Make Money Giving Healthcare Away for $1? This Startup Says It's Possible
At first blush, the health care startup Sevamob sounds like it must be a charity. The two year-old Atlanta-based health tech company aims to offer extremely low-cost care to low-income communities in India. For $1 to $3 per person per month, employers and schools can buy healthcare coverage for their employees and students. That coverage includes a monthly visit from doctors in Sevamob's mobile clinic, access to basic drugs and supplements, and discounted prescriptions.
But founder Shelley Saxena is very clear on the point: he's not building a nonprofit, thank you very much. Sevamob is an example of an audacious idea with an audacious business model.
Up until now, a service like this might have been funded by grants and well-meaning donors, and not a revenue-generating business model. But this is an age in which data is king. With his staff of tablet-toting field doctors collecting mountains of patient data in a region where it's traditionally been impossible to conduct market research, Saxena is banking on the fact that he is sitting on a commodity big businesses will be willing to pay for.
A serial entrepreneur, Saxena founded his first company, SaasMob, to help businesses get their mobile apps up and running more quickly. It was through SaasMob that Saxena began working with the University of Georgia and University of Tennessee to build a mobile platform for farmers in the United States. The platform would give the farmers advice on how to improve their crops via their phones. Seeing the program's success in the States, Saxena decided he wanted to replicate it in his home country of India. The only problem was, he says, "That audience didn't have smartphones or electricity, and only roughly half of them could read or write."
In order to make a product like this work, Saxena realized, he would need to employ middle men to get the message out. But that presented yet another problem: in order to hire middle men, he would need to be able to pay them. So Saxena conducted a survey among the rural farmers in India, asking them if they wouldn't pay for farming advice, what would they be willing to pay for? The overwhelming response was healthcare.
The Business Model
And so, Sevamob was born.
Rather than selling directly to patients, Sevamob sells bundles of plans to employers and schools. But while the company's overhead is relatively low thanks to its reliance on mobile health workers and technology, the money coming in from monthly subscriptions would never be enough to run the entire business. So, Saxena has developed additional revenue streams, including collecting referral fees from hospitals, should a patient need surgery. He warns, however, that Sevamob keeps referrals to an absolute minimum, "Our most important metric is our renewal rate," he says. "If we were malicious and referred the patients too often, that renewal rate would drop. We'd shoot ourselves in the foot. So there's a control in the model."
Sevamob also licenses its technology to healthcare providers in other countries, including Liberia. But perhaps the biggest cash cow for the company, down the line, will be its ability to sell its trove of anonymous patient data to major companies, an emerging business model for companies that want to do some good in the developing world and make money while they're at it. BiNu, a startup that makes an app which connects people in the developing world to the Internet, plans to make a similar play. Traditionally, market research in the developing world has required paper-based surveys, which are time consuming to distribute and even more time consuming to process. By digitizing that data, companies like BiNu and Sevamob could make it drastically more efficient for big businesses to act on the findings.
Though Sevamob is only serving 3,500 people in its first year, (a pool too small for most brands to consider representative of the market), GlaxoSmithKline has already partnered with Sevamob on a free trial to distribute samples of its Sensodyne toothpaste to areas where tooth decay is rampant, and samples of its calcium tablets where big portions of the population are calcium deficient.
The partnerships not only have profit potential for Sevamob, but the products dispensed could drastically improve people's health long term. Instead of toothpaste, for instance, Saxena says many people in India use a powder product that's loaded with tobacco dust, putting them at high risk for cancer down the line. Doling out something as simple as toothpaste and getting people accustomed to using it could change that.
Before Sevamob can start charging these companies, though, it will need to expand its database of patients. Within the next 12 months, Saxena aims to move beyond the two districts it targeted initially and expand from 3,500 to 10,000 subscribers. Once it's developed a substantial base of data, it can then anonymize it and begin marketing that data to major corporations. If successful, Sevamob would be living proof that now, more than ever, it's possible for a business to be good for the world, and for the bottom line.