Last week several members of the GSMA mHealth team attended the mHealth Summit in Washington, DC. This is one of the largest events held on this topic with all the industry’s movers and shakers coming together at National Harbour Washington, on the shores of the grand Potomac River.
With such large-scale events the detail can sometimes be lost in the broad sweep of subjects and senior executive-level presentations, but this year a strong set of trends and clearly defined motives were observed.
Commercial Approaches and Frameworks
In developed markets the role of commercial models is understood as a mechanism to transform the health industry. In his keynote presentation, Paul Jacobs, the CEO of Qualcomm, conceptualised this dynamic as the move away from a healthcare business to a health business. This transformation relies upon a shift in approach from reactive to proactive systems, characterised by monitoring, active advice on behaviour (diet, habits, etc.) and automation of actions early in the diagnosis cycle (e.g. pushed early stage warnings at onset of complications; all techniques that reduce the need for health care). This is a clearly defined and broadly understandable commercial opportunity.
However, the commercial model for emerging markets, arguably the regions that would benefit most from mobile healthcare, is notable by its absence. Several speakers highlighted the challenge of taking a successful mobile health initiative from funded to a standalone self-sustaining and commercially viable service. The term ‘funded’ is used here as a catchall term to denote several levels of approach, including charitable, empowerment of specific segments and community-based approaches. The unifying factor is they all rely on a subsidy-based investment model in marked contrast to commercial models.
NGO funded and commercial players have occupied polar opposite positions on this topic. On one side, NGOs have accused commercial players of favouring narrow and risk adverse strategies when developing healthcare in non-established markets. Commercial players have countered by claiming there is a certain business naivety prevailing amongst start-up health initiative providers who are unhampered by the demands of ROI and the long-term viability requirement of any commercial initiative.
The Commercial vs. NGO Approach to mHealth Start-ups
The issue resides in the differing aims of the funded versus commercial organisations, illustrated in the diagram above. Effectively each player sanctions specific actions to achieve their aims which in many cases are incompatible with each other. For example an NGO may wish to improve nutritional intake within a target country and will enact a number of actions to achieve this. In contrast, a commercial player may wish to increase its market share and will enact actions to achieve this. These two aims are not necessarily compatible, being grounded in differing strategic intentions and desired outcomes.
This incompatibility in overall strategic intent is not a new problem. It has dogged health development in emerging markets for decades, leading to a number of problems including the dreaded funding gap – created as early-stage funding dries up and seemingly promising mHealth innovations struggle to convert to fully functioning commercial propositions. What has changed is the funder’s willingness to consider a more commercial approach. Several speakers at the mHealth Summit emphasised the importance of considering long-term viability within the framework of a business opportunity. Esther Dyson, renowned digital commentator and angel investor, as well as Steve Case, founder of AOL, attempted to crystallise this idea by sharing their wisdom on how they brought embryonic start-up business ideas to market fruition.
Dyson and Case provided good theoretical background to growing start-ups but did not tackle the specific challenges facing mobile health-funded initiatives within the Mobile Operator (MNO) environment. A more hands-on illustration was provided by Craig Friderichs, mHealth Director for the GSMA, who highlighted how the GSMA successfully facilitated engagement between the South African MNOs, to provide a free SMS message to all their customers to subscribe to maternal child services and, once signed up, to provide zero-rated content during the pregnancy and first stage immunisation period. This success of this initiative hinged on the inclusion of a subtle commercial angle – the option to provide value-add-ins. While the basic service was provided free, scope was inbuilt for MNOs to provide premium add-ons such as multimedia capabilities. This permitted MNOs to demonstrate their USPs and so create an environment where competition could take place but also benefited health agencies by driving behaviour change and increased quality registration data – a win-win scenario.
Incorporating the totality of the value chain from funding through to commercial elements and concentrating on each partner involved is immensely important. Illustrated below is how GSMA mHealth sees this dynamic.
Funder to Commercial Proposition Continuum
Each player involved in this process can be placed broadly within a silo of facilitator, driver or continuum enabler. Some value chain players occupy overlapping roles (e.g. entrepreneurs), while secondary facilitators including infrastructure, devices and services and ongoing investment lie beneath these stakeholder silos. These players influence and have a direct impact on the process of facilitating mHealth (e.g. network infrastructure spans each of the silos being critical to the entire process). Importantly, while these stakeholders are in a silo arrangement, each should ideally integrate and feedback into the other as successful initiatives come online, new funding is started and progresses toward sustainability, lessons learned are disseminated and additional commercial opportunities develop resulting in a cyclic or positive feedback process.
By conceptualising the process in this way, the involvement of each party is considered, resulting in a greater potential for scaling and sustainability.
Parting Thoughts
The various players at this year’s mHealth Summit have started the process of realising the pathway to drive long-term sustainability and scaling toward commercial stand-alone mHealth propositions.
Commercial frameworks do have the potential to sustain and grow health initiatives but remain a challenging proposition for NGO’s and their partners. Here at the GSMA, we have worked to facilitate this process, understanding that long-term viability lies in integrating both NGO and commercial frameworks.
For more information on the GSMA Mobile for Development mHealth, please contact us on [email protected]. For information on various mHealth initiatives, click here. For more information on GSMA mHealth resources, click here.
Top photo: from Scripps Translational Science Institute