Arunima Rajan There has been a lot of concern in recent years about lack of innovation in the healthcare sector. However, statistics shows that the start-up eco system is slowly evolving and even though there are no companies like a WhatsApp or a Facebook in the space, there is still some reason for hope. The lack of innovation in healthcare has always been the centre of discussions in academic circles. When David M Cutler of Harvard University published a paper entitled “Where are the healthcare entrepreneurs?” four years ago, it became a talking point in several debates and healthcare conferences. Investments will rise, said some. Dim future, said some others. In fact members of top management of healthcare companies openly admit that healthcare resists change. During a recent conference in Cambridge, Jonathon Bush, CEO of Athena Health, too echoed similar views. “It stinks to be a digital health care entrepreneur because you can’t get the data you need. The average doctor receives 1,100 faxes per month. The information is all analog: print, fax. Without digital data, there is nothing to do,” said the CEO, reported Forbes. Given the extremely bureaucratic, complex and closed nature of healthcare sector, several aspiring entrepreneurs often do not venture in to the space. Further, building customer base, raising funds from angel investors, venture capitalists and corporate arms of foundations also takes extremely long time. Changing the rules of the game “Healthcare sector is always been a bit slow when it comes to new technologies and innovations. The reason for that is pretty simple, ‘you deal with people’s life ‘day in day out and hence anything that is not tried and tested, standardised or approved isn’t accepted so easily,” says Ruchi Dass, CEO of HealthCursor Consulting Group. “The reason for this perception is little mentoring that is available to shape such start ups. Due to the absence of proper guidance and financial support a few of them turn out to be successful,” adds the entrepreneur. So where do healthcare companies stand after reforms introduced by multiple governments including the Affordable care Act in the US? Certainly better than before, as new niche products and service companies are able to create significant new market opportunities by focusing on providing a unique experience. Today, there is a broad spectrum of healthcare innovation and most of the successful start-ups are being run by either serial entrepreneurs who have built a company before or by "doctrepreneurs" - doctors or healthcare practitioners who decide to build a business that solves a real problem they experienced working with patients or in the health care system. “There's a great opportunity for people coming from outside of healthcare, to look at bringing technologies and models that have worked outside of healthcare,” says Unity Stoakes, co-founder of Startup Health, a New York based start-up accelerator. “A new wave of innovators is entering the market and starting to win by delivering dramatically superior customer experience and results and create new revenue opportunity,” adds Stoakes. Most of the Indian entrepreneurs still have a long way to go to replicate the success of tech start-ups of Silicon Valley or Israel. The potential of technology to create affordable, high quality and accessible services is largely untapped. In fact for a really long time, only two business models were in vogue- hospitals and physician’s practice. Further, there have been numerous legal and bureaucratic gate keepers like License Raj which was a huge hindrance for importing medical equipments till 1991. Yet, it certainly appears that executives are taking carefully calibrated steps and testing various business models. “I wouldn’t agree completely with the statement that youngsters in India or abroad are reluctant to pick up healthcare as their career. We have some of the most innovative new age start-ups in healthcare that are founded and managed by a group of youngsters Biosense technologies, Surgerica, HealthKart, Socialblood, Agatsa are to name a few,” says Ruchi Dass. To understand new age start-ups, one should look at Tushar Vashisht who never thought he would be part of a healthcare start-up. He started his career in Wall Street with BlackRock, after graduating from University of Pennsylvania in 2007 with a Bachelor of Applied Sciences, majoring in Computer Science. Prior to drinking the start up kool-aid, Tushar helped initiate government of India's Unique ID (UID) project for almost two years. While at UID, he advised the Chairman, Nandan Nilekani, on project strategy, besides working on various business development aspects of the project. However, he gained 15 kilos in a year after joining India Inc. And this was when his quest for healthy and fit living began and which eventually led to the formation of Healthify me, a calorie and nutrition tracker for Indian foods. Armed with the application, a user can track weight, nutrition and fitness. It also provides continuous contextual advice and feedback to users to help modify their lifestyle. “Studies show that 70 percent of all employees in India are overweight. Mathew Cherian and I were part of this workforce as well, when we moved back to India. The only difference between us was that I let myself flow with the crowd while Matt used his knowledge of nutrition and fitness to anchor himself. I gained 15 kilos in a year after I joined India Inc. till I met Matt. And that is when our quest for healthy and fit living began. This brought significant changes in my diet – I went back to my US diet, and the way I balanced my gruelling schedule in the UID project with my fitness pursuits motivated by Matt and my friends, I worked towards a half marathon, finishing it in an hour and 45 minutes a year later, and 18 kilos thinner,” says Vashisht. Today the company has distribution tie-ups with medical chains like Apollo and Max Healthcare, gyms and corporate wellness programmes. “In the few months since the launch, we have had 10,000 app downloads, over 600 premium membership registrations, and our users have collectively lost over 3,000 kilos,” explains Vashisht. Vashisht says that a start-up needs a great team to count on and the skills of co-founders should be complimentary. He admits that his co-founder Mathew Cherian, who holds a dual Masters Degree from MIT, is one of the anchors of his start-up. He also knows that the market that they are approaching, however theoretical is a multi-billion dollar industry and there can be a real business that can be greater than $100 million someday. Rajat Goel, CEO and co-founder of Eye-Q, a super-speciality eye care chain, seconds his views. He points out that Indian healthcare for all its problems, still offers chances of success for the right business models. “At Eye-Q, we started with a great team, spent almost two years exploring and developing our business model, and then started scaling up the business step by step,” says the Indian Institute of Management, Ahmedabad graduate. So why do some start-ups fail? “The most important factor which defines success is whether the healthcare service provides a great experience to patients, so that those who initially try the service say positive things about the hospital-and also return whenever they need eye care,” says the co-founder of Eye-Q. “We invest in building awareness about our hospitals locally and have partnered with local practitioners, who have already built a strong patient base of their own in the local market,” adds Goel. He also enlists reasons that can affect the health of a start-up. “A very important factor is also to examine what your patients feel about you. Customers should see you as an institution with integrity and recommend the company to friends and family. Whether customers return to the healthcare service provider should be closely monitored by the organization,” warns Goel. Goel also insists that the marketing plans should gel with the market conditions and the lifestyles and culture of the people they are catering to. “An entrepreneur can revive his start-up by reworking the business model .It may not necessarily mean changing the products or services that you offer. The major focus would be on approaching your marketing, packaging, pricing and delivery practices in a different way,” advises Goel. Why ecosystem matters? Perhaps not so surprisingly, a healthcare start-up is incomplete in itself as it is the ecosystem that matters. “Consider a patient that needs medication for his ailing kid at the middle of the night. A tech based start-up or a primary healthcare centre isn’t the answer. The idea is to put all stakeholders in a value chain and make the chain drive value as well as sustainability. Incentives should be clear and enough for each stakeholder to be a part of this value chain. People who understand a bit of new age technology, public health system and governance can build some of the best start-ups,” says Ruchi Dass. Profitability, the ultimate marker of successful entrepreneurship, does not depend on top-line revenue growth. Similarly top line revenue growth doesn’t mean better healthcare. “The revenue generated by a company depends on each partners’ value contribution. As a matter of fact, it is not a hard and fast rule that only brands with better or known brand image can make more revenue. “The old formula for that was TR=P X Q. TR is the total revenue while P and Q are the price of the goods produced and the quantity sold. Today TR= Derived and retained value which is equal to patient centric evidence based value designs,” adds the entrepreneur. “Look at the model of Portea Medical, Docsuggest, Diabeto, Biosense and others- they are very much provider agonistic but provide overall patient value. However, there is a great potential for the known brands to take a plunge and join hands with these revolutionary ideas and serve better healthcare,” adds Dass. Healthcare entrepreneurship requires focus on how the organization plans their funding strategy. The investors the company selects how much money it raises, the terms it has -- these are all essential to creating and growing the equity value of business. The smarter the company is with its strategy, the greater optionality and opportunity he may have along the way. “Passion and perseverance are the most essential ingredients for success as a healthcare entrepreneur,” says Unity Stoakes. “If you have a big mission and are committed to building a great solution that will make a meaningful impact, you will be able to navigate than ongoing challenges and valleys of death along the way,” he adds. Ground work for startup The growing clout of start-up accelerators and incubators has changed the perception of the aspiring entrepreneurs also. “When someone starts a new business, he/she needs money to get it off the ground. You need the money to rent or purchase space for the business, furniture and equipment, supplies, professional fees such as legal and accounting, as well as continuing the research and development of your product or service. You may also need money to pay employees. There are several places where you can get the money that a new business needs, but first you need to think about which type of funding will work best for your company. But a few understand that part,” says Ruchi Dass. But funding alone does not explain why some start ups succeed and others fail. “If a start-up wait for too long to launch, they miss on the first mover advantage then. Most of the time the reason is poor hiring, chasing befriend investees, distracted by Facebook ads etc. When the idea is under fabrication, it is the time to create virality and do planning with mentors,” explains Dass. But what do start-up accelerators look for before investing in an enterprise? “Our first interest is to know if the start up is solving a genuine need or problem, be high on innovative or intellectual content, and have high growth. The space should be ripe for disruption or acceptance of innovations. Moreover, market size should allow room for upscale quickly. Second, vital element would be the founding team. We look for start-ups with multiple co-founders having complimentary skills and a history of working together would be great. Prior experience or understanding of the dynamics of healthcare industry would be always given preference. Ability and speed to execute on the part of the founding team are important part of evaluating a start up. If a company demonstrates the capability to develop a sustainable competitive advantage in the market, that would be a plus,” says Pradeep K Jaisingh, chairman of HealthStart India Pvt Ltd, a healthcare incubator. Diversity A growing number of women are also starting to venture in to the healthcare sector. Some of the successful ventures headed by women are Yoscare, Operation ASHA, LUMOback, Agatsa, Sorento, SughaVazhvu Healthcare etc. The paradox of women in healthcare is that general public often do not notice women-owned businesses in healthcare because they tend to be smaller firms, don’t advertise about the owner but more about the business offering and obligations. Just like US and other countries Government in India should give preference or support to women led businesses. “Millions of U.S. women own businesses (8.3 million women in US in 2012), and these firms show faster-than-average growth for jobs and revenue in seven of 13 major industries, including healthcare and social assistance. I am not asking to create bias but we know that women are not in great shape in India anyways on the top they aren’t secure as well. But this should not be a reason to see many women not venturing to start-up in healthcare. I am hoping that the nation will grow and we will witness a change,” adds Dass. The journey of each entrepreneur is different. According to Rahul Alex Panicker, Co-founder of Embrace Innovations an award –winning social enterprise that aims to help millions of vulnerable babies through a low cost infant warmer, teaming up with experts and being prepared for a roller coaster ride certainly helps. “Surround yourself with people who have expertise in different areas that may be relevant to you: manufacturing, legal and finance, general management and leadership, start-up strategy, venture financing, etc. They form your safety net. To vet deals, interview potential hires, vet potential service providers, etc. As an entrepreneur, your job is to connect all the dots, and keep the ship afloat and moving. Your success depends on the competence of your extended team,” says the young entrepreneur. “Be prepared for the emotional price to pay. Whatever ego you possess will be bruised - by employees leaving, by funders declining, by potential customers dicing your product. It takes emotional maturity to take things matter-of-fact. But an entrepreneur cannot be unemotional. Passion often puts winds in the sails of an enterprise, even though reason might be its rudder. Those around are driven by your passion. Your advisors, family, early customers, all give you chance because of your passion. So, expect a roller-coaster ride. It is very much a voyage of self-discovery. That healthcare, especially, medical devices, is a marathon. Timelines involved are far longer than, for example, doing a consumer app or even developing a non-medical hardware product. So, be prepared for the long haul,” says Rahul. Business plan is an evolving document Rahul describes business plans at early stages as nonsense. “Sound business plan for a start-up is an oxymoron,” says Rahul. “When one is trying to make a product that one has to discover the requirements for by experimenting in the market, and then sell in a market that does not exist today, how is it possible to make a 'sound' business plan?,” asks Rahul. So, the best one can do is to discover the unknowns as early as possible, with lowest possible (and no lower) spend, and through this process minimize uncertainty. Eventually, in many cases, success or failure comes down to quality of execution. Even, the discovery process mentioned earlier, which requires sound thinking, requires good execution for cost-effective discovery,” says Rahul. Today India is an attractive destination for start-ups because of large markets, unique problems, vibrant talent pool, availability of capital, large private and government healthcare systems, capacity to generate clinical data, and existence of modern cities that provide comfortable base locations surrounded by large geographies that are representative of many developing countries. K Ganesh is one of the most successful serial entrepreneurs of recent times and has redefined the rules of the healthcare industry. He concedes that he uses his own filters before starting up in any sector. “I always check before starting a venture, whether it is a large market, as it should not be niche or small.” He also believes that it is important to check whether venture solves a big pain point or need or is it just addressing a ‘nice to have requirement’. “There should not be too many players already in the sector as you have to see whether you can build a category leader in the segment. In order to have a better than fair chance of success, one needs to check whether their product or service is a disruptor and whether it can change the status quo. Ask the entrepreneur about market research and quickly comes his reply. “Extensive market research encompassing the market opportunity, consumer behaviour, competition-both local and international, business models, regulatory frame work, eco-system and funding sources is the pre-requisite for any venture.” Elaborating further on the groundwork for a start-up, he adds, “It is also very important to have an accurate understanding of the talent challenges within the spaces. Companies often fail because they have not paid adequate attention to this aspect because the ability to execute is very heavily influenced by the quality of people that you have.” Though he feels that planning is important, he also adds that is often a chicken and egg situation especially when it comes to potentially disruptive business models. “It is often difficult to understand if something is a good or bad idea without trying it.” Question him about what he wishes he had known earlier as a senior member of the management and he smiles. “We are still at a fairly early stage in our journey and learning all the time. I would like to think we have gone in to this business with our eyes and minds wide open rather than making assumptions. We are fortunate to have a great team both within Portea as well as at Accel Partners and Ventureeast, our VC partners. The team comes with years of experience in the healthcare and start-up space and we are happy we have been able to deploy these learning to avoid pitfalls as much as possible. If I had known the need is so strong, I would have started this venture two years earlier,” adds Ganesh. Every year, there are hopes pinned on new entrants of the industry to change the face of the industry and raise the bar, but challenges of the sector often bring them down. “Lack of sound business plan is one reason. In any space, start ups can fail due to lack of a sound business plan, poor execution, failure to secure funding, sub part timing or a bad hiring which proves a grad on their ability to execute. Specifically healthcare, while is a large opportunity, is also very complex and tough one. It needs large capital, patient capital and strong execution, capability. It is an operations intensive business. Many people especially young entrepreneurs underestimate the execution challenges.” And what does he think about the future of Indian start-up eco system? “India is one of the most attractive destinations for healthcare start-ups because the opportunity is large. The healthcare spending is estimated to be USD 100 billion in 2015. There is still a lot of basic work to be done in the space to bring execution standards up to the level that is available in developed countries. Indian demographics unfortunately mean we have a crying need for quality healthcare at all levels. More than 51 percent of deaths in India occur due to chronic diseases, India has the second largest geriatric population in the world. Government funded or public healthcare systems are dysfunctional and most of the healthcare spend is private pay. All this mean a large healthcare business opportunity.” According to media reports, Accel Partners and Ventureeast have put $8mn in his company Protea Medical. Ganesh says that the quantum of funding raised and dilution is important for a start-up. “Yes, both the quantum of funding raised and dilution is important. Promoters need to have enough money and “skin in the game” to be motivated to build a large business,” says Ganesh. Raising Money However, the funding issue is more complicated than it might appear as most of the start-ups often use their own money during the research and development stage. “Every start-up company should try and first master the art of bootstrapping. I don’t recommend you to get stuck there but learn these basics. Forecast from bottom up, look at your cash flows and not profitability to start with, Go direct as much as you can, hire good mentors and position yourself well before your competition or the market leader,” says Ruchi Dass. “Secondly, there will be a few who will ever fund green field projects except the start-up accelerator groups that I mentioned earlier so seed financers and Angel funds are the best to start with. Check out websites like Angelist, ennovent and get registered. There are two kind of VCs; strategic and non-strategic Angels. Omidyar and Reid Hoffman ones are strategic angels that in addition to funds might also pass on the domain experience that they have to offer. Pick former if you get lucky. Remember well begun is half done,” explains Dass. And no matter the duration of waiting period, a good service or product always gets funded as per experts. The hard truth is neither diluting too much equity in lieu of small start-up support amount nor allowing some outsider interfering in day to day operations often makes planning uncomfortable. “There is also a way to bootstrap first and then look for Series A funding. It worked for me as well,” says Dass. “In most cases, a Series A is used once the company has shown some traction and needs more money to expand. It’s the money that will take you to new heights, better revenues, cash flow positivity and a huge payday via acquisition (or some other exit.) Know your options well in advance and sign it only when you are comfortable with the structure,” explains Dass. So, where do the fledgling companies position themselves in the healthcare system? India always had infrastructure problems both in healthcare and education along with other sectors as well. If you pick up 10% of Indian population we outnumber the German population today. So it is simple, a good service can fetch billions if that gets launched in India. But who have a better chance of making it here? “You should develop in India, with India, a service or product that is meant for Indians and make your money. CHMI has published more than 250 start-ups in India and this number is growing multi-fold every here,” says Dass. Today the primary source of debt fund in India are Non-Banking Financial Company’s (NBFCs) and banks, however both these institutions are reluctant to fund projects or companies in seed stage. These institutions fund the product which has passed the seed stage and the funding is done primarily to commercialize the product. The only option for seed stage funding is through venture capital or Angel Investors. Angel investing which is primarily done by high net worth individuals is at a very primitive stage in India; hence VCs are the only available option. Apart from the capital, start-ups also require strategic guidance and business expertise which the VCs bring on board once they invest in a company. The VCs typically occupy the board of the start-ups and participate in its operations and strategic decision making. As they have good amount of experience gained from managing other companies under their portfolio, they are able to participate in every stage of the company’s progress (in which they have invested) ranging from product development to commercialization. K Ganesh knows that raising money is stressful and consumes a huge chunk of time available for an entrepreneur. “Surely, a typical start-up goes through several rounds of funding before it monetizes,” says Ganesh. According to Ganesh, even if you can initially fund your company, it is a good idea to get prominent angels involved from the beginning. It will help in getting good advice, in opening lot of doors and in establishing legitimacy in VC’s eyes. VCs see thousands of business plans and find it hard to identify the needle in the haystack so they look up to experienced angels to refer good companies to them, But certain business models are amenable to angel funding to get it to next stage or series A funding stage. Most healthcare business models are not in this category. Building serious, scalable healthcare venture needs lot more money than what angels can pump in. So when should you raise Series A funding? One option is to raise Series A on a paper plan – if you can! The other is to raise angel funding, get some traction, get some customers on board, show that the idea is viable and then get venture capital for growth. At the end of the day, raising money early reduces one of the many variables that an entrepreneur has to deal with. He reflects, “It gives them a longer rope to try out a number of ideas and experiment. For instance, they can offer customers their product or service at various price points or even for free. This will help them garner feedback more freely and early on in their life cycle. Having money also helps in hiring a good management team by offering more than just options. It may be possible to pay them some salary to cover their sustenance costs. This can help attract better quality people.” Prod him about whether branding his start-up was difficult, pat comes the reply, “I have been fortunate to have been involved in several ventures that have essentially been services companies but have managed to build a strong ‘brand’. Portea has been a pioneer in home healthcare in India and we are using our first-mover advantage in this space to grow aggressively using a mix of extensive online and offline marketing/branding activities. The key is to help develop customer understanding of the space and partner with key stakeholders (to expand the space), rather than hammer away with just brand-specific activity.” Ganesh thinks that healthcare is long-term play and one needs to be patient. “There are innumerable opportunities. But pick and choose where you want to enter after a lot of thought. It is important to choose a big area where there is a large opportunity and space. Preferably new disruptive model rather than, say, open another super specialty hospital or open a pharma chain. There are too many players and unless you have very special skills and have lot of capital, this is difficult to pull off.” The appeal of a successful model in US is hard to ignore. However Ganesh says that it is critical to play to your strengths rather than copy the US model or someone else’s model. “What is right for them or right in a particular geography is not the same here in India. For instance healthcare is mostly covered by insurance and Medicare in the US and Europe, while in India it is mostly private-pay. So the factors are very different,” concludes Ganesh. Social enterprise Studies show that demand for affordable and accessible healthcare is growing faster in India. Affordability of healthcare services has always been a great concern in India, where more than 70 per cent of healthcare expenditure is done out-of pocket. This may explain the mushrooming of technology based business models that address the spiralling cost of healthcare .Moreover, healthcare facilities are highly concentrated in urban regions which make access to healthcare in rural India a major challenge. Healthcare business, for these new breed of entrepreneurs is not an opportunity to make money, but make some change in the way care is delivered to people across the country. With the increasing interest in healthcare issues in India, a number of healthcare companies are starting to feel the benefits of being socially responsible. Ikure Tech Soft Pvt Ltd, a brain child of Oracle employees, have set up Rural Health Centres (RHC)s across West Bengal and Orissa. The company recently received investment through Intellecap Impact Investment Network (I-cube-N). According to iKure founder Sujay Santra, his company tries to address some of the key problems of the Indian healthcare system. It is extremely important to have a great cause and have a sound business model to be a sustainable enterprise,” says the CEO. Real and substantial rewards can be reaped by those who approach the flaws of the system with creativity and flexibility. In the case of MyDentist, the CEO’s personal experience of marketing equipments came handy. “The role called for meeting dentists and waiting outside their clinics for a while before they met me,” recalls Vikram Vora, the chief executive officer of MyDentist. “While waiting endlessly for the dentist at their clinics, I realized the two main gaps- the lack of transparency in costs and long waiting period to see the doctor. These issues experienced by the patients formed the core of the MyDentist proposition - reasonable rates, transparency and focus on customer satisfaction,” adds the founder. Today a MyDentist clinic is open 12 hours a day, six days a week across 72 clinics at Mumbai, Navi Mumbai, Thane and Pune. The rate card is available on the website and free X –rays and free dental checkup is the norm. Named as one of the start ups to look forward to in the coming years, the CEO of My Dentist couldn’t be in a happier place. But he admits that he would do things differently, given a second chance. “At the point of starting up, I believe I would have been better placed if I had more knowledge on scalability, processes and people development, which we learnt over time. I think in most startup entrepreneurs have a problem similar to what I went through at that time. We generally look at our businesses with a short term vision and put self imposed boundaries on them. Because of this, I believe we took some extra time to develop and implement robust and replicable processes across the organization, thereby delaying the growth by some extent,” he adds. For those not in the know, the beginning of the start- up was bootstrapped with savings and loans from friends, relatives and even credit cards. However, taking debt was not sustainable for a faster growth and scaling up. Eventually, the founder had to raise funds. Seedfund Advisors incubated them and gave them the first round of funding. Subsequently, they raised 50 crores from Asian Healthcare Fund and Seed Fund. “Seedfund also helped us with our growth strategy. They asked us to shut the old clinics, invest in branding and systems at a stage when we were very small. We invested in technology and today all our clinics are connected. We know at a glance what the cash flow is, what materials are needed and our dentists can pull patient records from any clinic,” tells the CEO. Seed fund also helped the company realize the value of not just maintaining flawless service but also on how to look and feel customer-friendly. Eventually, the company redesigned its log and clinics with the help of experts to make it more appealing to masses. Initially, business came from referrals and patients who revisited the clinics. Even though they faced competition from the well established dentists in the cities, people were open to trials for treatments like clean-up. The clinics are often located at crowded localities like opposite Mahim church and railway stations. “We believe that location matters for a start up. We need to be at a location where we are accessible, visible and also have enough footfalls,” says the CEO. Challenges The Planning Commission’s observation on India’s entrepreneurial ecosystem in the report titled ‘Creating a Vibrant Entrepreneurial Ecosystem in India’ notes that India needs to create nearly 1.5 crore jobs in the next decade starting 2012. It also states that the large Indian firms have not created enough jobs and also it is unlikely that they will be able to generate significant amount of new jobs in the near future. With the public sector jobs also declining, there is an immediate need to accelerate the Indian entrepreneurial growth. However, the challenges to start a business are many ranging from regulation to funding. The regulatory system plays a big part to attract VCs to raise funds in developed economies like the US and Europe. The VCs are restricted by lack of clear finance structures and stable exit opportunities. Moreover, the ease of doing business in India is not very encouraging. India was ranked 132 among 183 countries in terms of ease of doing business in 2012 by World Bank. The start-ups face great difficulty to attract talent to join their company as the risk taking ability in Indians is far less compared to developed economies. Majority of the current young generation prefers to join bigger companies with better pay. Another great challenge along with lack of novel ideas in India is the inability to design product and services that satisfies the needs of a diverse customer base. The successful models elsewhere have failed in India. A service like online prescription management software for individual physicians is a good example. This was a great success in the US but did not pick up in India despite a huge market because, most of private practitioners operate in a less organized and less regulated environment in India. “In terms of execution, both timing and skill are important for a successful start-up. Any product or service which is either extremely ahead of the market trend or late to reach the market will not gain traction. For example, any lifestyle or corporate dental clinic that started 15 years back would not have seen the same demand as it is receiving now. Similarly, skill or strategy to position the product or service is also a key for success. Hence, the success of any start up is directly connected to its capability to address the challenges in the industry, which the existing players are not able to address,” says E. Saneesh, research analyst, business and financial services - healthcare, Frost and Sullivan. In the period between 2012 and January 2014, India and China topped the chart in terms of number of VC investments in Asia Pacific region. India has witnessed 73 deals and China has witnessed 53 deals. “The annual investments are around INR 1,200 crore in India and INR 3,000 crore in China. However, the Planning Commission estimates the annual investments in start-up funding in India will increase to INR 14,000 crore in next 10 years starting from 2012. The segments attracting deals were quite different between the two countries. In India, the healthcare provider segment attracted almost 50 percent of deals and a similar percentage of investments for China happened in the pharmaceutical and biotechnology segment. India’s increasing demand for healthcare needs and paying capacity of the population is expected to make the healthcare provider segment to be the hot favourites for start-ups and early stage investments. The healthcare equipment and pharmaceutical technologies that could reduce the cost of health care delivery are also expected to attract investments in India,” explains Saneesh. Today entrepreneurs are both hopeful and apprehensive about the reforms in the sector. “Often, the start-up has to obtain multiple licences (usually in double digits) from different government agencies, which is sometimes a herculean task. In general, India is not an early adopter market and very often, the taking off of a new concept can be slow. Execution is quite difficult, as in India, commitment often has very little meaning. For example, your vendors may not supply goods to you in time, causing you to fail in your commitment to your customers or employees may leave without giving any notice. Moreover, for a retail businesses, rent to revenue ratio is very high compared to the US or other developed markets,” says Santanu Chattopadhyay, CEO of Nationwide-The Family Doctors. According to K Ganesh, co-founder and chairman of Portea Medical, the infrastructure challenges in India whether in power, roads, and even internet connectivity take precious time away from entrepreneurs. “Regulatory flip-flop like tax on angel investments, FDI policy for e-Commerce, lack of government support for spurring entrepreneurship (like what Government of Singapore has done) are some of the areas that need to be addressed. Debt funding / bank funding is just not available. Although in many instances new job creation takes place through start-ups and new-age companies, it is not treated as a priority sector. Department of Science and Technology has to come up with a comprehensive policy and take measures to address these issues. Recent steps, though small, are encouraging like the new India Innovation fund set up by Government of India,” concludes Ganesh.