The Inc42 & AWS series — Scaling From 1 To 10 — looks at healthcare startup Innovaccer’s growth story
Innovaccer supports healthcare providers in offering services efficiently based on data-driven predictions and insights
Its data platform has been used by more than 10K healthcare providers in the US since its inception in 2014
The Inc42 & AWS series — Scaling From 1 To 10 — continues with a closer look at Delhi-NCR-based healthcare management solutions startup Innovaccer.
For startups, funding and leadership do go a long way in ensuring success and keeping the business going. But more often than not, even despite having a brilliant founding team and the right set of early investors, businesses fail because of the wrong timing or if they choose the wrong market for their products or services.
That’s where you hear about the infamous pivot. A lot of companies might claim to have pivoted from one model to another, or one market to the next in the search for growth, but very few actually manage to achieve that elusive product-market fit, which is so crucial for startups.
This conundrum is amplified for SaaS platforms and software solutions as these cater to a wide variety of enterprises and use-cases. So finding a niche can often take years — something that healthcare SaaS startup Innovaccer has grappled with in its initial days.
While Innovaccer founders Abhinav Shashank, Kanav Hasija and Sandeep Gupta were clear that their tech startup would use data to empower enterprises and businesses, it was not just about creating a product with fancy-looking UI that would attract investors. For them, it was about creating something that would still matter in the next 10-15 years.
Big Data was coming up in a big way around 2015 and this was the opportunity that the trio wanted to tap into. Hasija, who is the chief technology officer, at Innovaccer recalled, “We knew the key was to identify the macro trend and capitalise on it. And for us, the macro trend was that the cost of digital data storage was going down by 50% year-on-year. But the data management technology market was only increasing by around 14% at that time.”
This mismatch in data storage prices and the potential of the data management market came at a time when the data boom was just starting. Innovaccer was founded in 2014 and at the time India only had around 250 Mn internet users. On a global level, data was unstructured and Big Data technologies had just started to gain traction as businesses looked to organise this data to gain insights and actionable analytics.
As part of Inc42 & AWS’s latest series — Scaling From 1 to 10 — we caught up with Hasija to understand how Innovaccer went about innovating for the healthcare market and solving big problems.
Innovaccer Taps Into Healthcare Big Data
The slow growth for data management was a gap Hasija and the other cofounders thought would exist for the next 10 years. “So we wanted to keep our focus on that gap. And we asked how do we build upon Big Data technologies to create a data platform and provide enterprises and companies with the insights that we can from unified data.”
At this point, Innovaccer went ahead and tried to find its product-market fit in various sectors in the enterprise world. In enterprise technology, often the key is to identify the product-market fit and fail fast and learn fast. And Innovaccer failed fast and frequently enough before finding its niche.
In the early days, it started exploring the market fit in the business school world and organising data for business school professors which would help them gain insights from different public and private data sets.
“We were the leaders in the space. But we soon realised that the space is too small. So we pivoted towards the corporate world, the Fortune 1000 companies, and work with customers like Disney, NASA, Harley Davidson and more. Here we realised that unlike AWS which is a horizontal tech platform, the data platform cannot sustain in this horizontal and it has to be verticalised,” Hasija emphasised.
That’s where Innovaccer’s growth story actually starts. Hasija said that in the mature markets, healthcare was going through a big change around 2015-16, and Innovaccer was certain that this change would take on an enormous front in the next 10 years, in South Asia and Southeast Asia, the two most populous growth markets.
Simplifying Healthcare Through Data
But before it can even focus on working with healthcare providers in India, Innovaccer has to play a role in solving one of the big hurdles. In India, data is often unorganised, disparate, in multiple languages and in some cases erroneous.
So in the context of the Indian healthcare or healthtech market, much of the innovation is around improving access to healthcare through the use of technology. This explains why Innovaccer is focussed on the US market for its healthcare data platform. In the US market, the problem is not about data, but about the cost of healthcare, and with data management and processing, Innovaccer is able to reduce the costs for providers and availers.
“At that time, a US citizen had to choose between paying the mortgage for his house or paying for healthcare and insurance premiums. The cost was spiralling up. And the cost can only go down if the right people have the right information at the right time within the healthcare ecosystem, which is where this data platform came in and achieved that.”
Innovaccer’s Big Data SaaS offering focusses on supporting healthcare providers and institutions accelerate delivery of services by making powerful decisions based on data-driven predictions.
Its healthcare data platform has been used by more than 10,000 healthcare providers, touching the lives of over 10 Mn patients in the $3.9 Tn US healthcare market. The repository essentially collects raw data scattered everywhere, integrates it, normalises it and parses it through Innovaccer’s algorithms to provide trends and predictions to hospitals and healthcare providers to take decisions based on structured, consumable and ready-to-use data.
Healthcare Data Rides On The Cloud
“Everyone’s realising that outsourcing cloud management is the way to go. Because that’s not your core business; it’s not cloud management. And it’s going to be costly in the first year, when you have to really work with platforms like Amazon Web Services (AWS) to reduce those costs over time. And you will eventually get to a good break-even point or profitability on just the cloud cost.”
Innovaccer has been working with Amazon Web Services since late 2015. The first two years, Hasija claimed, were more about understanding how to make the most optimal use of cloud computing, offering the service more efficiently to its customers and in a more automated way.
“AWS is amortising your dev-ops costs, it’s amortising your security infrastructure costs, and absorbing those costs through the service it offers your business,” Hasija said, and added that using features such as reserving instances or through spot or on-demand instances to manage user load depending on the stage the business is in. “These have helped Innovaccer reduce infrastructure costs by roughly 35% over the past year,” Hasija said.
The more advanced services and technologies that AWS offers are geared towards startups or companies in the scale-up phase, which Innovaccer started exploring in 2018, Hasija added. And this partnership helped Innovaccer make optimal use of the cloud, just as its adoption was also growing across healthcare.
With its integrated platform, Innovaccer has created a comprehensive database that includes information such as clinical data, hospital operation processes and insurance claims. Data can help hospitals recognise high-risk patients that need more immediate attention and offer actionable insights at an early stage in the treatment.
Additionally for health insurance, claims processing is another important area where data analytics has reduced turnaround time and patient anxiety. But here data has to be stored securely and confidential patient data has to be treated with utmost care.
Working with AWS allows Innovaccer to build a more secure data platform for its customers, and Hasija hopes that one day India can take a mature stance on data protection. “The key is to first create a regulation on digitising this data in healthcare to start with and put protections in place at that stage. At the end of the day, healthcare is a professional service. And in healthcare there is a lot of human-generated data, which tends to be more varied, personal and a lot more unstructured than in other industries. To really save lives. And to really make people healthy, you need that data in a structured way.”
Creating A Data-Driven Culture
Hasija told us that when it comes to healthcare data — more so than data from other sectors — the need for businesses is to be a customer-obsessed organisation. “Not just solving customer’s problems but making them heroes is our core DNA. So our engineers are not simply thinking about building a platform; they are thinking about how this platform or product will really help our customers become heroes, by solving inefficiencies in healthcare and drawing in more business. So that’s something that was one of the first mantras for Innovaccer and customer obsession is across the company today.”
But this hard-nosed approach is tempered with empathy, which Hasija said is a “very important core value” for Innovaccer. Even as the team has grown to beyond 300 employees, the attempt has been to bring in empathy to problems, whether they are for customers or internally. “In big companies, there is a lot of friction between teams — the engineering team might blame product management over the right requirements. The sales team might say the customer success team is not helping retain customers. So it’s really important to have empathy and compassionate leadership to figure these things out.”
The empathy goes hand in hand with transparency. The Innovaccer HQ in Noida has flexible seating space, open layout and plenty of light flowing through the bays and cubicles. The expectation of transparency goes both ways for employees as well as the founders and the management. Hasija said there are no work timings — teams set their own schedules — and the overarching philosophy is that as long as the work gets done, there is complete flexibility for people.
“Just be in the shoes of the other person to see how to do things; what’s happening with them, and how we can help them. That’s one of the core values we believe in.”
Taking Stock Of Indian Healthcare
For Innovaccer, the US market and the revenue growth from the clients there has been a crucial ingredient in success. But what about the Indian market and where does Hasija see Innovaccer’s data-first approach fitting in the Indian context?
“The United States has solved the issue of access to care. And by access to care, I mean, even if you go to rural parts of the country, citizens have critical access care next door to them. If we’re talking from a government point of view, the first one [problem] to solve is access itself,” he stressed.
Secondly, he added, the access to care is also skewed for those who have access as it’s usually the people with a steady income, living in cities and paying taxes. That’s a small subset of the market. “So in the most rural parts of India and small towns, access to healthcare is a big issue that has to be solved first.”
Measures to make the public healthcare system in India more affordable and accessible are being taken by the Indian government in the past few years. The launch of Ayushman Bharat — the government’s flagship public healthcare program which aims to provide insurance coverage up to INR 5 lakh (or $ 7,290) per family.
As per DataLabs by Inc42 estimates, the total market size of the healthcare industry in India is projected to be $202 Bn this year. This is a growth of 84% from the $110 Bn market size in the year 2016. But the Indian public welfare and healthcare schemes have seen poor implementation on the ground, and this is the biggest gap in the Indian market, despite the large market size.
Shaped by these market conditions, and on the back of India’s prowess in software and IT services, healthcare startups such as Innovaccer are using Indian innovation and technology IP to create solutions for the global health market.
Hasija does not think India is in a unique position, as “every nation is struggling with healthcare” and trying to solve the issues through various approaches and the newest ones involve a lot of data processing and cloud-based computing. “It’s a diverse environment within itself — each vertical within healthcare is bigger than the verticals outside of healthcare.”
The driving force behind the phenomenal growth of the healthcare industry can be linked to the emergence of these verticals — especially the rise in medical tourism in India, lifestyle management, preventive care, wellness, mental wellbeing and more.
“I think Indian healthcare will go through two different routes. The first route is there will be more institution build-up to provide access to care, which is when costs will start to rise and healthcare spending will also rise. And that’s when India will be able to tap into the power of what data can do.”