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The Health Insurance Business in India

Insurance is a very interesting business. Nobody thinks they need one until they face a certain situation. For a country with chronic illnesses and perennial under penetration of healthcare facilities, systemic solutions have not necessarily kept pace with the needs of the people.

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Health Insurance is still expensive with costs being high and care being limited in access. The insurance sector is regulated however, the care givers are not regulated and notoriously resist any attempts at regulation. The cultural tag of God for care providers muddles the water even more.

Cost of Health in India

Image depicting cost of Healthcare in India

People in MSMEs or in the unorganized sector don't have access, let alone the right pricing. The result is a large number of uninsured and underinsured employees with no health insurance benefits. This problem begged for an intervention and that's a problem Abhishek Poddar of PlumHQ is solving.

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Episode Transcript

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Summary Key Words

building, india, people, health insurance, business, startup, company, founder, insurance, employees, started, country, opportunity, media, problem, large, segment, market, product, thesis


Abhishek Poddar, Krishna Jonnakadla

00:00 Various Speakers

Honestly, if I was a VC, I wouldn't have funded myself. Like who knows how bad the presentation was, you know, to pay scale you have to think sometimes I think too much of money restricts innovation. That's the sad part. But destiny finds you on the road that you take to avoid it. Whenever you get to eat on a rocket ship, you don't ask which we will see. You didn't really ask ourselves, like too many questions in terms of

00:23 Various Speakers

how big can we get? So it was very, very hard to explain what is UGC? He wanted something first dirty our own.

00:29 Various Speakers

So me 1 million to 10 million overscaled. Again, you know, we had basic teams struggle, struggle, struggle, but every day was just learning, which was just amazing.

Krishna Jonnakadla  00:39

Listen to founders about their stories, and how they build their startups here on Maharajas of scale. With me, your host, Krishna Jonnakadla, co founder of mango mobile TV and Bob. Hey, everyone, we are back with another exciting episode with Abhishek Poddar of Plum HQ. Plum has been doing a phenomenal job exploiting a gap and a need that has existed for quite some time. Plum sells group insurance for small and medium businesses. It was a hole that was waiting to be plugged. And Abhishek took it up. We are talking to Abhishek on this Thursday afternoon in gloomy Bangalore, where it's been raining for the last literally several months or so. And it's gotten to a point where I don't care about the weather anymore. So appreciate Welcome to the show.

Abhishek Poddar  01:40

Hey, Krishna, thank you so much for having me on the show. Yeah, this time, it feels like we are in Seattle, Bangalore as always gray and it's always raining.

Krishna Jonnakadla  01:51

I know. I know. i It's, I still remember when I used to be based out of Seattle. This was 18 years ago. And I had another colleague on the East Coast who was based in Buffalo. And our head of consulting at that point in time used to say, I have two of my best team members who are leading to separate practices on either ends of the US with high depression and high suicidal rates. But instead from you guys, all I get is productivity. I don't know how you guys too. So yeah, it reminds me a lot about Seattle. Awesome. This

Abhishek Poddar  02:33

weather in Bangor would never get you society. It's only high productivity, I'm sure.

Krishna Jonnakadla  02:39

Yeah, I have never had a laziness complex. I suppose I'll be that way. So appreciate you. It's great to have you. Tell us a little bit about yourself. And what are you working on right now?

Abhishek Poddar  02:53

A perfect, yeah, I can give you a quick journey. And then why we are building clam and what we are building and feel free to stop me. But my journey really started in 2007. As just complete, I just completed my bachelor's from IIT Kanpur. In the backend it days, you go through the grant of a whoever, which companies are coming on day zero and the day one in the day two, and where can you get placed first. And I went through that process was lucky enough to get into consulting, spend the first couple of years at McKinsey. But there was a really good time for me to learn some of the basics of business, I had no clue about how business is done. But I think what I realized was a have to be much closer to building things rather than telling people what to pay. So that's what got me into startups. So the first startup experience was back in 2009. This was a startup in India, in tech and media is a company called 9.9. Media, worked there for a couple of years building one of their lines of business. Then went to do my master's at Stanford. Again, I would say not very thoroughly planned. It's because it's a rat race you everyone that has joined Consulting at some point in time, they have to go to B school and I was in that rat race and went to the B school. But again, very glad that it happened to be a place that I really enjoyed. Because of what the work that I really enjoy, which is building and building startups. I think that ways. Stanford was a great place to be in the middle of some of the best minds in the world, building some really amazing things, building some really amazing companies. So spent my couple of years doing their masters, started a company. If you are in the Bay Area, and if you haven't started a company, you have done something wrong. That's how people think so ended up starting a company called rents real we were building an E commerce marketplace for product rent. So our thesis was the way he Bay has been built at that time, he was a big thing, but the way he Bay was built to connect the smaller sellers to the consumers. Can there be a similar platform for renters rather than selling? And the thesis was that the rental as a business has been evolved has evolved in two verticals. One is housing vertical, and second is Car Auto vertical. But there is a whole host of verticals, Viet clothing, the party supplies, be it your adventure equipments. Can we build a platform like eBay for everything other than those two verticals, I did that for a couple of years and figured out hey, the unit economics isn't working out. That was our first stint of building a company from the scratch on my own failed attempt, ended up joining Google for a few years with this goal that, hey, let's get some real product building experience. And again, amazing experience at Google built a couple of products. One was called Google My Business, it was a SME platform, and one of the largest SME platforms, we had close to 40 million businesses. That was using Google My Business to get a presence on Google and different kinds of products of Google. And second was a payments product called Android Pay, we were launching the newer version of a failed attempt, which was Google Wallet. And I was personally responsible for the tap and K experience NFC based in store payments experience. So those were the two products that I worked on. There was always a short term plan for me that, hey, I'll get some formal product management experience and get back to building companies. So I ended up coming back to India, and was building a company called hyper track, we are building a location platform for developers who want to build real time tracking. We started that in India, eventually realized that us is the right market for what we were building. And my co founder ended up moving to us, the company ended up moving to the US. And in that transition, I decided that, hey, I've done this back and forth multiple times, I'd made my family uproot themselves, multiple times from India to us to India, and I can't do that anymore. And that was my journey into club. And that's when I met sort of serve as my co founder. And we were, we had different ideas in mind of what we want to do. But one of the things that are maybe two of the things that resonated was a number one, we want to do something that will keep us busy and excited for at least the next two decades, if not more. So we have to find a very large meaningful problem. And this should ideally be something that is the that's the last thing that we do in our life. And number two was, we have to do something that is that creates an impact that creates a legacy, it has to be a large enough problem. And in that mix of things, based on our prior experience, and based on some of the research that we do research that we did with our customers. That's how we stumbled upon what we are building today, which is plum, Plum as a group health insurance and employee benefits platform. And happy to talk more about that. But that's a short journey of that. That's my short journey of what I've been up to in the last 15 years and how I ended up building plum.

Krishna Jonnakadla  08:42

That's pretty interesting. You cover the whole arc of life, the last couple of decades, at least close to that you come through from IIT Kanpur to 9.9 media and and then you're Stanford and trends here. That's, that's amazing. Tell us a little more about the media company that 2007 Was it,

Abhishek Poddar  09:08

did you say 2009 2009 this company called 9.9 media. So our thesis there was in India, all the media companies are going after the masses, the Times of India and the Hindustan Times of the world, and the world will and India specifically will evolve into niche media, they will be different kinds of communities that will require very, very targeted content. So think of tech enthusiasts requiring content only on tech. So we had built this property called digit. Similarly, finance enthusiasts and finance leaders. This specifically the CFOs, requiring content on how to manage finances, and we had built a community and property and manage a property this includes a magazine where aside and events for finance leaders, similarly for the HR leaders and so on. And we are busily building this set of properties, which are very niche and targeted to different kinds of very different kinds of communities. What we were very successful at was building this tech community. So digit ended up being the largest tech community, both in terms of magazine at that time, and now the website and the events, etc, that we do right now. The other communities, what we realized was, the size of opportunity as a business is not that.

Krishna Jonnakadla  10:42

Interesting, but it has today, it has metamorphosed into something much, much larger isn't it? You have. I still remember when we think about media, the most common thing that comes to everybody's mind is film and entertainment. And in an in film and entertainment, we had a time when you had the likes of Rajshri productions, shoot movies like hum South South hair, and we would think the whole country wants to watch something like come satsang. And today, we have a situation with the prevalence of OTT platforms, the genres have multiplied. Today, at least during Halloween, we are seeing a lot of horror hardware related stuff come up. But 10 years later, or maybe almost 1012 years later. Don't you see that the genres and the segments have actually panned out, mostly because of the prevalence of a different set of tech. So 10 years later, looks like that hypothesis has actually come true. We have all kinds of magazines, we'll have all kinds of media properties. And just like they say about startups, timing is everything.

Abhishek Poddar  12:04

Timing is everything. But no, I would have to say that. editing some of the niche media hypothesis still hasn't played out to be very honest. From a business sense perspective, it's still not a very profitable business. If you are in niche media, one thing that we have realized is unless I you unless you are the top two media houses in India, especially when it comes to online and print media, you would never make money. You would never be profitable, because media businesses about advertisers and the advertisers always want to be in the number one or the number two player, they would never go to number three.

Krishna Jonnakadla  12:45

You know, I've, I've, we'll come back to plumb in in a few minutes. I don't know if you've wondered. Warren Buffett. If you if you've read about Warren Buffett's investments, one of the things that one of the things that Warren Buffett did was buy a newspaper in Buffalo. Buffalo is not a very large city. It's, as far as I know, it's not even a tier two city. It's literally the equivalent of a tier three city in the US. out near Buffalo is Rochester, New York, and Rochester, New York is home to both Kodak at one point in time when Kodak was the reigning king of film, and photography. And then Citibank. Buffalo itself is not really a hub. But there was a newspaper in Buffalo. And I have always wondered about it, funnily enough, I never thought there would be a distinct, there would be a forum to discuss this. He spent 10s of millions or maybe upwards of $100 million to acquire that newspaper. And there are literally only two newspapers in that town. And they are battling for, obviously, like you said, they're both battling for advertising market share, let alone the fact that they are carrying news when when you look at a situation like that, I know media is prevalent now. But India has been home to lots of businesses, lots of tier two cities where take Kung Fu, Mira Indore, Bhopal, Mangalore, Mysore. In spite of all of that somehow, segment based niche media is one but smaller down newspapers haven't caught on as well. I don't know. Do you think it's because of lack of demand or because of a lack of enterprising mindset?

Abhishek Poddar  14:46

No, it's a, I would say lack of demand. Right. See there if you again with the hypothesis that the media businesses are run by advertiser money the advertisers will spend for the segment where they see the largest revenue opportunity. And the largest revenue opportunity typically, or I would say so far in India has existed in the metro or the tier one cities and not so much in the tier two and tier three cities. So even if you are the number one newspaper in a tier three city, the advertisers haven't yet seen that market opportunity to go and advertise in that leading newspaper. That is changing, that is changing, right? That has been the case so far, it is changing. But the change is essentially that the kind of media that we are used to has also changed in that meantime, right. Now there is a concept of newspaper, right? People are consuming content, through different mediums through different mobile apps that have come up. So now, those are the platforms for media for these tier three cities. And that's where you will see a lot of startups getting built, which are addressing to tier two and tier three. And that's where advertisers are spending.

Krishna Jonnakadla  15:59

Interesting. So why when when did you decide to move on from 9.9?

Abhishek Poddar  16:06

Yeah, so this was, this was in 2011. And it was a very, it was a conscious decision along with the co founders. This was a, this was an opportunity that we had decided when I was coming in as well that, hey, this is a two to three year journey where I come in, and I learn a lot. But I also contribute to building a certain line of the business and that we have been really, really privileged to have the founder is promoted sinner who was the founder of 9.9. Media, I would contribute a lot to him for helping me get into the B School in the first place. He was the guy who helped me with the application, he was the guy who gave all the recommendations, and guided me to that to get into the B School in the first place.

Krishna Jonnakadla  17:05

I see I see. And then, and then Stanford.

Abhishek Poddar  17:09

That's how Stanford happened. And again, yeah, if you are, I'm sure there'll be a lot of young entrepreneurs in the room, who are thinking about what their career is, I would definitely recommend if you want to learn if you want to be at the heart of entrepreneurship, definitely spend a few years if possible in the Bay Area. Very, very different kind of learning and inspiration that you get, and you can always

Krishna Jonnakadla  17:38

and then. And then that's where the rental startup that you spoke about, there is still you know, the funny thing is outside of automobiles, and homes that you talked about, which have always had a market. The US lifestyle itself has, I mean, take people who live in cities like Chicago, they live in cities like Seattle, they still own boards, they hold pontoons. And it has, I guess, because of the number of financial options that are available. Most people have chosen to actually either lease or purchase boats, and very rarely, rarely rent it out. I personally know for people who all owned either a boat or a pontoon. And they would only while just like how gym economics work. About 85 Maybe 90% of the people don't even take it out for a ride a couple of times, or maybe three or four times. But other than that, the remaining 10% do but the remaining 90% Look at them and still decide they're going to own one instead of actually renting one. I'm I'm amazed. That kind of startup never really took off.

Abhishek Poddar  19:01

No, yeah. But I think there are two very fundamental changes that are happening right. One is I think there is more and more percentage of people who are moving away from this concept of owning to a shared economy. It's an it's happening around the world, right even right now. If you look at closer home in Bangalore as well, you will see the percentage of people who are owning homes versus renting homes, the percentage of people who are renting coops increases every year. People have lost that charm that hey, I need to buy home at a certain age. So that's one fundamental shift that is happening. And number two is us is such a large market that even if you're looking at a fraction of the market, it's still large. So to give you an example we when we started Renzi we were focused on just one vertical we started with one vertical. That vertical was party supplies. People who are organizing parties for Are the kids in the US and just renting for the party supplies, you will be shocked to hear the size of existing market back in 2012 2013, it was more than a $20 billion spend in the US, just for party supply renters it is two times larger than the market that we are operating in right now, which has health insurance, the entire health insurance market in India, which is $10 billion. So us as a market is so large that even if you pick a very small niche is too large.

Krishna Jonnakadla  20:38

Absolutely. And the fact of the matter is, there's one part of building in the US, which is it's definitely expensive to build a business, there is no question about it. But then there is the other balancing angle, which is that the size of the market itself is very large. There are far few impediments to actually build one if you know, a game plan, and you know how to actually pull that off. You're absolutely right about that. And so a couple of years, and how far did you get what sort of traction? What sort of growth did Yeah, so

Abhishek Poddar  21:16

we started, we picked one vertical, which was a party supplies, we launched in one city and expanded to around five cities in the same area around the same area, we got to a few $100,000 in terms of revenue per month. So I think we were in terms of revenues in terms of growth, we were making great progress. The challenge, there were two challenges, one we didn't have a line of sight of is this a profitable business that can be built in the next few years, given the cost of acquisition that we were seeing. And number two, we failed as an entrepreneur to raise money to build it. To scale that business at a much faster pace. We were running it like a bootstrap business. And we were founders we are first time founders, we were in two of us were essentially h1, not h1, b Sorry, the the student visa f1 or f2 visa holders were the visas are also going to expire. And we are in this. We are figuring out we are like running month to month that hey, what do we do if we are if you don't have cash, right? It's one is if you don't have cash and two, we won't we won't even have visa, and we can't legally stay in the US after a certain period of time. So I think we panicked that he this is not going to happen. And let's figure out something that can help us be in the US and run our home.

Krishna Jonnakadla  22:53

Wow. Imagine walking away from something like that.

Abhishek Poddar  22:57

Yeah, no, it was it was a very, very hard choice. So for around for months, we decided, hey, let's we'll we'll we'll join a company. And we will do something we will keep running this in parallel. So for around six months, we did that as well, which is we're doing a full time job. And we were running this in the night. And then we figured out Hey, you can't build a company like that you can't build a company. If you're spending, let's say 10 hours of your night. It is impossible. 

Krishna Jonnakadla  23:28

Yeah, yeah, you're not really productive here. Okay, and then, and then it was more of a sort of a personal decision to make sure you started something. 

Abhishek Poddar  23:43

That's correct. That's correct. So I think the decision was that, hey, I have to get back to building and get back to building a startup. And given the experience that I had with building rain seal, one of the things that was playing in my mind was that, hey, I don't want to go into this visa hassle anymore. I want to when I build something it has to I want to remove that uncertainty from that equation. So it's better to go back to India even you're actually removing I remove two uncertainties. One is the visa situation. And the second is it's much cheaper to live in India, right? I can live in India for three years, five years without a salary. And that same amount of money will probably be enough for just six months or nine months in the US. So you're giving the same amount of money is giving you a much much larger runway in India.

Krishna Jonnakadla  24:37

Definitely, although Bangalore is known knocking on the doors of various expensiveness that is, i i honestly in the last three, four years, I have bumped into literally hundreds of hundreds of entrepreneurs and the ability to live on I wouldn't exactly call At a shoestring, maybe we'll call it a size of a budget and leave for three or five years in India essentially, is a blessing and a curse. So the blessing part of it is that the pressure is not so enormous to actually make the ends meet, which is one thing. And perhaps you also have family here and in some form or shape that can act as a safety net, to the extent that it can. So that's the blessing side, and maybe it will give you a longer runway because you very rarely have a situation something works out in six months, nine months. If it does, it's just a possibly a perfect storm of external circumstances and your preparation that's coming to your aid. But more often than not, that's the situation is you need that two or three year runway, where you have to figure out figure out a lot of things there, what I have seen is that the ability to actually stay on that small, or whatever that pot of gold for three or four years, in a way can also lead to a lot of what can I say inertia? I can, I can easily tell you 4050 startups, which are led by founders, which are literally in limbo for the last four years. The worst thing that can happen to startups is you neither grow nor die. Right. So it gives you that loose sense of or a false sense of security saying today, I've got time I've got time, I've got time. And I've and I've seen that. Yeah, I still remember a friend of mine, having attended Sabir Bhatia his talk talks in the Bay Area, those days after he sold Hotmail. And he was asking him, dude, why did you start this what was going on in your mind? He said, I was a student. And as soon as I came out, or rather, I was visualizing the kind of things that were going to hit me as soon as I graduated, the student loan, the daily bills, and all the other thing, other things. And his response was, I have to build something where I have to jump past all of these. So in a way, the unforgiving nature of the economy, access access, sort of, I would, I would say it's a stick in a way to actually poke you and then push you to make something work faster. And yeah, but if you know, the game that you're playing, because usually, great companies, and great ones have all go through ups and downs, they take like a well cooked meal, they take some amount of seasoning. And I suppose that opportunity exists very,

Abhishek Poddar  27:56

very, very, very likely. Very good. I think it's a that's a point that 99% of the people forget. But you're very right, that they don't use this as a as a false sense of comfort. that, hey, you have money, and you can wait for five years for something to cook up.

Krishna Jonnakadla  28:17

Yeah, I know. I actually feel sorry for all of them. When when I see them, because growth is the one thing that can actually change. And I want to touch upon one aspect you spoke about just a few minutes ago, which is the bootstrapping part, the the startup that I have co founded right now, which is vouch, which is a digital escrow platform, we're at that point right now, where bootstrapping will not work anymore. The there is early stage traction, but the number of requirements that are coming in left, right and center from the market are so different that it could can we build it in the bootstrap manner? I think we can. But we will be doing a great deal of disservice to the product, the opportunity and our own time, in terms of how we are building it. So I totally agree with you there. Unless there is an angle where you're able to build an old world business and sustain it. Where it in some sense, it's literally a trading business. Right. So it doesn't require vast tracts of investment. So yeah, I you know, only a seasoned entrepreneur can understand what I'm talking about. So awesome. And then you said a few things. When you decided to start plumb or rather while you were in the ideating phases. One is you wanted to stay busy and excited for the next couple of decades. That was one and it should be a large enough problem. And a startup that makes an impact this Sounds very idealistic. I have heard people, people really, in a sense, I've never heard anybody say these things where they're while they're building something. Given the amount of revisionist retelling of story and history that happens in our world, I've always heard people talk about this in retrospect, they'll go back and revise why they even even started and then say, okay, we wanted to stay busy, we wanted to build something big. While all along, it would have been some something for survival. But this is interesting. So talk about that phase, where did you even get these notions of building something that makes an impact, you can always wait for something large enough, but impact may not necessarily only be a part of it,

Abhishek Poddar  30:49

I think it's being driven by I think both of our personal experiences, sort of syrups. And my experience is that, hey, it's a, we have tasted different kind of opportunities, be it building a failed startup, be it working at a large company. And we had certain ideas of what we get out of each kinds of these opportunities that, hey, if I continue working at Google, I know I'll be able to have a large impact. But there is something missing here. versus going and building something on my own. There, I may be able to satisfy some of the things that I want, which is hey, I want to learn how to build an organization, I want to let it build some personal wealth, or maybe I want to build some fame, but then I'm not getting impact, right. And I think out of these experiences, we had realized that, hey, what is important for us in the next phase, and this is a discussion. And so that was one part. And the other part is, both of us have had multiple ups and downs with our post a past co founders. And we decided that he in this journey that we take, what we are building can evolve over time. But it's more important that we as co founders agree on some of the basic principles of why we are building. If you agree, if you aren't on the same page of why we want to build a company, then the water can evolve over time. But we'll always go back to the same basic of why and we will be able to agree, because we are using the same principles. So we had very explicit discussions on those whys of why we want to do this. Got it. Got it. So we, we had very explicit set discussions on those wise. And that's how we came up with these principles that, hey, this is what matters to us, we have to create impact. And ideally, this is the last thing that we are building. And we don't have to go back to the corporate world or building something else.

Krishna Jonnakadla  33:11

Yeah, no, going back to the corporate world can be a big motivator, or not going back to the corporate world can be a big motivator. As someone who's had somewhat of a similar background as yours. Having a professional career and doing a startup in between and coming back and doing having professional career interspersed, I can relate to a lot of what you were saying, and then how did the idea or the opportunity itself, for plumber group health insurance come about? Looks like, at least I'm getting a sense that you had a very methodical approach to it. Because one is you had all these guiding principles, busy and excited, which means it should be something complex enough that must come that must compel you to that must excite you must look must look inviting. I mean, insurance, for a lot of people can be as boring. But if you're building something in that space, as one builder to another, I can definitely agree that it will sound exciting.

Abhishek Poddar  34:16

Yeah, it was a it was a space that both of us had zero experience to people who had never ever touched insurance in the past. So our I think we did three things. One is we had our own personal experience building companies. And we had some idea on what are the problems that founders face or people leaders face in terms of building companies. So we have some idea of a we want to solve this problem of building really high quality health insurance and health benefits. So that was one input for us, which is our own. How did

Krishna Jonnakadla  34:56

you zero in on the health insurance segment per se? Talk about that part. Yeah, yeah.

Abhishek Poddar  35:02

So we Yeah, so we had a very broad idea that, hey, we want to do something in the people benefits space. And we touched upon many different aspects of people a particular reason 

Abhishek Poddar  35:17

I think, and these are, these are two very different answers. Saurabh was coming from a world of fresh works. And he had seen the company build scale from Around 200 300 people when he joined to around 2000 People company, and he saw how important how important and how broken is the benefits piece and how impactful that can be done. Right. I had, while building hyper track, we had thought about doing, we I mean, in the entire lifecycle of building a team. You need HR tools or different kinds of HR tools. And you need to think about the people experiences, including benefits. And the realization was a there are 300 companies in India that are building HR tools, or payroll tools, more than 300 companies, but no one, when when you have to think about health insurance or health benefits are people benefits, there's no one, you have to go to a very old insurance broker or someone to get it. And most of the times, if you're a small company, you would never be able to set up a health insurance program in the first place. So those were our experiences, we number two was to actually narrow down on what we are building, we thought, hey, let's not go by just single people problem that, hey, if I have this problem doesn't mean that 1000s of other people will also have that problem. So we spoke to close to hundreds of founders and people leaders in India to narrow down on the problem and narrow down on our hypothesis as well that Hey, are we building something that is more common in India as a problem, and we saw most of the people resonated with what we experienced that we had. And number three was we spent a lot of time understanding the evolution of the industry itself. And given that we were the two outsiders to the industry, we had no clue. So we can ask very first principles kinds of questions to an insider as well. We flew to Bombay and met all the leaders in health insurance pays, for example. And that's how the thesis got built. So our three core thesis was a number one, India is going through a fundamental shift when it comes to health insurance adoption. And we have a very small adoption right now. But in the next 10 years, India will be at a place where almost everyone will have health insurance very similar to how US is are very similar to a lot of European countries or Asian countries, our health insurance will become as essential as a roadie couple of Makhan. In India. Our thesis number two was we are not a rich country where people can afford health insurance on their own, very small percentage, not more than 10% of the population will be able to buy health insurance on their own. So you have this 1.3 billion population that needs health insurance, the government has said that, hey, we will do or use manpower for 500 million people. So now there is this middle India who cannot buy on their own and the government won't support them. How do they get health insurance and their our second thesis was employer sponsored health insurance is what will drive the adoption of health insurance in India. And if you actually reflect back at any country that has gone through that 100% kind of penetration, a largest percentage of that has happened. Through the employer sponsored health insurance, you have lived in us and you would have seen how prevalent employer sponsored health insurance is in the US. And it has happened in most of the countries as well. So that was our second thesis, which is the largest segment of the market will be employer sponsored health insurance. And our thesis number three was all the companies in India that were building anything around insurance were focused on either the motor insurance or the retail health insurance. So be it policybazaar Very focused on life, mortar and retail, Star health very focused on distribution of retail digits and across the world. Very focused on retail and on the experience side, but no one was really solving for the employer employee health insurance, which requires different kinds of solutions, which requires How do you think of smaller companies and making it accessible for smaller companies? How do you think of making it affordable for companies as small as five employees, 10 employees? How do you think of the user experience not just for the employees but also for the hrs who are managing their insurance? So that was our thesis of how we started which is our own problem, expanded to hundreds of HR leaders and then expanded to Hey, what is happening largely in the market


Krishna Jonnakadla  39:58

seems like I think this is A global outreach opportunity if you ask me, because there are MSMEs, globally. And if you if you take all the insurance shop options that are there in the US as well, they are take Aetna or Blue Cross Blue Cross Blue Shield, any of them are possibly for very large corporates, while there are 1000s of large corporates that are there, but outside of them, the bulk of your you know, let's say there is your neighborhood furniture store, which has some some employees. And because of their hire and fire policies, there is the Cobra insurance angle, which covers the time that somebody is unemployed. So I, I see that as an opportunity. I'm, I'm actually surprised. Let me talk about that interviewing part where you spoke to so many of them. The average labor code book in India, labor study will tell us that about 90 plus percent of the workforce literally has is first of all, working in an unorganized sector, which means they're largely denied benefits. In fact, the benefit word is a misnomer in India, because most businesses have so much economic uncertainty policy uncertainty, that you either have lifestyle businesses that are run by one or two people, where I know they have possibly founded the business. But in fact, it's sort of like a parasitic relationship with a business. The business literally exists for them to run their life. And you have these eight or 10 employees around them, who literally have no future, have really no future. And I am a chartered accountant, you know, thank God, my opportunity is very different. But I always look at people like them and say, Why do these people even work here? And why do we not have a large scale revolt on our hands in the in the country? And then you realize that all these three trade unions who literally have only I think if my memory and numbers served me, right, only 20 million people on their membership, and have held the entire country at ransom from literal, bringing in late worker legislation or any pro worker and pro business legislation. Right? So if workers are happy, then I get a lot of a lot of people asking questions. Why are our workers unproductive? Why do they not step up and contribute because they have no stake in the business. And our laws are such that forget a stake, they don't even get any benefits? Benefits is like a bad word. And as a person who's employed 2030 people, I can say what kind of burden it entails on the business, because the revenue side is so broken, we cannot fix that. So I'm surprised you had to go through the interview process. But anyway, you did. And then talk about the start.


Abhishek Poddar  43:03

But I'll give an interesting anecdote there as well, right? We, you mentioned that the business owners in India, don't think about benefits or don't give benefits, right? I'll paint an extreme picture, actually in India. And it's one of the very unique countries where a lot of business owners, especially in the smaller towns, they're not giving a formal health insurance or benefit to their employees or their contract laborers. But when something happens to them, right, if there is an accident, or some critical illness and they get to hospital, most of the times the business owner, they feel morally liable to take care of that person. A lot of times the business owner will take care of the expenses of that person in the hospital while in the hospital a lot of times and it's just because of how this is just because of Indian culture. You won't see that in any other country. So on paper, you're right that we don't have employee benefits. But the reality is actually a lot of times the business owners do take care of the benefits or the healthcare expenses of their employees. Yes, it's very restricted to their critical illness or an accident, but they do


Krishna Jonnakadla  44:18

I you know, I'll share a discussion I had with a friend of mine, and because in India you have a rainy day fund for multiple things. Your you illness's one fun, getting kids married is another fun. And maybe a buying something expensive is another fund, and maybe not something drastic happens in the extended family. That's another fun. So you have a lot of rainy day funds. And retirement is another one. So what happens not to mention mortgage mortgage is a recent phenomenon in India, maybe about 1520 years ago, people never used to take housing loans because it was so expensive, they would wait out till they would be 5055. they've purchased this obscure piece of land somewhere outside the city. So when you go to the US, you start earning there, you still kind of have that mindset, because there's so much uncertainty. You have your 401k, you have your medical insurance, you're paying your mortgage, all those basics, roti, kapra, Makhan, are all taken care of, and but you still put away money. And my friend would ask me, Why are you still putting away so much money? I said, there's so much uncertainty, do you? I don't think you understood American life. He said, Your 401k is for your retirement. If anything extraordinary happens on the health front, you have your medical insurance, your mortgage is covered. Your if something happens to you the mortgage insurance covers the market, what risk are you talking about going to enjoy the rest of the money to actually be bought? But if this kind of a product actually took shape, imagine what employees could do something similar. Right? Correct, right. In fact, on one of my earlier episodes, I've shared the story of this Hindi film, where Raj Khanna and Govinda Rajan Khanna is the elder brother of wealthy family. And he's overseeing this estate, the entire estates, revenues, goes to take care of his health, and then he gets thrown out of his house, all kinds of things happen. I forget the name of that movie. I've talked about it in one of my blogs as well. And I used to say, that whole movie wouldn't exist if a product called Health Insurance existed in the country. Right, so Okay,


Abhishek Poddar  46:45

many, many, many, many movies, many Hindi movies that will be on that same story like, right,


Krishna Jonnakadla  46:50

so then that's how, and unit study thought, what was the first version of the product? Like, when did you launch? How was it launched?


Abhishek Poddar  47:01

Yeah, so our very first product was targeted to a segment that didn't have any access to health insurance. So if you look at India, and how the corporate insurance in India has evolved, they have all built products, targeting 1000s of employees or hundreds of employees. And we saw a very clear gap that, hey, if you're a company, let's say the 10 employees 200 employees segment, it's not about hey, what experience you will get after the purchase of insurance, you won't be able to purchase insurance in the first place. So our very first product was targeted to that segment that we will now provide health insurance, which is accessible and affordable to companies have 10 employees, 200 employees, and we saw an initial, we saw an instant traction there. Overnight, I think within within the first few months, we got hundreds of companies that were using plump. And we were the first company I think in the world, not just in India, who basically brought this transparency and real time pricing to the world of employer employee insurance. policybazaar did that for the retail insurance. But that never existed. When it comes to the corporate insurance, corporate insurance, you have to go and find a broker, give tons of data to them, and then wait for a month or so to get some code. And you are at the mercy that hey, they prioritize you because you're a small company, do they prioritize you? And are you doing in a follow up to get that code, you were the first company that hey, you don't have to even talk to us, you go to Plum hq.com. And give basic data, upload basic data, tell what kind of plan you want to build, and you will get real time pricing. And you can go and make the purchase happen. And it was so targeted towards that segment, which was like waiting for a product like this is the reason we got that kind of initial traction. And then they started building more and more segments that we go after, with the kind of problem that that segment had right. So let's say now we are serving if you're serving a segment of companies that have 1000s of employees, they don't have a problem accessibility because there are insurance brokers that are already going to them, they have a problem of experience that hey, can my employees and can my HR have a great experience in terms of understanding and using insurance and in terms of going beyond insurance to providing a better health care because that is my end goal that I want to take care of the health insurance is just a means to that end goal of providing a better self care.


Krishna Jonnakadla  49:34

dive a little more deeper into that starting point. What did you launch first visit a website. Where did the first sign up come from? How did how did that happen? And then when did you hit the next 10th? Yeah.


Abhishek Poddar  49:51

Yeah, so this is a great question, actually. We the first 10 signups From the interviews that we had done, when we were doing the interview, one of the very clear goal that we had was, the interview should end that, hey, here's my check. And I want to buy your product today. If that doesn't happen, then it's a sign that you're, because most of the times you're doing these interviews with your friends and families, right? And they want to be nice to you, especially this is an Indian culture that they want to be nice. You want to be nice to everyone. They say, hey, yeah, you go and build it. I like what you're building. And I'll use it. But I will use it is very different from a here is my money today. So we would go into this interviews and say, Hey, assume we have the product. And we will actually go and say I have the product ready. We didn't have the product ready. But I would say hey, we have the product ready? Can I get your check today? And if the answer is no, that means a we are not solving a genuine problem? If the answer was yes, then it was a sign that we are solving the genuine problems. So we had signed up customers, or we had, I would say we had gotten commitment from a list of customers from those interviews itself. So those were our early customers, probably the first 2030 customers. The next set of customers was us reaching out to our larger network. So it was no marketing or anything, it was just brute force. Whoever is in our networks or our my network, be it people that we have worked with in the past, or their friends, we just reached out to them aggressively over WhatsApp. And at that time, it was before March of 2020. So the wall was still open, and we can go out and meet them as well. So we met a lot of people. So we probably got like the first 5060 customers through our own friends and network. And then we started seeing some of the snowball effect, which is these 5060 customers started talking about plans in their own network. There were words flowing into WhatsApp groups that he I have heard about plum, or hey, I just signed up a plum. And that's a fascinating, that's a great product. And I was able to get a really high quality insurance program. So we had built our website, but that website was very basic. But people still started coming to our website, all organically, there was no SEO, there was no, we didn't start paid marketing or the Google Search Marketing till probably like a year, year and a half in our journey. This was all all organic. And even as I see right now, right of the 1000 customers 1000 Plus customers that we have almost 80% of the customers are organic, or from reference a very, very small number are through our SEO or the SEM kind of campaigns. So that was that was the initial story for us.


Krishna Jonnakadla  53:01

But just two more questions. One is India is a family driven society, you have extended families, very large families, you also have religious groups, you have professional groups, let's say the Jain Association or the plumbers Association or the hotel Association, what stops given the fact that many of these people are actually potentially working for all these small and medium enterprises? What stop someone like you from offering a group health insurance for people like that, because a lot of those people don't have access?


Abhishek Poddar  53:38

Yeah, no, nothing, nothing actually. So it's a these are all in our idea phase that he will go to see our larger larger goal is that we want to accelerate the adoption of health insurance and healthcare in India. And what you just mentioned is another way for us to achieve that vision. But we have to be very systematic in terms of how we get there. We are a small company with a limited resources. So we are very focused that he will go segment by segment we are right now we are very focused on b2b as a go to market we are only and within b2b as well. We are very focused on companies and not different kinds of all kinds of organizations that you mentioned. And within that b2b and companies as well. As I said right we when we started we focused on 10 200 employees then we slowly expanded 202,000 employees then we have now started going after 1000 plus employees as well. And even there we are a focus that he will go after the tech first companies initially now we have started going after slightly more non tech companies as well. And that's been our learning from the past that he if you try to do everything at the same time, you will fail and you will fail without knowing what didn't work. So for us it was very important that whatever we Do we choose one market at a time, one problem at a time, one product at a time, make sure that there is a very strong product market fit and a channel market fit, and then we do something else. But we have a very clear understanding that this market is so large, this opportunity is so large. And what we have building has applicability across all kinds of companies and organizations that in five to 10 years from now, we can see everyone in India, or maybe everyone outside India as well using PLA. But let's first get to solving and delivering a great experience to the segment that we are into right now. 

Krishna Jonnakadla  55:39

Just two quick questions, what's been a great challenge until now. And what's what's been something that accelerated your growth. The biggest challenge

Abhishek Poddar  55:49

is finding the great finding the right people are great leaders who can build this. So in the first the first phase, if your company you're trying for a product market fit, and that's where you as a founder, or founders, or the founding team has to be very focused on getting to that product market fit, there's nothing else that you should your business razor focused on that. Now we are in the journey of one 200 of scale up. And there, what you realize is, as a founder, we cannot scale. If we are two of us are doing everything, the only way for us to scale is we have a set of people set of leaders who are great at each of these things, be it building a brand, be it running performance, marketing, be it running sales, be it building partnerships, and so on. And then empower these, get these people and empower these people to work in that same focused way along with each other and deliver great outcomes. So our job and actually I'm coming from one other. I was meeting another founder who is considering joining Blum and he asked, Hey, what what is your day to day look? Like? I say there are only two things that I do. One is getting the best people to join us. And number two is making sure they are they stay focused on what we are trying to pay. Amazing. I think it is both your questions on what's the biggest challenge and what are we doing right now?

Krishna Jonnakadla  57:25

He does. He does, he does. So appreciate this has been a short but amazing conversation. It was great to hear you talk about your earliest startups as well. And then what you're doing with plum, I'm certain this is still very early days for this market. There's a huge opportunity out there. Perhaps in a follow up interview, we will pick your brain in terms of what that new vantage point looks like as you scale more peaks. And also come back and talk about some other supply side teething troubles that you had. I'm sure you had quite a few there. Mostly we've we've gotten to discuss only on the demand side. Before we sign off anything else that you would like to share with the listeners?

Abhishek Poddar  58:06

You know, first of all, thank you so much. This was very, very engaging discussion. I think we are just starting up. And I mean, I'm no one to talk about scale, because we are we haven't even started scaling. I think maybe in a years from a couple of years from now, hopefully you and I again, do this chat. And there, we will have scale to hopefully 10s of millions of users that we have insured and then maybe I can share some of the experiences on how to scale.

 Krishna Jonnakadla  58:37

Certainly, so certainly, we wish you the very best Abishek

 Abhishek Poddar  58:40

Thank you so much, Krishna.

 Krishna Jonnakadla  58:43

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