What is your vision for Practo?
Healthcare is huge and will keep us busy for many decades to come. We want to help people become more productive and reduce the number of times they fall sick. Even if they fall sick, how fast can they recover? We can help them connect with whatever service is available. I think our goal is to reduce the number of days people lose in a year due to illness. Practo’s vision is of 100 years. We want to create a technology company that will stand the test of times.
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The immediate goal we have is to help you when you are sick by finding a doctor or booking an appointment. But we can do more if we understand you better. Preventive healthcare might be a little too forward thinking, but say check-ups, i.e if you are checking up on your health regularly. We could help consumers set up reminders on check-ups, we can remind them to take medicines. We want to engage with you before you fall sick.
What kind of investors do you need to support Practo in the long run, given that growth-stage investors are becoming cautious and in some cases, impatient?
We have short-term, medium-term and long-term plans. For instance, when we speak about analytics, it is a short-term plan to help providers in their near-term needs. A long-term plan, which is 20 years from today, is to get doctors to call up patients and engage with them. The medium-term plan, in the next five to 10 years, is to make Practo a global company. We believe that Practo’s products will add value not only in India but to a much wider audience. We have a plan to move to more markets. For short-term, we have acquired a lot of businesses, built a consumer base. Can we now become the best destination to book an appointment? It is still sometime away when we can say the problem has been fully solved. Let’s say you need to get a cataract surgery done. Are you able to do an entire research on what to do, which provider to go to, figure out expenses, all on Practo? Can we help you do that faster and easier? So, investors who come on board have to be aligned to our short-, medium- and long-term goals.
What are the challenges you face as a digital healthcare start-up?
Challenge one is to take all the providers along. For consumers, it is a behaviour change but for providers, it is a big change. For instance, their business model may have to be tweaked. The second challenge is, health tech is very nascent across the world. Initial public offerings in health tech, at least the consumer-facing side, are very few. The industry has a lot more to figure out, monetization being one, behaviour change being the other, the role of technology being another. The industry itself will take some more time to peak. Thirdly, our international expansion could have been faster but regulatory framework in each country is different. In some countries, there are more government hospitals than private. Because of such different dynamics, business models must be different. Consequently, it takes time to penetrate these markets.
Your valuation has attracted a lot of attention, especially because of the disparity between revenue and valuation. How do you justify the valuation?
We don’t comment on valuation and revenue. We are a Singapore-structured company and our revenues are aligned that way. But, we have been focused a lot on finances. Practo is generating significant amount of revenues in India and also outside India, both from the marketing and the software businesses. I have a clear visibility of the company moving towards profitability in the years to come. The network that we have built among healthcare providers will be with us not just this year but for many more to come. Similarly, with a consumer, the relationship has a lot of value. This network is valuable. Monetization will follow because we have very strong levers.
Practo seems to be stretching itself too thin by trying out a lot of things simultaneously, which may impact your core proposition. Do you subscribe to this school of thought?
I don’t blame anybody from outside to think we are doing too many things. It is a fact. From a vision standpoint, we are doing the optimal number of things. Businesses grow for the number of things they do and die because of the number of things they don’t. You can die if you do too many things but you can also die if you do too few things. Practo wants to strike that balance. But there is a clear strategy and reason. If things don’t work, we continuously keep shutting them down. We have a healthy way of trying things and I am comfortable with the number of things we are doing.
One of the reasons we do so many things is because in healthcare, worldwide, business models are evolving. Many of the companies may be doing one of the few things that we are doing. One of the reasons we do them is because they are interlinked. For instance, the revenue we make from the marketing business is somewhat dependent on the number of consumers and transactions. Our ability to provide value for providers and consumers and generate revenue are interdependent.
How have the new consumer-facing verticals fared so far?
We try many things. Some click and some don’t. Wellness and fitness is something that we tried but we need more focus and management bandwidth. It is more on the pause mode. Medicine delivery is an interesting business because there is a lot of pull from the market. We have been in Bengaluru for a year and trying out a few more things.
What is definitely clicking and scaling up is telemedicine. Over the last year, we have done well in that. It is still in initial phases but the traction is good. We are pushing the pedal on all of these, but some of these businesses also need time from a consumer behaviour standpoint. As soon as we think the tipping point has come, you will see us going big on it.
What would you have done differently if given a chance?
We grew really fast in the last 12 months. When you grow so fast, it puts a lot of pressure on the customer base. Our service levels to customers have dropped. We have taken time to stabilize again, but we gave our customers more pain than we wanted to because of this growth. We made mistakes. We took time to scale up our teams and train them. There were gaps in our service levels. I would have focused more on service levels. The sheen that we had got dented. In the next two to three years, if we work really hard, we will get that shine back and the relationship will get fixed.