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Building the health tech super app | Prasad Kompalli @ Mfine
445 Plays2 years ago
Prasad Kompalli embodies the playbook for entrepreneurial success. With a strong technological background and 8 patents under his belt, Prasad had a rewarding tenure at SAP, the German tech giant that honed his skills and expertise. He recounts the challenges faced by Mfine, navigating through a near-death experience that ultimately forged a stronger and more resilient company.
Additional links:-
1.How Bengaluru-Based Startup Mfine Is Bringing Doctors, Clinics To Patients Through AI
3.How healthtech startup Mfine is using ai to make virtual consults easier
4.Mobile phone now an examination tool in the hands of doctors: Mfine CEO
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Transcript
From Technologist to Entrepreneur: Prasad Kompali's Journey
00:00:00
Speaker
Hey, I am Prasad. Sat Kompali, founder and CEO of Hemfine.
00:00:16
Speaker
If you were to make a playbook of how to be a successful entrepreneur, then Prasad Kompali's journey would very closely follow that playbook. He is a technologist with 8 patents to his name and has spent more than a decade with the German tech giant SAP. He then got some startup experience as the Chief Business Officer at Mindra before taking the plunge into entrepreneurship with M-Fine. M-Fine started with a simple idea of allowing consumers to get access to the best doctors online
00:00:43
Speaker
and is today a full-stack healthcare partner for consumers. In this deep-end candidate conversation with your host Akshay Dutt, Prasad shares the journey of building one of India's leading health tech startups and how they faced a near-death experience eventually coming out stronger and more resilient. Stay tuned and subscribe to the Foundathesis podcast and any audio streaming platform to hear more such heroic stories of starting up and building resilience.
00:01:16
Speaker
So aspiration was really that a lot of things can be done with computers, a lot of automation. I mean, towards the 96, 97, we started hearing about Infosys, of course, and TCS, et cetera. Then suddenly it started thinking that, okay, actually things can be built out for global markets, large scale solutions can be built. But actually quickly realized within nine months that it's like a drop in the ocean, right? When we joined such a company like TCS.
00:01:42
Speaker
So left the company and joined a small, very small company that started operations in India, a German company, which was doing Salesforce automation and things like that. Then kept on thinking about how to build large scale systems. And also what happened was that that company I joined was acquired by SAP, one of the largest enterprise companies. So moved to Germany in a more responsible role, spent time there almost like six.
00:02:07
Speaker
six years, six and a half years or so in two strains, but came back beginning of 2009. But having said that, I also learned a lot. I mean, I grew pretty fast at SAP, learned a lot in the sense that how to large scale operations or to run large scale systems have to be with, you know, mission critical software development and delivery and deployment, people management, multicultural, multinational, distributed development.
00:02:31
Speaker
So, a friend of mine was a colleague at SAP and also he had a previous attempt at it to solve together with a professor at MIT to actually produce something that basically will change the cost equation if you can produce that kind of technology in India and capability of producing is there. So, as an engineer, as a problem solver, it looked like
00:02:54
Speaker
Yeah, everything is possible and, and we can do it and quickly build a prototype. And we thought that we can do this. You're talking of the kind of devices that say GE or Philips build, like those kind of, which are used in hospitals. It's actually implants. So even more specialized actually, like a cochlear implant, which it's like a neurostimulator. So it helps you bond deaf people to hear.
00:03:15
Speaker
Things like this, based on certain conditions to be met medically and things like this. There are only three, four companies in the world that are doing it well, right? These kinds of devices, right? So it's pretty deep in that sense. See the problem solving that technology is the easiest part, building the business around that product.
00:03:32
Speaker
was all the cushion I had when I was in a company like SAP. There are a few things that I have learned about the market as well that the entire ecosystem has to accept the price point. The entire ecosystem has to accept that this is something that they will also get benefited from. The doctors involved or companies involved in between suppliers, etc. And the training that is required for the device post sales and all that stuff. So we understood that will take
00:03:56
Speaker
and almost a gestation period for an implant like that to be built in India and delivered, et cetera, and to be accepted. And we were absolutely not ready in the way that we were imagined in the company. We need a stronger platform support, perhaps like a GE or somebody like that would do much better, or even as a strategic investor, we have to get somebody. So had a pharma company CEO committing to us as an early investment, probably that also blinded us a bit, that no, and did not uncover the problems
00:04:24
Speaker
for a while because the funding was committed so we were more focused on building and spending time on what we are comfortable with of building a prototype and things like that but really not understanding the overall ecosystems and on the same time of course the internet commerce was taking off and got in touch with Vokesh and Ashutosh at Mindra and Vokesh was actually doing parallelism consulting projects of technology architecture etc so one of the consulting projects said he was looking for some technology head as well for the next generation of Mindra's journey and things like that
00:04:53
Speaker
So I said, I can do some consulting. So started with consulting at Mintra. Then one thing led to the other and the Mintra journey started there. You joined Mintra in a revenue role. Like LinkedIn says you were chief revenue officer. Whereas in SAP you were in a technical role, right? Like you were leading a team of developers. Like how did you make that transition?
00:05:14
Speaker
I did the consulting project that was again technical in the sense that what is a product roadmap, technology roadmap for Mindra to be a successful, differentiated fashion e-commerce play in India of world standards, right? A lot of inspiration from worlds or companies. So at the time Tomuker said that Shamik will do the CTO role and he was looking for a
00:05:35
Speaker
your city of who will go deep and build the systems from for the future and the deep expertise on building the systems while because i was still consulting ideally i would have moved on because there's a technology cto coming in already but in discussion location i also got inspired saying that it can i do something different on the business side right
00:05:54
Speaker
For me, it was a different challenge, but it is not really that I could only do technology. Having gone through a startup and having seen some senior management roles at SAP, et cetera, I also felt that this is a good opportunity for me to extend beyond being an only SQL CTO.
Strategic Shift to Health Tech: Birth of M-Fine
00:06:11
Speaker
Essentially, it's like growth hacking was like the core focus, like using data to figure out how to drive growth.
00:06:17
Speaker
Yeah, pretty much started like that. And then digital marketing is an inevitable part. And then you'd be surprised. I set up the data science team, but actually we actually had a growth engineering team, which is different from the core engineering team as well, which is doing productizing a lot of these things. Like helping to increase the average order value by suggesting that you may also be interested in this when someone selects something or showing similar items.
00:06:44
Speaker
Yeah, yeah. Start from there, recommendations to sorting logic or to, yeah, sorting logic was kind of recommendations as well. So in the way that the merchandise is appearing, things like some of the growth marketing to retention tools, et cetera, right? Communication engagement tools, et cetera, increase the LTV.
00:07:00
Speaker
Pricing was a big deal to really optimize what is the optimal price between conversion and margins. The role expanded into looking into the entire category management as well. Entire virtualizing, supply relationships, marketplace versus inventory model, working with the brands, building, bringing new brands to the country, or working with the existing brands to increase the share of and improve business. And you were there during the acquisition by Flipkart as well. And I think post the acquisition also.
00:07:29
Speaker
2014 was the acquisition, 2016 I left. So it's pretty much in the middle of my skin treatment rather the acquisition happened. And I think my personal opinion, one of the very few large scale mergers, right? Successful mergers, right? That succeeded in not only preserving value, but actually increasing value for both Flipkart and Mintaret, both the world parties, right? But yeah.
00:07:52
Speaker
Being in that successful merger and seeing through was learning in itself, how to keep the focus, how to understand value creation, value preservation, and how to do things which are good from a core competence point of view on both sides.
00:08:07
Speaker
So what led to the birth of mFine? These are very different domains from fashion e-commerce to health tech. Yeah, I think that entrepreneurial bug was still there. Mintra was a good platform for me to just learn a little bit more on the consumer side and things like that.
00:08:25
Speaker
So I got very interested in fundamental transformations that technology can do, right? And then of course, AI was coming up, et cetera. Health was definitely on top of my head. The inherent nature of how technology can fundamentally change the way healthcare delivery, health care is an inherently data-driven business, devoid of technology as of when we started. So, so started thinking about it in the middle of 2016. Around the same time, towards the end of 2016, started talking to Ashutosh as well. Ashutosh was the co-founder of me.
00:08:55
Speaker
So we actually traveled a bit. We went to China, Singapore, US, talked to few companies in UK. There is Babylon Health that was getting built up like a chatbot driven doctor kind of patients and things like that. There was Ada in Germany.
00:09:10
Speaker
So there were pieces like telemedicine and there were pieces that were there in different countries that were evolving. So we quickly thought that this is something that is super useful in a country of such an expanse like India where infrastructure is not reaching, physical infrastructure, doctors are not reaching. And doctors are limited in number. And then we talked to, of course, few customers, potential customers, few doctors, hospitals, something like
00:09:35
Speaker
50-odd doctors, 100, 150-odd potential customers, like general users, then the idea of M5 is shaped up. What was the original idea? Was it like chatbot, doctor, consultation?
00:09:50
Speaker
No, actually it was a little bit more abstract than that. So, so I personally, I'm a bit more abstract thinking than sometimes it doesn't work. That's why part of the reason why I was too soon excited about Windows Analytics was also because that problem at an abstract level sounds very interesting. So.
00:10:07
Speaker
But nevertheless, M5 also has a little bit of an abstract idea. So my idea of M5 was that, see, we have so much of mobile changes, the life of people, and so many services are becoming consumer internet services. Can we imagine healthcare as a consumer internet service or more broadly, even health as a consumer internet service? That means that it is streaming, it is always present.
00:10:29
Speaker
You can instantly connect. It's personalized for you, knows you. You can access any service you want on demand and make it as simple as open the app. Just tap on a few things, talk to the doctor, tap on a few things, get your medicine, tap on a few things, get your test organized. So we found that mobile and AI is a superb combination to actually solve this problem and make healthcare a very consumer internet service.
00:10:54
Speaker
kind of thing and from that abstract idea of course came in saying that no we need to have a on-demand consultations not appointment based so that people can immediately go and get it right like any other internet service on internet you don't go and take appointments for later it particularly in health when you need something right so and then further
00:11:12
Speaker
Being on demand, we created the AI bot, which basically can be available anytime and bridge the time between the doctor coming in and you logging in for a doctor's consultation and with data collection and pre-diagnosis and the intelligence can be built in. So that was the idea. So the version one of the app was around consultation.
00:11:33
Speaker
Like that was the initial focus. Yes, yes. And was it like an aggregation model where doctors could like sign up and as gig workers in a way? Yes, we didn't do it with individual doctors. So work with hospitals where the specialist doctors are, orthopedicians or cardiologists or even gynecologists, etc. So unless they believed in you that you are a good tool for them to deliver better care in line with their reputation.
00:12:03
Speaker
they wouldn't have come online to us. And you built diagnostics and pharmacy also in version one or that? Yes. Version one strictly not. Yeah. Version 1.5, we started showing option to do order tests or order pharmacy, et cetera. So pretty much by 2019, we started having that feature as well. 2018 was the launch of V1. 2019 middle, we already started doing this.
00:12:29
Speaker
How did you do the plumbing here in terms of pre pandemic? I don't know if doctors were really that comfortable with the teleconsultation. So how did you get them to agree to really honor that if someone has booked a slot, then the doctor should be there in front of the camera at that time.
00:12:47
Speaker
building the plumbing for the data transfer that if the doctor orders a test, then the patient can seamlessly book the test and the results can be sent back to that same doctor. If the doctor prescribes the medicine, that medicine can be seamlessly ordered and all of that. How did you do all of that? That seems like the hard problem here.
00:13:06
Speaker
Yeah, yeah. One of the hard problems was, as you were saying, the time adherence. When you go into M5 today, you actually say you select the button called consult now. And then there is a AI board that is actually coming in and collecting data and at the end of it.
00:13:22
Speaker
within 15 minutes of that ending of that quick conversation with AI, you actually get the doctor, right? Of course, there was a push and pull with the doctors as well. Why should I do this? So even now on M5, 95% of appointments start on time. And the 5% start within 8 minutes of the same, within the 8 minutes of the given allotted time.
00:13:47
Speaker
Right. So, so, so a hundred percent starts within statement, 95% actually online and another 5%. So we achieve this over multiple things. Our system is big for that to take care of checks and balances, pre-check, sending notifications to doctors, getting it ready, sending notification to patients so that they come on time and things like that. From the beginning said it's a consumer debt service that has to be on demand. And then of course, work with the partners on the diagnostic side and pharmacy, we have pharmacy, we are not really skilled. We've been limited in certain pin codes, et cetera.
00:14:17
Speaker
We also felt that we needed to differentiate the pharmacy delivery experience to be able to be a reasonable player compared to already established. Pharmacies are very entrenched play, largely capitalized players. Why not just plug it with an existing pharmacy, e-pharmacy player? Like to be honest, I talked to everybody at that point in time for starting off, right? But at around that time,
00:14:40
Speaker
Most of the pharmacy use cases were chronic patients. And medicine, when you order, it could come two
Overcoming Challenges in Building M-Fine
00:14:46
Speaker
days later, right? 36 hours, right? So it was a chronic patient, chronic acute patient, etc. But the experience I wanted was different. The experience was that I do a consult, the outer order medicine, and kind of acute care in the industry terminology. So immediately I want the medicine next two to four hours, right? So that's why we finally built our own system and worked with our own partners.
00:15:08
Speaker
who can do. You were truly replicating the OPD experience. When you go to an OPD, you get a prescription and then you get it filled. That total itself has a pharmacy where you get it filled.
00:15:19
Speaker
And it was important for us that most of the use cases were that. When you bring your child or you come yourself, you bring your spouse or you bring your parent. Dr. says, okay, these are the medicines you should use. Sometimes doctors also say, use this medicine. One day later, if it doesn't improve or two days later, it doesn't improve, then we do the test. See, this is a very immediate kind of a use case. So those things were not captured by e-pharmacy at that point in time.
00:15:45
Speaker
And your commercial engagement was with the hospital. You would have an arrangement with the hospital that X number of doctors being available from this time slot and this time slot. They would be like a roster. Doctors would be available on M5 app in that roster. And you would manage the appointments for slot which was allocated to them.
00:16:04
Speaker
Yes, yes. Largely we were working with the hospitals in the country. You are not paying upon consultation fees to them that you're paying for the number of hours that a doctor is committing. No, there was a commercial is based on consultations only.
00:16:19
Speaker
There is no minimum guarantee or business or anything like that. So for us, whatever we opened is a new channel for them, right? So it can make them by destination. For the customer in their journey, do they select the hospital chain or they select consult now and then whoever is available, they get.
00:16:35
Speaker
I select the doctor in the hospital. The doctor from the hospital is visible in the list. So it's always our list is sorted by the availability and the distance to you. So distance was again another insight that we said that it gives you just the comfort and we were humble enough to understand that
00:16:53
Speaker
Healthcare experience will involve offline as well at some point in time, right? We don't want to be, you know, one is, we don't want to be like inadequate, saying the doctor says, no, I want to examine you. Then the customer has to look for somebody else altogether. It's not if the doctor, if she can go to the same doctor, he or she can go to the same doctor, it would be better. People typically choose based on experience, based on specialty, et cetera. So that's how it turns out.
00:17:20
Speaker
Would you monetize the offline transaction also, if the doctor said, I want to examine you physically? Yeah, there is a mission that can be booked through M5 only. That is a separate monetization on top of the online whenever they visit the hospital. Okay, for a patient, it will cost them the same, whether they go through M5 or they directly go. Yes. Okay. So tell me how you build traction for it, like on both sides, like building supply and building demand, because
00:17:47
Speaker
Even to build supply, the model would need some proof of concept initially because you're not giving any guaranteed payment. So you would probably need to show them that, okay, this hospital is using it and they have these many concerns happening through it and so on.
00:18:03
Speaker
I think a few things worked well because when you go to a hospital and talk, we went to the hospital primarily because we thought that it's important to bring top-notch specialists online. It will be a big differentiation.
00:18:20
Speaker
There is another underlying reason, when you talk to a hospital, it's a business decision and it's a strategic decision. I'm going through a digital channel, I'm opening a digital channel. They are not counting, my interpretation of this, why it works, they are not counting this hour, this how much, they do come. Finally, they'll say, okay, it's taking off or not, but we'll have enough time to build that initiative.
00:18:44
Speaker
from a hospital point of view. So it is not like immediately I get my extra patients or not. I'm not counting at the end of the day how many extra patients I've seen. And they're able to see that view. And secondly, they're also able to see that this is an additional channel. Now I'm present on digital. Even for example, somebody who's taking a second opinion for a surgery, I have a chance to convert into surgery, which is a significant portion of my business. So essentially for a hospital, their OPD is like a top of the funnel.
00:19:13
Speaker
there are 1000 patients walking in, 100 of those or 50 of those will get converted into more high ticket services, be it hospitalization or surgeries or procedures. Absolutely. Do you still remember the first account you cracked? Was it like a big sense of achievement?
00:19:31
Speaker
Yeah, it was in the sense that until then it was only in our heads, right? So somebody is seeing the same point and saying, yeah, we would do it. And that too, we did it without even the first version of the product click. No, it was 70% PowerPoint and he was playing work in 30% some pieces running. Right. So.
00:19:48
Speaker
Which one was it? Like the first account you converted? First was RxDX in Bangalore. They still work with us. I think one more thing is the software aspect is that when we talk to hospitals, institutions, CXOs of the hospitals, etc., we could align at a vision level.
00:20:04
Speaker
It was becoming less transactional, more discussion about what can we do? They're also thinking about future growth areas, the future areas of health care in India or desert trends, et cetera. We come from a technology background. We definitely attracted a bit of respect for whatever proof points and pedigree that we had. So early success was largely based on that trust and that appealing to the vision of these visionary hospital owners and doctors, et cetera.
00:20:33
Speaker
How did you tap into that network? That is like brute force. Of course, there were a few people we knew and we somehow got to know, but there was also like on the ground me and Ashutosh used to take doctor appointments and go and meet without any trouble and you know, just like really street smartness. That was the first I would say six, seven months, something like that.
00:20:53
Speaker
or maybe even, yeah, almost like a nine months. Like you would take an appointment with the head of department for a consultant. In that consultant process, you would try and control it. Amazing. That is amazing. But I think in nine months to 10 months into the business, we hired somebody from the pharma who worked with a lot of hospitals and doctors. She changed the game on the relationship side. We don't come from that background, so we didn't know that. But he definitely helped. And slowly, of course, the team started building and building.
00:21:22
Speaker
I'm guessing that economics of a digital consultation would be much better, right? Because you're not spending on nurses. In a physical consult, you need to have nurses, you need to have a cashier and all of that, which everything is now through AI and like through the app. See, but the transaction value is small. The incrementality would be less. Thing is that two things. One is the volume has to be good enough. And secondly, there has to be a, let's say, LTV has to be better. The percentage of customers have to move to other services as well.
00:21:50
Speaker
So once you signed up a certain, like a minimum viable size to have enough options in your app, then I was assuming you would have done a launch, a go-to market. Yeah. So typical go-to market was, of course, digital marketing and a bit of offline marketing. Like we would show up at pharmacies, have our pamphlets or the bags that you get from, those kinds of things. Some of these hospitals were also forthcoming.
00:22:16
Speaker
that to say that you can also consult us digitally on and put up posters in the OPD, in the OPD, et cetera, right? So it was not like it was like immediately scaling, right? It was like a lukewarm slowly because it was a lot of behavior change. See, what was interesting was that the use cases were like really reinforcing the belief in us that it's a matter of time, like pediatric patients from about to take off kind of trying about to train was about to leave the station and they,
00:22:46
Speaker
and we was like instantly crying and the co-passenger downloaded the app or it was like unimaginable for us. It felt as if people needed it, right? And the marketing, I wouldn't say was the best ROI, but still because of this behavioral change, et cetera. But however, there wasn't any other option and we had to keep pushing, keep showing up.
00:23:06
Speaker
Like this is an online consultation. Talk to your doctor in 60 seconds. Talk to the reputed doctor and book your test and things like that. Let everything happen on your phone. So we did spend a lot of money on marketing. Of course, then this was going on in 2019 when we launched other services like diagnostics, preventive health checks, e-pharmacy, second of all, beginning of 2020. Pharmacies and diagnostics, these were like through partnerships.
00:23:33
Speaker
Similar partnerships, again, similar approach with a few national players and local players. Again, you give a choice to the customer based on the distance and factors like immediate availability of the slots at home or even at the center, if you have to press scan or something. And systems were integrated. The reports will come to the app. The doctor can see the reports with the consent of the patient. Those experiences were taken care of.
00:23:54
Speaker
Like you would have integrated with the systems of like say Lal Path Lab or ROGL so that the data can flow, the booking availability, all of that can be. Absolutely. Systems were sophisticated enough. On the other side, we integrated where it was not, we used to give our system and they start to use our system. Like lab management software, you created the lab management software for the unorganized labs.
00:24:17
Speaker
Not lab management. Lab management is more internal of the lab. But you can think about it as CRM. Booking an order, engaging, and sending the robot to me to stop bringing the robot piece back and things like that. And so you were essentially doing like a hyper-local ANC. So like one pharmacy for each pin code, which could, and you would have some logistics partner, like a shadow fax or someone who would take care of the pickup and drop. Okay.
00:24:42
Speaker
Absolutely. How were the numbers trending by then? Like what kind of numbers were you tracking? Was it number of consults or was it like a revenue? Yeah, it was more number of consults, something like few thousands we were doing every day. This is by 2019, end of 2019. And a few more additional transactions. I think it was more like
00:25:03
Speaker
1000 concerns and maybe 300 additional transactions, something like this for a day, something of that nature around that number. Of course, then we also explored other customer acquisition channels a bit on the corporate side that the HRs want to give these benefits to users. Very new quote, but like a little bit like maybe out of 1000, we used to get 10 or 20 from corporate kind of thing. One corporate degree and they won't take it seriously kind of thing at the early days.
00:25:31
Speaker
Like they would pay for the concern for their employees, something like that. Yeah, pretty equal in that time. And at that time, of course, yeah, much COVID happened, right?
Impact of COVID-19 on Telemedicine and M-Fine
00:25:40
Speaker
So the things have changed pretty dramatically after that, right? So we immediately, of course, government started saying that telemedicine is important. They changed all the gray areas, et cetera, and that telemedicine is the way to go. What were the gray areas earlier in tele-conserve?
00:25:56
Speaker
Not clear it was made to be sometimes scandalous. Why are you doing this? Are you doing something behind the scenes? It's kind of things we need to explain. We're just an extension of the hospital and to the digital world and things like that. So those were all removed. March 24th was the lockdown and April 1st week, the guidelines were amended by the medical council saying that, no, we should do it.
00:26:18
Speaker
You well capitalized, had you raised funds? Of course. How much had you raised by then? By then we already raised 30 odd million for 3 rounds. So we were okay. I think by then we raised around 20 odd million. And then after COVID, 6 months into COVID, we raised again another victim.
00:26:36
Speaker
So this is like a hybrid business because any consumer internet business which is trying to change behavior needs to do a lot of cash to really make that behavior change happen and make it like a repeat behavior change and so on. So hence you needed a lot of money for customer acquisition.
00:26:56
Speaker
Yeah, it's about building the market. So definitely needed that money. And to be very honest, without COVID, it was even more difficult to change that behavior. So yeah, you would have had to spend a lot more time and money. And even the distribution channels were not mature enough and things like that. So even if you imagine doctors or hospitals or any other source of distribution, like corporate channel, et cetera.
00:27:19
Speaker
What do you mean by distribution channels here? For example, a corporate taking the product and giving it to their employees. That's what I meant. A hospital saying that I want to take this and give it to my patients. It's not very mature in that sense. People are doing it very proactively in that sense.
00:27:39
Speaker
Yeah, but after COVID, of course, things have changed. Government changed the rules. So providers became a bit more comfortable doing this, right? And of course, there was another way, right? With lockdowns and everything. So one thing led to the other, and initially in COVID, because of lockdowns and everything, and because of whether a lab is allowed to do this or not, RTBCR, et cetera, kids were not available, diagnosed with it, got hurt initially, because also people are not going to the lab.
00:28:06
Speaker
for any other thing. But then after that diagnostic was taken off big time. It's opened up like crazy. I always say that COVID led to a lot of things. For example, people understood that teleconsult can be done properly, fairly complex situations can be handled. It's an important infrastructure piece for India to have, for healthcare systems to have, or policy to have, or consumers to have. Secondly,
00:28:30
Speaker
People became aware that testing is important. Knowing about your health is important, right? And it has to be, it can be done at home. Testing has to be done, right? And one more interesting thing was that people realized that they need to know about their health. They have to measure vitals. Everybody understood oxygen saturation measures. Long strength measures. You have to be serious about these things. The last point was that people understood the health data.
00:28:57
Speaker
and regards why is it important right the vaccination the language change right now vaccination what is comorbidities like where is my record when i'm a diabetes patient where is my regard that i'm a heart patient where i'm what are contraindications and think ready i need my health records
00:29:17
Speaker
This was all locked up in my hospital or somewhere else, somewhere else, or I lost it with papers. These are the four factors, like teleconsult, diagnostics, wireless measurement, and data capturing. This has all become very important. People have understood this. Large population has understood this.
00:29:33
Speaker
We launched a quick chatbot saying that evaluate yourself whether you are having covid or not based on whether you travel or whether you are coughing, whether it's a dry cough. So quick chatbot we launched based on what we have already in the infrastructure wise and that took off really well.
00:29:51
Speaker
We had a data science team working on area, etc. And the team has come up with the idea that we can actually implement the algorithm, capture the PPG signal, it's called photoplatysmogram. So it's basically a standard technique of looking at a pulse oximeter.
00:30:06
Speaker
you put your finger in it, basically throwing a light on it, taking the reflection of the light from the blood stream and based on the variations of it, you can measure your oxygen saturation level. So then the team has invented or innovated that take the signal from your finger, putting the finger on the mobile camera of a simple Android camera, phone camera, if the signal is good enough and they proved that the signal is good enough to measure SPO.
00:30:34
Speaker
That was fantastic. Kudos to the team. Kudos to all of us who have contributed to that in the team. That was fantastic. That was basically why I believed in it, that mobile has to be the central point of healthcare service. Seeing it in action was for me... It's like a step change.
00:30:52
Speaker
Until then, I was happy that, oh, with just a mobile, I could get a doctorate patient talk in a detailed way. The way I built it, not like just a video call. I could actually diagnose, I could do everything. I was happy about the diagnosis itself. I think now suddenly I saw a vital being measured on mobile, right? So I was like, hilt to pieces. Then of course the team now got the mandate and the research and wherewithal. They are excited as well. Now, over a period of time, we launched heart rate.
00:31:21
Speaker
Measurements pretty accurate SPO2 is like and again that also through the mobile camera or finger And then beginning of this year we launched around April we launched BP. We can mention BP now
00:31:32
Speaker
It's amazing. All through the camera and finger. Amazing. These are all based on thorough research, published papers, et cetera, which we implemented the algorithms of it. And we enhance the algorithms because the way that the techniques, et cetera, which are RIP, not only that, the effectiveness of that has increased because of the data that we have.
00:31:55
Speaker
we can apply ml on top and then actually the algorithm can improve and the learning can improve right so that improve over a period of time so we and fingers crossed we will be launching even blood glucose level monitoring blood glucose also without a prick like generally you did a
00:32:12
Speaker
with the same DPG signal, so we should be able to track it. And geographically, do you cover all of India, or is it more on metros? No, see, for the web services, if you look at the consultation and these tools, etc., around 45% comes from non-metros. And obviously, the physical services, hospital visits, or diagnostics, etc., those come more like 70% from metros. But the idea is to expand it.
00:32:39
Speaker
So, for the intro, I mean, it would not be like finding a close by doctor, but it would be like solving an immediate problem that you want to consult now. Also some kind of expertise that probably is missing, right? Like, so there are hardly like, even to detect a problem is so difficult in this country, right? So I remember one, so there was a psychiatrist consultation
00:32:59
Speaker
we were doing for an elderly patient, and the doctor got it out and asked the patients in former, both were on the video, to walk and show, see the gate. And he suspected something and he said, you should talk to the neurologist. And there are, I think last when I saw, I think around 1700 neurologists in this country.
00:33:17
Speaker
That's it. They could talk to a neurologist on M5 and their suspicion was true that there was some issue in the brain, some growth, which is causing the problem in the gait as well. And they could actually get to the next step of care, at least what they should look at.
Post-COVID Strategy: Corporate Partnerships and Profitability
00:33:32
Speaker
What type of numbers do you do now? How many consultants?
00:33:35
Speaker
So we come back now towards, we're now doing around 3000 or so, but our mix has changed. We don't do digital marketing anymore. We do a lot of corporate right now. So a lot of corporate business has come after COVID. Like the company would pay for every consultation or they would like to say that we'll pay part of it. They take a subscription and then say that so many consults per person kind of.
00:34:00
Speaker
Yeah, like a package where in a year you are allowed to three free concerns. So, yeah, so we went almost like from 1000 to almost like 10X during COVID. Obviously, it settled at a higher end. It didn't stay there, but it came down, but at a definitely higher level than what it was before COVID. And in the meantime, we also went to a restructuring we are more focused on.
00:34:24
Speaker
pushing towards profitability, we have a goal to become a bit positive by next year. So with the partnership with the joint venture with lifestyle, so we go on into that direction where we can actually build own labs, own flipboard service, own across all services like pathology, genomics, radiology, et cetera. So we realize that there is a experience differentiation we can bring. And of course, economics are even better than just an aggregation. So in areas where it matters, we are actually owning up as well. So that's the direction that we are going now.
00:34:52
Speaker
So tell me about this merger with Lifestyle. What triggered it? And I would have thought probably the easier merger option would have been with the e-pharmacy players because it's purely digital integration. And like, what made you want to instead choose to merge with a diagnostics company with an offline presence?
00:35:11
Speaker
Yeah, so I think we explored all options, to be honest. So from the combination of some kind of comfort of working with Mayur and Dean, Mayur was an early energy investor named Vin as well, by the way. Yeah, so we know him. Just give it a round of Mayur for our listeners who don't know about lifestyle at Mayur.
00:35:29
Speaker
Oh, Mayur runs the live cell. He is the head of the live cell business, MD of that. The live cell is into what is called cord blood banking. And that's the core business, but they've expanded into other areas as well of therapeutics areas or genomics and things like that. And also a lot of specialized diagnostics in mother and child area. It started with cord blood banking. Basically it's the storing of the cord blood and a baby's bond so that you can use the stem cells.
00:35:56
Speaker
The stem cells, you can use the stem cells in therapeutics when it's needed in specialized areas. And then they expand it into other specialized diagnostics and genomics, etc. That's the business he runs. And lifestyle is like a funded startup? It was a funded startup, but it's fully profitable company. What was the trigger to explore merger options?
00:36:15
Speaker
The trigger was definitely a combination of our own roadmap and outlook from after five years of in the business. And more immediately was that the environment is definitely changing. So we definitely got hit by kind of a, we didn't expect the speed at which the things have changed in the funding environment. So we were in the middle of our funding round.
00:36:36
Speaker
And then things have changed dramatically. We were getting the kind of funding that we wanted to get to. That was one trigger immediately. But tell me, I think you raised almost $70 million in the last two years, right? For two years, we would have raised around 17 odd million, 20 odd million. And the next two years we raised another 47 odd million. Why did you need funds? Like you had raised a pretty substantial amount, like 48 million.
00:37:03
Speaker
Lasts like about a year or so back. So yeah, part of it was about a year and that's some branch care earlier, but yeah. So I think we still were betting on growing the market marketing as well as we were taking pretty deep bets into technology buildings, upfront, right? So none of the things that I have talked about are possible without deep investments into technology, right? And these are not monetizable also.
00:37:28
Speaker
And not immediately, definitely. And it has a story of engaging the user and constantly being available for the user and then building more long-term subscriptions for the user, et cetera. And it's not an immediate thing that you go take it and pay for it.
00:37:43
Speaker
In the market, I don't think anybody else has similar solutions, etc. It took a long-term view that we have to rebuild this in a different way. In the shorter run, we probably underestimated the amount of money to take to build the market purely by marketing to some extent. We could have done a little bit of alternate approaches of how to, we could have done, let's say, more aggressively on corporate
00:38:06
Speaker
earlier in our cycle compared to when we started. So yeah, corporate started more, let's say, more deeply for us beginning of this year, could have gone a bit more aggressive last year itself. That would have given us the cushion of the store acquisition cost. So do you regret spending on the product?
00:38:23
Speaker
extremely cool features that you built up. No, no, not at all. I think we could have done a bit differently was the way we built up our corporate channel, right? And we could have done a bit more differently on the way we built our margin structure or the structure of how we did our diagnostics business, et cetera. But these products don't significantly move the needle for you, right? So today,
00:38:47
Speaker
For me, within the first month of usage of a free tool, 25% of them are giving me a paid transaction, right? My engagement and app retention and engagement of app opening, et cetera has increased by three X after the tools were introduced, right? So, and acquiring users for a free tool is.
00:39:06
Speaker
much cheaper than acquiring for a paid transaction. And secondly, I'm addressing a larger market from an awareness point of view, wherein you may not be sick today, but you are okay to measure your BPE or SPO2 or etc.
00:39:24
Speaker
you are monitoring, tracking your periods, etc. So, these things have a significant strategic value and a business value that is attributed. This is the reason why today you don't need to spend marketing. Yes. Today, everything is organic at this point in time. We will start to spend marketing in some areas, but we will actually market these tools on the pay transaction. Which will be a lot cheaper. The cost of acquisition will be a lot cheaper. Amazing.
00:39:53
Speaker
Just tell me about the capital and the partner deal. Is it like an equal margin? So I wouldn't go into details of that exact share and things like that, but yes, there is a coming together to create a large scale platform wherein we own significant parts of the value chain, particularly those high value and high margin kind of parts of the value chain, like diagnostics and things like that. And we expand the digital footprint across all the services with MPI. So
00:40:21
Speaker
Lifestyle diagnostics has come in, we have come in, and we are also rolling up more diagnostic chains in all areas, pathology, radiology, diagnostics, et cetera. And for this joint venture already, you're acquiring regional players, not so organized players.
00:40:39
Speaker
Yeah, the regional players, their own unique strength, et cetera, and bring them to this platform where all these digital capabilities can be leveraged for their growth and scale in the future as well. And consumer experience can be unified, improve, increase the effectiveness, et cetera. Now we can do much holistic care programs, like for example, how do I take care of long-term, your chronic conditions and things like this.
00:41:04
Speaker
How do I do a lot more valuable preventive care with the combination of correlation of data of your imaging or pathology, biochemistry, as well as genomics. So a couple of fundamental issues of improving of economics and customer acquisition costs, et cetera, investment into technology, deeper ownership in high margin areas, and having sufficient capital to innovate. All of these problems are solved for us right now. So we are now actually really accelerating.
00:41:31
Speaker
Over the next 12 months, very exciting roadmap, almost like accelerating like crazy to become one of the top five platforms in the country. And then eventually in a couple of years, become top three platforms in the country. How will you plug in the pharmacy gap? We are also doing pharmacy now. So we have an interesting partner. We'll announce it soon, but we have an interesting partner with a large pharma distribution capability. Like an offline, not like a startup. It's a distributor across offline distributor of pharmacies.
00:42:01
Speaker
The already connections to nearly 60 to 80,000 pharmacies across the country and top 120 brands of the country are already there as part of their network. So we are exploring some things which will materialize very soon. So that will be the supply and then you put in place, like you'll plug in logistics. Where's the retail experience? Yeah, absolutely. Amazing.
00:42:24
Speaker
So that's what I said. It's a kind of a V-shaped thing and we have got everything to become one of the top notch platforms in the country. And I'm super confident of the technology. Now we are combining that technology with capabilities of real assets, both offline and online, both services and products. So that's the future.
00:42:43
Speaker
How did you feel at the bottom of the V? I'm guessing when you had to lay off about half of your headcount, that must have been like the bottom of the V, right? How was that period for you? Good question. Yeah, it's tough. It's tough in the sense that, let's go back to my, as I said, right? I've always been successful, right? Not an outstanding success, not an outstanding failure ever. But this is like a kind of a setback, a bit of a setback, but major because also I didn't like it at all that I had to, we had to take that tough call of laying off.
00:43:12
Speaker
readjust the cost structure and everything.
Building M-Fine: The Importance of Team Sport
00:43:15
Speaker
The only thing that was important at the point in time was to stay afloat, make sure that, yeah, one is surviving and secondly, preserve what we have built. We deeply believed in what we have built. So for survival, we didn't kill things that otherwise... So just a few minutes ago, you said, right? I mean, these are not immediate value. Why are you building these things? It's very easy to kill those innovations.
00:43:37
Speaker
I mean, cause take becomes paramount, right? But how do we find that balance and how do we stay sane and the reason for our existence and the purpose of this venture? And so I don't think it was a heroic act. It was a good, good enough effort and to survive, take day by day as it comes. So I want to understand what is the relationship between your GMV and how much you like your GMV in this case would be?
00:44:04
Speaker
the consultation fees that you charge to a customer. So what is the relationship between the GMV and what you... The GMV is basically what the customer pays. And typically different margin structures for different services. So we have agnostics and you're an aggregator, you are in the mid-40s kind of margin, but that'll go up further if you're owning the lab itself, right? But mid-40s is massive. I had no idea that the margin was so high.
00:44:32
Speaker
And diagnostic is good. And consultation, we typically have, we are not a lead gen platform, so we are more a consultation platform. So we get almost like about early thirties kind of margin. Pharmacy would be lower margin because we work with the retailers, the fag end of the chain, but which also will change now going forward. But yeah, that's roughly the question. And what kind of top line did you do last year? Or what is your top line target for this year? Or if you can share some revenue numbers,
00:44:59
Speaker
What broadly I can tell you is that we reached a GMV of 40 million annualized beginning of this year. Part of that revenue came from different services, stopped them, we reduced the market, all that stuff. But overall, we're looking at next year to do slightly better than that, in fact, but almost nearing the profitability end of next year, getting to a bit of positive. Okay. Do you have a five-day week? Yeah. I mean, for me, it's like all days a week.
00:45:27
Speaker
What are this? Usually a bit relaxed on Sunday, but yeah, six days. Okay. So let's frame it like this. So I want to understand from you about organization building and you've been building M5 for quite a number of years now. So what are some of those lessons that you can share with future founders about all buildings?
00:45:47
Speaker
I think it starts from the premise that like building a company, entrepreneurship is a team sport that I link very strongly. It's not going to be an individual sport or an individual heroics that we build a large impactful company. If you were to build that, right? So if you're doing hobby projects, maybe different, but really building an impactful company with multi dimensions to multi-dimensional aspects of capabilities, culture and everything. So.
00:46:16
Speaker
You really have to have a team sport kind of attitude. I also believe that sport is a better analogy than some organizations or some people talk about family and things like that. I believe that that comes somewhat in the business environment that is less relevant. The team is not a family team, it's a team sport team in the end.
00:46:35
Speaker
I think there is a lot of performance aspects, mutual accountability aspects, which are difficult to map to a family analogy. Typically, family is more about sacrifice and unconditional support and things like that, those kinds of things. But some of the experts are irrelevant, but Kingsport is way more understandable, relatable for people. And that too, the younger generation, which is basically involved in building these companies and startups, I think that's even more relatable and understandable. And for me personally, as well, that works better.
00:47:05
Speaker
So starting from back to mine, for me, I strongly believe that co-founder would be important. So that's how, for me, is that if you have an idea, you have some thoughts, et cetera, start with convincing at least one more person who has at least the same level of commitment, skin in the game and excitement. So that's the first sales job, right? So as the CEO or a founder, so that's where it starts. And then you convince a lot more people and not only convince, but bring that same conviction in a lot more people.
00:47:35
Speaker
of what you believe. So yeah, that's how we built it. Me and Ashutosh started this, got excited about this, and started building some of the early teams, which is also from X-Mintra as well, and started building that around. And build a larger team, the initial team was very important, so that they really can take them and have the same
00:47:57
Speaker
Level of commitment to understand the market, understand the consumer, build the product that is unique, or build the company that stands by certain values and approach. So that's the philosophy being followed. The one thing I've learned over the years, I've worked in small companies, of course, big companies as well, multinational companies, and what I learned is that you need to make also your culture, culture and values are
00:48:22
Speaker
Largely influenced by the co-founders because their personality, their approach to things, we definitely... That's one point. Second point is, unless you have really specific thing for your business, it will become a little bit meaningless. So things like we have fun, we really love our customers. These things are very superfluous at some point in the overloaded terms.
00:48:46
Speaker
So what we really, at least I pushed personally in the organization, I try to push, I don't think we are perfect. Try to live by that is that what is important to build a good, large, scary, impactful healthcare company and health tech company. That's how.
00:49:01
Speaker
So we identified what is important for us as a competency, as a kind of overall competency framework that we built, as well as what is the kind of behavioral pattern, like cultural behavioral patterns. So this thing about a team being always cross-functional. So we always sell credit that we have to be as much a healthcare company, as a tech company, as an operational excellence company. How do you structure the company? Like you would have like say a product team, right? Like, but what would be different?
00:49:31
Speaker
We have functions. Functional expertise is what works, but most of the deliveries and most of the projects are all a combination of business person, product person, engineering. Basically, people align around projects and therefore, it is a multifunctional group of folks who align around a project. Not only that, I want people to look laterally to find teammates rather than vertically in deep organizations. The reporting line
00:49:58
Speaker
is not your team. In a football analogy, the one that you pass the ball to is your team, not the person that you're coaching to be a better expert at. So that's always the idea. I also believe that people have to have deeper personal connection to the goals in the organization, achievements in the organization, and whatever they're building for themselves.
00:50:22
Speaker
whatever the building for the company or for the MGL staff to be kind of aligned. We have a support policy for higher education. You fund people's executive education. Yeah, at least we set up a catalog. We work, HR works on a catalog of interesting courses that people can do. Why a job? So I want to understand as a founder, do you like change your mode of working when you transition from that 0 to 100 employee head down from the avenue transition to 100 to 1000 employee head down?
00:50:52
Speaker
Like probably the 0 to 100 you would personally be doing a lot of hiring and you would be approachable to everybody and probably you would personally be setting goals and being part of project conversations and so on. How does that change once you cross 100 headcount and from that 100 to 1000?
00:51:11
Speaker
Yeah. So yes, I think there is a, there is that transition, definitely. So you need to base a larger team that can actually pretty much do the same thing that you would do or maybe even do better than you would do. Right. So I do come from experience of both working small company as well as large team setups as well. Right. So, so do you understand that being a second time founder as well as being coming from a
00:51:35
Speaker
larger executive role in a larger company, multinational company. I do understand that transition. I believe I understand. So I think that has been relatively smooth for me. So I wanted to ask you this now that you've merged with life sales diagnostic business, would you continue to be the
Future Growth: Mergers, Acquisitions, and Global Aspirations
00:51:51
Speaker
CEO? What is the equation going forward?
00:51:53
Speaker
I think for the foreseeable future, that's what we're looking at as I'm fine. Continuing as an organization with the capabilities on tech and digital and bringing the entire platform and this tech platform as well as brand and supporting all the consumer journeys across offline.
00:52:09
Speaker
and consumer channels as well, V2C and V2C, etc. That continues to be in the case. There is a significant role-up play of multi-organizational acquisitions and build-up, etc. I think it more would look like a conglomerate as we go along. Me and Ashutosh are part of the board of lifestyle. That's where it's all converging into an execution structure or an end-to-end view of the entire company.
00:52:37
Speaker
So it's much like what the Baidu's approach is of, which is also like doing a roll-up of head tech companies. So this would be like to acquire more companies in the diagnostic space or also in other spaces. There are multiple areas. I think we will announce the next quarter or so. Diagnostics is one across diagnostics, like pathology, radiology, genomics, et cetera. And in short, tech has a big area as well for us.
00:53:01
Speaker
Some acquisition also would be there where we see good technology that actually can scale joining and so some care areas like care programs, like chronic care management, etc. So that multiple areas that we are looking out more openly towards eliminating those capabilities.
00:53:21
Speaker
And you want to go beyond India also? Or you want to be India focused initially? Initially, yes, beyond India, but we won't say no to beyond India, because there's opportunity everywhere. That was one of the things that when me and Akhil also started MPIN, they say a very universal topic. We can bring a lot of things we have done innovations-wise are relevant also. So yeah, even some of the capabilities now we're acquiring will be also relevant abroad as well. And that brings us to the end of this conversation.
00:53:50
Speaker
I want to ask you for a favor now. Did you like listening to the show? I'd love to hear your feedback about it. Do you have your own startup ideas? I'd love to hear them. Do you have questions for any of the guests that you heard about in the show? I'd love to get your questions and pass them on to the guests. Write to me at ad at the podium dot in. That's ad at t h e p o d i u m dot in.