GOQii began its life as Vishal Gondal’s second venture back in 2014. Vishal, a veteran entrepreneur, had previously built a game development company – Indiagames, which was subsequently acquired by Disney for close to $100 Mn.
It offers a free wearable wristband that can be procured on the purchase of a fitness subscription service that offers a one-on-one mobile personal coaching service backed by the data collected from the band. The startup has gamified the concept of fitness to keep its users (referred to by the service as ‘players’) engaged and motivated to ‘win’, rather than ‘work’.
Today, with a 100+ strong employee base, it is the market leader in wearables in India, with a 16% share as per the latest IDC report. GOQii has raised a total of $13.4 Mn in funding from 6 rounds, out of which 5 rounds did not have disclosed figures.
Here are excerpts of our conversation with founder Vishal Gondal, who spoke to us about the healthtech-hardware space. The sector has been brimming with players both from within the country and internationally and is getting quite exciting with startups providing distinguishment in products that add substantial value to the end users, garnering success.
In this conversation Vishal talks about mentors, hiring, innovation in healthtech and more.
This interview has been edited for brevity and clarity.
Inc42: What does the healthtech industry look like to you?
Vishal: Today, there are two kinds of startups in this space – on the curative side or the preventive side.
You are either spending money on medicines or doctors, or you are preventing consumers from getting till there by keeping them healthy. There’s a lot of disruption that is bound to happen in this space because there is massive fragmentation, there is data but it is scattered everywhere, the patients are ill-informed of what to do and this allows doctors to make money off of them, and finally the trouble with pharma companies. There are all these challenges, the tech solutions to which are big startups waiting to happen.
But my favourite companies will remain the ones which have models that allow the empowerment of the consumers by motivating them and educating them.
Inc42: In the past year, aggregators have been mushrooming in the healthcare industry. Should innovation be approached differently in the sector?
Vishal: Innovation today is required more in the nuances of positioning a product in a sector like healthcare. A crucial thing I have noticed in the healthcare sector is that people have a conflict of interest while starting a business. For instance, as a company if I make revenue from doctors and hospitals, I am incentivised to send people to these doctors and hospitals.
Then, my business is not about improving your health, it is to make more money from sending you to them. Irrespective of you requiring the expertise of a doctor, I will recommend you to one. Today, most businesses function in this system, which in itself is the problem with the healthcare industry. It is therefore advisable to try and make revenue directly from the consumers themselves and make money only when the consumer feels they have become healthier.
I come from a background of gaming, where the business model is to engage your consumers, get them addicted to your product and then monetise. GOQii innovated by applying the same concept to a relatively dull sector like healthcare by gamifying the process of taking care of your body. My point is if we can get people addicted to playing Candy Crush, then why can’t get them addicted to eating vegetables, or addicted to walking.
We never thought of this as a medical problem, in fact a user of GOQii is not called a user or a patient, he is referred to as a player. If you go to any healthcare website, you will be called a patient. Even if you are not a patient, you will referred to as one because the site categorised its target audience. They are already making you sick without you being sick.
Today there is a band for diabetes, a band for blood pressure and other such products, but nobody buys them. The reason is that consumers don’t want to be reminded and told by others that they are sick. If you are wearing such a band, you already give the impression that you are sick, and why would anybody want to do that?
This is why GOQii never positioned itself as a chronic care or weight-loss program. The impression that people need to believe in is that a GOQii user is healthy and active – which is a positive connotation. Monetising positivity along with focusing on engagement as a key metric is what innovation in this sector should address.
Inc42: What impact have mentors made to the product that GOQii is today?
Vishal: I was lucky to have had the opportunity to have worked with a lot of people in my past life. So I had a lot of people mentoring me for different things. There was always somebody mentoring me on hardware, on deal making and so on.
Pravin Gandhi is somebody who I respect a lot, he was my first investor back in 1999 in Indiagames, and he has now even joined our board. Our tech go-to guy has been Amit Singhal, who also joined as our board member and he has only been part of two boards in India, that is Paytm and GOQii – so that inspired a lot of confidence. An advice he gave us that, if you are building a tech-based company, 50% of your employees should be working on tech alone. Right now we are at 38% but we are rapidly approaching that target.
Then there are guys like Ronnie Screwvala, who has a brilliant understanding of commercials. You can always take 20-30 minutes from them and run them through ideas and their inputs during that short time can be very helpful.
One of the biggest challenges for a startup is – whether to grow fast or focus on building a better product. At one point, we were going for the latter. There was a time in the Indian ecosystem in 2015 when everybody wanted to scale extremely fast, and you tend to get swayed by the flow. But we were lucky to be advised by several mentors that there was no hurry and to maintain our effort on developing a consumer friendly product. In hindsight, that was a great call.
We were also very close to spending big money on marketing, but were advised against it. Today I realise, it would not have made a big difference in our numbers. This is an advice that young entrepreneurs should also pay heed to, marketing is not important. Building a great product with a high Net Promoter Score is what is important. If your existing users are not getting you more users, then there is no point wasting your money on marketing.
Another key aspect with which I got help from my mentors, was GOQii’s brand and product positioning. There was a lot of confusion as to how we are positioning GOQii early on. It was then that one of our investors, Bala Deshpande told us to go and get insights from your consumers. We spent a lot of time doing just that and the learnings were immense – more than we could ever think up while brainstorming. Some of the aspects that we felt we should head in were completely different from what the consumers thought. I am not saying gut-calls are not important, but once you have enough data from your time talking with your consumers, you can use your gut and data to come to the right conclusion.
Inc42: GOQii has received funding from industry heavyweights like Ratan Tata, Neeraj Arora, and Vijay Shekhar Sharma, amongst others. What got them invested in you and your idea?
Vishal: The pitch itself generally entails the vision primarily. The people of the calibre you mentioned are not there to get into the details at the early stage. When I met these people, I told them that GOQii is not just a wearable, a fitness subscription model, or any one thing. It is a platform that transforms your life. People usually try to give some metrics, the market size and other such numbers, but for me it was always the case of answering why. Especially at the early stages, it all boils down to the entrepreneur’s credibility.
There cannot be enough metrics to convince an investor to invest in a company where the founder lacks vision and passion for the idea. One of the values that GOQii preaches is practice what you preach, so when I talk about health and wellness – the investors, knew about and had seen my own transformation. When I told them that what I did for myself is what I will do for the users of GOQii, it was very easy for them to correlate.
Moving from early funding stages to later stages, you need to translate your vision into numbers. The important metrics for GOQii are, are the people really becoming healthier, and are they continuing their lifestyle (because we are a subscription service). The beauty of it was, at that time 86% of our active users showed healthier stats from before, and 60-70% of these users were renewing their subscription. That is all any investor ever wanted to know, because if we had claimed that we had a vision and passion but that were not getting them translated into the fruit of our labour, then it meant ultimately we had no value.
Inc42: Investors do give the best advice, but not always. Have there been instances of you not heeding their words?
Vishal: There was one thing that we did very differently right from the beginning – that all the investors were opposed to – was that we always had a paid model. Many startups think, let’s get the users onboard and the money will then follow, I think that’s a flawed strategy. This is because when we are trying to build a business, we need to know if it’s a real business or a business full of hot air, and you know that today these businesses have lost their steam.
We started with a business model focussed on monetisation from the get go, so that our business made money on a unit-economics basis itself. We might change our model in the future, but at that point in time we will at least know what kind of conversions happen, what users pay for and don’t. Monetising is essential from the very beginning as it validates your product, whether the market you claim exists – actually exists. It was a tough call to make at the beginning, because without this strategy I could have got millions of users on my platform for free. But then I wouldn’t know if they would pay me or continue to pay me.
Inc42: How did you overcome challenges that most Indian hardware startups face?
Vishal: Manufacturing – People are trying to build a hardware company today without even spending any time in China. I personally spent over 3 months there, and I think people should spend even more time there. You can design your hardware product in India, but today to manufacture a product, you have to be in China. If you are not willing to do that, I don’t think you will be able to build your startup.
Product differentiation – This is a crucial aspect that hardware startups need to understand that just having a hardware product is not sufficient. For example, if GOQii only had hardware, we would have been killed by now with all the other health wearables out there. Because we were able to combine it with a whole health subscription package, and the rest of the ecosystem like the coach, doctor and product recommendations, nobody has been able to compete with us. A commodity is just not enough; you need a key differentiator.
Financial planning – The good thing we did was bring onboard a startup CEO/CFO early into the business. We also got PwC to be our auditor from day one. Most people think this is a cost that can be incurred later, but mistakes that you would make without them in the beginning will heavily penalise you later. It is always good to have a good auditor, lawyer and they are willing to work on equity or cash as well. Today most of these people are part of incubators and accelerators, CFO’s can be brought on on a temporary basis so these aspects can be easily covered by startups.
I have seen some startups take VC money and bought office spaces and spent 50 lakhs on just doing up the place. That is a completely irresponsible waste of money. Every penny I spend on something that is not adding value to my product, is a waste especially at the early stages. Today, AWS and Azure are ready to give you cloud space, how much hardware do you really require? Your costs are pretty low in such an environment. And if you are a B2B business, you should be able to get your customers to pay for your product rather than trying to get exorbitant amounts of funding. With respect to social media, you don’t need to have mass media campaigns to promote your product either, GOQii never has either. My point is that the cost to get started with your idea is not high because of this (affordable) ecosystem that has been built.
Inc42: What are your plans for the expansion of GOQii’s service offerings?
Vishal: Consumers are the centre of our entire product and ecosystem. We do not look at competitors or other products; we only look at consumers. For example, we started services like coaching, doctor and diagnostic recommendations only after our consumers asked for it. We further used this approach to answer our user’s questions like which running shoe should I buy, which brand of olive oil should I consume, which vitamins do I take considering my workout etc. So GOQii is becoming their all-round trusted health partner.
In the near future, I see GOQii becoming involved in providing people cover for their health in an insurance-like service. Because, if I am managing your health and I have the data that can actually invalidate any external audit requirements, why look elsewhere. This is all the power of data. But data alone is not sufficient, you also need context.
I may know that you have not been exercising for the last ten days – that is data. We know that there was fog in Delhi and that’s the reason you could not walk because it’s too cold and you cannot see 10 steps ahead – that is context. The context is missing from most AI platforms today, and GOQii is trying to tackle that today. We call ourselves, human-powered artificial intelligence – a combination of human interaction and data learning.
Inc42: How do you plan on scaling your reach to tougher markets (beyond the well- serviced urban consumer base in India)?
Vishal: It is a misnomer that our target market is restricted to urban consumers, 60% of our customers come from smaller towns. The answer to this puzzle is actually quite simple because people want to get healthy everywhere, not just in the metro cities. Added to this is the fact that ecommerce has helped every corner of India. We’ve got users from Andaman & Nicobar Islands to Arunachal Pradesh.
We have just reached a partnership deal with Amazon Launchpad that will help us reach a wider international audience. This will help us roll out GOQii in the United States, Canada and the United Kingdom starting next year.
We are also looking at expanding beyond individual consumer sales and will be targeting companies that get their employees onto our subscription service.
Inc42: Making the right hires is a complex task, especially in startups. Has GOQii made any wrong hires? How do you ensure it doesn’t happen too often?
Vishal: Oh yes, plenty. But the incidence rate has been reduced drastically, because today we have a very different approach to hiring. We do not hire MBAs or IITians, we like to hire the underdogs because they are hungry to perform.
The hiring process starts with something we call the DNA test. In a time of need for growth, you often end up hiring people who may not be the best for your business. In the DNA test, we ensure if the person will fit the philosophy of the company and will be there for the long run.
A lot of people write things in their resumes, for example there was this guy who said he liked to paint, we gave him the stationary and believe me he could not even draw a stick figure! Similarly, there was this guy who claimed to be a chess champion, so we instantly organised a chess tournament which he actually won. You can figure out the guy who got hired.
But when the bad apples do get through, you need to get rid of them ASAP. Like they say, garbage in, garbage out. We do not let them remain in the system for long, they will do more damage than good. Having said that, our attrition late is quite low, close to 3%.
Inc42: How do you keep your employees motivated?
Vishal: We only hire people who love us, and we have six6 rounds of interviews to vet that. Every employee in the company has access to on the house, healthy organic food, every employee has to exercise and every employee has to take part in social causes. This is made clear from the get go, that if you do not thoroughly enjoy these benefits, then you will not be a good fit in our company. If you don’t want to be healthy, you will hate every day in GOQii!
There is an open offer on the table for all employees, that if you do not like our culture, you can leave with two months severance pay – no questions asked. Luckily for us, we have not had anyone exercising that option yet.
Inc42: What was the most stressing moment for you personally as GOQii’s founder?
Vishal: The good thing about GOQii is that our business itself is to de-stress. This year, my most stressful moments were during the 14 days Everest base camp trek. Sometimes, people get overcome with the emotions of small day to day issues, but once you experience the stress of survival in those low-oxygen conditions, the daily stresses seem monumentally smaller.
I believe in the concept of decluttering your mind. I am trying to reduce the decisions I need to make on a daily basis. For example, I only wear red tee shirts, I only wear red shoes, I have very few applications on my phone. When I was on the 14-day Everest base camp trek, there was no internet, hardly any connectivity, but my work never got hindered. People always believe that staying disconnected for even five5 minutes can hamper their work, but it’s never the case. The reason is too many things to do only adds to the burden of the real problems that you really need to focus on.
Inc42: Has the journey been worth it?
Vishal: Oh, most certainly. I am on a paid holiday! I get to write off all my marathon expenses and my travel to the Everest basecamp expenses as marketing expense! I get to eat healthy food for free, I get to do everything that I want to do in life today, and it’s all thanks to GOQii. If your hobby becomes your business, you never really have to ‘work’. That’s what happened with Indiagames, with gaming being my first love, and then when I became passionate about a healthy lifestyle, GOQii came to me.
Today I also get to invest in early-stage startups, and I do it not to make money but to give back to the ecosystem – if there was no one to fund me when I was 21 years old, then I wouldn’t be here. This is why I am there at the startup events and conferences, and it is to help startups who require it. If I can make a difference to even one potentially good idea, then I am content.