Prashant Tandon, Founder 1mg chats with Amit Somani, Managing Partner Prime Venture Partners.

Listen to the podcast to learn about

02:00 - Start Up When YOU Are Ready

08:00 - New Healthcare: From Doctor Centric to Patient Centric

13:15 - Acquiring Consumers in Healthcare

19:00 - Different Customer Segments in India

22:00 - Building a Digital Only Healthcare Company

24:15 - Be Very Clear About Your Reason to Exist

29:30 - Conventional Wisdom Doesn’t Build Anything New

Read the complete transcript below

Amit Somani 01:00

Welcome to the Prime Venture Partners Podcast. This is your host, Amit Somani, and I am delighted to have with me, a friend, former colleague, and now a successful entrepreneur. Prashant, welcome to the show.

Prashant Tandon 01:12

Pleasure to be here, Amit.

Amit Somani 01:14

Prashant, I was just looking you up, you relocated back to India in 2009 and I came a couple of years earlier to you in 2007 and at that time many of us came back actually for professional reasons. Cause it looked like India was about to take off and, and finally, 15 years later it’s happening in a big way. So maybe just tell us a little bit about your journey of why you came back to India and how the journey’s been.

Prashant Tandon 01:35

Okay, so the itch to comeback actually started around 2007. That’s when I graduated from business school, and wanted to do something in India. And yes, you’re right. India was booming, India was looking exciting. But I did not know what to do if I were to start up, so I parked myself at McKinsey for a couple of years in San Francisco, and thought maybe with time I’ll understand better what I should do, if I should do, when I decide to jump in.

Over those two years, I got a good exposure to healthcare in the US and also met Samir, who was my co-founder. And that’s very important, having somebody who’s willing to jump along with you into this chaos. A lot of things have to come together. So you have to have an idea of what you want to do, start up where, how, with whom, which city, which sector, the tech.

So a lot of things have to fall in place, which thankfully they did in 2009 for us. and it was clearly India was the land of opportunity. The US was just coming out of the economic crisis and it was still a little bit of a downer there and it was everything upbeat here. Kind of what it is like right now as well it seems.

So I thought what are we doing? And a lot of my friends in the US actually Americans moved to India to do their own startups around that time. And I was like, am I wasting my time just being away from where the action is, I should be where I should be. So I came back.

Amit Somani 03:10

Wonderful. Like you said, there are a lot of parallels between those times and now, for somebody listening to the podcast now that is contemplating coming back to India. And the other trend that I noticed, although you said you came back a couple of years after grad school. I came back after 14 years in the US so I was there for a very long time. A lot of people are now just going, doing their grad school or something and coming back right away.

So what recommendations or thoughts would you have for people that are just going to the US, maybe to learn something or to be a part of that ecosystem and then come back.

Prashant Tandon 03:40

See, there’s no cookie cutter recommendation to be honest. You come back and you jump in, when you’re ready. And that ready is different for different people.

So, it should not be that, Oh I didn’t come immediately. So is that a problem? Or it’s been 10 years, 15 years that is a problem. I would say there is clearly a lot happening here. But there is always a lot to learn outside as well. So, you have to do your own personal trade offs. There’s an opportunity cost of everything.

There is an opportunity to learn everywhere, but this is a journey. The entrepreneurial journey, the most important thing is that from a personal mindset perspective, you should be just feeling ready for it. And whenever it’s, it can be day zero, you may not, you don’t need to go out at all for that matter.

If you are clear today, then why go to business school. If you are still figuring out and trying to understand your place in the world and your philosophy for your life and all of that, take your time. Opportunity is everywhere and you’ll learn everywhere.

So for me, those two years were great. I learned quite a lot. It’s personal development, it’s professional development, and then I felt, it was actually time to move back. So take your calls.

Amit Somani 05:00

Absolutely. So now let’s talk a little bit about healthcare, the sector that you chose, like you said, I didn’t realize you were doing healthcare at McKinsey.

Honestly and candidly, right? How has that evolution of that sector been, particularly from the point of view that you’re a tech entrepreneur in terms of adoption of tech, both from the consumer side, from the government regulatory side. Has it been too slow, reasonably paced? What do you think in terms of how long it has taken since your first venture?

Prashant Tandon 05:30

The interesting thing about healthcare is that it’s never fast. It moves at a glacial speed. What we thought that we had come to build in 2009 is what we are building now also, and hoping a lot of that will fructify in the years to come.

But, two, three important things. I think, one from first principles, whatever we believed will or should happen actually happened. We thought it’ll happen in two years. It’s been 15 years and it’s now unfolding as we speak. So it’s a game of patience. It’s a game of just chipping away and kind of making sure you are solving the issues of today while preparing the company or the model for what will be the future model for healthcare tomorrow.

And that’s both exciting and sometimes irritating or frustrating that not everything that you want to build it’s the right time to build. And the wait is sometimes quite a bit for you.

So you have to find what are the current problems to solve, to keep yourselves actively in play, that you are building out things that are solving today’s problems and laying the foundation for tomorrow. So in healthcare a lot of times the problem is that people build out a model for the future, and that future is not the one year horizon, two year horizon. It turns out to be a 10 year horizon.

And not many entrepreneurs have the wherewithal to go through with it. So solve the here and now problem and keep a view on what you’re solving for the longer term. But it happens the good news is, for us at least, the good news was it happened, whatever we envisaged, A lot of it has happened and more is unfolding.

Amit Somani 07:30

Give us an example of what you had envisaged back then and you thought it’ll happen in 2, 3, 5 years and now it has taken 10 years or 12 years and it has happened. Number one, and a related question, what are you envisaging in healthcare specifically. It’s looking 10 years out. What do you think will happen from now, now that you have the benefit of the last, uh, 12 years?

Prashant Tandon 07:50

I think we started with a doctor centric platform and the idea was we are digitizing the healthcare ecosystem and once we have the platform inside a doctor’s clinic, then we’ll kind of get the entire ecosystem digitized from there and all the benefits will accrue, et cetera, et cetera.

And the first thing we realized after spending a year and a half, was that this industry will move from a doctor centric to a patient-centric ecosystem. Now it seems very basic, and seems very straightforward. And in FMCG and consumer everything, customer centricity or consumer centricity is kind of well known.

But when we would talk about patient centricity in healthcare, people thought it was not coming out of knowledge and insight, but it was just us being naive and not knowing what the reality of the market is that healthcare can never be patient-centric. It’ll always be doctor centric or care centric, which is insurance centric, depending on which country you operate in.

And that was the completely confident belief of the entire ecosystem. So go to a pharma company, go to an insurance company, go to a provider network. All the big players will tell you healthcare doesn’t work this way. So this was, we were told that by investors, of course, and everyone else, but we believe that the market will move to that.

And today, every single pharma company, every single hospital, every single healthcare institution talks of patient centricity as the most important thing they are focusing on. So, which sounds very basic today, but at that time was a big thing. Another thing I’ll tell you, when we started 1mg, I was very clear that we want to build an integrated healthcare platform, which is the information, pharmacy, diagnostics, consultations all together for the patient on one platform.

And it came from a belief that that’s how healthcare will be delivered better. And the digital platforms will have the data interplay and patient context going. So that will be the way you can actually give better outcomes in the future.

So, again, all investors and all our competitors also were very clear that you should pick either via pharmacy or via lab or via telemedicine platform. And call it being stubborn or whatever but we decided from the get go that we want all of it, and we want to create a model because we saw ourselves more as a healthcare platform than a commerce platform.

Commerce was an enabler to deliver healthcare for us. It’s just how you view yourself. Now, again, five years, seven years every single platform that is selling healthcare for whatever reasons, call it cross sell or margin expansion or whatever, but every platform is integrated with all the services coming together.

Now five, now 10 years out what do I see? At least my view is consistent from where it was when we started off, that now the building blocks have been built, the plumbing has been done. e-pharmacy, e-consultation, e-diagnostic, all that foundational stuff is there. All the services have come together. Now we’ll get into much more lifecycle, personalized and predictive care because the data interplay between all the services and longitudinal information of patients will become possible.

So where are we headed more, I would say, Healthcare than disease care, as they call it, that it’s your management over a period of time, what trajectory that you are on, your diabetes and heart problems and hypertension and whatever you’re going on a certain trajectory. A million people in your situation went from on a similar trajectory, and then some went up, some went down, some went sideways, depending on specific interventions, that’s where we come in with the nudges at the right time.

So what will happen is healthcare will become much more predictive, personalized, and preventative, and it’ll be a lifecycle care model of delivery.

So that’s what I am fairly excited about. It’ll become like that as against what it is right now, which is the same for everyone in very, very broad cohorts. and What is going to make it possible is data, which has always been scarce still today. The foundation is very strong and the government is also now, I would say, boosting it with the NHA and the other good stuff that’s going on.

Amit Somani 12:40

So I had a business related question, on this integrated healthcare notion and you know multiple players, each providing like a full stack. I’ll give you diagnostics, I’ll give you consultation, I’ll give you content, nudges, I’ll give you whatever else, right? How much of that is a manifestation?

It was your vision. But when I look at the industry, the fact that still acquiring consumers is very expensive. And healthcare by nature of it, unless you’re a chronic patient, you’re not going to the doctor every day or every month. And therefore, you have to keep acquiring, reacquiring.

And therefore this is like you know necessity as a mother of invention. Say, look, once I get the customer, let me make sure I can truly serve them over a genuine lifetime pun intended. Because otherwise I have to keep acquiring and making money on the first transaction. It just won’t make sense.

So how much of it is a necessity? As opposed to, I mean, it’s obviously good from a consumer point of view.

Prashant Tandon 13:35

It absolutely is and that’s where it is perfect that you anyway have to do it. Whether you believe it or your reason to do it may be different. You’re absolutely right. Even if I were seeing myself only as a commerce, I would still want to do more cross sell. That’s what I mentioned.

And I said that fundamentally everybody today is doing it because it makes business or commercial sense. Having said that, what also ends up, at least in my experience or my view, Is the conviction of what you are building and the philosophy behind it.

And in my case, that philosophy was very clear that If we are going to build the healthcare platform of the future, I need all these services coming together for the patient and over a long period of time. So it makes business sense is absolutely a positive cherry on the cake. But everyone would end up here was fairly obvious because of the reasons you mentioned and because of reasons I am going after as well.

Amit Somani 14:45

Understood. Now switching to the patient side, right? Or the consumer, how has that behavior evolved or changed in general? Because for example, it is notoriously kind of known that Indians will much rather do, you know, curative healthcare than preventive? Probably true for all human beings, but even more so for India.

That is one, second is this notion from a consumer point of view of the attach, is that happening? Are they sticking around, whether it is on 1mg or what you see in the landscape that, or is it that I’m a very, you know, every time I wanna go look at something, I look at either best of breed or do a Google search or ask my friend, where should I go?

Prashant Tandon 15:30

So I think first of all, the Indian consumer is not a homogeneous single type of consumer. For every offering you’ll find some consumers or the other. But, the mega shift or the macro shift I think is that consumers are getting more involved in their healthcare and they’re getting more skeptical with the healthcare that they get.

And both of these have been consistent trends. And if, you know, 20, 30, 40 years back, it was very clear the doctor was on a pedestal. And from there it has shifted to most of the consumers and patients feel that they’re all getting kickbacks and not acting in their interest. And there’s a lot of skepticism that has come in where the patients are all over Google trying to reassure that what is happening, is the right thing or not.

And I think with that, what that has meant is that the patients have started asking a lot more questions and started informing or educating themselves a lot more because they don’t trust that the system is working for them.

And while it’s a mixed bag of which part of it is healthy versus dangerous. But I think the fact is that patients are more involved in their healthcare, number one. Number two, post covid, the awareness level and the kind of flexibility or desire to try out preventative in bigger ways has actually increased quite a bit.

People are much more receptive because a lot of people saw mortality up close. And I think that does have an impact. And so people are getting into more and more. I think that the question you asked is, what is the attach of a consumer kind of a thing?

I think one, nobody owns a consumer. At the end of the day, the consumer has multiple choices. At best you can hope to be in a first amongst sequels for a bunch of services that you provide for that consumer. but I think it’s very heartening for us at least, that we have a subscription plan called the 1mg care Plan where you sign up for six months, you pay some 289, 279, something like that.

As of now around five lakh people are on that subscription plan, so they’re willing to sign up for a six month pay upfront, a little bit, and be attached to our platform. So to me, that is very heartening. It’s probably the largest subscription plan in healthcare in the country today. Um, and I think the mindset or the market is moving. Earlier, it was almost impossible to get people to buy into subscription plans for anything.

Now, whether OTT, whether a few other services, whether Amazon Prime, whatever has played a role. But people are now, once they are comfortable, they’re willing to stick. assuming they’re getting what they’re getting. I think the market has changed. and now we will see much more of, because see, lifecycle healthcare will not happen till you have people attached.

And that’s why our view was first we will get a subscription plan going, which is just better value for what you get in terms of economic value, and then we’ll come in with the nudges to make it better outcomes and things like that. And that’s another example of what I was saying earlier.

A lot of people just go to the future we’ll create the next generation disease management model of how to manage diabetes better, how to manage cancer better, how to manage this better, that better. The problem is it’s very hard to get consumers to stick with you for a period of time. and get those outcomes going. So we thought first we’ll build stickiness, then we’ll build nudges.

Then we’ll show outcomes, then we’ll charge for those outcomes. And of course, we are anyway making money if people are sticking.

Amit Somani 19:40

Understood. You mentioned Prashant, that there are different kinds of consumers in India. Of course, we know India is not one country, it’s like 10 countries. Can you elaborate a little bit, maybe with some of the more unusual ones, right? Like some segments, meaningfully sized segments that you have seen.

Prashant Tandon 19:55

So I think if you look at the top end of the customer base, people have huge spending power and a desire to spend as long as they see value in it. And that they would, they are willing to pay up for premium services, and at least in healthcare, we are seeing a lot of labs, a lot of service providers, even in diabetes or on nutrition people are paying a few lacks a year for their nutritionist, for their diabetes counselors, et cetera, those who can pay.

And these are kind of western market economics. And it’ll be certainly you are restricting yourself to serving, a percentage of the, a couple of million at the top of the pyramid, kind of, people. Then there is the, at the bottom is the entire spectrum where affordability is everything, and that’s where generics and price of a medicine or treatment decides whether a patient goes through treatment or does not at all. And that’s where having the right generic options and cheaper solutions mean everything to that patient base.

So that’s unfortunately a very large segment of our population even today. And then there’s a big middle class out there, which is aspirational, which wants the bigger brands, and the best deal they can get in it.

So, what we are seeing is across these spectrums offerings have come up. So whether it is a diet counseling plan or a nutrition plan or a diabetes plan costing a few lacks. Or people who are not willing to spend 200-400 rupees on managing their diabetes and cholesterol even through generic. So the spectrum is insane. And that’s where I think the government has an important role to play in healthcare. At least at the bottom of the pyramid, the top kind of takes care of itself.

Amit Somani 22:05

Wonderful. One last question on the healthcare business side, and then we’ll jump to entrepreneurship and your journey there, which is, I saw you in some quote on the, maybe on Twitter, say something that, look, you know you’re going multichannel, omnichannel.

Is it possible to build a digital only kinda healthcare company going forward? You know what you had to do, you had to do, and you’re at a certain scale. Or is it that India is inherently going to need to be omni. Of course for delivery there is a clear element of delivery of healthcare that has to be in a physical location, but just for a new age tech company, is it possible to go digital only or pretty much every company will…

Prashant Tandon 22:45

I think you can go digital only. I don’t think going offline is imperative. We are going offline is true. We are going omnichannel, multichannel. But that’s also, I think, at this stage we have the luxury and the aspiration to be the largest healthcare company of the country. And the fact is that today around 3 to 4% of healthcare is in the entire digital of outpatient healthcare ePharmacy diagnostic. We’re talking 3 to 4% at max of the market.

So if you want to be a major player out of this hundred percent, that 3%, even though it is going to double every year for the next few years, probably. Or grew at 50, 60% at least still. It doesn’t get you to the dominant market share positioning.

And the omnichannel is very real in healthcare, especially for the kind of services we provide. Is it required in every healthcare delivery or every healthcare platform? Not really. I think a lot of things can be purely digital. A lot of things will be largely digital, data science based, et cetera, et cetera.

And if I were to even do it all over again, I think I would focus purely on digital for the first five years again. So it’s just, you need to get to a stage where the additional channels start blending in with the online, creating a model that is truly at least a little omnichannel and also you start looking for new channels to access consumers. So for now, I would say, if you can, digital is still at the early stage, the most appropriate way to reach out to a consumer.

Amit Somani 24:30

Understood. switching gears now to the entrepreneurial part of your journey in the sense, how have you grown as an entrepreneur? You mentioned the role of a co-founder is very important. Maybe some of the lessons learned, that you would want to pay it forward to folks listening in.

Prashant Tandon 24:45

Sure, so I think firstly, it’s very important to have a philosophy of what you are building and what value it adds. As I said earlier, also, don’t do it for the excitement of, or feeling a necessity to be an entrepreneur kind of a thing. and be very clear what’s your reason or what will be your reason to exist in the world out there, or the marketplace? What view are you carrying, that actually turns out to be very important in the long run.

Other, very, very important point I would say is that there is immense power in compounding and you have to keep getting better every day. And when you have the luxury to look back three years, four years, five years from where you were, where you’ve come, it’s all the little things all along the way, every day.

It’s to put your head down and keep just getting better at whatever you are doing in the direction that you want to go. That part. I think there’s a lot of, there’s a need for a lot of patience. Anything good takes 7, 8, 9 years to even start looking like something is coming together and it takes that much time.

You have to have that wherewithal and patience. Thirdly, I would say, it’s a marathon and it’s a very turbulent journey. It keeps going up and down. You need your support system in place. And having the right co-founder, having the right core team, having the right family systems, having friends, having a way to keep your, maintain your sanity, all of these are absolutely critical.

So it’s very, very important to focus on your own sense of mental wellbeing along this way, because there will be, there will be big highs, big lows, and that’s the nature of the beast. But at some level you have to just detach a little from the hype and stay grounded on what you need to do and, most of it at many points will not be in your control.

So, and that’s my next important fourth point, which is try to have as good a sense of what you can and what you cannot control, what you can put your everything in it, and what you cannot just let go. And mostly what we, a lot of as humans make the mistake of doing the opposite. We obsess and sweat and worry about things that we actually have absolutely no control over.

And don’t spend enough time on what we can actually influence. So, we cannot control the markets will go up or down. We can control whether we grow fast or not. Whether we can control whether our burn is in a certain line or not. We can’t control if the regulatory landscape is going to completely get changed on its head one fine day.

It’s done then it’s done, your obsessing over it won’t change. Your fundraise, no investor available and you being paranoid about it and your panic showing to your team and your customers and everyone else is not going to help anybody. And it’s not like that panic will solve the problem. So panic about or obsess about what you can actually influence and just let go of everything else.

You can’t control everything and the outcome is actually not in your control at the end. So, I think these are some of the things I would just say. It’s a learning, continuous learning. And I think that’s the other thing you always need to accept with humility, that you are getting irrelevant very soon unless you level up repeatedly all the time.

So have that understanding that this is a world where it’s changing so fast that even if you were the master of what you were doing. Whatever you are doing, it will probably be relevant in five years. So keep picking up something, some new skills to stay relevant to people around you.

Amit Somani 29:05

Wonderful. I think you’ve covered a lot of good stuff there, so I don’t have any follow on to that.

I will just ask one last question before we wrap up here, which is what advice did you get along the way without attribution or what is popular folklore that you totally would debunk saying, this is crap. Like, don’t worry about it. You gave a lot of positive things of what to do, what not to do based on what you would hear or have experienced.

Prashant Tandon 29:35

So let me think. That’s a good one. See, we’ve done a lot of things where the wise people everywhere had a consensus view that this is not the way things get done. As I mentioned about patient centricity, as I mentioned about integrated healthcare, et cetera, et cetera. And, as a person, as a group, as a company, we kind of decided to believe in it and continue.

And also a lot of times people told me that you do whatever you want, but at least in your fundraise pitches, tell them what they want to hear. And, how does it matter, just call yourself an ePharmacy and say the rest are pilots or whatever, whatever. Now, for whatever reason, good or bad, I always felt that what I am building makes sense and somebody will buy it and I don’t think that following conventional wisdom builds anything new.

If everybody was new to it equally, then, you would probably not be the one getting the chance to build it. And the other thing, I think one more thing I wanted to share was, I’ve always, and I’ve worked with various different investors, a lot of different board members, investors, friends in the ecosystem, all well-meaning people.

And they all share their very well-meaning and good advice that comes from their vantage point. And earlier what I used to feel is that, yeah, they know something a lot more than probably I do, but over the period of time I realized that, or I felt that everyone is just trying to share their thoughts.

But your main job is actually to, to take a call based on your conviction at the end of the day. Everybody’s input is worth exactly what it is. It’s just an input. It’s not that anyone knows much better. If they knew, they certainly would not be just advising you. They should be building out something better.

So I think stick to convictions all along. And many times it has happened that nobody agrees with you, you continue to go down that path and it’s worked out fine for me. So I’m not very sure if that is a suitable example, but that is something that at least I have seen that even if everyone in unison is saying something and you feel that’s not the right thing for you, maybe it’s not the right thing for you.

Amit Somani 32:20

No, that is a wonderful place to end. You know, keep learning, keep compounding patiently over the long term, and don’t worry about conventional wisdom. So thank you so much Prashant for being on the Prime Venture Partners podcast.

Prashant Tandon 32:35

My pleasure. Thanks, Amit.

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