Indian healthcare market today is worth US$ 100 billion and is expected to grow to US$ 280 billion by 2020, a compound annual growth rate (CAGR) of 22.9 per cent. Healthcare delivery, which includes hospitals, nursing homes and diagnostics centers, and pharmaceuticals, constitutes 65 per cent of the overall market. Rural India, which accounts for over 70 per cent of the population, is set to emerge as a potential demand source.
All such factors of extensive demand and growth are attracting entrepreneurs to provide cost effective and time saving solution to people via their ventures. Sector consolidation, better customer experience, accessibility are few of the major drivers of Health Care Startups. So if you are planning to start a business model in domain of Health Care, FS brings you the first cut planning on the same.
Health Care Startups – Models
[A] Directory Portals – Directory portal of health care provides the information related to any of the vertical of health care. Eg – a portal for the information of all the doctors available in the city, portal for locating the nearby medical store, portal for providing the information about medicines, tests etc. Practo is an example of healthcare directory portal that provides information about the nearby doctors in the city and also acts as a platform for online booking and consultation.
[B] Consultation Portals – Consultation portal of health care provide one way or two way communication for patient. One way means indirect interaction between doctor and patient ie via email, over chat etc and two way means direct interaction between doctor and patient ie video conference, phone call, home service etc.
[C] Service Portal – Service portals provides the services related to Health Care domain. Eg – home delivery of medicines, home service of blood testing etc. Healthkart is an example of e-commerce of medicines.
Health Care Startups – Generic Analysis
Health Care startups require a lot of ground work and planning prior to its execution. So if you are planning to start a Health Care Startups, Here is FS Analysis on first cut planning factors that needs to be taken care at initial stage–
Assumptions for Case Study – For the entire analysis of Health Care Startups first cut planning; let’s assume that we are planning to start a portal to locate the doctors available in the city and consultation as per consumer demand. So the basic model of our startup is as follow –
- Free Listing of Doctors – to get the traction on the website
- One way Communication Consultation – small fees to generate the revenue
- Two way communication Consultation – high fees for specific requirements
[A] Selection of Business Model – Suitable, Sustainable and Scalable
First requirement for any of the startups is “an idea that is suitable for mass, sustainable in terms of revenue generation and scalable in long run”. So, any of the above mentioned models could be implemented as separate or as permutation.
Once the model is selected, the major focus should be on analyzing the feasibility and long term survival of the business model in the market. So, the concept should be evaluated on the following parameters –
- Achievability Analysis – Check for the feasibility of idea in terms of its execution within desirable time frame, cost etc.
- Market Acceptance Analysis – Check if the targeted market base would accept your startup concept.
- Sustainability Analysis – Check if the idea is sustainable in long run.
- Scalability Analysis – Check if the idea could be scaled up into other verticals or it would get limited after certain expansion or time span.
Case Study–For our case study of a portal to locate the doctors available in the city and consultation as per consumer demand, following are the initial selection analysis –
- Idea is feasible in terms of creating the portal, listing all the doctors address, fees etc.
- Idea is acceptable by targeted students as it would help them in saving the time, cost etc.
- Idea is sustainable in terms of continuous demand and revenue generation.
- Idea is scalable to other locations, verticals, services as well.
[B] Market Analysis – Market Size Valuation and Competition Analysis
The next requirement of Health Care startup is to estimate the size of market that you are planning to capture and the market competition that you are going to face against your concept.
For the market analysis following market analysis should be done –
- Problem Facing Market Volume – Check for the total volume for your concept
- Targeted Market Volume – Check for the potential market base
- Direct Competitors – Check for the Strengths and Weaknesses of direct competitors
- Indirect Competitors – Check for the players that would stop you once your concept start growing
- Infiltration Rate – Estimate the rate at which your concept would capture the market
Case Study – For our case study of a portal to locate the doctors available in the city and consultation as per consumer demand, following is the market analysis –
- Concept of doctors locator is beneficial for all the population of the City
- Targeted market volume of our concept is all the population having access and interest in online search and consultation.
- Direct competitors are the players working in same domain
- Indirect competitors are the players that have sufficient resources to enter into the market
- Progression rate or market penetration rate can be estimated by the combination of marketing strategies, portal features etc.
[C] Getting the Required Resources – Database/ Manpower
Next constraint of Health Care startups is confirming the availability of required resources to execute and smooth running. E.g.– a strong database is required for directory portals, doctors with good experience for two way communication portal.
Following are the resources required to execute the Health Care startups –
- Database – For directory portals, accurate database is required
- Manpower –To execute the startup, technical, managerial, doctor staff etc are required
- Technical Support –Resources to conduct the online execution etc.
Case Study –For our case study, following resources are required –
- Doctors – to execute the online consultation
- Technical Staff – to develop the website/app and other technical support
- Managerial Staff – to manage the activities, database etc
- Marketing Staff – to get the business expended
[D] Website / App Development – Eye-catching, User Approachable
Website or App is the interface between backend team and front end user. So the User Interface must be eye-catching and user approachable to make visitors able to convert into users.
Eg – Directory portal for doctors could be made attractive by map based tracking of their location, time availability etc.
Case Study – For our case study of a portal to locate the doctors available in the city and consultation as per consumer demand, following could be the center point of attraction-
- Map based tracking of doctors to locate them easily
- User friendly chat option for support
- Information related to diseases, diet plan etc.
[E] Revenue Model – Profit Generation
Basic aim of any of the business model is to generate profit margins that are sufficient enough to run the operations smoothly. The potential revenue models for directory portals could be registration charges from doctors etc. For one or two way communication portals the revenue model could be the consultation fees, registration fees etc.
Case Study – For or case study, the model is a combination of free and paid services –
- Free Directory Portal – to get the traction
- One Way Consultation – small fees for email, chat supported service
- Two Way Consultation – high fees for specific requirements
[F] Marketing Strategies – To Capture the Maximum Market Volume
Before and during the actual execution of startup proper marketing strategies are required to capture the market. Since the targeted market for Health Care startups is huge, so combination of general and targeted marking strategies is required.
Case Study – For our example, following could be the marketing strategies –
- Social and press media marketing for publicity of the portal
- Targeted marking at doctors clinics, hospitals etc.
- Discounts / Cash Burn for initial traction
[G] Long Term Vision – To Get Acquired or To Become Leader
Startups have two major objectives in long run, either to become leader of the specific business vertical or to get acquired by big player. Having clarity on your long term vision at the starting point itself helps in moving in the right direction.
Health Care startup of directory portal could be targeted to get acquired by some big player of same domain or to become leader by introducing all the verticals etc.
Case Study – For our online portal, target could be to sell it to some big player who is potential client for acquiring it.
[H] Scalability Model – Future Growth
For future growth of any of the business model, it must be scalable in long run. The scalability could be defined in terms of enhanced market presence, enhance reach or introduction of other verticals as well. Health care startups have a huge scope of scalability. Any of the business models, as explained in starting, could be extended by incorporation of other verticals.
A directory portal could easily be extended to one way communication portal by introducing the chat support system, email etc.
To have scalability model helps in deciding the right direction and time span to transform or encompass the business model.
Case Study – For our case study, the model could be extended in following manner –
- Enhanced geographical presence
- E-commerce of Medicines
- On Demand Home Service, Visit facility
Wish you luck for your startup. Stay tuned with FS to know more.