Entrepreneurship

Medical Sterilization
Startup

Group 3
Ananthakrishnan Rajamani
Arun Vetrivel
Balasubramanian Panchapakesan
Kamalakannan
Suresh Kumar Radhakrishnan
Value proposition
1. What current need will the venture serve?

Ans: Standardized sterilization process for hospitals that do not have the infra to avoid Hospital Acquire Infection

(HAI)

2. Which customer segment will you target?

Ans: Corporate hospital chains, standalone hospitals, Govt tertiary care, Medical Colleges

3.Will it emphasize differentiation or low cost?

Ans: Differentiation

4. Will it serve a new or existing market?

Ans: In India, this is a new market

5. What will MVP at launch be? What need map will be used for adding features?

Ans: Will launch trial service using tie-up with existing hospitals with excess capacity. MVP may not include validation

in the first iteration.

Value Proposition
6.Who will provide complement required for whole product? On what terms?

Ans. Hospitals with excess capacity will provide infra to render the service. We will work on a revenue sharing
model with them. Existing medical logistics company will be used for collection/delivery. We will use fee model for
them.

7. How will product be priced? Does skimming or penetration pricing make sense?

Ans. Product will be priced on cost + margins

8. Can venture leverage price discrimination methods, bundling or network effects?

Ans. Network effect can be leveraged.

9. What switching cost will customer incur? What is expected life of customer relationship?

Ans. Switching cost will not be high, cost will be 20% higher, but will lead to ROI due to better maintenance of
equipment and lower infection rates. Improves brand equity of hospital. Expected life will be at least a 10 year term.

10.Relative to the rival products, how will customer willingness to pay compare to their total cost of
ownership?

Ans. Willingness to pay will be good because otherwise customer will have to invest in infrastructure and skilled
personnel to do the sterilization.
Business Model Canvas
Go to Market
1. What mix of direct and indirect channel will the venture employ? What margin or exclusive rights will
channel partner require?

Ans. Direct sales channel

2. Give expected customer lifetime value? What customer acquisition cost will the venture target?

Ans.
Surgeries a day 40 nos
Trays a day 120 nos
Total charges per tray 1500 Rs
Total cost revenue per day 180000 Rs
Total cost revenue per year 54000000 Rs
PAT per year 10800000 Rs
Total life time value 54000000 In five years

3. What mix of free and paid demand generation method will the venture employ? What will the shape of
the customer conversion funnel be? What will be the cost of each conversion?

Ans. Free Awareness campaigns/seminars to hospitals. Awareness through CSSD professionals. Through Sales
team.
Go to Market
4.If the venture relies on free demand generation methods, what will its viral co-efficient be?

Ans. Venture does not rely on free demand generation methods, this requires active solicitation of prospective
customers

5. Will the venture confront a chasm between early adopters and early mainstream segments? If so what is
the plan to cross the chasm.

Ans. No, there wont be a chasm.

6.Does the venture have strong incentives to race for scale owing to network effects, high switching costs,
or other first-moved advantages? Do scalability constraints and late mover advantages offset these
incentives?

Ans. There is a strong incentive to race for scale because it can be easily replicated, and there is little switching
cost.
Technology and Operations management
1.What activities are required to develop and produce the ventures product?

Ans. Tie-ups with existing hospitals with sterilization infra and logistics teams.

2.Which activities will the venture perform in-house and which will it outsource?

Ans. Initially, everything will be outsourced except sales and marketing.

3.Who will perform outsourced activities and under what terms?

Ans. Hospitals with excess capacity will provide infra to render the service. We will work on a revenue sharing model
with them. Existing medical logistics company will be used for collection/delivery. We will use fee model for them.

4. What are the cost drivers for key activities? Can the venture exploit scale economies in production by
substituting fixed for variable costs?

Ans. Cost is mainly for infra. This can be reduced by partnership with existing hospitals having extra capacity and
changing the fixed to variable costs.
Technology and Operations management
5. Will the venture create any valuable intellectual property? If so, how will be kept proprietary?

Ans. No.

6. Are there other first mover advantages in technology and operations? Later mover advantages?

Ans. Yes, capture the market share and also get into early agreements with existing hospitals with excess capacity
and customers.

7. Given capacity and hiring constraints, can the venture scale operations rapidly?

Ans. Yes, most of the effort will be involved in sales and marketing and replicating the process.
Hypotheses
Qn. Will hospitals actually want to move to this service from in house?

Brochure and demo video explaining the service along with ROI analysis given to hospital mgmt.

Qn. Will CSSD managers want to evangelize our service within the hospital?

Sponsor CSSD manager seminars and discuss with them about standardization of patient care

Qn. Will Instrument dealers and distributers partner with us?

Include key instrument dealers/distributers in sponsored CSSD educational events

Qn. Per tray pricing, would they be willing to pay?

Find how much hospitals charge for sterilizations to the patients.

Qn. Hospital wants to reduce HAI?

Find out hospitals current HAI and their goals to reduce the same.
Hypotheses
Qn. Does increased turnover of patients increase profitability?

Discuss with Hospital administrators to understand their current pain point for increasing profitability

Qn. There is a problem in maintenance of surgical instruments?

Discuss with bio medical department on what is the current average life of surgical instruments in the hospital

Qn. Reputation of hospital is impacted by HAI

Find out the rating of the hospital from the insurance companies.

Qn. Will the hospitals with excess capacity partner for this purpose? Priority 1

Will discuss with hospital admin on excess capacity for sterilization and their intent to increase the same to bring
in revenue. Target at least 3 medical colleges.

Qn. Is there a logistics partner available who is capable of handling sterile equipment and within the
timelines required?

Find out the medical logistics companies available and whether they provide such a service and at what cost.
Key Hypotheses to be validated Priority One

Priority 1: Buy in from key partner college with excess capacity for sterilization

Identify a hospital/medical college with excess capacity and verify if they would be willing to share unutilized

capacity and make some revenue from the same. Target: SRM College

Priority 2: Buy in from one surgical department of hospital for pilot/trial

Identify a hospital which would be willing to outsource the sterilization process for a pilot.

Target: Apollo hospitals Urology dept.

Validate if: Hospitals will be willing to let their equipment go out of premises, do the equipment carry insurance,

who would be liable in case of damage.

Hypothesis Validation
Hypothesis validation
Hypothesis Field action Action taken Results

Buy in fm key partner. Can Interview with Validate with He has agreed for a pilot. He wants us to improve the

SRMC give excess capacity for Decision makers in Dr. Vijayaraganavan- process in CSSD to meet JCI standard and take

our new outsource SRMC Director of SRMC, ownership for accreditation.

sterilization business Interview with

Dr. Bhasker Raj- VP

Buy in fm surgical department Interview with Validate with He greed for a pilot with condition on liability for any

for sending instruments Decision makers in Dr. Muralidharan- damages and have to prove that this service cost is less

outside there permises Apollo OT Director than current method and have to provide evidence

showing redacting of surgical site infection.