Startup Revenue Models

How do early stage companies make money? Even if you have a disruptive technology somebody needs to pay for the product/services or you might have to find other ways to make money. For example, online technology companies that don't sell a product directly to the consumers cannot only depend on ad revenues. The reason is simple - at an early stage the SEO mechanics + traffic volumes do not work in your favor or rather do not give you enough traction to monetize. Many companies build the platform first and then figure how to make money (Facebook). All conventional revenue models have two basic tenets:

1. You need customers. 
2. Somebody needs to pay for your product/services. 

Basically, you need to earn more than the cost of acquiring your customer. One needs to find ways to monetize the value your product brings to the customers. Besides the central question of who pays?, you need to think about value proposition, customer need, product/market fit and the scalability nature of the opportunity. I looked at a few successful companies who are doing it differently. Most of the below information is from public sources like Twitter, Quora, company websites.

LevelUp - mobile payments
LevelUp provides the hardware to run the payments free of charge and have 0% processing fees for payment processing (upside for clients/businesses). LevelUp calls this Interchange Zero. Generally, credit card companies charge merchants between 1-3% fees.  LevelUp makes money by charging for customer acquisition campaigns or for rewards to existing customers. Running a campaign costs $0.40 for $1 of credit redeemed by a customer.

PatientsLikeMe - health sharing website for patients
They sell/share all patient data to companies (primarily pharma) other than identifiable information. They explain on the website how they make money? Essentially, it is projects involving market research and health economics and outcomes research since PatientsLikeMe has the platform + ability to record data and outcomes from patients for particular diseases/drugs/treatments in real world settings.

Kinvey - backend as a service
Kinvey charges users per API request. Clients pay for the app backend services when they get active users, actual usage, or data for the app.

Backupify - backup and recovery for online apps
Pricing segmentation where the levels are based number of users, number of domains, per month etc. The free tools aren't that useful.

Runkeeper - running app
The fitness training app operates on a freemium model with the Elite version allowing live broadcasting and advanced reporting. The company is moving towards a consumer health platform with the Health Graph API to bring multiple health apps, medical devices and sensors under one roof. This could trigger a lot of opportunities on the data analytics side to provide value to consumers.

Wayfair - diversified e-commerce
It operates like any other e-commerce company. From a content/ ad perspective, the company tries to personalize the experience for the brand while optimizing the traffic to conversion rate. They have a dedicated social media team which works with advertising. Also since the company was bootstrapped for the most part initially, the pressure to take risks and decisions was different.

Nanigans - facebook performance advertising
They license the Ad Engine on a self-service basis or the company manages your campaigns. The tiered pricing is based on the volume of Facebook ad spend ($30K/month minimum). The website says that the company provides access to all the data at audience, creative and campaign levels.

The revenue part is one of the most important elements of the business model. For emerging companies, a good and differentiated customer value proposition improves the likelihood of success and the clarity in the business model needs to be defined. As Bob Higgins (Highland Capital Partners) said: "I think historically where we [venture capitalists] fail is when we back technology. Where we succeed is when we back new business models."

Innovation in Therapeutics: Drugs of the Future

At the recently concluded MIT Sloan BioInnovations 2013 conference, one of the panels identified the top innovations in the past five years in life sciences and predicted the innovations within the next five years. The panel discussed the challenges for the future of drugs and how the advances in genetic modification, nanotechnology and biochemistry will shape the scientific breakthroughs.

Panelists:
Navjot Singh, Ph.D., Partner, McKinsey & Company
Tim Harris, Ph.D., Senior Vice President of Translational Medicine and Biochemistry, Biogen Idec
Anne De Groot, M.D., CEO, Professor & Director, Epivax
Prof. Ehud Gazit, Ph.D., Chief Scientist, Science and Technology Ministry, Israel
Eric Perakslis, Ph.D., Chief Information Officer and Chief Scientist (Informatics), U.S. Food and Drug Administration

Here is the list of innovations that the panelists identified.

Past five years:

1. Xalkori (Crizotinib) for the treatment of non-small cell lung cancer by Pfizer
2. Adeno associated virus for gene transfer therapies
3. Small interfering RNA for modulation of gene expression
4. Vaccine delivery patch based on microneedles
5. Democratization of data - genesis for big data
6. Selzentry (maraviroc) for HIV treatment by Pfizer
7. Weight loss drugs
8. Therapeutic vaccines
9. Drugs for treating cystic fibrosis
10. Tysabri for the treatment of multiple sclerosis by Biogen Idec
11. Use of bioinformatics and cheminformatics for drug discovery and development

Next five years:

1. Drugs that lead to increased life expectancy
2. Gene therapy to get proteins inside the body
3. Fully controlled formation of amyloid assembly
4. In-depth understanding of cardiovascular diseases
5. Genetic markers
6. Drugs to treat psychiatric and neurological disorders
7. Using induced pluripotent stem cells for testing treatments / drugs
8. Antibody and small-molecule therapies for cancer treatment

2012 snapshot

Events in 2012 (in no particular order) that captured my attention for sustained period of time:

• US 2012 Elections
• Summer Olympics
• Storm Sandy
• Higgs boson discovery 
• Curiosity rover landing on Mars
• Supreme Court  ruling on Healthcare Reform
• Stop Online Piracy Act
• Mergers and Acquisitions in the tech + medtech industry
• Unfortunate gun violence in US
• Horrifying incident - Delhi rape
• Apple product launches
• Facebook IPO
• Gaza Israel conflict
• Iphone vs. Samsung
• Awesome sporting events
• WikiLeaks
• International current affairs

Indian Passport Renewal in USA

This should be helpful for people renewing Indian passports in the US. The process is straightforward,  perhaps even quicker if you do it in person at the consulate. I had mailed all the required documents and received the new passport via express mail in approximately 8-10 days.

Documents that I had included as part of the package:

1. Original current passport 
2. Completed online application form with 3 photographs
3. Nationality Verification Form 
4. Copy of the first 5 pages and last two pages of the passport 
5. Copy of valid visa on passport/ Green card/ Permanent residency card/ Employee Authorization Card/ I-797 approval notice
6. Copy of proof of residence (bank statement or rental lease agreement)
7. Copy of degree certificates ( for ECNR) 
8. (Optional) Copy of marriage certificate (needed for wife’s name inclusion) 
9. (Optional) Copy of first and last pages of the passport for wife 
10. Applicable fee - money order of 46$ 
11. Prepaid self-addressed envelope with postage of $18.95

Make sure that you notarize all copies for the documents included.

Helpful links:
VFS Global (official page to apply for a new passport)
Application for re-issue of passport (this link has tabs on the top for further information on fees, documents required and the application form.
Another useful example of passport renewal
Path2USA instructions

Path to Patient

Patient-centered medicine! This phrase gets mentioned a lot nowadays. What does it exactly mean and while thinking about improved patient care what do the stakeholders need to be cognizant about? Here is a an excerpt from the Maizes et. al. (2009) article on integrative medicine and patient-centered care (Commissioned for the IOM Summit on Integrative Medicine and the Health of the Public). "Patient-centered care is defined as care that informs and involves patients in medical decision making and self-management; coordinates and integrates medical care; provides physical comfort and emotional support; understands the patients’ concept of illness and their cultural beliefs; and understands and applies principles of disease prevention and behavioral change appropriate to diverse populations."

A number of articles talking about patient-centered hospital design, new business models (the shift from product-centric culture to a more integrated patient centered company) and other ways to differentiate the drugs/devices with surrogate + value driven outcomes keeps the conversation active. Charles L. Bardes, M.D. gives his perspective on defining patient-centered medicine through this article in NEJM. He mentions an important aspect of patient and doctor working together without any inhibitions. I like the way Dr. Bardes puts it across: 'The patient and the doctor must coexist in a therapeutic, social, and economic relation of mutual and highly interwoven prerogatives.'

The number of smartphone apps are on the rise targeting patient monitoring, health education, data aggregation, and other aspects of the care cycle. New innovative companies are using next generation technologies and leveraging the mobile phones for diagnostic medicine especially targeting developing countries. The number of business opportunities for all emerging entrepreneurs and the life sciences industry are abundant. In the medical device industry, typically 3-5 companies control almost 70-80% of the respective markets and the other 20-30% smaller companies is where disruptive innovation happens. Of course, most of these companies get snapped up by bigger players sooner or later. M&A has been the strategy for many of the big players in the industry. Covidien is an excellent example which has grown significantly due to acquisitions has been very active in buying companies (Barrx Medical, Oridion Systems, Newport Medical Instruments, Reverse Medical, superDimension) within the last year spread across different business units. This again brings back the topic to niche focus and helping patients, in effect, answering the questions - where is the unmet need and how can we solve it?

The strategic focus on keeping the patient at the center affects your marketing and business planning,  R&D innovation, decision making and the most important thing - execution. From medical device and pharmaceutical perspective two emerging themes which address the patient aspects are reverse innovation and personalized medicine. A couple of months back Babson College organized the Healthcare and Life Sciences forum which was based on the theme: Path to Patient. 

Rodrigo Martinez of IDEO brought up an interesting point during this panel - why do we keep discussing about patient experience in healthcare? Some of his thoughts are captured here:

1. Connect with people – stop thinking about only treating patients 
2. Health information usually serves a transactional goal – needs to be engagement platform 
3. Healthcare isn’t a system, it is an emergent network – we should collectively fail, learn and improve 
4. Market research often confirms the past – needs to open creative doors 
5. Business goals keep trumping patient experience 

Patient participation is imperative as payers and providers address the cost effectiveness of adherence. The Patient Centered Outcomes Research Institute (PCORI) was created to measure and establish the best practices to deliver more effective care to the patient (compare the effectiveness of health treatments and strategies through research to make informed decisions). Medtronic's Omar Ishrakh had recently brought up the important aspect of delivery model in emerging markets which also relates a lot to the topic of this article.  He emphasized the new patient-centered approach due to lack of medical infrastructure and awareness. The growing fields of HEOR and market access continue to capture the patient perspective focusing on clinical, economic and patient-reported outcomes. The new entities formed as part of the recent reforms can provide the platform to the changing doctor patient relationship. Patient Centered Medical Homes (PCMH) and Accountable Care Organizations (ACO) are bringing the care provider especially the primary care physician  in focus for the entire care delivery process. It will be interesting to see over the next couple of years how these aspects affect the changing dynamics and how participatory medicine integrates with the current system.

Succeed by Thinking Like an Entrepreneur

In a world where you can no longer plan or predict your way to success, how do you reach your most important goals? HBRChat with Len Schlesinger discusses why it is important to act like an entrepreneur — take action, learn from what you find, and act again.

Inbound Marketing Explained

The Inbound Marketing Process Infographic

From: IMPACT Branding & Design