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Solving Healthcare Affordability Crisis | Aditya Sharma (Affordplan)
0 Playsin 12 hours
"The journey of reduction in health care costs is not the responsibility of the hospital on its own, it's also the responsibility at the patient level."
Aditya Sharma, CEO and Co- founder of AffordPlan, is tackling the critical issue of healthcare affordability in India. From his unique perspective as an investor-turned-founder, he's driving a purpose-led mission to reduce out-of-pocket healthcare expenses for millions. AffordPlan partners with hospitals to offer a blend of micro-insurance, loans, and wellness programs, making essential healthcare services more accessible and financially manageable for patients.
Key Insights from the Conversation:
👉 Healthcare Affordability Focus: Afford Plan's central mission is to alleviate the financial burden of healthcare on Indian families.
👉 Integrated Hospital Partnerships: The company's success relies on close collaboration with hospitals, integrating their services into existing healthcare systems.
👉 Financial Tools for Patients: Micro-insurance and loan options are strategically bundled to reduce immediate and long-term healthcare costs.
👉 Beyond Traditional Loyalty: Afford Plan's program offers tangible financial benefits, creating a sustainable relationship between patients and hospitals.
👉 Purpose-Driven Entrepreneurship: Aditya's approach emphasizes social impact, aligning business goals with the critical need for affordable healthcare.
👉 Strategic Turnaround Experience: Valuable insights into navigating a company turnaround, highlighting the importance of adaptability and decisive action.
👉 Investor's Perspective on Founding: Aditya discusses how his investment background shapes his strategic thinking and risk management.
👉 Emerging Healthcare Opportunities: He identifies wellness and AI as key areas for innovation in the Indian healthcare sector.
#HealthcareAffordability #AffordPlan #FintechIndia #HealthTech #MicroInsurance #IndianHealthcare #PatientFinance #HealthInnovation #StartupIndia #SocialImpact #HealthcareCosts #HealthWellness #AIHealthcare
Disclaimer: The views expressed are those of the speaker, not necessarily the channel.
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Transcript
Introduction to AffordPlan and its mission
00:00:00
Speaker
um Hi everyone, this is Aditya Sharma. I run a very unique fintech company focused on health
00:00:20
Speaker
You know, you said that AffordPlan is fintech. focused on health. ah Just help me understand exactly what do you mean by that? What is affordable? We work with hospitals, which are our primary target group, to drive up their revenue through higher utilization of all their services inside the hospital.
00:00:45
Speaker
That's what we do right now. We are now getting into the cost side as well. So that's what we do. That's our job.
AffordPlan's approach to cost management
00:00:54
Speaker
You drive up revenues of hospitals. Yeah. how ah How? Per patient realization. So we have a product, current product, which is called Swast. So today, what is the what is the insight?
00:01:09
Speaker
Mostly people are indifferent to which hospital they would like to patronize. What we try and do is we eliminate that doubt. Point number one. We try and get you to work with one hospital who is our client, right? it ah Second, what we and try and do is you utilize all the services in a hospital.
00:01:30
Speaker
Now, hospitals are very adequately equipped to take care of all your healthcare needs. But for whatever reason, you know, they are not able to see patient completion journey.
00:01:45
Speaker
Whether it is IPD, whether it is pharmacy, whether it is lab, hospital some of the hospitals that we work with, very good labs, but not high utilization, right? So on one hand, we work with them, but the main objective is to focus on the real problem, which is 10 crore Indians falling below poverty line.
00:02:06
Speaker
Through the hospitals, we reach out and to the customers and reduce their kharcha.
Loyalty and insurance products
00:02:13
Speaker
That's what we do. ah Can you zoom in more?
00:02:17
Speaker
Give me a couple of examples of how you reduce the patient expense. yeah Are we talking of an insurance product? No. Insurance and healthcare care has its own on issues.
00:02:29
Speaker
We have micro insurance products, which are smaller tenure, smaller coverage. So India may insurance penetration is on the lower side. It will continue to be. Privatization happened almost 40 years back.
00:02:43
Speaker
Before that health insurance has always been around, but the concept of insurance doesn't settle with many Indians, right? um Where it's not considered as an aspirational product.
00:02:54
Speaker
So, you know, if you look at India, very high ah savings as far as gold is concerned, because it can always come in use. massive phobia with most indians let's buy a house right uh son's education daughter's marriage if you go back to the 80s now fortunately for all the right reasons they are educating both healthcare care if you tell them what happens if you've got a bad situation in health you know we are anyways a very fatalistic society okay destiny that's written in our brains what can we do also because the premiums are increasing very very fast 25 30 jump in premiums i won't quote numbers but i'll just say it's a fairly steep jump
00:03:41
Speaker
so what we do is we load up micro insurance products which are uh can be different can be a small vector bond product can be a personal accident product they are available in the markets we work with insurance companies to kind of make edits and launch it we are not an insurance company but our job is to bundle bundle it all together so that the overall journey of a patient becomes less expensive so what happens in a hospital today they'll end up giving discounts discount is you know water down the drain doesn't mean anything What we are saying is don't give a discount.
00:04:13
Speaker
Get the family hooked on, family, friends, relatives hooked on your hospital. So every time he comes, he's getting a benefit provided he comes back later. Ideally, we would like to make the cost as low as possible for help for patients.
00:04:25
Speaker
But you know that's like ah that's like a dream. What we are encouraging is frequent testing healthy living. Right?
00:04:36
Speaker
Which means that if you are managing these two well, your longevity is better, quality of life is better, and your sudden healthcare expenses will not go outside the window.
00:04:48
Speaker
So we play that bridge between responsibility, between ensuring our hospitals are ah well lubricated and the patients are running well.
00:05:00
Speaker
oh Okay. yeah Can you... Is this like a loyalty program? It's a loyalty program with lots with lots of bells and whistles. So whenever people say it's a loyalty program, I cringe.
00:05:14
Speaker
One specific program. that This is what it costs. This is what you get as benefit. like and just give Cost is like we keep it to a minimum. It can be free also. We don't want to have a situation where people say, okay, I'll think about it.
00:05:26
Speaker
So it can be as low as 100 bucks. What's the customer journey? How would a customer discover this? Inside the hospital. So our CAC is zero. Marketing costs are zero. When you come inside the hospital, because healthcare is also very need-based.
00:05:40
Speaker
When I'm healthy, i am not going to a hospital. It's not a mall. So it's a very need-based product. Once the minute we got to scale, how do we ensure cost is reduced to the bare minimum, which we've managed to do?
00:05:53
Speaker
ah which can be 100 bucks, free. ah They advise you. They tell you what the product is. there is a have How would I discover that your counselors are there? Is it at the time of bill payment or if I'm going to the inpatient department? Floor mapping in multiple areas. Pharmacy, lab, reception.
00:06:11
Speaker
Okay. In multiple areas. Larger the hospital, larger the floor, larger the number of people. And what would the standee say? I'm assuming there would be some standee. Standee will say in English, reduce your healthcare care costs.
00:06:22
Speaker
In Hindi, it will say bachat. right got it that is what it will say she educates you you take you download an app right and you get on board immediately you will see a micro insurance available to you which cover some part of your uh cost based on certain conditions of course should you want a loan you can always say i want a loan we will have that settled with some of our mbfc guys ah So that's what it is. Okay.
00:06:52
Speaker
Okay. but But each hospital has a unique app. Like it's not like a Fort Plan app in general where you choose. No, no, no. Subjaga hospital is the name. Okay. Okay. Got it. Got it. Can I take insurance for my current use case or insurance is like in case in future something happens, obviously, right? You get insurance for a limited period.
00:07:09
Speaker
irrespective. Okay. But depends, we have both products, HospiCash and personal accident. Right. and And these products, what do they mean? HospiCash is key, if you fall sick, you can get coverage based on the number of days that you are in the ICU, there's a certain limit.
00:07:25
Speaker
Personal accident is if you had an accident, accident can be anything, it does not have to be car accident, you can drop, you dropped an iron on your foot, you fell down, you broke your leg,
00:07:37
Speaker
you had burns, all of this is covered. And so they will give you coverage of a certain value of 60, 70,000. We are saying, hey, we are not going to give you for paying nothing.
00:07:47
Speaker
We are not going give you coverage of 10 lakh, 15 lakh, but we'll give you some amount. So even if we can't change the world in one go, we'll change it. And is when you join for a limited period. Like let's say three month insurance, you get free, something like that.
00:08:01
Speaker
One year generally. You can renew. One year insurance, you get free. Okay. And then you renew if you like it. Okay. If you want to. So how would the patient ah if show you, show the hospital that he's transacting because he has the app?
00:08:16
Speaker
Like to earn cash back, he needs to scan the app or something? like Yeah, we have QR codes. so on So it's really simple. how How does it happen? Like if I go to the pharmacy, what will be my experience? You will go to the pharmacy, you download the app, you scan the QR code and you can use your debit, credit, cash, whatever you want to make the payment.
00:08:34
Speaker
So for a patient, nothing has changed. Life as usual. Okay, so instead of paying through Google Pay, I pay through... No, no, no. You can use Google Pay, but it happens on our app.
00:08:45
Speaker
Okay. You can use you you UPI, you can use Cash, you can use anything, but it's happening through our app. And what am I scanning? there There is a dynamic QR code or there is a QR code pasted on the window? There QR code pasted over there.
00:09:00
Speaker
And it has the offers. It will tell you what offers. and And your journey starts. You start spending. Is there How do the hospitals see you? Do they see you as a loyalty solution provider? Or what do they see you as?
00:09:14
Speaker
Do they see you as a software provider who is powering their loyalty app? No. No. hospitals so let me tell you how hospitals think about this most hospitals rather hospitals are mainly focused on clinical excellence and that's a massive area of responsibility look at the amount of changes that are happening on the equipment side uh India is not an easy place to run a hospital you know you have some of the highest real estate costs on top of that
00:09:49
Speaker
Across the world, there is new there are new products that are coming out every year, which means there are very frequent upgrades, massive training. It's only when you get inside a hospital, you appreciate the amount of complexity that they deal with.
00:10:03
Speaker
So this is something that they look at us as partners, and that's how we present ourselves. So ah our program is designed in a way that there is complete There is complete faith and trust between us and the hospital.
00:10:21
Speaker
For example, they know that their cashback cannot be utilized anywhere else. He cannot go to a petrol pump. It is completely secure. They are aware of the fact that their patient data not going to be leaked.
Healthcare operations and partnerships
00:10:35
Speaker
See, when a guy comes to the hospital, he is as it is unhappy. Either he is in pain, right? Or, you he is emotionally disturbed. On top of that, yeah he doesn't want to come and figure out that there is more information, more pain, more restrictions. So we keep the product in a way.
00:10:54
Speaker
Entry is very easy. There is no exit fee or anything. It's as as and when you feel like. And in addition to that, we'll deliver medicines, we'll deliver your tests, etc., etc.
00:11:05
Speaker
Okay. So, This core product is what you said is Swast. That is correct. When I, when I look at healthcare care or when I'm wanting you to look at healthcare, care please remember only one in 20 needs hospitalization.
00:11:20
Speaker
The remaining 19 don't need hospitalization. And in the numbers that I give you of people who are impacted because of rising healthcare costs, it's not the ah it's not the surgical costs that are killing them.
00:11:33
Speaker
It is out-of-pocket expenses. If you look at India, we have the highest number of patients in diabetes, cancer, cardiac. Your disease prevalence is starting earlier. You're getting a lot of situations where young young people, obesity is a problem.
00:11:49
Speaker
ah On top of that, stress levels in the country is slightly higher than average. Right? I think if you're just traveling from point A to point B, it can be difficult. Imagine some of the other things that are going on.
00:12:00
Speaker
So this is the reality of our lives. And we will face this more and more. Vitamin D, Vitamin B, I don't know what is going wrong. But our bodies are not retaining at all.
00:12:14
Speaker
And it is vital. I'm i'm not of a doctor, but any doctor will tell you. so You know, I've been a Fortis customer for a while now. Fortis has Fortis app and often they will tell you that ah you can book an appointment through the app. You don't have to come stand in line, et cetera, or you can get your results through the app. You don't have to wait at a reception for getting the results.
00:12:36
Speaker
So essentially it's like a hospital ERP with the front end for customers where they can do all of that. Now for a customer, it just sounds like friction. If I have one app, which is like, integrated with the hospital ERP and a second app which is for loyalty it can be one app we work in a way that it is basically part of the hospital app okay okay okay so this can be embedded within the existing hospital app and whatever payment related functions are there those are powered by afford plan the rest of the functions whatever yeah ERP the hospital is using it's powered by that yeah
00:13:13
Speaker
yeah Okay. It's because one or two hospitals might get a little irritated. So, we have to be a little careful. Okay. Got it. Got it. Okay. Healthcare requires a different handling.
00:13:25
Speaker
It requires a lot of and empathy. Right? And the minute you reverse it and you start over commercializing everything, that's when the revenue model will also collapse. So, yeah. so ah So, the loyalty...
00:13:44
Speaker
part of your offering ah seems to be something which could be attacked by, let's say, a company which is focused on loyalty, like say this Capillary.
00:13:56
Speaker
Capillary is a loyalty-focused business. they They mostly do retail, I think, a lot, or at least they have a lot of retail clients, so they power the loyalty for retailers. But for them to enter healthcare, um you know, they already have the technology and the know-how to build the product uh how do you what is your defense here what's your mode so ah let me give you a small idea about what comprises of our org right we have people who come from the traditional product and technology we have people who are coming in from financial services consumer behavior healthcare wellness
00:14:40
Speaker
You have to bring a lot together. It is not necessarily a tech play. Right. You have to talk a different language. Sure.
00:14:51
Speaker
i mean, you know, it seems very simple, but in reality, to be able to pull it off product after product, it's not as simple. Ask me the hair that you see on my head was into two, four years back.
00:15:07
Speaker
i have seen ah And, you know, unlike in a retail where many things can go wrong and you'll still have patience.
00:15:21
Speaker
Imagine you're sitting with a broken leg and something goes wrong.
00:15:31
Speaker
Nobody is going to entrust you with their finances and health and have a bloomer. It is the end of your life. So you have to be very careful.
00:15:42
Speaker
In addition to that, we spend a lot of time with our people who are on the floor. Right? Which means there is a fairly strong physical element as well.
00:15:55
Speaker
So there are quite a few areas which make it, I won't say if impossible. Nothing is impossible. Should a person have the will to want to fix it?
00:16:08
Speaker
Why not? In our case, it is also a very purpose-driven business. And that perhaps is our biggest moat. and my two co-founders, Dr. Prithvi and my school friend Anand, we firmly believe that we want to change this.
00:16:27
Speaker
And for us, any adversity is not the be-all and end-all. We'll find a way to fix it.
Business model evolution and strategies
00:16:34
Speaker
For me, this came about when I worked in an impact fund and I had to travel from, you know, from, you know, in a life which was focused on large cities, et cetera, et cetera, to other parts of India. I saw India for the first time.
00:16:49
Speaker
That's when you rely what's going on. You are lucky to be born on the right side of the tracks. So for us, I think the fact that we are purpose-led is our biggest mode.
00:17:00
Speaker
Everything else, it's the intangibles always, Akshay, that matter more. Anybody can copy anything. But oh you know what keeps you up at night? It is the fact that, yeah, i want to figure out what to do with cancer, for example.
00:17:15
Speaker
So we've been thinking of cancer now for the last eight months, nine months. And we still haven't figured out our journey. We will eventually. It's not that easy. We can go and get great oncologists on board and they'll come up with something.
00:17:29
Speaker
How do you create something out of it? And we want to also ensure that we are not doing anything on the clinical side. That is not our area. Yes, we will have great doctors.
00:17:40
Speaker
One of our partners is the one of the the pioneer of transplant surgery in the country. And he ran a very successful chain of hospitals.
00:17:50
Speaker
It's very easy for us to end very tempting, but we will stay clear of that. So I think that is our mode. Okay, got it. ah Your core value proposition ah or the mission that drives you is affordability.
00:18:04
Speaker
And ah each of these programs, like a maternity program, for example, makes maternity related services affordable. How does it make it affordable? How do you get a hospital to give a special pricing?
00:18:19
Speaker
so you make it affordable through a combination of micro insurance loans cashbacks wellness programs which are available at a very very steep discount so everything on everything you are reducing price So it's not just one area.
00:18:39
Speaker
And I will not want to overemphasize on surgery because I will say one thing that again, you're not dealing with that small group that needs surgery. You're also dealing with chronic patients. Right.
00:18:50
Speaker
So for example, you know, geriatric, I gave you that example. Maybe I was not illustrative enough. You suddenly are confronted with some weird disease, which is chronic.
00:19:04
Speaker
If only you are a little careful. There is also some behavior change, right? The journey of reduction in healthcare costs is not the responsibility of a hospital on its own.
00:19:14
Speaker
It's also the responsibility at the patient level. So that's what we will try and build and incorporate through, whether it is through our app or through our nudges and notifications.
00:19:27
Speaker
It's a 360 degree view. it's It works when all parties play together. Okay. So what you're saying is one part of the value add is a reduced price, but that's not the only value add.
00:19:40
Speaker
Uh, if you can prevent the expense from happening in the very first place, then that itself is a cost saving. Uh, okay.
00:19:51
Speaker
Okay. Understood. And I'm assuming the way you prevent that expense from happening is like a, what they call as digital therapeutics, like, like essentially, ah tracking patient activity levels, step count, e etc. Like integrating with their fitness watch or whatever they wear. Amongst other things.
00:20:12
Speaker
Okay, one part is prevention. And how so the third piece is actually reducing the cost of the procedure. and So that is like something which you negotiate with the hospital that we will get you bulk customers or give us a bulk price. Is it something like that?
00:20:28
Speaker
Yes, I would say in the ballpark. Okay. In the ballpark. But we will… Like a volume discount? um I won't get into that. No.
00:20:39
Speaker
We don't acquire patients from outside directly. We are building a very strong program on how to acquire patients from outside. But everything is currently used through a combination of the factors that I mentioned.
00:20:53
Speaker
but driving existing patients back to the hospitals using their cash back see hospitals can be plagued by a lot of discounts right and uh i i haven't heard of discounts from hospitals oh you are you are amongst the you are an ideal patient for a hospital and but why is that ah how does the discounting happen just give me an example like ofality You don't give good discounts on your pharmacy.
00:21:24
Speaker
You step outside, there's massive discounting going on. Pharmacy, of course, I know outside hospital is discounted. Labs, same. Surgery for cash patients, they will always start bothering you for a discount.
00:21:38
Speaker
okay People will float around. discounting is a big part of
00:21:46
Speaker
any hospital's bane. so if for example I'm going in for like a maternity surgery before I select the hospital I'll I'll ask them what's the price and I'll say i ten happens all the time ah and you imagine for a hospital they've kept on upgrading patient patient care kept on upgrading doctors kept on upgrading equipment and then people are coming and saying I can go x y or z who may or may not even have one tenth equipment So, you know, you and I are not necessarily what comprises 80% of the country.
00:22:22
Speaker
Right. For you, it's like, tga I'll pay with my credit card. For many of these people, they are having to sell their household jewelry.
00:22:33
Speaker
Right. To fund healthcare. Right. Because that's the reality of our country. And this, you can enable them to pay installments, like you can offer an ending. There are options Okay. well obvious okay So think about it that we take a problem and we break it into thousands of small pieces and we then try and see what are the core things that need fixing and we try and fix that.
00:23:02
Speaker
We don't try and fix everything. What matters to you, we will try and fix. got it okay okay so let's talk about the journey of reaching here where you are today uh is this the version one of afford plan was it the same or was there an evolution in how the company and the mission evolved and you know just take me through the history version one was a very different product which was um And you were not involved in version one, right? so so how just just give me a little bit of a history of like your background and a Afford Plans background and where the two of you met.
00:23:42
Speaker
i was working in impact fund i used to look at many of their healthcare activities and part of their portfolio and afford plan was something that came to us part of the investment team a group of investors and they were not just a fort plan there were other people ah not just my fund there were other other funds as well and Over a period of time, I landed up becoming from an investor to a consultant to a CEO, to a ceo and then finally i bought it out.
00:24:16
Speaker
So the first 12 product, I had nothing to do. ah You were at Low Capital when you got the pitch for Afford Plan. I think there was a 10 million round ah in which Low Capital participate participated in 2018.
00:24:30
Speaker
um What was the pitch at that time from the original founders? think was very similar. There was nothing radically different. Like a loyalty, ah powering the loyalty program of hospitals. yeah Similar, similar. Okay. and order to But the thought process was on how do we handle the healthcare costs, right, ah for patients.
00:24:57
Speaker
So, the pitch was similar. The means and mechanisms were different. The execution was different and I would put it down to the natural evolution of business learning.
00:25:09
Speaker
When you start off, you have an idea, you don't really know what you're doing. ah I think if you, if I were to look back as maybe I would say as what is the mistake that one can learn ah is your pilots have to be very tight.
00:25:25
Speaker
Your revenue model needs to be very, very visible and expansion should not start, uh, and of your Unless you are very clear.
00:25:37
Speaker
ah One very key point over here is nobody can afford to fall in love with his or her own product. That is a classical screw up that I have seen in multiple areas where you get emotionally attached. It's not easy to distance yourself, but you have to be highly dispassionate that no matter what happens, if it's not working,
00:26:00
Speaker
when do you pull a plug is actually very important for all founders uh and many mostly if you see most people land up continuing when they should should have pulled the plug ah okay you're saying to business model same thing idea same thing ah there you go business model when they prioritized patient before a four plan hospital last doesn't mean that your history or your story or your future is over. It means that you need to go back.
00:26:35
Speaker
Either the product is the problem or you targeting it at the wrong hospitals. not You don't need to be in every hospital in the country. you can still make a huge impact and build ah scalable business, which is at the end of the day, it has to be profitable.
00:26:50
Speaker
Nobody does anything for free. But you need to realign your lens and you may need to make innovations all the time. It's very simple. Amazon, what does Amazon say? It's a good example. Nine out of ten are going to fail.
00:27:04
Speaker
Right. So, you know, failure cannot be a setback. And that's where the purpose-led org comes into play. You have to keep at it. You have to keep moving things along.
00:27:16
Speaker
So, I would say it was a natural evolution. Mistakes were made. The only thing that perhaps could have been done better was to pull out the plug, which is now ah something that
Aditya's journey from investor to founder
00:27:27
Speaker
we embrace. We pull out the plug first.
00:27:29
Speaker
So, the Ertswile model could be something like what, say, Kenko has… no, very different. It was largely focused on small hospitals which were doing maternity.
00:27:40
Speaker
but this would be to see you said the hospital came at the end of the model uh they would design in a way that perhaps the hospital didn't see the benefit very quickly right was it like a let let me give you a hypothetical product and you tell me if i'm right or wrong in my understanding uh There would have been a way to enroll people onto a maternity plan and there would have been X number of hospitals, say 10 hospitals where you can choose and it would have been a special package and the pitch would have been that if you are pregnant, then come and join this program.
00:28:16
Speaker
No, not that. The program didn't work like that. See, B2C, direct b two c These businesses, this business is B2B2C and even the hospital business was B2B2C. you said the deferred delivery is something you're changed in the product what does that mean basically it means that we'll work with hospitals to ensure that a patient can see uh visibility on delivery costs being reduced over a period of time because we kind of help him build a kind of a savings bank with the hospital the more you spend you can see your delivery is the cost
00:28:53
Speaker
keep glos gone god it got it So there is this story of this guy called Dr. Edward Jenner. And this is, you know, how the smallpox vaccine was discovered.
00:29:06
Speaker
What he realized is that all the milkmaids who were dealing with the cowpox disease never got smallpox.
00:29:17
Speaker
So, it's not that many of these things are because of intense research and development. Sometimes the answers are sitting right in front of you and you jump over it.
00:29:28
Speaker
Or you don't even think about it. You have to keep eyes and ears open. But till you do it, till you don't do it, you'll never know. Okay. So, I want to kind of… understand you as a founder and you know you are an investor turned founder which is a very very unusual case in most cases it is founders who get an exit and become investors i've rarely seen an investor who quits being an investor and becomes a founder how has that shaped you what is the way in which you think about running an organization what are the uh
00:30:05
Speaker
behavioral differences between you and another founder who would not have been an
Investor perspectives and business execution challenges
00:30:09
Speaker
investor first? How did being an investor shape you as a founder? So I think, A, you're always very cognizant about what is the end result.
00:30:20
Speaker
Because as an investor, you're always looking at your multiple on capital, your ah ROI. So you are always far more financially savvy. Why am I doing this?
00:30:32
Speaker
So the first thing that changes is your ability to create a product is always dependent on the end result.
00:30:43
Speaker
So unless something is scalable and profitable, you will not go on plugging it away. We always keep going back to that discussion of being able to pull a plug. It's far easier for me to pull a plug.
00:30:57
Speaker
right then it might be for some of my other colleagues or my other uh you know people who are generally who start the journey as founders uh the risk is you can you pull the plug a little faster sometimes that can happen so then you have to surround yourself with people who kind of balance it out and whether as in senior colleagues and whether as other co-founders, which is why we have three co-founders.
00:31:28
Speaker
We also have a set of advisors who come from healthcare, come from consumer product, be my ex boss so that you're careful. ah So that is one. Second is investment is all about process.
00:31:43
Speaker
ah As you can make a small error in your process and investment, it can be have massive consequences. So you force people to become more aligned in terms of process.
00:31:57
Speaker
Have we done this? If we haven't done this, we will not get to the next step. If you ask me, my biggest struggle was this. Getting people in business to start thinking process because they are so execution oriented.
00:32:09
Speaker
They'll start something tomorrow without thinking about the consequences. ah So there are pros and cons. Your ability to take a risk is actually higher as an investor because you will always take punts on certain areas where other people may or may not be clear um so you realize that if you are not taking a risk it's not going to work out so you will take a risk even if you see 70 80 percent u clarity mayhi ari as long as you have some idea of the end road in mind you'll take them you will move on um
00:32:47
Speaker
Some of these areas have been very beneficial. I have been blindsided maybe in certain other areas. But as I said, you create an org which hears, which listens and you trust people to take that judgment and you say, hey, where if I can't play a T20, I will at least have people on my side who can play the because ah because As an investor, you know that your investment does not necessarily make sense.
00:33:13
Speaker
Only if if you decide that you are Pele, Maradona and Messi all rolled into one. You have to find the right talent um because you can't do it all alone. So that becomes something which is easier.
00:33:26
Speaker
ah Delegation is faster, quicker. ah You don't take, I'm going to land up doing everything on my own. It's not possible. So those are certain advantages. I'm actually surprised why not so many investors have moved into founder roles. In fact, I do know quite a few actually who have said, I've had enough of this spreadsheet and you know legal vetting going on and I want to get my hands rolled up.
Post-COVID turnaround and strategic pivots
00:33:52
Speaker
Chris Capital, Ashit Dawan, great example, Ashoka University. So there are quite a few and I'm 100% convinced that they will be as successful as a first time founder.
00:34:05
Speaker
Okay. Fascinating. um You did a turnaround of afford plan. I would love to hear that turnaround journey. When you joined, what kind of revenues were they at? What was the team like? How did you change things?
00:34:20
Speaker
So, I can't recall the exact revenues, but let's just say that the cash burn was maybe five times higher. Right? Because of team size? Primarily.
00:34:31
Speaker
And team size and you know all the issues that were there earlier. with the erstwhile product where you didn't have line of sight on profitability. So, you know, combination of factors and then we were hit by COVID, ah which kind of precipitated everything.
00:34:47
Speaker
um So, I think the first... the you You bought the company where once COVID like after COVID? No, no, 2023. Okay, okay, okay, okay. Beyond COVID, okay. yeah okay But I was already deeply involved.
00:35:02
Speaker
and First thing was, I was deeply involved and for a very long period post-COVID till 2023, I was not the legitimate owner, but I was running the company. So, you code did one the only good thing COVID did was it allowed us to completely close the first-to-while product.
00:35:23
Speaker
said We said we're not going anywhere. The new product was already work in progress and we just went ahead and launched it. right uh and we launched it in all the wrong hospitals in the beginning but one hospital fired there was a period where in that period we had to also reduce staffing which I think many people did in covid because uh you know there was no business essentially and hospital businesses were fairly bad especially for our side because you could not even go to a hospital to make a bd pitch you can't enter
00:35:55
Speaker
There is how do you do a BD with a guy when you are wearing a mask, you have gloves, he's sitting behind a screen. You may as well not go. In most cases, you can't even go because hospitals were either in a red zone and there were other issues.
00:36:07
Speaker
Right. so So first was to shut down the first-while product, trim the team wherever required, let go of cities and then start a product which we felt had more power.
00:36:22
Speaker
ah And you don't need to see too many signs of victories. As long as a few signs are there, you your gut will tell you if you listen to it. So gut instinct kicked in.
00:36:34
Speaker
And that's when we started building the product. um Post which I think we consciously made an effort to continue adding more edges. But we could not afford to be a single product company. That's a big risk.
00:36:52
Speaker
Something changes, your story gets really compromised. So you want to have multiple products.
00:37:01
Speaker
So it's not easy to do a turnaround, but I've been part of turnarounds in the past as an involved investor. So past background always helps because turnarounds are not easy.
00:37:13
Speaker
You can gloat about it once they are either work in progress or they have happened. But when you are at it, every night can be a nightmare. when you are going back. Have you been part of any turnarounds?
00:37:27
Speaker
No. You can live through one. I have lived through two or three now. And if I go in for a comprehensive healthcare care package, there are hundred things that are not going to be right. It is thrilling.
00:37:39
Speaker
But to be able to manage a situation with your back to the wall, limited runway, it really keeps your adrenaline
Aditya's entry into investing and leadership insights
00:37:48
Speaker
flowing. ah Sometimes it can actually ah make very life very difficult.
00:37:55
Speaker
Because small triggers can result in um very, very shaky decisions because you are and ah you're on the edge all the time.
00:38:06
Speaker
okay okay understood um okay what is uh what was your journey of becoming an investor how did you become an investor everything happened by accident i was in future group reporting to kishore biani when one day he introduced me to someone who's still a part of my journey here and uh actually made me into what I am.
00:38:31
Speaker
That gentleman's name is Sanjeev Gupta. Sanjeev used to be the CEO of Coca-Cola. And oh my boss, KB, introduced me to Sanjeev.
00:38:43
Speaker
And I was only supposed to help him make a PPT. And Sanjeev is someone who says, will want an inch and he will then take 100 acres. Right.
00:38:55
Speaker
So, he became so involved in my life in terms of work. ah that he said, you might as well stop doing what you're doing doing and join me full time. So that's when I linked up with him. I entered through the operating route where he wanted to know how do you run retail businesses. He didn't have any background because he said, I can sell tail, sabun, Coca-Cola. He was in Leavers earlier.
00:39:22
Speaker
But yeah what is this retail? So location businesses, I understood, which is why hospitals, I can understand. right It's a lot to do with your TG, the segmentation, the locality.
00:39:34
Speaker
So that's how I entered and spent a lot of time with him. And this is Everstone that you're talking about? respond It was earlier Indivision, then Future Capital. Yeah, but primarily that and then Low Capital where actually my journey as an investor started because the they taught me how to invest.
00:39:53
Speaker
like me What is Everstone's history? Who started it? and Everstone's history pretty much available on the net. So it was started by Sameer Same. So I think that is available. I don't want to get into that.
00:40:04
Speaker
But from Everstone then to Loke, which is where my eyes opened about the reality of India. And I think the toughest business for me was to manage a milk business out of Jharkhand.
00:40:17
Speaker
That really took a lot of stuffing. It's a very, very difficult business, I realized. Because when the whole world is sleeping, your guys have to be on the road because you know milk has to be available at 4 o'clock, 5 o'clock.
00:40:33
Speaker
And Jharkand has its own challenges as a state because it is still coming up. So infrastructure, etc etc. A lot of potential because great mining. but And that company continues to do well, ah very well.
00:40:50
Speaker
But hours figuring out who's our customer and why is that the dahi melting? Why is the product not coming through? So Lok forced me to travel outside large cities, lot of work in smaller cities in South India on the lending space on some of the other areas.
00:41:15
Speaker
Also continue to do a lot of work in healthcare. So got involved with the eye company based out of Bangalore. Dr. Mohan Diabetes, he's a pioneer in the world of diabetes.
00:41:25
Speaker
Healthcare care journey actually started with Everstone. and investment in global hospitals, which is where I met Dr. Ravindanath, who is one of the pioneers of transplant in the country. He's now working very closely as not only an investor, but as also as a mentor.
00:41:43
Speaker
So, uh, he's the guy who actually went against common thinking at that time, which was transplants will not work in India. Who will pay? And I have a personal story because my sister-in-law had to go through a lung transplant, right? And it is all because of him.
00:41:59
Speaker
So the journey as an investor is always interesting. You're working in multiple areas and you are seeing different thoughts play out, different themes play out.
00:42:12
Speaker
You are also seeing a lot of burnouts. And if you spend some time, you will always understand again in hindsight, there were fundamental issues in the promoter.
00:42:28
Speaker
Everything can be resolved. The product, the market, product product market fit, the pricing, what cannot be sorted out is the thinking of the promoter.
Leadership behaviors and market opportunities
00:42:38
Speaker
And that is where, yeah obviously there are areas like valuation and all, that is where it can go wrong.
00:42:46
Speaker
What's an example of flaws in thinking of promoter? Like what are the symptoms of it?
00:42:54
Speaker
Over aggression. See, promoters are naturally aggressive. ah You will not find a promoter who meek. So you need to know when to accelerate and you need to know when to pull the brake.
00:43:08
Speaker
You reverse the activities. You are headed for a crash.
00:43:14
Speaker
Always I feel emotional judgment or EQ. and That has to be something that you need take a quick punt on. Is this guy, is this a guy who will react well to adversity and make the necessarily changes, make the, make the right changes or make the changes at the right time or not?
00:43:35
Speaker
Uh, and it often boils down to that because business cycles will never be smooth. They will always be rough, rough weather. How do you react to a weather? If you're flying a plane in a, in a storm and you decide, key I'm going to increase the speed.
00:43:50
Speaker
Well, there's a problem, right? ah In fact, some of the
00:43:59
Speaker
some of the ah companies which were managed by first-while professionals who became founders were actually massively successful because they were able to mitigate risk better.
00:44:17
Speaker
It came naturally. And I also realized why some of these companies were successful is because there was not one person, there were two, three co-founders who were working.
00:44:29
Speaker
And that's a very tricky area. You can go completely wrong and it can ruin the business or you can go really right. The onus is on the promoters to be able to find common ground and have the maturity to be able to fix problems.
00:44:44
Speaker
But it's a fascinating subject, leadership behavior. And you can spend years and decades and that will also not be good enough. As to why why X leads to Y.
00:44:58
Speaker
Okay, fascinating. um You know, as an investor or from the lens of an investor, what are white spaces in the Indian market today? Like someone who's thinking of starting up you know what do you think are interesting areas to build in?
00:45:15
Speaker
So I'm a bit out of touch with it. I can only tell you in and around my areas what are what will work. So, for example, I feel that wellness is a huge space in India.
00:45:28
Speaker
And what do you mean by wellness? like Wellness products, wellness services, working on overall meditation, all of them. and the And the beauty is that It doesn't, wellness as a space is not being correctly addressed because it's not just a product or one service. It's actually can be or should be a bouquet of services.
00:45:54
Speaker
Cultivit is doing that, right? Like wellness. I would say Cultivit a wellness company. Would you agree? I would put it down as wellness. One of the elements of wellness. But physical, mental, psychological, they are all ah food.
00:46:05
Speaker
They are all part of a wellness journey. So, uh, I mean, there was a lot of involvement in the past in in the past as far as I was concerned on food. Earlier, if you put healthy packaging and I'm going back to when I was in Future Group, it was very difficult to sell that product.
00:46:21
Speaker
un Because health and taste, any which ways were two alien concepts. ah And there were some companies that actually did a good job, but they just got screwed because they went the health route.
00:46:33
Speaker
Now, if you put health, at least the first trial will be induced. Post that, you know, that post purchase dissonance, that is something you will have to manage, right?
00:46:44
Speaker
If the packaging has a very high or very low, sorry, reason to believe and they kind of dupe you into buying it and then you have it and you say, damn, thing tastes like crap, you will not touch it with a barge pole.
00:46:59
Speaker
But the acceptability is huge. and I think, ah you know, Maggie did a very good job of riding on the health with the Ata Maggie. I mean, they probably inspired other companies to think of health as a plank with the Ata Maggie. Probably it's not really healthy. It's just a positioning. I don't necessarily say it's healthy, but at least creating the impression that, oh, this is Ata Maggie. This is not Medha. And, you know, there were...
00:47:27
Speaker
ah creating a good category there. I think they were a pioneer in that. So that is, yes, you're right. So that is an attempt by them, which kind of but perhaps opened the market. Beverage space is very interesting.
00:47:39
Speaker
If you see the beverage space, I see one new product on the shelf every month. right I make it a point to go to at least one or two of the supermarkets or even if you're unlinked on Blinkit, you will see one new product in a month and I remember some people had predicted that it is bound to happen.
00:48:00
Speaker
ah And I'm just very happy to see that the quality of the products are also up there. Because if you have studied or worked abroad or lived abroad, when you go to the markets over there, you will see that low sugar alternatives have been around for forever.
00:48:15
Speaker
That India is embracing this finally. is I feel that's a great space to be in. ah So, you know, this whole health play can come through very well.
00:48:28
Speaker
There is a lot of activity which is happening in the AI and ML side. I'm not still very sure as to what are the models that are going to come through. That, I think, will impact almost every space, right?
00:48:42
Speaker
How would it impact the wellness and health space? We're able to perhaps, able to... So, look, we get a lot of... information about patient needs patient requirements uh in maybe in some time you can use some of that to even predict uh trajectory as to where this is going to land up and it can actually play a big role on the prevention side
00:49:12
Speaker
that if you take the data of similar such people in similar beep pin codes, there is a a lot of similarity in disease prevalence. It can be, it's not difficult to understand why.
00:49:25
Speaker
It can be because there are high income people who are living there who perhaps are eating ah food which may not be appropriate. You can also do a lot of work with discipline prevalence or disease prevalence. Where is this likely to go?
00:49:38
Speaker
And you can use a lot of that learning to say, what perhaps is the right interventions. There's a huge play on that data. So business is changing and parts of India always will require some of the traditional products. So for example, protein, milk, all of these will continue to find their way in under penetrated market.
00:50:00
Speaker
I'm a big fan of ah people who think It's not necessarily that every business has to be a national business. There is huge possibility for you to do things and have massive scale even while being a regional business.
00:50:14
Speaker
Right. Because the complexity is so huge and the offtake is so high that for some products which can perhaps be claimed to be sold nationally, you might still never get there.
00:50:26
Speaker
Right. Organic food, massive area of growth. Now people are willing to pay. Five years back, perhaps it was too early. And there are a lot of people who have been trying things.
00:50:41
Speaker
Some have worked, some have not. But some of these areas are interesting areas. All right. Okay. Awesome. ah Thank you so much for your time, Aditya. It was a real pleasure chatting with you.
00:50:51
Speaker
Same here. Thanks, Akshay.