What it takes to be a successful health entrepreneur

When he was starting out in 1999, Mike Macharia knew that technology could make a huge impact in his country. The only problem was everybody thought technology was too complex, he told Devex, and the people who regularly talked about tech solutions made them sound far fetched.

That notion gradually changed. Seven Seas Technologies, of which Macharia is president and CEO, has made inroads in Kenya and several countries across East Africa throughout the past 17 years by integrating technology and business solutions across sectors, including in the health, security and other social services. In the health care sector, SST provides a range of services, from upgrading medical infrastructure and furnishing hospitals and clinics with high-tech medical equipment to deploying health information systems in hospitals and health facilities.

A number of globally established businesses such as General Electric Co. have partnered with the technology company on health projects. Currently, SST, in partnership with GE, is part of a seven-year government project aimed at capacitating health facilities across Kenya with radiology equipment and imagery analysis via telemedicine. Global investment fund manager The Abraaj Group is also a shareholder at SST.

Macharia is aware of the growing number of innovators and budding entrepreneurs with novel ideas to transform different segments of Kenya’s health sector. Macharia has in fact come across a number of ideas that have caught his attention since the company launched Afya Labs, an initiative aimed at supporting local startups and entrepreneurs developing or with pioneering health care ideas, in July. He met an entrepreneur looking at setting up an Uber-type structure for health emergency situations where hospitals and patients can request for ambulances using an app, and another entrepreneur who is building out a platform to create an inventory of health care workers, such as nurses and clinical officers, to help address human resource gaps at health facilities.

“Being an entrepreneur in Kenya is much easier today, honestly,” Macharia told Devex over breakfast in Kenya. ”You’ve got access to angel investing. I think you’ve got far more venture capital funds. And there’s now more embracement of entrepreneurs in the marketplace.”

Still, Macharia sees the majority of entrepreneurs fail to get their ideas of the ground.

The reasons vary, he explained, from lack of concrete long-term plans to flawed or weak business models. A doctor, for example, may set up his or her own medical center to address the problem of health access in a given area. But without considering and understanding key elements such as governance or establishing an efficient procurement system, that medical facility will likely struggle.

Another barrier is lack of networks — whether customer, political or supply — which are crucial for any business venture. The best capital in the world is one that combines money with network access, the CEO said.

“We feel we can really help a lot of entrepreneurs who come into our table, [but] our motivation is they need to plug into our ecosystem,” Macharia said.

If an entrepreneur with a promising new app in maternal health, for example, agrees to integrate with SST’s system, the company will give that entrepreneur instant access to its hospital network; mothers already subscribed to SST’s health information system will then receive SMS notifications to use a new application, giving the entrepreneur the customer network he needs.

That’s just one part of an entrepreneur raising his or her chances of getting his ideas off the ground, but it doesn’t stop there, Macharia said.

“You cannot sit in your cocoon and say you’re going to build something and [expect customers] to come. You need to understand a combination of policy, the problem and the market,” he added.

Policy can make or break one’s business, the CEO explained, and being aware of what the government is trying to achieve can also be key to getting an idea to scale.

If a company has taken on a government-led project on maternal health, and suddenly the government decides to provide free maternal health services — which the Kenyan government introduced in 2013 — then that company is likely to face issues with reimbursements, for  example.

“Whatever you do, you need to understand the political impact,” Macharia said. “I think the person who remains as the best possible customer for us is government because government will always scale health. Government in any country is the biggest consumer of health care.”

Charting a clear understanding of the problem one wants to solve as well as the market one is trying to enter can boost chances of long-term success. In the health space in Kenya right now, entrepreneurs may find opportunities in addressing the health needs of women and children, who make up the bulk of patients in most hospitals and health facilities, Macharia noted.

Devex recently visited a Tunza family health clinic in Kiambu county, Kenya, as part of our Making Markets Work campaign with The Abraaj Group, Philips and PSI.

Making Markets Work is an online conversation to explore what’s being done to make global health care markets accessible to people at the base of the pyramid. Over 10 weeks, Devex and its partners — The Abraaj Group, Philips and Population Services International — will amplify the discussion around effective health financing, analyze key challenges blocking universal market access in the health care supply chain, and explore the key strategies to make markets more effective. Join us as we look at this important issue, and share your thoughts by tagging #MakingMarketsWork and @Devex.