How to Start a Business

Digital Healthcare

10 Steps to start a business and scale it : Case of NOVI Health (Personalized Healthcare Service)

Jinny Kim

April 26, 2024

Do you remember the video called "The End of Beginning"?

"The End of Beginning" is a presentation video released by the renowned Silicon Valley venture capital firm a16z in 2018.

This venture capital, also known as Andreessen Horowitz, gained attention around 2011 with a column stating, "Software is eating the world". Seven years later, they released a new message called "The End of Beginning."

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I personally found this video very inspiring. The essence of the video is as follows:

Nowadays, mobile users are becoming as important as, or even surpassing, internet users. People are spending a significant amount of time online.

However, the significance of software and online services is still not fully recognized. We are just beginning to enter an era where "software is eating the world" in various fields such as real estate, healthcare, logistics, digital currency, where internet penetration is low.

Of course, there are still various innovations happening in markets like social media and search. Artificial intelligence technology, for instance, is completely reshaping the search market.

On the other hand, this venture capital firm is paying attention to changes in markets where software has not yet penetrated. They see significant opportunities for entrepreneurs who can overcome the high entry barriers in such markets.

In this context, it's interesting to observe how digital healthcare startups start their businesses and expand.

After the COVID-19 pandemic, there has been a heightened global interest in remote consultations, digital therapies, and so on. It's worth paying attention to whether this trend will open up entirely new aspects of the era where "software is eating the world" for digital healthcare startups.

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The reason for examining the case of NOVI Health in this article aligns with the points mentioned above.

Since the declaration of the smartphone era by the iPhone in 2007, more than 15 years have passed. According to data, 6.8 billion people worldwide use smartphones, with around 500 million users utilizing mobile apps for diet, exercise, and chronic disease management.

The digital healthcare market utilizing mobile apps is gradually expanding, with efforts to gain recognition for professionalism and effectiveness through regulatory approvals.

For example, in 2017, the AI healthcare app 'Noom' obtained official certification for a diabetes prevention program from the Centers for Disease Control and Prevention in the United States. Subsequently, it collaborated with the U.S. insurance company Aetna to provide programs and mobile services for hypertension prevention and management for hypertension insurance subscribers.

(Refer to : Noom’s Diabetes Prevention Program receives CDC Full Plus Recognition)

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NOVI Health is a healthcare startup established in Singapore in 2019, providing personalized health management services with medical and nutrition specialists and health coaches.

Founded by three doctors targeting diseases primarily improvable through lifestyle changes such as diabetes and hypertension, NOVI Health aims not only to provide medical services such as drug prescriptions but also to enhance accessibility to holistic approaches to chronic disease treatment.

Asia Tomorrow decided to examine the process of how they started their business and expanded it into 10 stages.

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1.Discovering the Problem:

The founders, who were working as doctors, identified recurring issues in hospitals. They faced a dilemma where simply prescribing medications within the hospital setting was insufficient to address individuals' health issues, especially for diseases like diabetes and hypertension that require consistent management and healthcare.

They aimed to create a more scalable, holistic solution beyond just assisting patients who visited hospitals.

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2.Defining the Problem:

The common belief among the co-founders was that addressing the root causes of chronic diseases, rather than just treating symptoms, was essential. They recognized the need for an approach that improves lifestyle habits to manage or prevent conditions and defined the problem as the absence of such an approach.

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3.Brainstorming Solutions:

The co-founders determined that two elements were necessary to improve lifestyle habits for managing and preventing chronic diseases: personalized healthcare services & the technological capability to implement them.

NOVI Health identified the need to gather data on individuals' lifestyle habits to provide solutions that facilitate sustained changes in their daily routines. To achieve this, they needed to:

define the data required to understand chronic conditions based on the expertise of doctors and health coaches
encourage users to consistently record their data through mobile health management and coaching services
utilize data analysis and artificial intelligence to derive insights and improve solutions.

In pursuing this approach, NOVI Health leveraged the expertise of its medical and health coach teams to define the necessary data for understanding chronic conditions, encouraged user participation through mobile health management and coaching services, and attempted to enhance solutions by utilizing data analysis and AI technologies.

NOVI Health gained a competitive advantage by providing personalized healthcare services using both clinics and mobile platforms. Through the Novify app, users could record their daily lifestyle habits and receive tailored feedback from experts at appropriate times, thus establishing a foundation for receiving assistance in managing their health.

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4.Building the Initial Team:

The vision of NOVI Health, which aimed to make personalized healthcare services available to everyone, was a shared experience and belief among the three co-founders who were doctors working in Singapore.

They envisioned that by introducing a technology-based solution to change daily habits that contribute to chronic diseases, they could expand beyond personalized healthcare services for individuals into a much larger business.

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5.Customer Segmentation:

From the outset, NOVI Health has focused on diabetic patients. They provided tailored coaching services for weight loss and lifestyle improvement both online and offline, targeting users who already had chronic conditions like diabetes or those at risk of developing such conditions.

A team of experts including doctors, nutritionists, and health coaches provided personalized services, including medications, to customers. When customers recorded lifestyle-related data on the mobile app, the company could remotely assess their condition and provide necessary feedback.

Collaboration with B2B customers was also a significant aspect of NOVI Health's business. For instance, they collaborated with Thomson Medical Centre to operate a program called HOPE, which remotely provided blood sugar monitoring, nutrition, and lifestyle management to pregnant women with gestational diabetes.

The trend of collaborating with B2B customers has been increasing. Institutions, insurance companies, insurance brokers, employers considering employee welfare, healthcare and wellness service providers, and medical concierge services have shown interest in NOVI Health's approach.

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6.Revenue Structure:

With customer segmentation into B2C and B2B, the revenue structure naturally divides into two directions. Among them, B2C revenue streams diversify through monthly subscriptions, personalized healthcare consulting fees, and related product purchases.

B2C Subscription:

Diabetes: $299/month~ (Magnum)some text
- Continuous blood sugar monitoring, medical services, dietary therapy, and lifestyle coaching
Weight Loss Management: $99/month (Optimum)some text
- Health coaching for sustainable and healthy weight loss
Weight Loss Management with Medication: $432/month, qualification needed (Optimum Plus)some text
- Health coaching for sustainable and healthy weight loss integrated with medical treatment

Health Services:

Personalized Health Screening: $299 (NOVI Assessment)some text
- Plus: $399
- Premium: $999~
Cancer Screening test: $200~

Shop:

Goods: Sensors, Vouchers, Supplements
Subscription: Sensors

B2B Partnership

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7.Long-term Business Perspective:

Wearable and artificial intelligence technologies are advancing rapidly. In the long run, it is anticipated that businesses will strengthen their focus on providing personalized healthcare services remotely based on these technologies. For instance, NOVI Health could enhance its services by adding specialized artificial intelligence services for lifestyle habit correction, thereby increasing the scalability of the service or developing and presenting more affordable (accessible) products.

Furthermore, the habit of recording data on users' lifestyle and daily routines itself will be beneficial to NOVI Health from a business perspective in the long term.

As data on users' lifestyle habits and healthcare needs accumulates, the expertise in aggregating and analyzing this data can become NOVI Health's competitive strength points and value-added service. Services that users use habitually have the potential to generate repeat revenue, making them positive from a business standpoint.

"Over time, we are improving digital healthcare products and leveraging data analysis and artificial intelligence to predict risk patterns and profiles more effectively and optimize interventions to be more targeted to each individual's unique genetic makeup and lifestyle." - NOVI Health (interview with Singapore Business Review)

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8.User Expansion:

NOVI Health, which initially focused on chronic diseases such as diabetes and hypertension, expanded its services to include obesity and blood sugar management.

Obesity and blood sugar management are both chronic conditions related to diabetes but are more mainstream healthcare management issues. Strategic choices like these, which increase the market size, will likely be helpful for NOVI Health's business growth.

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9.Reflecting Trends:

Recently, various healthcare apps have introduced weight management services and have even ventured into prescribing weight loss drugs as medical providers. The skyrocketing popularity of drugs commonly known as "obesity medications" or "diabetes drugs for weight loss" is expected to have a significant impact on NOVI Health's services.

(Refer to : Noom And WeightWatchers Now Offer Weight Loss Drugs – Forbes Health)

"The noteworthy aspect is that for the first time in the history of obesity treatment, these drugs not only help patients lose weight and reduce food intake but also reduce the risk of serious complications such as kidney, heart disease, and other chronic conditions. (Of course, new drugs also have side effects.)"

"In this paradigm, exercise, nutrition, behavioral support, and medication are not standalone solutions but part of a larger solution for sustainable results. Weight loss drugs can play an important role when carefully prescribed as part of an overall strategy. The market for weight loss solutions will grow rapidly." - NOVI Health Co-founder, Dr. Kyle Tan

(Refer to : Commentary: Our understanding of obesity has changed, so must our approach to weight loss - CNA)

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10.Plan for the Future

Medical challenges such as the increasing elderly population and the spread of chronic diseases, both in Asia and globally, underscore the urgent need for innovation that can improve outcomes in a cost-effective and sustainable manner. In this context, the need for telemedicine is also becoming more prominent.

These challenges in healthcare are driving the development of new technologies and methodologies aimed at improving accessibility to medical services, enhancing the quality of care, and increasing patient satisfaction. This is particularly crucial in regions where geographical access to healthcare is challenging or where medical resources are scarce.

Referring to the earlier description of NOVI Health's service structure in three stages:

Defining the necessary data for understanding chronic diseases based on the expertise of physicians and health coach team members.
Encouraging user engagement through mobile health management and coaching services.
Enhancing solutions through data analysis, artificial intelligence, and other technologies.

It is anticipated that NOVI Health will expand its service capacity by broadening the range of targeted diseases, such as diabetes, chronic conditions associated with aging, and weight management, through technological advancements in order to provide services efficiently in the business-to-consumer (B2C) market.

Moreover, it is expected that NOVI Health will strengthen its expertise through health data research labs like Living Lab and expand its revenue structure into the business-to-business (B2B) sector, thereby fostering business growth.

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