An expert has said that digital health startups in Africa have a major challenge in their value proposition – they are struggling to find ways to become profitable businesses.
This was the opinion of Jan Schafft, Co-Founder of AMPION, in a chat with nuviun.
Ampion is a non-governmental organization (NGO) that is dedicated to growing entrepreneurship and technological innovation in Africa. The organization has a physical presence across the continent and its flagship initiative, the Ampion Venture Bus, has become a portal that aims to bridge nascent stage entrepreneurs, startups and investors to the end goals of large scale impact or market success in Africa and globally.
Ampion has supported several African health startups including Halt Ebola which focuses on connecting rural African communities to information, expertise and practices on Ebola; MobiDawa which uses low cost mobile technology, smart phones and web platforms to provide free, on demand medication information to patients in Africa; and Glukoa - a tool for diabetes and high risk groups that allows users to self-manage their treatment and directly connect with peers and specialists, using the Web, Mobile App and SMS.
In addition to finding a way to make their products profitable business-wise, Schafft added that health startups in Africa also need to figure out whether – and how the targeted users will embrace the service.
It is even more important for health startups to know how/if people would actually use the developed innovation that the startups are proposing. This is why it is very important to have experienced locals on the team and to pitch the ideas during the tour to local communities to see if the business model is actually applicable, he said.
He added that the ability of health startups on the continent to connect to leading healthcare agencies and NGOs will also go a long way in ensuring their survival.
For those that are starting out more as social startups, their connection to expert partners like leading healthcare NGOs for example can be improved significantly.
According to him, Ampion is interested in helping digital health startups on the continent to overcome these major challenges.
We bring in Venture Capitalists, business mentors and investors – they tell the startups how they have to adjust their business models to be able to offer a good value proposition. Secondly, we build a strong network on a pan-African level and bring in healthcare NGOs, government agencies, international foundations and corporate CSR experts to help social startups in becoming sustainable.
To survive and to be profitable in the African healthcare ecosystem, he said a digital health startup has to find out whether the potential clients of their product are actually able to pay a high enough price for them to generate revenue. But if the people affected by the problem in the home-market are not financially capable of paying for the solution, he advised digital health entrepreneurs to consider other solutions to become financially sustainable.
“You monetize the data you gather of the clients using your services; you first enter the market in another African country where people can pay for your product; you find a corporate sponsor who funds you within its CSR budget; you work with public funding or foundation grants,” he told nuviun.
He said that there are a lot of international funding opportunities for startups addressing the improvement of healthcare in Africa.
“Many entrepreneurs however do not know how to access these funds. We are also trying to support the Venture Bus startups in that regard,” Schafft said.
The nuviun blog is intended to contribute to discussion and stimulate debate on important issues in global digital health. The views are solely those of the author.