 400 million people and I sincerely hope that we reach that state
Future of Employer-Sponsored Health Insurance
00:05:07
Speaker
as well. Then what really happens to this middle India who cannot afford on their own and where the government is also not helping, right? This 700 to 800 million people.
00:05:17
Speaker
If you look back at how each of these countries where you see 100% penetration has happened, how each of these countries have evolved over time, you will see one common trend which is the health insurance penetration has happened only because of employer sponsored health insurance or sponsored health insurance. It has never happened because of retail health insurance. And in what is going on that similar path, right now if you look at the doubles,
00:05:42
Speaker
The employer-sponsored health insurance covers almost three times the people compared to a retail health insurance. Employer-sponsored health insurance is going at around 23-24% year-on-year compared to retail, which is at 11-12%. So we are already on the path, but we actually see much faster adoption in the next decade, where we will see up to 700 to 800 billion people getting covered
00:06:06
Speaker
through the employers. And when is it covered through the employers? Think of 150, 200 million lawyers getting covered, and then each employee having four to five family members getting covered, right? So that's how we each at that state. So that's our second thesis, which is, employers found that health insurance will be the biggest driver of this adoption. And her thesis was, if you look back,
00:06:28
Speaker
of the last 20 years in India since employer sponsored health insurance started in India, it has remained almost the same in the last 20 years. We have seen a lot of innovation on the retail health insurance, be it policy bazaar on how to make distribution really cost effective, even to start health in terms of how to build very large network and make health insurance more affordable for the retail.
00:06:55
Speaker
and seeing digits and echoes of
Challenges with Traditional Health Insurance
00:06:57
Speaker
the world in terms of how to provide a great post-purchase policy experience. But all things have been very restricted to the retail segment, but the larger opportunity is the employer segment, where, imagine before Plum,
00:07:12
Speaker
If you are a 10 people company, you wouldn't even get a health insurance. Accessibility was a challenge. Unless you are a company with thousands of employees, you wouldn't get a health insurance. And there are structural reasons of why that was happening as well. And I can go into those structural reasons. But the biggest problem was accessibility.
00:07:29
Speaker
The other problem was affordability. The health insurance, and especially the employer health insurance, didn't have any concept of MRP. So the insurance would charge whatever they want, however they want, two simpler companies. They may charge one company, one ex, and the other company, two ex. There was more transparency. They would take some data from your age of employees and dependents and stuff like that, and then give you a customized code.
00:07:56
Speaker
And they will give you a customized quote, and that quote may be almost 2x of what the real quote is. And that's the challenge, which is because there's no transparency, it's left to the buyer to go and negotiate how well you are able to negotiate. Compared to retail, retail is a very regulated product. Retail health insurance
00:08:15
Speaker
you need to set a price and get it approved by the regulator, which is IAD, and that's when you can sell. And if a product has been approved for, let's say, 5,000 rupees, no matter where you buy it from, you buy it directly from the insurer or from policy bazaar or from an agent next to you, you will get it at 5,000 rupees. You won't get it for 6,000, or you will be able to get it for 4,000 rupees. But employer insurance doesn't have that concept. So there was no transparency and affordability of the product. And then the third one was
00:08:45
Speaker
Even for the larger companies that were investing a lot on employee insurance, they didn't have any post-purchase experience. So the employees never really understood what they were getting. The employees had an audible experience when they were at the hospital trying to use the insurance. And the HR or the admin who's using or managing the insurance had a very, very tough time in terms of... It's a very manual process.
00:09:11
Speaker
You have to call your HR and say I need to use it and then he'll call some PPA or someone, right?
00:09:17
Speaker
And HR in the process became a support desk. We have seen so many companies where now the HR teams have to have one or two people that they have to hire just to manage insurance. Imagine that kind of experience. So these problems existed across the life cycle from purchase to employee experience to the administration experience. When we thought of this experience, we thought of
Plum's Holistic Health Approach
00:09:43
Speaker
not just insurance, but the broader problem of employee health, right? Why the HRs do it? Because they really want to take care of the health and insurance is one of the means to achieving that outcome. So the goal was how do we help the organizations, be it the founders or the HR leaders, deliver better health for the employees and their family. And that's the whole vision of Plum as well.
00:10:10
Speaker
Okay. I understand the access problem, like small organizations did not get access. Definitely that is there. And definitely the employee experience is also broken. But like, you know, to solve this, did you envision getting an insurance license and all of that or becoming like a insurance, like a digital insurance broker? Yeah. So technically we are, we are a broker.
00:10:35
Speaker
But what we do is we go very deep with our insurance partners to go and build these custom insurance products at custom pricing. So think of us collecting a lot of data to understand the needs of the customers.
00:10:52
Speaker
to go and figure out what kind of risk exists and what is the right pricing. And then working with the insurance manufacturer slash the underwriter, think of ICIC Longbird or New India, you say, this is the price at which we should sell this product. And this is the group at which we should sell the product. So, for example, an ICIC Longbird would never sell a product to a 10 employee company before. And now they are selling product to even 10 employee company because they have been able to build that kind of confidence
00:11:22
Speaker
that this is a customer that is coming via Plum. Plum has done the right amount of underwriting and fraud check and validation that this is a healthier portfolio or a healthier risk that I am underwriting. How do you achieve that, the underwriting part of it? That seems to be the pivot around which the whole business revolves, being able to do underwriting well.
00:11:48
Speaker
What is underwriting? Underwriting is essentially a set of rules that you understand over a period of time. If it's a group of 10 people,
00:12:03
Speaker
that is coming to you for taking a health insurance and this group wants cover from day one without any waiting period, I want to make sure that this group is not taking insurance because they are going to get it. They are sitting, one of these 10 people is standing right outside the hospital and will get hit the very next day. What had happened in the retail health insurance is they have taken care of this problem by saying, hey, we will put a four-year waiting period.
00:12:31
Speaker
that if you have any pre-existing disease, that won't be covered for the past 4 years. In the good product, that waiting period never exists, and hence, this is a very critical risk for you to figure out, right?
00:12:42
Speaker
So we had to build certain rules in our system to figure out, hey, is there any amount of selection that is happening in the group? That, hey, it's where a group is taking insurance with one person of 10,00,000 and other nine people with 1,00,000. That means there is a higher propensity of this one person getting admitted the very next day. There's one simple rule that I'm telling you, right? And there is no rocket science. These kind of rules,
00:13:10
Speaker
existed before Plum. This kind of understanding existed before Plum. The difference is it was all in the head of underwriters. And actually you mentioned how the pricing worked, right? You would send a data
00:13:26
Speaker
to the insurance company and then maybe after a week or two weeks, someone will send you a code. Why that was happening was because it was waiting for an underwriter to look at the data and say, if this is a risk worth taking or not, and if it is worth taking, what is the right price? What we are doing is we are just taking those rules and putting that into code.
00:13:48
Speaker
How do you automate 99% of what has already been learned and what is already happening in a manual way? So that now as an insurance company, now I don't have to wait for weeks or months for some underwriter to have bandwidth to look at the data. And number two, now I can serve companies even as small as five employees or ten employees because I really don't have any
00:14:12
Speaker
operational cost of serving this company, additional operational cost of serving this company. I have to put the same amount of effort to underwrite a 10,000 people company as I would have to put a 10 people company. A traditional insurance company would look at it in a very different way, which is they would have these
00:14:29
Speaker
hundreds of requests for pricing. And they would obviously prioritize the 10,000 people company over a 10 people company. And hence they'd said, Hey, one more to look at smaller companies, because it's not worthwhile. Right. There's a fixed cost for each request they evaluate and they want to optimize. So what is the onboarding journey for a corporate with signs up with you? How do they, I mean, what kind of data do you need from them? How does that whole approval process happen?
Building Plum's Product and Onboarding Process
00:14:56
Speaker
Yeah, so it's actually quite simple. As a company, you can actually just go to plummhq.com, you give some basic information about your organization for us to do the validation, and then you go and build your own insurance program that you really want.
00:15:13
Speaker
this entire process will take you around two to three minutes and you'll be able to build a custom plan and get a real-time pricing because this is all part of your algorithm. Don't you need data of all employees or stuff like that? What we do is we give an estimate based on certain assumption of the employees that you would have given, right? So what we ask will say, give me some estimate of the average age, etc. You put that estimate and we give you an estimate. Let's say we give you an estimate that A,
00:15:42
Speaker
Based on this estimate, it's a 1 lakh rupee insurance plan. And there will be a 10 to 20% deviation. And then as a next step, you go and upload your data. And we will upload that data of employees with data of birth and their names. And we will quickly do the validations that we have internally. And let's say this 1 lakh has now increased to 1 lakh 2000 or may have decreased to 95000. So then it's a binding code rather than an estimate. And then you go and make a payment and your policy gets issued.
00:16:10
Speaker
Tell me how you converted this thesis into an actual product. How did you get the product off the ground? Because this is like a
00:16:22
Speaker
It's a product which needs a lot of buy-in, like you need insurance company buy-in because I'm assuming you wanted to sell very tailored products, solving corporate problems. So why would an insurance company give you a buy-in when you are like, I mean, it's not like you're a large company going to them. So how did you navigate getting the product off the ground?
00:16:46
Speaker
No, absolutely. So see, there are three kinds of users that we are serving in a way. There is an employer who is buying the product. There is the employee and her family that is using the product. And then there is insurance companies and other healthcare providers that are serving on our platform. And what we did when we started or before we started Clum was we met hundreds of these
00:17:16
Speaker
different kinds of users, including the HR leaders and the founders of companies to figure out, is there a genuine problem that we are trying to solve, right? We didn't want to solve something that didn't exist as a problem. And the goal was very simple. One was to understand the problem and to get a sign off from early customers that if I build a product, you have to be my first user of the product.
Partnering with Insurance Companies
00:17:46
Speaker
And the ask was very simple, Kibos, if I give you this product today, are you giving me a check? Are you swiping a credit card? Otherwise, it's all very conceptual. All of these people are friends, and they'll be nice to you saying, hey, go and build it. But our ask was very simple. Hey, assume I have this today. Swipe your credit card. And there was a validation of what we were trying to solve, and it gave us good inputs on how to solve it as well.
00:18:15
Speaker
And same from an employee perspective. What are the challenges that employees are facing? What we did was, we took all of this to build our understanding of the problem and the scope of the problem. And then we flew to Bombay, which is where all the insurance companies are located. Both Saurabh and I flew to Bombay and met a lot of these larger insurance companies to figure out why no one is really solving it.
00:18:44
Speaker
And what was interesting to them was two things. One, they all knew that there is an opportunity, and they all wanted to go after this opportunity, but they didn't know how to go after this opportunity. They wanted to go after this segment of small to medium-sized organizations of 10 employees to 500 employees, and in the last five years, they've all
00:19:08
Speaker
They were all talking about this in their pitch deck, or not the pitch deck, sorry, the company annual strategy deck, that, hey, we have to go out of the SME market, we have to go out of the SME market. But year after year, there was no results. They were all still serving the very large corporates. And when they heard it from us,
00:19:26
Speaker
on how, right? That's what excited them that there is someone who really understands this market and has a plan to go and address that market. And we started showing them, hey, this is how the product is shaping up, right? We had to do a lot of storytelling because we didn't have any customer at that point in time, right? It was a lot of storytelling and I think as a founder, 90% of the job is to just
00:19:52
Speaker
tell stories to customers, to partners, to potential team members who will join you in that mission. And I think that's what worked with these partners as well, that we were lucky to get some of these companies to be excited about that shared vision that we have. They were excited to share that common vision. But it wasn't easy. We took
00:20:20
Speaker
To get the first insurance company, it took almost six months. Well, which company was it? This was ICS Lombard. This was ICS Lombard and they're the most forward looking companies of all the companies in India in the insurance space. And we have been a great, I mean, it's been a great partnership since then, but it took us three months to get the second partner. It took us one month to get the third partner. And now we are in a stage where everyone, every insurance company are trying to get into Plum. It's the other way around.
00:20:51
Speaker
But I think that's the nature of this business as well. The same thing applies in new banking or FinTech if you talk to a lot of founders.
00:21:01
Speaker
It takes a lot of time to convince a banking partner to come and work. But once you have built it, once you have early traction and once you start scaling, then every partner, every bank will come to you and say, I want to be that partner for you. But how did you even get into the room with the right people? I was assuming this would be like a CXO level discussion, right?
00:21:25
Speaker
A lot of this was hustle, but not everything was CXO level, right? A lot of these were just going bottom up, finding out from our network, whoever possible within these companies, and then going up one meeting at a time. And some of these were also CXO level discussions because we were able to find connect from our past lives. Torub comes from a lot of startup background.
00:21:53
Speaker
McKinsey Network helped a lot of people from McKinsey end up being leaders at these FinTech or insurance companies. So that was very helpful.
00:22:04
Speaker
I think when you are a founder, you have to do everything. You have to just hustle, right? There is no single answer. It was just hustle. We used whatever network we had and tried. We carpet bombed. You hit the street, basically. And what was the first product that you launched with ICIC? And what was the product range that you started with?
00:22:32
Speaker
Yeah, so the very first product was a corporate health insurance product. It's just health insurance. And the problem that we were solving was before Plum, the health insurance as a product was available in general to companies of hundreds of more members, hundreds of more members. Some companies used to offer it to companies of 50 or more members. Our very first thing was we will launch a product that is available to companies of 10 or more members.
00:23:03
Speaker
And we specifically targeted 10 to 100 member companies that, hey, this is a market that no one is addressing. We convinced our partner to build a product for that segment and figure out a pricing for that segment. And we went up aggressively after that segment. And for us, it was a market that was never, ever solved. And they were all like, hey, we finally have a way to set up employee health insurance through club.
Early Customer Acquisition Through Networks
00:23:27
Speaker
How did you do initial customer acquisition, like getting those first 10 or first 50 customers in? Yeah, network and carpet warming again. The first 15-20 customers came from those interviews that we had done before even starting Plum. They had all said, yeah, we will use Plum as soon as this exists and they all signed up.
00:23:53
Speaker
We extensively reached out to everyone in our network, all the founders, like including my own previous co-founder from Renzi, who was building a company called Shifu, a lot of reached out to all his peers at Freshworks who had left Freshworks to build companies, factors.ai, et cetera. And there's a lot of entrepreneurs who are ex-Freshworks. I think the first
00:24:24
Speaker
50 customers would be from our own personal network. There was nothing else. There was no marketing, et cetera. It was just reaching out to our network and doing carpet bombing. And then, for us, it was critical that these customers have a great experience. Right now, we have more than 1,000 companies that are using Plum.
00:24:51
Speaker
83% of these companies have come directly to Plum without any marketing campaign, etc. They have come, they have directly come to PlumHQ.com. They will open up the URL and sign up, or they will reach out to us over email or WhatsApp, etc., because they've heard about Plum from some other founder or HR leader or finance leader or some other employee. And for us, that level of
00:25:20
Speaker
trust that we were able to build in our existing customers that got them to recommend Plum to everyone else was a sign that, hey, we are solving some genuine problem here that people are talking about Plum. I'll give you an example yesterday. Yesterday evening, when I was driving back home, I got a call from one of our very large customers and she said, I am going to get you four customers that are larger than me.
00:25:48
Speaker
In the next three months, I know these companies have policies that are going to expire and I'm going to get you these four customers. Did you build a self onboarding platform and then start doing it? Or did you initially do more bandwidth onboarding for customers or when you launched?
00:26:08
Speaker
How did the product evolve? What might work to start with, right? And we followed the classic model of MVP that we talk about a lot. When we launched, we didn't have anything. If the product didn't have anything, we were just going and we figured out an insurance product that didn't exist. And we started selling them. There was no tech product on which you can sign up and
00:26:34
Speaker
figure out and do a cell phone boarding. The first 10-15 customers were like that. We learned from them.
00:26:42
Speaker
and figure out, hey, what are people buying and how are people buying? So our very first launch was, hey, we will now build a buying experience where customers can go and figure out what kind of insurance plan they want and they can get a real-time pricing. And that was the very first time in the industry. I think globally, it was the very first time in the industry that we had made corporate health insurance pricing
00:27:12
Speaker
transparent and real-time. The way retail health insurance pricing exists right now, the corporate health insurance pricing was never available in real-time and in a transparent manner. And we were the first homes to do it. And then we started seeing people signing up on their own and
00:27:28
Speaker
The purchase didn't happen completely online. We had this very ambitious vision and that vision still exists, but we had this ambitious vision that, hey, we will move this industry from 0% product driven, 100% people driven sales process to a 100% product driven, 0% people driven. What do you realize that it will take?
00:27:51
Speaker
a longer period of time for that transition to happen and it's not just plumb that can push that transition, it's just a matter of time as well. People need to get real trust over online buying process for them to completely move online. What we have achieved so far is probably a 60% product driven, 40% people driven purchase process. But we are on that path.
00:28:15
Speaker
And over the next maybe a year or so, that will become 80, 20, and maybe over the next five years, it'll become 100, zero, but we will get there. So our second product then was how employees understand and use their insurance. So we launched an employee app, which made it really easy for even a 15-year-old person to go and understand a complicated insurance that used to be a 30-page policy document to understand it on one screen of their mobile.
Promoting the Founder Thesis Podcast
00:28:47
Speaker
If you like to hear stories of founders, then we have tons of great stories from entrepreneurs who have built billion dollar businesses. Just search for the founder thesis podcast on any audio streaming app like Spotify, Ghana, Apple podcasts, and subscribe to the show.
00:29:09
Speaker
How did you achieve that in terms of simplifying it? It's a language. It's a usage of words, right? See, what happened in insurance is people have spent decades or actually centuries to figure out all the edge cases that can happen in insurance, and they've made the insurance policy document to address all of those edge cases, right? That way, I will pay you $5,000, some insured.
00:29:40
Speaker
But these are 50 reasons why I won't pay you because these were the 50 things that they had found in the last 100 years where they shouldn't pay. And these 50 things may actually be very exceptions. Why do you want to complicate the policy? Then that's one example. The other complication is the words that you choose to convey the same thing. If you're saying, hey, this is a 5 lakh sum insured policy,
00:30:07
Speaker
because that is the technical word that industry has figured out. You can tell me the same thing that I will cover up to 5 lakh of your hospital expenses. Someone who has never been in the insurance world, they would have a very hard time understanding what does 5 lakh some insurance really mean. What is the second sentence that says, I will cover up to 5 lakh if you visit a hospital. So just looking at
00:30:37
Speaker
things from a very first principle and that's where we had the advantage because we didn't understand anything about insurance. We were the customers of that product in a way. When we were looking at terms, if we didn't understand it, the assumption is our customers also won't understand it, which means this is a problem that we need to solve.
00:30:57
Speaker
And hence, we should write it in a way that I should understand, assuming I'm not some incident. You had that outsider's perspective, that benefit of being an outsider. Correct. And most of our team members are outsiders to the industry. And we follow that very, very strongly. It's a principle that we follow that the team has to be 80% plus outside the industry. OK. So this was the second product you built.
00:31:26
Speaker
What next in the product? The product was the claims experience, how employees and their family members can claim when they're at the hospital or after the hospital experience. So there our understanding was, hey, people have to send, people have to really write down, fill the form.
00:31:47
Speaker
a very complicated form, collect all the physical receipts, send it to a blue dart to the insurance company, track that blue dart to make sure that it has really reached, get a confirmation that people have received it, and then the insurance company will read it and say, these are missing documents, you again send another blue dart, and then maybe once you have done these three and four back and forths, then you will hear that, hey, out of one lakh claim, 80,000 is approved, and then a week later, you will get that money in your bank. Our simple question was, hey,
00:32:17
Speaker
Why do we need to send all of these documents in physical? Why can't I just scan these documents and upload it somewhere? Why do I need to fill up these complicated forms? Why can't I simply perform on my mobile or on my browser? This is a very simple question. What we launched was an experience which people can use on WhatsApp.
00:32:45
Speaker
So now, customers can just open up their WhatsApp and initiate a claim in less than five minutes, and then they're able to track their claims entirely on Plum.
00:32:57
Speaker
and everything else is just taken care in the back end by blog. No physical document submission, et cetera. So they can just use the phone camera to click photos and then you can read that the insurance company will read it, okay? Correct, correct, correct. And now, over a period of time, we have built a team in-house as well who will read those documents, they will correct those documents if required, they will ask for clarification before it goes to the insurance company, so that if it goes to the insurance company,
00:33:26
Speaker
it will get you will get your claims money and you will get 100% of what is eligible. You want to eliminate that wasteful back and forth and take care of it at your end before sending it to the insurance company.
00:33:44
Speaker
Then we launched the HR experience, right? You bought the insurance, employers started using the insurance, now the HR has to manage the insurance, right? There is, especially in a fast-growing company, think of Unacademy, which is probably adding hundreds of employees every week. They have to get covered as soon as they join the company, right? This process was a very manual process before plowing. The companies were expected to send an Excel sheet on the 30th of every month.
00:34:14
Speaker
Even if someone has joined on 1st of December, they would send that data on 30th of December. And then someone will check their email on the insurance company site, look at that Excel sheet, and upload that Excel sheet on some internal system. And two weeks later, that person will get enrolled. So imagine a person will join on 1st of December, might get enrolled on 15th of January.
00:34:40
Speaker
Right now, the company's system has evolved to using all kinds of HRMS and cable systems. Our question was, is there a way we can just get data from your HRMS system and enroll people automatically as soon as you add someone in your HRMS or as soon as you set up an email for that person, right?
00:35:03
Speaker
We'll just get the data. If there is some data missing, it will automatically send a form to the employee to fill the missing data. And we will collect all of that and it will automatically flow to the insurance company through the APIs. Though you have to wait for any Excels to be sent, which can be missed out. You don't have to wait till end of the month to do the enrollment. Everything happens in real time and
00:35:25
Speaker
automatically with the consent of the employee. Right, okay. So which apps have you degraded with to get that data? Yeah, so right now, the most common HRMS apps that we see in our segment are the likes of Darwin Box, Razor X Payroll, and there are some integrations that are on the way like the KKHR and Google Suite.
00:35:48
Speaker
Okay. So this takes care of enrollment for the HR manager. Even the exit also is managed through this because that system knows who's leaving. Correct. You were saying there are other things, right?
00:36:10
Speaker
Yeah, so that's just one of the features that HRs require, right? And HRs require multiple other features or understanding how people are using the insurance, what kind of experience they're employed, what are they using outside insurance because Plum as a platform is not just insurance. Plum as a platform is a dire
00:36:27
Speaker
health care for the employees. We have a team of doctors that are available 24-7 to the employees for teleconsultations. We run wellness sessions every week. We offer dental checkups and vision checkups to the employees. So when companies are coming to Plum, they are now
00:36:46
Speaker
setting up a suite of healthcare for the employees. And now the HR also wants to understand how people are using each of these benefits so that they get evolved these benefits over a period of time. So now we have launched some of the usage features as well, and it's all evolving. I would say whatever I'm saying, think of this as the V1 of multiple versions that we will launch
00:37:14
Speaker
We are probably in terms of what we imagine the future to be. We are not more than one person there in terms of our product development. There is so much that can be done in this space of helping organizations get the right kind of health care and manage the right kind of health care and helping employees and their families stay healthy and get the right kind of access to health care when they're needed. There's so much to be done in that space that we have barely scratched the surface.
00:37:42
Speaker
This health benefit part of it. One part of your business is pure insurance, which is working with partners. The other part which you just told me is health benefits like fitness and wellness related stuff. Who pays for that expense? Some of that is part of being a member of Plum. For example, Dr. Consultations and some of the checkups that I talked about.
00:38:10
Speaker
You get it just because you're a member of Plum, and it's baked into our business model itself. Some of these benefits let an annual health checkup that employees will do.
00:38:23
Speaker
those are paid benefits that corporates upgrade to or they buy a more sophisticated premium offering or something when they are coming to one. So it's a mix. Okay. And companies can choose like these employees under premium plan, these employees under basic plan and so on. Okay. Okay. Okay. Okay. But what drove this adding this benefits portion, was it like customer demand or like
00:38:50
Speaker
Yeah, it's more. It was more. It started because of the customer demand. When we started Lum, we thought about this as just a health insurance platform and all our customers started coming to us that we all do more than health insurance. But I think as we started talking to customers and a lot of what we do is just driven by customers. Okay.
00:39:13
Speaker
Do you also plan to like plug in, you know, the space of health benefit for corporates is where there are a lot of startups who are creating like say, you know, mental wellness or chronic disease management where they're also targeting corporates because that's like a way to onboard large number of customers in one go. So are you planning to like plug them in and also offer those as additional offerings?
00:39:42
Speaker
We do. We do. That's a great point. So the way we think of Plum is we are building access to healthcare, which means we don't have to really solve each and every components of healthcare from the scratch. What we have to build is piping to the right quality of healthcare.
00:40:05
Speaker
So what we do a lot, right? And which includes health insurance as well. What you've done is we have brought the right kind of health insurance provider on our platform. And now we are making it accessible to every organization in India. It extends to the healthcare and health benefits as well, where we already have mental wellness partners and a lot of organizations use mental wellness via plug, but through these partners.
00:40:30
Speaker
or some of the other programs that we mentioned, which is chronic illness or diabetes management, etc. And the way we think about our future is there will be certain parts of healthcare which are very core to us, which we would choose to build in-house. There will be certain parts of healthcare which may not be core to us or which may be very asset incentive, sorry, asset theory.
00:40:57
Speaker
where we will choose to partner. Think of diagnostics, lab tests, et cetera. We build hundreds of labs or thousands of labs across the countries. We have an investment. We'll go ahead and partner with organizations that have done a great job at that. We have already partnered on that.
00:41:15
Speaker
And there will be some opportunities for us to as well buy some of these existing solutions and we are open to that as well. So we continuously evaluate for everything that we do, we continuously evaluate the build versus buy versus partner as an option and that option can change over a period of time. When we started, teleconsultations was a partner for us.
00:41:40
Speaker
Over a period of time, we figured out now it is becoming so cold that we moved from the partner to a build decision. Okay. But the doctors are on your payroll or they get paid per consultation like gig workers? Yeah, more like gig workers right now.
00:41:56
Speaker
I mean, we have, we have, we have some, some doctors in house, uh, who are, we've got them as running my dash show. And then to extend the capacity, uh, we have, uh, think of them as doctors on call. I think work has probably not the right word, but like, right, right, right, right. Got it. Okay. Okay. Got it. What kind of company would you want to acquire? Like, you know, what would make you say, yeah, I would love to acquire this. Like, what is the sweet one? Like, I like a pure tech plane or what? Like.
00:42:26
Speaker
Yeah, let me put a disclaimer. We are not at a stage of acquiring companies that's probably in the future, not right now. But when you think of acquisition, there are two ways of thinking about acquisition. One is where it helps us enhance our offerings, be it terms of health care or insurance. And number two is it's giving us
00:42:50
Speaker
In the near future, when I say near future, maybe a year or two years down the line, we'll probably do go after the capability enhancement kind of accusations. So maybe mental wellness is one of the topics that you talked about. Instead of partnering, maybe we go if we find someone who's really good in terms of the
00:43:11
Speaker
experience that they have built, right? Maybe it makes sense for us to acquire. And maybe five years down the line, when we are so big that now we see exponential growth that can happen through acquisition of distribution, then we might be open to that as well. But there's too much in the future. Yeah, hypothetically, I understand.
00:43:38
Speaker
what do we look at, right? So, I think how you are solving a certain problem, are you solving it through technology, are you solving it through people, maybe certain other ways you are solving that problem? That we don't care a lot, right? You may be a very tech-heavy or a people-heavy, I don't care. What we care is, hey, what is the experience that you have built? Do the customers really love that product that you have built? Then will that actually enhance the
00:44:06
Speaker
customer love that Clum already has, right? If that is true, then it makes sense for us to evaluate it. If that is not true, no matter if you're the best technology in the world, it doesn't matter. Okay. Are there other companies which are taking this full stack approach? Like, say, I mean, the most well-known name in InsureTech is policybazaar. Policybazaar wouldn't get involved in claims and all, right? They're just selling, right?
00:44:34
Speaker
So I don't know much for me to comment on it. From what I know, they haven't been involved in claims, but that doesn't mean that they won't do that in the future, right? I mean, who knows what will happen? Technically they can, but I don't, I think as far as I know, right now they're not. Is there any other company which is taking this full stack approach of like from sales to claims?
00:45:01
Speaker
Yeah, there are multiple companies that have come up in this segment, Onshoreity, YouTube Health, Nova, and they're all doing a fantastic job. And I'm really glad that Glum is not the only one that has to move this industry in a certain direction. We have some really good founders and teams that are together pushing the industry in the right direction. And given how large this industry is,
00:45:30
Speaker
We will need multiple of these companies to push the industry in the right direction and to get to that vision. Our vision is to have very high adoption of health insurance and
00:45:43
Speaker
really good access to healthcare for everyone. I don't think clump can do it alone, right? You would need multiple people. No, no industry can be disrupted by just one single player, right? You need a whole big things happen. So all great founders, great companies. Okay. So let's talk about the employer or the customer part of it. So what is like your
00:46:08
Speaker
sweet spot in terms of employer. Do you look at like say companies which are operating in high margin spaces like knowledge economy companies or are you agnostic and it could be a manufacturing company also and what is like the average headcount of your customer base and you know stuff like that if you can talk about. Absolutely. So broadly I would say this is what we are building eventually will be used by
00:46:37
Speaker
companies of all sizes and companies across all industries and companies across different kinds of employees. What we are doing is we are just figuring out what is the first segment and then the second and then the third, right? It's just a go-to market so that we are focused at one segment at a time. So when we started Plum,
00:47:03
Speaker
We started with companies of 10 to 100 employees and who are the early adopters of technology. And you would have heard, you would have always heard about the adoption curve, right? There are innovators, early adopters, late adopters, and then the lacquers, right? So you have to always focus on the innovators and then the early adopters. What was the segment that you're going after?
00:47:26
Speaker
Then after the first six months, we started going after 100 to 500 employees companies and we started seeing really good product market fit in that segment. Now we are seeing success in 500 to 5,000 employees companies as well. A lot of companies in that segment have moved to Plum. And now we are figuring out go-to-market and 5,000 plus employee segment as well.
00:47:49
Speaker
We have done all of this in more innovators and early adopters kind of companies. Now we are thinking about, how do we go after the more traditional organizations as well, right? Right now, we are very restricted to modern companies. So while within that 10 to 100 employees, you're also going after the traditional companies and we are in the early phases of that.
00:48:13
Speaker
And then as we figure out 10 to 100 works in traditional company will scale that 200 to 500 company segment. And how do you acquire customers? Is it purely online ads and all or is it also like on the ground, a sales team? Yeah, so it depends on every segment will have a very different go to market. Depends on which segment, right? So if we go after the tech organizations in the 10 to 100 or 10 to 200 employee end of segment, there are a lot of
00:48:42
Speaker
online acquisition models, be it content, be it paid ads, be it a CEO, et cetera, that works beautifully. And that has scaled for us very, very well. Within the tech, if you go after the larger companies, there it's a very enterprise marketing kind of approach. And we are in the early phases of figuring out a scalable enterprise marketing approach. Now, as we start going after the traditional companies,
00:49:12
Speaker
early days for us to figure out what is that go-to-market that would scale up, right? So we are experimenting with different approaches. We don't have any fetal street right now in terms of sales, but we might have to experiment with fetal street sales as well. And how has the user base grown? Like first year, how many employers were using the platform? What is the number currently? Yeah, first year we had close to
00:49:37
Speaker
100 or 120 companies. Now we are at almost 10x of that. Within a year, we have grown by 10x. We eat a number of organizations. We eat a number of people that we have. And that's a plan for 2022 as well. We have a roadmap to further grow this by another 1,000%. And we feel comfortable of getting that kind of growth as well. Given the opportunity that we have,
00:50:04
Speaker
And the kind of leadership and the team that we have been able to build that, I know that this team will be able to scale what is working well, they'll be able to scale that and they'll be able to figure out new go-to markets as well for the next set of growth. And what is the average headcount right now of your base, like employer base? The average would be around 60-70 employees.
00:50:31
Speaker
because a bulk of these customers are still in that 10 to 100 employees. But if you get one company of 5000 employees, they'll be equal to pay 50 customers that you would have had in the SME segment. Yeah, I mean, obviously the big companies will move the needle significantly. They'll always be very skewed towards
00:50:56
Speaker
the larger customer base that you have, right? Okay. So like, how much do you earn? Like, what is the revenue metrics like? Like, is it a percentage of the premium paid, which I'm assuming would stay with you and some, I mean, you would share with the insurance company, right? Like in the premium?
00:51:17
Speaker
That's correct. So with respect to insurance, it's a very regulated business and we operate, we have a license from IIDA to distribute insurance and we have to follow the IIDA regulations in terms of what is the possible brokerage or commission that insurance company can share with a partner like Plum. So we follow every product has a different
00:51:42
Speaker
regulation. For example, health insurance will have a different number versus a life insurance versus an accident insurance. So every product has a different number and we just follow whatever is in the regulation and that kind of... Hypically, it's what, single digit percentage? It's a single digit percentage, yes. Okay. You're selling life insurance also. In the range of health insurance, regulation is 7.5%. Life insurance is 5%. Accident insurance is another 7.5%. So
00:52:11
Speaker
These are all public numbers. What is the average premium amount per employee? The average premium amount per employee will be around $6,500-7,000. Think of Plum making $10.
00:52:35
Speaker
for years, for instance. Right, right. Got it. Okay. Got it. Okay. So I want to understand the role of tech and data in your business. Do you also support in underwriting for the insurance company? Or is that something that purely they do? You know, like, like help me understand what is the role of tech and data in this? Yeah, this is a business. Whenever you're building insurance, you have to, even if you're not an underwriter,
00:53:03
Speaker
on paper or on the books of the regulator, you have to build underwriting as a function.
00:53:10
Speaker
at the heart of it, because that's one of the advantages or differentiations that you can build. And we do that a lot, right? So we actually, when we launched this product, say, now you can insure 10 or more people. It was backed by some of our understanding of how underwriting can be different.
00:53:35
Speaker
how fraud check can be different. And this was our input to the insurance companies, which they agreed to, to experiment. And then they started seeing good results in terms of pricing and underwriting profits. And then they said, here, let's do it for a sustainable period of time. So business started with an understanding of underwriting and how underwriting could be different from what these companies have been doing for decades.
00:54:03
Speaker
And we have to be at the forefront of innovating on the underwriting and fraud checks, etc., to keep opening up newer segments, to keep opening up newer products, to keep improving the price for this industry. So that's a bread and butter, if you ask. But whenever we have to do something, we have to
00:54:26
Speaker
we collect the data, we do our own analysis, but then we have to go to our insurance partner and say, hey, this is what we have realized. We want to experiment with us. And then they are the eventual decision makers because they are the end of the day, they are the underwriters on paper. Okay, okay. So your underwriting function's goal is essentially to make doing business with you more profitable for the insurance company. Correct. So two goals, right? We have to do underwriting to
00:54:56
Speaker
open up market to more number of customers. Give me an example of this. How can you open up market by doing underwriting in-house? The first example that we talked about, which is the market was restricted to 50 or more members. We said, hey, now open it up to 10 or more members. Or the market said, hey, we want
00:55:21
Speaker
some insurance company said, hey, we won't go to tier 2 cities because we don't know how the underwriting works. We said, hey, we will go and underwrite. We'll figure out the underwriting model for that city. So now you've opened up that city, for example. Or some insurance company said, hey, we don't want to underwrite an insurance cover for more than 5 lakh per family. We said, hey, we'll figure out
00:55:48
Speaker
underwriting for 10 lakh or 20 lakh, right? Because there were customers who said, hey, 5 lakh doesn't mean anything, right? We want to start with a 10 lakh kind of cover. So those are examples of how you can use underwriting to open up newer markets. How did the underwriting happen? What is the, like say, you know, if an insurance company was comfortable till 5 lakhs and you pushed them to do 10 lakhs through your in-house underwriting function, what was the data that they crunched and, you know, what did they present then?
00:56:19
Speaker
So let's say you find out, I'm giving a very hypothetical example. Out of 100 claims, two claims go beyond 5 lakhs. And each of these claims are 2.5 lakh each. They were all 7.5 lakh claims. So basically, if you have to go from 5 lakh to 10 lakhs, I'm insured, you will essentially...
00:56:41
Speaker
Based on past experience, we know that you will have a 5 lakh additional outgo from a claims perspective on these 100 claims, right? So now for us to go from a 5 lakh to 10 lakhs, I'm insured. We don't have to charge it to exprizing in terms of premium. We have to just account for that 5 lakh additional outgo that I'm expecting. 5 lakh divided by 100 would give you the additional costing for that risk. Correct. Correct.
00:57:10
Speaker
So I guess insurance is essentially a business of being able to price risk well. And as you get more and more data, which gives you that intelligence to price risk, wouldn't it make sense for you to become an insurance company yourself? Because you would be able to price that risk much better than any of your insurance partners, because you would have that data across multiple partners. Yeah, there is, there is. So
00:57:39
Speaker
I mean, that's one of the future possibilities to take, which is we can. And this is, again, in that going back to the same logic of build versus buy versus partner, right? Taking approach of partner and from an insurance perspective, what you're asking is, hey, does it make sense to do a build or buy when it comes to insurance aid? And that is the possibility.
00:58:04
Speaker
I think we'll keep re-evaluating that decision of partner and if we at a certain point of time think that there is more profit pool and a larger strategic reason to do a build or buy in this, we are open to that. Right. Because you have distribution and as you get pricing, then it probably is a logical journey. Got it. Okay. And tell me about the funding journey so far.
00:58:34
Speaker
Yeah, so we have been very, very privileged to have some really good investors who backed us. Our very first investor was Incubate Fund.
00:58:46
Speaker
And that happened when we were in the very early hot process of solving this problem. Okay. When you were still meeting employers and asking them, do you need this? We hadn't even started building the product. And now who is one of the partners at Incubate Fund, he understood the space and he knew the problem that we were solving and he was ready to bet on us even helping. Then the second one was with the Sequoia and Tanglin Sequoia was the Sequoia search program.
00:59:17
Speaker
And that happened in a very inbound manner. We were in our build up and our scale up journey and a lot of Sequoia companies had started using Plum and I think that's how they started seeing or hearing about Plum.
00:59:34
Speaker
And again, very, very privileged to have folks like Ashish, Sharindra, and Rajan who were doing excellent mentors for us in this journey. And then Sankalp and Ravi from Time yet, really, really good set of investors who have been like, it doesn't let journey. And then the third one was with Tiger Global and all our existing investors who participated. Again, it was all, this was also inbound when you were not doing any raise. And again, because of two reasons.
01:00:04
Speaker
They understood this market and had a very strong thesis on the space. And because they had heard about plums from a lot of their portfolio companies. Yeah, that portfolio company effect is massive. I mean, you're solving a problem for them. They would obviously want to talk about how you're solving it then.
01:00:23
Speaker
That last one was, I think, 15.6 million, right? Correct. So what do you think? Where do you see Plum by 2025? What's the vision or the roadmap? The first milestone that we all talk about internally is within our five years of existence, which is by end of 2024, we should further at least 10 million members
01:00:53
Speaker
And when it says serve, there should have a high quality health insurance and access to health care via Plum. So that's the very first milestone that we are tracking. And this is not just about the numbers, right? It's also about
01:01:07
Speaker
the quality of experience that these 10 million people get. And one metric that we also track is the NPS, the Net Promoter Score. And one of the most important Net Promoter Score NPS is the claims NPS, because that's a moment of truth. That's when rubber hits the road, because in the business of insurance, it's easy to get customers. It's easier to sell versus provide them with experience when they're in emergency.
01:01:36
Speaker
And our metric there is we have to stay above claims and PS of 80. In that ballpark, we keep fluctuating between 70 to 80, and our goal is to be at that level or exceed the claims and PS of 80. That means it'll be a sustainable growth, right? Otherwise, we'll just have numbers for the sake of numbers, but we are not really following or providing a great experience.
01:02:05
Speaker
So the way we want to build this company is it's a company that is scaling up, but it's also scaling up in a sustainable way and actually solving some of the core problems.
01:02:16
Speaker
If you like the Foundathesus podcast, then do check out our other shows on subjects like marketing, technology, career advice, books and drama. Visit the podium.in, that is, T-H-E-P-O-D-I-U-N.I-N for a complete list of all our shows.
01:02:37
Speaker
Before we end the episode, I want to share a bit about my journey as a podcaster.
Podcasting Journey and Zencaster Recommendation
01:02:42
Speaker
I started podcasting in 2020 and in the last two years, I've had the opportunity to interview more than 250 founders who are shaping India's future across sectors. If you also want to speak to the best minds in your field and build an enviable network, then you must consider becoming a podcaster.
01:03:01
Speaker
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