Tell us about your background.
I studied electrical and computer engineering at the University of Cape Town (UCT). In the middle of my master’s degree at the age of 22 I dropped out to launch my first tech start up – Personera. I was able to raise venture capital from a number of well-known angel investors for the business, which was a software platform that integrated with social media platforms for the promotions and fan mechanising industry. Eventually I took the business to the US and commercialised it with the support of my South African investors. I lived there for two years and sold it in late 2013/early 2014, which is around the same time I started RecoMed.
How did the idea for RecoMed come about?
Both my parents are doctors and I grew up around healthcare. While I was living in New York I was making a lot of my healthcare appointments online, and I felt that we really should have a similar tool in South Africa. Healthcare is a massive industry that touches millions of people’s lives but is riddled with huge inefficiencies. Having already had the experience of raising venture capital, I came back and wanted to do something that would have a much bigger impact.
When I started RecoMed it was at a time when platform businesses were clearly changing the world. For example Uber and Airbnb have made things radically easier for the consumer to make a quick decision and transact. On Airbnb you can find accommodation at a chosen price point, read reviews and book it immediately. Similarly with Uber you can see what taxis are available in real-time, look at ratings and order an Uber in seconds. Doing something like that in South Africa for healthcare made a lot of sense to me because the consumers were ready; they had smartphones and they were dissatisfied by the inefficiency of the system.
Added to that, it was a personal goal to become one of the most valuable technology companies in the country and ultimately on the continent. So I decided to build a healthcare platform to help healthcare consumers make appointment bookings with the same ease and speed as they’d expect on Uber or Airbnb.
And tell us about your journey so far.
Working in the healthcare space was a lot harder than I expected, particularly in the beginning. When we launched, innovation in healthcare – and especially innovation by tech startups – was new and required a culture shift. I think we’ve made strides towards a more inclusive industry now but initially it was like pushing a boulder up a hill.
If we look at the rate of innovation in fintech, for example, health tech lags behinds enormously for a couple of reasons. Firstly, banking consumers are eager to adopt technology that makes banking and investing easier and accessible for them. Large companies often still see the people accessing healthcare as more passive ‘patients’, as opposed to empowered consumers who are mobile and online. Thus, companies aren’t always necessarily addressing the consumer’s needs and experience when they innovate.
Secondly, both healthcare and finance are very established, regulated industries largely based on a transactional business model. But the problem with transactional models is that you need far more funding to get off the ground because you don’t have fees to keep you going in the early days. In order to get to scale you need millions and millions in funding. That is a much more accepted reality in fintech and that’s why it’s the most venture capital-funded space. I believe that within 10 years health tech will be equally as big as fintech.
But that said, in healthcare we’re seeing resistance from corporates to pay for fee-based software and what it means is that startups like us have had to pivot to a model where we charge a per-booking or per-usage fee for every appointment made on our platform. The change has resulted in much better traction for us.
We also have to remember that we’re really in the first wave of startups disrupting healthcare. I’m proud that RecoMed is one of them, and in less than five years we’ve paved the way for other health tech startups to launch their great ideas and turn them into viable businesses. We are also fortunate in that currently there are a number of excellent accelerators and mentors in the sector that are doing a lot of good – for example Siraaj Adams and the Digital Health Cape Town (DHCT) accelerator programme.
What do you think has been the key to RecoMed’s success?
In any industry, but healthcare in particular, I think it’s important for tech entrepreneurs to have a strong technical and business skills set or surround themselves with people who do. My experience was instrumental in RecoMed’s success because I have a background in computer science, building and managing tech teams and dealing with developers; and this helps in building a strong product. The other value I bring is raising funds. My previous business raised in excess of R20 million and RecoMed is going to do the same. I think it all comes down to finding the balance between the business model, the product and the ability to fundraise and manage a team.
From a strategic point of view, we’ve also chosen to partner with other leading stakeholders and technologies in the industry. We are integrated and working with a number of market-leading practice management application companies and clinic management tools, as well as corporate groups such as Clicks, Medicross and others. Secondly, we have our own electronic system through which doctors are able to offer available slots to consumers to make appointments. Nobody has ever done that before, but now we’re replacing having to make several phone calls back and forth to make or change an appointment and from what we’ve seen from consumer adoption, people want that freedom and ability to choose. So essentially, we haven’t aimed to replace established businesses in healthcare, we have tried to flow into the gaps in healthcare and create mutually beneficial partnerships with key players.
Let’s talk about the tech for a moment. What would you say are must-haves for any health tech startup entering the market?
My core piece of advice is to ensure that your system is fundamentally interoperable from the get-go. RecoMed is built as a technology platform and right from the beginning we ensured that all of our partners could integrate with our system. The second thing is that you’ve got to be serious about the quality of the technology and learn how to build things properly. Multiple times I’ve seen startups building weak and bad products and as a result they can’t get through the enterprise level security tests that need to be passed.
In this sector we are dealing with very sensitive information and we can’t afford to make mistakes. This means that you need more investment in the tech and a minimum level of sophistication to be able to be enterprise-ready.
So I would say build your system with integration in mind and build it properly from the beginning. Companies that have done that and who have made those investments are doing well because they can focus on going to market and not fixing the product. If you are stuck in a cycle of continuously reengineering your product while you are going to market, your days are numbered.
The question of competition is also something startups should consider. How should they respond to competition?
The reality is that if you are a pioneer you are always running the risk of performing market validation for other people who come after you. History shows that the fast followers tend to do better because they are more capital efficient than the pioneers. But history also shows that a number of the first movers won, and they won big. Our goal is to continue focusing on locking up the market and reaching more consumers, healthcare providers and corporates in the space. If down the line there is a well-funded and well-motivated competitor, they will find it a lot easier to partner with us and work with us than they would to replicate what we’ve done.
What role do companies such as RecoMed have in developing tech talent?
We’ve got a few roles to play. One is that companies like us need to show the talent out there that there are great problems to be solved inside startups. In Silicon Valley the most desirable place to be is with Facebook, but deep down the guys want to work for the next Facebook. You want to work for the best startup in town, and that’s a respected career choice.
The second thing is we’ve got a responsibility to do is to develop the people inside our own company. It’s common for any startup for developers to come and go in order to join or start other startups. You’ve got a responsibility to mentor those people and to help them grow. If you are a busy company you don’t necessarily think that you can afford to make the time investment, but it can be one of the most rewarding things to see a person develop in their role. You may sometimes wonder if it’s worth the time and money to invest in training and developing your team member if they’ll just end up leaving your company. But then what if you don’t and they stay?
What are your plans for RecoMed going forward?
Our plan is to double our business a few times over in South Africa and to become a household name. This year we will definitely cross a million users, but I would like to go well beyond that. In the future, expanding to neighbouring countries is obvious because most South African companies have a footprint there. In terms of Africa at large, I think there’s good opportunity there too, however having done a global expansion before I’m sensitive about doing it properly, but in all, I’d say Africa is our next frontier and we’re poised to take on the challenge.