Co-founder of SanoPass discusses the opportunities and challenges of a start-up.
I contacted Andrei Vasile, co-founder of SanoPass, to find out more about his innovative solution for medical subscriptions and the financing methods he used to support and consolidate his start-up.
SB: Andrei, you are an entrepreneur. What was the first entrepreneurial initiative in your life?
Andrei Vasile: Sanopass is my first entrepreneurial experience. My professional experience comes from the corporate area, but I have been interested in entrepreneurship for some time. In a way, I was an entrepreneur before SanoPass – I had many projects in the companies I worked for: Citibank, Unicredit, Edenred – projects I started from scratch.
For example, at EdenRed, I opened a new business unit in the Republic of Moldova – starting with opening the offices, hiring personal, products, up until the first sales.
Mihai Vădean - co-founder of Sanopass - was already an entrepreneur for more than five years, having a design and architecture business, therefore knowing how to manage a company and how things work. He gave me the courage to switch from corporation to entrepreneurship.
SB: What triggered the birth of Sanopass?
AV: SanoPass was born as a result of personal dissatisfaction with the subscriptions offered by large clinics. The corporate employers I worked for offered as a benefit, subscriptions to all large networks of medical clinics, and each time I was annoyed by the long waiting times for appointments, and distance to the actual location.
At a glass of wine with Mihai, in a restaurant, I mentioned to him the time I called for a consultation at the clinic that I was subscribed to, and they booked me in about 20 days time. We thought about whether there is a solution to visit a doctor, without waiting so long for the appointment. We couldn’t find such a clinic in our Google searches, so we decided to do something about it. We discussed the idea in the coming weeks, and things became more and more serious.
Before we decided to invest money in the development of SanoPass – an Uber for clinics through which people would get faster access to healthcare – we have done a series of quantitative and qualitative studies on about 2.000 respondents.
From the results, we realised that there was indeed a problem in this area of healthcare subscriptions, a general dissatisfaction about the waiting times. We also discovered that in 3 out of 5 cases people were booked to a clinic located in the other part of the city or far from home, and we realized that the medical system was very little digitalized. In 2018 when we carried out the study, there was almost no digitalization in the medical field. All clinics offered subscription cards, but 80% of the respondents told us they would prefer a mobile app. This gave us more courage, and we started to work on SanoPass.
SB: How much money did you spend until you could present your product?
AV: The studies cost us about 2.000 to 2.500 Euro. The questionnaires were designed by us and the development of the application was 100.000 Euro. There were 3.600 man-hours, and a team of over 30 IT experts worked on it.
I worked with a team from the Republic of Moldova – the company is called PayNet, and they are specialized in such solutions.
SB: What difficulties did you encounter at the beginning of the project?
AV: It was not our first time opening new business lines, but we are not doctors. To develop an application for the medical field, it took us some time to get out of the way, to see how the flow should be.
We did not want to inspire ourselves from international products because the markets are very different, and this might have not worked. We used the feedback collected during our studies and this way we reached the specifications. We have greatly improved since that initial version - and we are still improving it.
SB: I understand it is a platform that connects companies with smaller clinics in Romania. Can you tell us now how many companies you are working with?
AV: We have 40 client companies and over 650 clinics we work with, from all over the country, ranging from individual medical cabinets to networks of clinics.
SB: How difficult is it to attract companies to your platform? How do you bring them – alone or is it teamwork?
AV: It's teamwork now. The first 200 clinics were brought by Mihai and I, and it was intentional this way because we wanted to first-hand collect the feedback from the market, understand how they approach patients, how they view a possible collaboration. We practically went door to door, from clinic to clinic.
It was an excellent experience because we were able to make an on-site analysis - we saw how clean it is, how kind the staff is, how the clinic is in general. There were clinics from which we left the meeting, being sure we will not sign a contract, for many reasons.
SB: How do you sign a contract - how long does it take?
AV: It takes a few days. We have practically no refusal from the clinics because they have many benefits working with us: we bring our subscribers as patients to them and pay for the medical services they provide. If we do not bring them a patient, they do not have to pay anything. Moreover, they benefit from our promotions on social media, on the app and in our presentations. We do not negotiate their prices; we pay consultations and medical services at their list price.
We also had harder negotiations, usually with larger clinics, and then, the average signing time is 2 to 3 months, depending on how many signatures are needed.
SB: What's your view on sale experts? Do you think they are a part of the team?
AV: We have a commercial team that takes care of developing SanoPass, on a daily basis. We do not have a sales team, but we have the business development one – they deal with bringing in new clinics and new customers. This process of bringing in clinics as affiliates is closely linked to the sales process. For example, suppose we get in a factory in Turda to showcase to them our offer of subscriptions. It would be best if we already had a local network of clinics, i.e. around the factory or the site, for better selling points. Thus, these two things are intertwined and are the duty of the same person: the more developed the network is in his/her area, the more successful the sale will be.
Our agents are very dedicated, we sign up around 4 to 5 new clinics a day nowadays, and usually, the average was about ten clinics a week. We have started many discussions in times of crisis, and we have now resumed talks. We hope that by the end of the year we’ll reach at least 1.000 clinics, but we will see if this state of emergency is extended and how it will impact us.
SB: Which options did you consider when you started looking for funding?
AV: In terms of financing, we did not know what mechanisms are available, because we were not anchored in the start-up world (I was used to the idea that money comes to you). Of course, we had a very well-structured business plan put on paper, and we knew how long the money will last. In the first months, we focused on launching the platform and issuing the first subscriptions; we thought: “let's be up and running, and then focus on the financing area”.
We started this process in October 2019. We began following TechAngels, where we signed up to make a pitch – we were selected, and we had a relatively ok reaction – there were discussions after that meeting.
We initially looked for 500K euros in financing for 25% from the company. After the first presentation at TechAngels, seeing the tickets, we realized that it would be quite challenging to get such funding from the first time – so we halved it, thinking that secondary financing would come at another stage.
We signed up for HowToWeb, where we won the “Best start-up award” in that session.
I was somewhat disappointed that things were moving slow, and I looked for entrepreneurs in this investment field. Then I reached to Mr Wargha Enayati – I knew he was involved in other projects in the medical area. I was surprised when, the next day, we were in contact again; it seemed that we have got in contact at a perfect time: Sergiu Neguț and Alexandru Popescu (two former executives at Regina Maria at the time Mr Whargha owned it), and Voicu Oprean from Arobs, were thinking of setting up an investment fund in MedTech. They were not even organized as a business entity yet but when they decided that SanoPass should be their first investment, our desire to get investment and expand encouraged them to speed up the establishment of the Cleaverage investment fund.
In parallel, we have launched some PR actions to increase awareness: We had a press release in which we announced that we are looking for funding of 200.000 EUR. In a week, we have received applications from various domestic and abroad funds, and different business angels. Our surprise was a mixed team of entrepreneurs from Sweden – the Founders Bridge – that told us they want to invest in us.
In the meantime, we planned to go through an equity crowdfunding round too, so we contacted SeedBlink.
SB: Why equity crowdfunding?
AV: The first reason is related to marketing and brand awareness; it is a new thing in Romania.
We have closely followed all the listings starting with HowToWeb. We have observed the market's reaction at what is happening on the platform, and we have been interested in reaching as many executives as we could, to help us promoting SanoPass services and subscriptions in the future. This is how we got the EUR 400.000 – 150.000 EUR from each fund and 100.000 EUR from Seedblink.
SB: Now that you have completed a crowdfunding campaign, would you recommend this route to other start-ups?
AV: Of course. Aside from the money we attracted, we met a lot of great people. But I tell you frankly that it was very emotional. A few days before we were listed on the platform, SeedBlink listed ialoc.ro. It was a short period between them and us, less than a week, and I didn't know what impact this will have. The government also officially declared the COVID-19 pandemic, and the situation was uncertain.
We started to refresh the page, and we were stunned to see 30, then 60, and then 90 thousand; in less than an hour all the money was collected. I enjoyed it more than when signing with the two funds because it was very exciting.
There are more than six people in those two funds – there are many preliminary discussions, you understand why they can trust you. But there are few hundreds of investors, many of them enrolled on the platform along with our listing, which gave us great confidence.
We've got even more confidence in us, having validation, marketing and an exceptionally reach that week, and we met some great people. As proof, we are now working with Iulian Pădurariu for marketing, better positioning ourselves in the market and adding more value to SanoPass.
SB: What should entrepreneurs interested in equity crowdfunding start with?
AV: Those who are 20-30 years old, think they know very well what crowdfunding means. Still, what you should learn from the beginning is that besides the fact that you need to be very prepared when it comes to numbers and have a very detailed business plan, you also need validation from someone else before going out for equity crowdfunding. That's why it's recommended to get a combination between a VC and equity crowdfunding – before SeedBlink validates you, you need to be validated by someone qualified. If you do not have a validation, I don't necessarily recommend equity crowdfunding.
SB: How did the crowdfunding process took place on Seedblink? How long did it take to collect the amount desired?
AV: The whole process was very fast: we got in touch with the team, we had a meeting in which we discussed the project. They challenged us a lot and that's why we think you need to be well prepared before you have such an interview. And then we were indicated what documents we need to send. It went fast, and we had direct interaction with SeedBlink's founders – we were never shy to call any of them and ask for feedback.
As for the listing – as said earlier, it ended in less than an hour, although it had been allocated 30 days.
SB: How was the success of the Seedblink campaign reflected on the image of Sanopass?
AV: We have become more visible, more people heard about us. What surprised me is that I did not find any negative reviews.
SB: If you were to change places and have money to invest in other start-ups, would you invest through equity crowdfunding?
I would invest through equity crowdfunding, indeed. I know what the process means, so, if someone can deal with all the mechanism and bureaucracy, I would do it with great pleasure. Crowdfunding is a very convenient solution. But if I like a great start-up and would like to get involved in execution or advisory, I would probably go on and invest directly.
SB: Finally, I understand that you left a corporation, and now you have your start-up.
What advice would you give to your former colleagues? Would you advise them to take this step? Is it worth it?
AV: We'll see if it is worth it or not but I evolved a lot during this period., for sure I have learned what it means not to have support, marketing, automation, and how to read contracts. When you are alone and start from zero, using your forces and resources and doing great things, you have greater satisfaction at the end of the day.
AV: We'll see if it is worth it or not. I evolved a lot during this period. I have learned what it means not to have support, marketing, automation, and how to read contracts. When you are alone and start from zero, using your own forces and resources and doing great things, you have greater satisfaction at the end of the day.
I would have been more attentive to my finances before I resigned from the corporation – it was difficult for me in the first months to adjust my expenses. I would have done this exercise a year before and would have studied more about entrepreneurship - success stories, steps, more theory about the start-ups' world.
I stopped working on weekends, and only 8-10 hours a day in the office. I strongly encourage you to work in an office and disassociate the office from “home”.
Another advice: You cannot do two things which require your full time and attention, at once and well. That was why I gave up the job in EdenRed – I did not think it was fair or ethical to get money from a company and put my energy and mind into another. I was sure I will not be productive in either activity.
By Bianca Iulia Simion
PublishedMarch 03, 2021
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