Starting a Business in India: An inspiring example

An earlier Duke-initiated question for the blogs was in regards to starting a business in my host school's country. Immediately, I wanted to highlight the experience of one of my classmates and good friends here at ISB, Dr. Radhika Vasanthakumar.

At the time the posting was to be written, Radhika was out of town, presenting her entrepreneurial undertaking in Seattle, Washington at an international social venture competition. This past weekend, she and her three committed ISB teammates were again gaining international recognition for their work. The team, presenting their venture "Pioneer Healthcare", was chosen from 50 initial entrants and 18 presenting teams at the Asian Global Social Ventures Competition (held at ISB) to represent the region at U.C. Berkeley next month. I have no doubt that they'll continue to inspire judges and audiences alike, utilizing Radhika's 20 years of experience as a gynecologist in Tamil Nadu (both in cities and in rural areas) and the team members' joint health sector experience and ambition to improve access to healthcare in India.

The Pioneer Healthcare model is based on the premise that villagers in many parts of the country lack access to very basic but necessary healthcare services. According to Radhika, many clinics in rural India are understaffed, overcrowded, and in physical disrepair. Frequently, trained healthcare providers prefer to (or can only afford to) practice in urban areas, impoverished villagers cannot afford or physically tolerate long journeys to city hospitals, and out-of-pocket payments for medical bills are often too much for a village family to absorb. The Pioneer Healthcare team's mission is to expand access to quality, affordable healthcare to villagers in India, and the venture's plans are as detailed as they are grand.

The team aims to increase the provision of quality primary care in rural villages by capitalizing upon a hub and spoke model in which village care centers/clinics are connected to a Pioneer Healthcare city hospital with secondary care facilities, technological capabilities, and advanced medical knowledge. The team has thoroughly analyzed the venture's financial viability, funding needs, human resources potential, technological capabilities, incentive programs, operations and logistics, and sustainability. Additionally, Pioneer Healthcare's advisory board is comprised of a number of leaders from ISB and the medical establishment in India, and the team is garnering support and enthusiasm both locally (in the form of winning school funding for launching the business over the next two years) and around the world (see references above).

Regarding the specifics of launching this project in India, I was curious about (1) funding, (2) regulations/accreditation, and (3) the ease of starting a new business.

Funding: Radhika's venture would be funded through both equity (promoter and external) and debt. Given its dependence on leverage, I worried that the project may potentially be stalled due to the worldwide economic downturn. However, Radhika states that obtaining debt for the investment will not be as difficult as one might assume. She has been reassured that the healthcare industry in this country is indeed essentially recession-proof, and the banks with which she has discussed her initiative are anxious to invest in a financially viable and sustainable hospital/rural center network. Presently, private hospitals and healthcare facilities are being established in large numbers in India - a result of tremendous unmet needs, deregulation, and profit potential.

Regulations/accreditation: According to Radhika, there are no regulations or necessary accreditations in India for starting one's own hospital or healthcare facility. Once she secures the capital and the land on which to build, no government entity or medical regulatory body will stand in her way.

Ease of starting a business: Finally, my multiple conversations with this inspiring friend have led me to believe that it is relatively easy to start a business in India, once one has a thoroughly analyzed business model and financial support (not to mention a passion for making the venture a reality). Note: Nowhere here do I mean to assert that developing the business model or finding financial backing is easy! - I have been amazed by the efforts of the Pioneer Team (and specifically Radhika). This model has been crafted, refined, judged (multiple times), and refined again. The next steps involve building strategic partnerships with village headmen, professional schools, and existing practitioners in the pilot region, while finalizing plans for the launch of the business.

Radhika's passion and vision for rural healthcare is just one (incredible!) example of the exciting entrepreneurial spirit present in India today. At ISB, many students are working on plans for their own businesses, family ventures, or institutions that combine social empowerment with earnings generation. From my perspective, the Indian market, both in the health sector and more broadly, has significant profit potential, numerous unmet social needs, and a population of workers, consumers, and entrepreneurs that make it an exciting location for investment and new business ventures.

Many thanks to Radhika for sharing her story and for her ongoing inspiration and commitment.