5 Wrong Assumptions in Nigerian Health Tech and their Solutions

I’m sitting on the flight back home after a whirlwind 7 days that saw me traverse 5 cities immersed in the business of health technology in Nigeria. The main features of my trip were helping to organize and deliver the Health meets Tech Hackathon and attending a health professional conference to sell a vision of a tech enabled future. While mentoring during the hackathon it became apparent that many of assumptions people hold about health tech in Nigeria do not apply. These assumptions have been borrowed from other markets and while on the surface seem plausible, were at odds with my field experience.

I’ve spent the last 3 years trying to figure out how to infuse tech into health in Nigeria via the entrepreneurship route. In that time I’ve tried to build and sell software to patients, doctors, clinics, labs and pharmacies. This experience has helped me learn some things that differ from what the average onlooker would assume. As I tried to make some of my experience useful to participants at the hackathon, I saw the push back from some and disbelief in their eyes as I explained why their thought process was a pie in the sky that would likely not survive market interrogation. To extend to others and document some of those wrong assumptions I came across, I’ve decided to try articulate my experiences

Note that none of these should be taken as gospel as my sample size is very small and full of anecdotes. I must remind you however that the singular for data is indeed anecdote.

Assumption 1: People will pay a lot to have this “brand new” service.

On my London to Lagos flight, I sat beside a middle aged lady from Benin, Edo state. She related how this was an emergency trip for her. She’d only just purchased her ticket 2 days before. I inquired what the emergency was. She proceeded to tell me how her elderly mother had suffered from a stroke and she had to rush home to see her. I sympathized with her and wished her all the best. I told her about my background as a physician and some of the tech services I was working on to help people like her mother access better quality health care. The first question she asked was:

I hope your services are not too expensive?

The issue of price is the most important factor people consider when considering a health related expense. This is apparently true even for diaspora relatives who presumably have more disposable income (a worthy point as ‘diasporans’ are being targeted by some startups as potential payers). Imagine then how much more price sensitive the average cash strapped Nigerian is, whose list of priorities often doesn’t include healthcare. This manifests in traditional brick and mortar medical services who struggle to collect payments from clients for services rendered. Stories abound of mothers who after a c-section abscond without paying, only to throw a massive naming ceremony for the child. As their mind strong reach dem no dey even bring small jollof for doctor wey deliver baby.

How to Overcome: Startups often start with prices that are simply too expensive. Save your self time and energy, price between -N2000 — N5000 per month. Yes you read that right, ‘-N2000’. Consider even giving your users money rather than asking them to pay. Anything beyond this range will likely result in a solution that is dead on arrival. This applies in both a B2B and B2C context.

Assumption 2: On demand health services will disrupt the market

Much has been said about the ‘uberization’ of health care, of how on demand services are taking over the world. Everyone is predicting it will happen in healthcare. It’s hard to know if this will indeed happen. We can however look to a more advanced market like the U.S for possible learnings on how difficult it will be. This Rock Health graphic below demonstrates some of the difficulties with on demand healthcare in the U.S vs standard on demand transport services like Uber.

Culled from Rock Health: https://rockhealth.com/why-there-is-no-uber-for-healthcare/

In essence, the market size for on demand health appears smaller, more obscure with much higher costs.

How to Overcome: If you must persist in an on demand health service, you must consider starting a niche service. Not just any niche, but niche in such a way that it is relatively frequent, predictable and easy to locate. That would also necessarily mean that the market will be small initially. Persist however and go deep then you can move across to larger markets after you’ve built a system and gained some success.

Assumption 3: The health tech market is large

The health tech market in Nigeria is currently new and small. This small market size will be a feature of health tech in Nigeria for a long time. The most basic of tech in health is the EMR and only a handful of health providers use one. While there is potential for a large market in the future. Lots of heavy lifting needs to be done now to make said future possible. Over-estimating the market size and raising any type of funding for it will put you under undue pressure. I’m aware of multiple startups that despite some funding have had to retreat and pivot to find larger markets.

How to overcome: You will need to go deep in small markets and wholly own them. This will require patience. It is only after this is done that a larger dent can be made in the market. Following from this, it would be important to keep costs down while the early forays are being undertaken. Don’t be afraid to have side gigs that keep the light on. Also avoid expensive business models. I’ve come across several startups selling home doctor visits enabled by tech. This is simply unsustainable. Home doctor visits were a usual feature of general medical practice in the good old days but was done away with due to the unsustainable cost structure. Bringing it back with a splash of ‘tech’ is unwise. Don’t be tempted to hire a big sales force or massive marketing campaigns to start slinging your tech. Use guerrilla activities to grow your market. Steve Blank summarizes it excellently in this video.

The Nigerian health tech market is small. Keep costs low. Employ guerrilla tactics to grow and educate the market.

Assumption 4: The patient should be the primary target

This assumption follows on from the fallacy that patients are willing to pay for health services. Patients are always reluctant to shell out for any health service, physical or virtual. This is not limited to Nigeria as similar reluctance is being observed in the U.S where co-pays for regular services are going up and patients are complaining. When I indicate this to people, they pivot to say that they will get the patient to pay via their provider. This is another fallacy. Margins are already tight for health businesses in Nigeria. Remember, they’re still chasing mama and papa bomboy to come and pay for their C-section. Providers would sooner try to raise their own margins than try to pass on the cost of your product to patients that are already indebted to them.

How to overcome: Attempt to target the provider. This allows you reach a bigger number of patients in less time and with less effort. A provider recommending your product carries more weight. The key however would be in your business model. It has to be such that the provider directly gains value when he recommends and patients use your service. With a provider led critical mass, you may go on to target patients directly. Doing it prematurely without providers on board will be too expensive and difficult for you to gain significant traction.

Assumption 5: My idea is novel and never been done before

The odds of this being true is slim to none. It’s 2017, most ideas have been thought of before at least in one form or another. While the health tech market may be new, there is every likelihood that your idea has been executed in another market at the very least. If you dig deeper you may even find someone who’s trying to execute or tried in the past without sucess. The interview series at Digital Health Nigeria’s website helps to expose some of the work people in the Nigerian health tect space are doing.

How to overcome: Before starting out on that new idea, search deeply to find out who may be currently working on it. If not possible, find who’s worked on it in the past. If that’s difficult, find who’s worked on it in a different jurisdiction or market. When you find people of interest, connect with them on twitter or linked in and talk to them. They will give you valuable insights that will save you months of work. Build on the experience of others and make new mistakes. Don’t go it alone and remake old mistakes.

Conclusion — A formula for success

I’ve highlighted some assumptions that i think are wrong and suggested some things to try. An obvious question to ask is if there a good model of something that’s working in health tech entrepreneurship in Nigeria. The jury is still out but there’s one entrepreneur I’m aware of who’s silently making good progress. He doesn’t like to talk about his success much and remains low key. You’ll never see him featured on a tech blog but he continues to do really great work and has grown his startup tremendously in a short while. Some ingredients to his success as I’ve observed include but are not limited to these themes:

- Deep technical knowledge and experience in health tech

- Leveraging open source technology

- Involvement in government/ policy work

- Relationships with international development partners

To win, Nigerian health tech entrepreneurs may need to imbibe aspects of these themes to stay in the game long enough to influence the market to adopt your innovation.



I’m building a digital health company in Africa

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