Two interviews of the CEO on media explains his philosophy, how he built the company, mistakes along the way and vision going forward quite well. These are quite old though. I have summarized them and also provided the link to the original talk below.
Madhukar Gangadi @ TiE Hyd Healthcare BootCamp for Healthcare Startups
- Was able to start in 2006 with 48 stores in 4 months with initial borrowed capital
- Plan is to add 1000 stores a year for many more years to come in the future
- Initial sales strategy was to go to corporates and sell them discount cards which were additional discounts over an above offered to general public
- Entered Bangalore market pretty early post Hyderabad and burnt a lot of money as the openings were too fast
- Expansion in Hyderabad was easy as had many personal connections which worked and made the task easier. However in Bangalore and Chennai this did not work as there was no connection
- In a retail business scaling up via a cluster based approach is far better and profitable as well
- Tried the experiment of putting up clinics and pharmacy adjacently but failed because stores are not well built and thus difficult to get good name doctors to come to these clinics
- Failed in Medplus beauty which was launched at the start of the ecommerce stage but suffered cash burn and this was not able to take off as it was earlier than the business should have been
- For a chronic patient medicine is basically a commodity as they are buying it every month
- Facing resistance in terms of non validity of e prescription which has made it difficult but still able to sell online due to the omnichannel model
- Main reason for existence of branded generic in India is because it enforces quality of manufacturing
- The medicine is not just about chemical composition but also because of the way the medicine is made and the efficacy it will have
- 24×7 opening of stores makes no financial sense and cannot be done on a full scale model considering the costs. In an emergency situation hospital is better than a medicine shop
TiE Leadership Series by Mr. Madhukar Reddy, Founder & CEO – Medplus Health Services Limited
- Second son in the family and first son is an engineer
- Till 2019 from 2005 used just Rs 260 crores of capital post which Premji Invest put in Rs 200 crores and post that in the IPO in 2021 end raised Rs 600 crores
- Auditor has been Big 4 and Warburg Pincus was on board and also invested for a long time
- From 2011-19 the company had raised just Rs 100 crores including both debt and equity
- Promoter mentions multiple times company would have gone bankrupt but funding came in at the right time since inception
- CTO was one of the initial hires who helped build all softwares in house and that is now helping in save licensing costs for softwares
- Since Day 1 have been very clear that Medplus as a brand should be known only for value pricing and not fancy stores
- Better to focus on one good idea as capital is limited, energy that a human being can devote is limited and small things that entrepreneurs keep doing eventually are not successful
- Promoter admits that he too is guilty of falling under the excitement of starting a business from an exciting idea but his ultimate understanding is that all of this is a waste of time and a promoter must focus on just one business
- In a retail business profitability is not a challenge but scale is
- Differentiates with Apollo in the sense that Medplus is not fancy and just provides value
- Apollo is backed by a big company and hence was able to grow faster than MedPlus for some time and has fancy stores while MedPlus is more functional with best price and frugal operating structure
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