In August of 2020, I had the pleasure of facilitating a discussion on the topic “Mental Health Startups – On the Horizon” with four amazing speakers sitting across India, Malaysia and Singapore. With their mental health solutions being used in diverse geographies from Southeast Asia to the US and the UK, we had a rich discussion on fast-rising opportunities, challenges to be addressed and evolving payment models.
By then, most of the world had already endured months of lock-downs, restricted movements, travel bans, economic downturns, and many had also experienced changes to their livelihoods. Needless to say, mental health was a topic of growing relevance and importance, and we are extremely grateful to the following speakers for their time and generosity to share their insights on all the innovations on the horizon in the space:
- Antoinette Patterson,Co-Founder & CEO, Safe Space
- Azran Osman-Rani,Co-Founder & CEO, Naluri
- Jo Aggarwal,Co-Founder & CEO, Wysa
- Samir Chaïbi,Principal, Insignia Ventures Partners
Through this article, I hope to share key insights gleaned from the session, summarised into these themes:
- Trojan Your Way to Market Entry
- Quantify Evidence to Unlock Monetisation
- Scale Access with Trust
- Break Silos to Break Problems
“Trojan” Your Way to Market Entry
Wrap your solution in a proposition that speaks to your customers’ existing beliefs instead of challenging their beliefs from the onset, let the armies of evidence advance your cause after gates have opened.
For example, Azran shared that when Naluri first started engaging with employers and insurers, they were not concerned about mental health. To get their buy-in, Naluri had to use chronic disease management as the main front for their solution as these diseases, such as diabetes, heart disease and cancer, represented approximately 75% of claims for these customers, and hence the value of reducing cost in that regard was easily understood. Once customers started using their services, they collected data on how improvement in mental health directly impacts physical health – this evidence then drew interest from customers on mental health.
As a variation of this approach, Wysa’s entry point to governments was to create precedence for their use case that minimises resistance for paid services. They had provided free resources for ground workers and professionals struggling to manage mental health needs of patients and could immediately find relief using the solution. Building on “grassroot support” for the free solution, they then turned to building clinical evidence robust enough to convince NHS UK to not only adopt the solution officially but also pay them to deploy their solution at scale. One other tip that Jo shared was that securing a government body that is well recognised (though it was more difficult at first), was critical in paving the way for adoption by other government bodies across borders.
In a similar fashion, Antoinette had also used corporate workshops on burnout where employees had to download and use the Safe Space app to reduce the barrier for adoption employees to try speaking to a therapist when they are experiencing issues.
Quantify Evidence to Unlock Monetisation
Samir shared that the payment challenges for Mental Health are similar to that of preventive care for chronic disease management in some ways. It is hard to get reimbursement and part of that is because the majority of the solutions are not clinically validated. Startups would need to show significant measurable impact before they bring it to payers such as insurers and employers.
Jo recounted that when Wysa first started the payers were not ready and the solution had been primarily B2C. With the vast majority of the users being on the free app and a single-digit percent paying for text-based sessions with their human therapists.
There were a few pivotal realisations as they evolved for monetisation – (1) the need to have clear, clinical evidence for the solution for any systemic adoption from healthcare providers and government agencies to be possible and (2) the ability to demonstrate, track and measure ROI for using the solution is crucial to monetise with insurers and employers.
In the case of the NHS, they had implemented a clinically validated solution with quantified cost savings of at least $300M a year based on referral savings and allowed one-third of patients who did not need further clinical intervention to receive some support for their mental health needs. Clinical validation and robust data to quantify data also enabled Wysa to find traction with Accountable Care Organisations (ACOs) in the US, which are looking to adopt their solution using a value based care model.
In the case of Naluri, Azran said that they are deeply B2B with at least 90% of their revenue driven by insurers and payers. This was possible due to their entry approach as mentioned earlier and their ability to work with these customers to build actuarial models that quantify their benefit.
When asked to share on how Naluri had successfully implemented outcomes-based payment in Southeast Asia, he explained that the initial cohorts started with fee-for-service,while Naluri collected data to ascertain the benchmark for outcomes. This helped payers work out budgeting for subsequent payment to be outcome-based when they did not have a precedence.
Azran added that thereafter, the two main challenges for using an outcomes-based payment model are: (1) payers want a guaranteed cost for achieving a specific outcome regardless of variation in intensity of intervention needed with each individual and; (2) to have enough runway for the time it takes to demonstrate outcome.
For Naluri, studies with randomised controls to quantify clinical outcomes of their solution was also an important part of their path to scale monetisation.
For Safe Space, Antoinette shared they had used B2C as their initial pathway to obtain direct user feedback and demonstrate the efficacy of their solution. Armed with initial traction and data, they then turned to B2B for monetisation to scale their service primarily through brokerage platforms and direct employer engagements.
Scale Access with Trust
According to Jo, it can take Wysa’s AI as little as 15 minutes to deliver a Cognitive Behavioural Therapy (CBT)-based breakthrough with a user, which typically would have taken 3 sessions for a therapist to achieve. This is as users/patients would have spent the first session learning to trust the therapist, the second session getting the therapist to answer their questions,resulting in the third session onwards being when they were open to answering questions from the therapist.
The reason why technology can compress the time needed for outcomes, is that it accelerates the speed of gaining trust with users. This could be due to the perception that as the technology is non-judgmental and users can have a safe conversation when they are not ready to speak to human therapists.
All the speakers had agreed that the ability to gain and maintain trust is paramount for any solution to work in mental health, be it with technology or human intervention. Without trust, users cannot make meaningful progress with your solution. Further to that for Naluri and Wysa, they also hire their therapists in-house and train them to use their technology and analytics in enabling them to manage a much larger caseload compared to a regular therapist – this is partly how they can scale access and manage affordability of their solutions.
Break Silos to Break Problems
The speakers had discussed how mental health is a long haul game and that it does not exist in isolation. Solutions need to engage users in a sustained relationship with proactive support to make a dent on the problems to be solved. This means that to take on these mental health issues, startups have to break silos between domains and services, to look at how they can meet user needs holistically to address their stressors and related physical health issues.
Azran had highlighted that the biggest insights he had gained in Naluri’s journey were the relationships they discovered analysing user data from multiple cohorts on specific mental and physical health markers, respectively. He elaborated that the two largest common links found was between (1) depression and diabetes and (2) hypertension and anxiety. These in-context discoveries had reinforced their belief that mental and physical health needs to be addressed in tandem. Hence, they developed their solution with a multi-disciplinary team that puts users at the centre of the support they provide.
An example that Azran used was that financial problems are a major stressor for mental health issues and a therapist alone cannot address the need for specific, tangible advice in managing this stressor. As such, there is the need to fold multiple disciplines for human-centred solutions for mental health. Antoinette had echoed this view, explaining that Safe Space is now taking an approach to bundle other services such as nutritionists to be part of their solution for user-centric mental health management.
Jo pointed out that a huge gap is also the (dis)continuum between clinical and non-clinical needs. Similar to physical health needs, 90% of the work is done outside of clinical settings, in the natural settings of day-to-day activities. For persons who are assessed to not require or discharged from clinical support, this does not mean that their daily struggles end. In fact, they have to continue to work with these issues everyday. To maintain sustained mental health, it is hence important to break the silo between clinical and non-clinical users for a continuum of support in their journey.
Relating to the topic, Samir had shared as an investor that he steers clear of transactional models as he doesn’t think those solutions would be able to scale meaningful impact. He finds models that follow users through their journey for disease management with mental health support incorporated in their solutions as digital therapeutics companions particularly interesting, citing Omada Health and Pear Therapeutics as examples from the US.
In A Nutshell: Mental Health Startups – On the Horizon
For startups looking to enter the mental health space, if the market is not ready for the problem you are trying to solve, you could do well by finding a “trojan horse” to piggyback on an issue that your potential customers value before you shift their perspective with data-backed evidence.
Quantifying your evidence is key to unlocking monetisation at scale, especially if you are leveraging B2G and B2B models to expand access and revenue. It is also critical if you want to be part of the shift toward value based healthcare and outcome based payment models. If you can build ROI models that resonate with your customers and convince them from the start, great! If you don’t have the resources to do so, build something that goes to consumers and gather data to build evidence across initial cohorts that you can bring to these payers.
There can be no access to mental health solutions without trust, as it is especially sensitive for users to share their information. Technology can be used to accelerate the process of gaining trust and help maintain engagement and affordability as the solution scales.
To break problems in mental health, we need to break the silos in our approach to solutions. This could mean a continuum of engagement that supports users in their life journey that bridges physical and mental health as well as clinical and non-clinical needs.
All in all, as Samir nicely put it, while there are more than 1,000 mental health startups globally so there is some competition for similar solutions but the access issue is so huge that there is plenty of room for existing players and new entrants to rise. We are hopeful to see more opportunities emerge as the world awakens the awareness of mental health in mainstream discourse.
I hope you found useful takeaways from this discussion too! Would love to hear your thoughts on the topic in comments!
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— Hui Hong