Expert Opinion: Rajiv Kumar, President and Chief Medical Officer, Virgin Pulse

Rajiv Kumar, M.D., is the President and Chief Medical Officer of Virgin Pulse. Virgin Pulse, which is part of Sir Richard Branson’s Virgin Group, designs technology and cultivates good lifestyle habits for employee groups. The company’s stated mission is to “. . . drive more meaningful habits, for more employees, than anyone else. And we’re proud to say we’re changing lives.”

As of mid-2018, Virgin Pulse supports 1.9 million members in 17 languages across 185 countries.

Rajiv Kumar is a seasoned businessperson who is committed to building global health. He has learned unique and useful lessons as he has helped Virgin Pulse achieve a preeminent position among health care companies. Let’s hear some of the insights he offered in a recent conversation with me.

“What obstacles have we had to overcome?”

What obstacles have we had to overcome? One of the biggest in the health care space is that it’s very noisy. There is so much innovation happening, there are so many startups, so many people turning all their attention to trying to solve big problems and impact a lot of people and improve the quality of their lives.

So one of the biggest obstacles we had to overcome, and which I think any health care company must overcome, is to ask, “How do we become the signal in that noise?” That is another way of asking whether it is possible to stand out from the pack.

Another issue is that there a lot of bad actors in the field. There is a lot of proverbial snake oil being sold and as a result, buyers are skeptical about whether or not the solutions they are hearing can make the change and produce the results that their developers are claiming. So buyers and investors have to evaluate CEOs, companies, and vendors that are coming at them. That is really, really critical.

“We are not going to be another company that is doing the same old thing . . .”

From our earliest days, we were determined not to be another company that was doing the same old thing. We didn’t want to get lost in the crowd. And it really is a crowd. By our last count, there are more than 900 wellness companies in the U.S. alone.

We decided that we would turn conventional wisdom on its head, wisdom that holds that although company wellness programs are critically important, it is impossible to get employees to fully take part.

Is it really true that people don’t want to take part in their companies’ employee wellness programs? Well, we are not so sure. Employees might not want to take a health assessment or get their blood drawn. And some of them might not want to use a company’s outside fitness facility or take part in company fitness challenges and programs.

Prevailing wisdom held that it was pointless to spend money or pay people to try to get them to change their behavior. Paying people to engage? Most people agree that really wasn’t the answer.

And so we asked, what is the opposite of a financial incentive? We decided to tap into intrinsic motivation, which is the opposite approach. We went into the market hard with that point of view. We used financial incentives for vendors really as our foil, so we started to sell our company in an unconventional, out-of-the-box kind of way. And that’s the approach we took for differentiating ourselves, for getting people to pay attention to what we had to say.

At a certain point, we began to realize that it is not an either/or kind of situation, because people do engage in different ways, both through financial and social incentives. The answer lies somewhere in between. We have to leverage both, to be open to all the different kinds of motivational styles that people have. So we started to evolve.

“We had to get to scale as a company . . .”

Another obstacle that we had to overcome, and which I think many entrepreneurs have to confront in the space, is that to get to scale as a company, they have to sell to large enterprises, whether they be large employers, large health plans, or large hospital systems.

But there’s kind of a chicken and egg problem. Those big entities, specifically in the health care space, are very risk-averse. They don’t want to be the first to try something new. They require loads and loads of evidence and of course, they’re very focused on security and compliance. Those are some of the fundamental challenges in the space.

How do you sell to an enterprise when you’re not at scale yet? How do you get the scale? That’s one of the things we have really tried to overcome.

The solution evolved around finding some innovators inside of large enterprises, and to convince them to take a risk while containing any potential collateral damage. Sometimes, allowing them the ability to wall off the segment of the population, or carve out a piece of what we can do, maybe in a pilot format. That allowed us to prove our value without asking companies to put everything that they were building at risk.

That helped us start to work with large enterprises, and to prove ourselves And I think that’s one of the important things that everybody needs to know about the space.

“The payers are finally waking up . . . “

The payers are finally waking up to the fact that they cannot build every kind of relationship themselves. Even if they could, they’re not necessarily going to be well accepted by the market. And so payers are definitely opening up to the idea of partnering with best-of-breed, point solutions by which solutions reach employers and their employees.

I have not seen a ton of examples of early-stage startups achieving wild success by attempting to hitch their wagons to a channel partner early on. That doesn’t seem to work as a market strategy. The reason is that while your products are evolving, you need to stay as close as possible to the end-user or the end customer. By going through a channel, you can create a wall between yourself and the end-users and lose touch with what they are actually looking for, how they are experiencing your product, what they’re missing when they use it, and what the value proposition truly is. So you can miss out on involving your product and your company in a way that’s going to allow you to capitalize on the opportunity you have.

And we’ve certainly stumbled over that a number of times, thinking that partnering with a large health plan or large broker was going to be our ticket. That being said, now that we are north of $100 million in revenue, we’re actively looking for distribution partnerships. We’ve got the product, we’ve got the evidence, we know it works, it’s rock-solid. Now it’s simply about getting as many people as possible. And people realize, it makes much more sense to go to a channel through a channel partnership. Knowing when the right time is to do that is really important for startups.

“You’ve got to raise a bunch of money . . .”

Billions of dollars are flowing into digital health. I think it’s very hard as a self-funded or bootstrap company to go head-to-head against big companies that are raising $50 or $100 million. That’s something everybody needs to be aware of. If you want to play in this space, you’ve got to raise a bunch of money to be truly effective.

Now, are there companies that bootstrap it and get started successfully? Absolutely. But to get to scale and to carry out a brand vision in the health care space requires a lot of capital.

“It’s very important to identify who the thought leaders are . . .”

I think it’s very important to identify who the thought leaders are in the industry, and who the gatekeepers are. Yet they aren’t necessarily the same people who are funding your business, and it’s likely they won’t be.

I think people make the mistake of assuming that the people who are the investors will be the same people who will open the doors to the kingdom, who know what the real solutions are.

So you have to forge alliances with the people in the industry who can actually help you. And they are usually not the same people who are funding you.

“We are going through a sea change . . .”

Is the patient/end user experience improving? Absolutely. We are going through a sea change in the evolution of the products that are available to end users. We are seeing what I call B to B to C products and solutions, like Virgin Pulse, where we are one business selling to another business, and that business is selling to consumers.

Solutions like that, I would say, have reached parity with B to C solutions. There are companies out there that are delivering B to B solutions that are as good as, if not better than, what a consumer can buy on his or her own. And customers want that kind of quality experience when they are interacting with businesses. That is what it takes to establish credibility.

The Virgin Pulse app is one example. Eighty percent of all interactions between end users and us happen via that mobile application, versus our web application. Our app is actually the highest rated mobile application in the App Store. It’s more highly rated than many consumer applications.

To be truthful, I think we only got there in the past year or so. Other companies are catching up to that as well. It took us about a decade to get there, but we learned, and we improved, and we certainly borrowed lots of ideas from the consumer side.

I think that is a key to success, because consumers won’t tolerate solutions from their providers or their health plans that are subpar, compared to what they can get elsewhere. If a health plan offers subpar solutions, that plan gets cut out of the equation and isn’t able to affect any change in the way that it wants to. I think that’s a really important point.

“I foresee a lot of consolidation . . .”

I foresee that a great deal of consolidation is going to happen in the space. It’s very fragmented as we reach this kind of first decade, and go from 2.0 to 3.0, in the terminology that you, Kevin, use. I think there’s going to be a shakeout, a healthy consolidation throughout the industry, not that we want only a small handful of players controlling any space. We want a lot of innovation and a lot of competition. But at the same time, I think there are a lot of solutions out there today that are subpar, and that waste time and waste cycles. So is a shakeout coming? It is going to happen for sure.

“It’s very important not just to have a point of view . . .”

I would also add something that we have learned about leadership in this industry.  It’s very important not just to have a point of view, but to publish that point of view and share it widely, and openly discuss and debate it. That’s what we consider thought leadership.

In our case, we engage experts and conduct surveys, and put up data to show the industry what is happening, where it is evolving. That is why good companies take us seriously. If you are in the space, companies want to know in-depth information about your products and solutions.

At Virgin Pulse, we will continue to invest heavily in thought leadership through our science advisory board, through our events, through our whitepapers and more. Leading with thought leadership is critical. You have to invest in building up evidence early and often. It sometimes takes two or three years before things take off. But having hard, scientific, credible evidence is critically important, preferably in the form of published research.

“You have to pick one market to go after . . .”

One mistake we made early on was that we failed to pick one market to go after. A lot of companies make that mistake.

It’s very tempting to think that you’ve got one product that is immediately going to serve multiple markets. It is tempting to think that you have this wellness platform that you are going to be able to sell to employers, to providers, to employees. You believe that same product will work for everybody. We learned quickly that each buyer has a totally different value proposition, with a different set of pain points. It is hard to bend and twist one product into so many different archetypes that will meet different market needs.

I would say a lot of early-stage companies are trying to sell into three or four different markets, and that almost never works. Our industry is littered with the carcasses of companies that have tried to do that. So that would be another big piece of advice for innovators in health care: focus, focus and get your niche.

Dr. Rajiv Kumar is President and Chief Medical Officer of Virgin Pulse, which is part of Sir Richard Branson’s Virgin Group.

Thank you, Rajiv, for focusing on wellness and contributing to ‘The Digital Health Revolution’. – Kevin Pereau, The Digital Health Guy

You can find this interview in its entirety in ‘The Digital Health Revolution’. If you haven’t done so yet, you can sign up here for updates and to get your copy today.