Leading Change in Emerging Health Markets

About a month and a half ago, I was in Istanbul attending a global private health conference hosted by the International Finance Corporation (IFC) and John Hopkins Medicine International. The event brought together global leaders in the private health industry to have share ideas, knowledge and lessons in the industry. Participants were mainly senior management/CEOs across the health value chain from health service providers to pharmaceutical & medical technology manufacturers to investors in emerging markets. On top of the conference, my team organized a separate panel session for health providers in sub-Saharan Africa.

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I just wanted to share some of my notes and key takeaways from the conference as I was really struck by the discussions of the world’s leading health providers and how it feeds into my work as an investor in emerging markets. Essentially, how I should be looking at the overall market and types of deals I should be focusing on. There were two presentations in particular that I would highly recommend going through, which is Credit Suisse’s Capital Markets Perspective on the healthcare services sector and IFC’s lessons from investing in hospitals.

  • Health is a major driver of GDP growth in OECD countries averaging approximately 7.3% as a percentage of total GDP.
  • There is an upward trend of life science tools and medical equipment providers in terms of performance
  • When comparing trading valuations (EV/EBITDA), EMEA and RoW companies significantly outperform American companies in terms of revenue growth, particularly in Acute Care provision
  • Banks are shrinking their lending portfolios particularly in SSA
  • M&A activity will continue to increase in a fragmented market with private equity playing an important role in sector consolidation
  • Healthcare services are trending from inpatient to outpatient, invasive to non-invasive, and from treatment to prevention
  • The global financial crisis slowed growth rates of companies in IFC’s portfolio, but none experienced a drop in sales – indicating that hospital businesses are resilient but not immune to the global financial crisis
  • IFC’s revenue projections were reasonably close to actual, on average erring 5% lower than actual (which is impressive!)
  • The health market in SSA is an SME market, hence a need for smaller deal sizes, or a consolidation of deals for increased access to financing

Overall, the conference left me feeling uplifted, but also a great sense of urgency in terms of the work that I am trying to do. The conference was IFC’s 5th annual healthcare conference and am already looking forward to the next one.

How are We Standing with the Poor?

“The more someone identifies with a profession or an “accomplishment” such as an award, the less human he will be (in the classical sense). In virtue ethics, the only “excellence” worth attaining is that of “being human”, with all what it entails (honor, courage, service, satisfaction of public & private duties, willingness to face death, etc.); “achievements” are reductions and alienations for lower forms of life.

IN ANCIENT ROME this was a privilege reserved for the patrician class. They were able to engage in professional activities without directly identifying with them: to write books, lead armies, farm land, or transact without being a writer, general, farmer, or merchant, but “a man (*vir* rather than *homo*) who” writes, commands, farms or transacts, as a side activity.

TODAY, as humanity got much, much richer, one would have thought that everyone would have access to the privilege. Instead, I only find it in minimum wage earners who just “make a living” and feel forced to separate their identity from their profession. The higher up in the social ladder, the more people derive their identity from their profession and “achievements”. – Nassim Taleb

When I was with Acumen Fund, we would ask ourselves: How are we standing with the poor? And quite frankly, I wasn’t sure if I even really knew what that meant. For the longest time, I thought it meant putting myself into another person’s perspective, trying to see the world through their eyes and “speak up” for those who didn’t have a voice. And then I came across this posting by Nassim Taleb, who separates out identity and accomplishment and really got me reevaluating my definition. It also made me realize how hard it was, as the higher up the social ladder you are, the harder it is to distinguish between identity and accomplishment, the harder it is to relate.

Standing with the poor is about looking beyond profession. Beyond awards and accomplishments. Beyond first impressions. Standing with the poor is a reminder to oneself to separate the way you look at yourself and others around you; between their accomplishments and identity. Standing with the poor is about understanding self-worth, regardless of what situation/career/social status you are in.

And at the end of the day, it all comes back to valuing human dignity.

Responsibilities of an (Impact) Investor

For the past few months, I have been reflecting a lot on my role as an investor. Business plans and proposals come across my desk and as I shift through them, it really struck me on how large a responsibility investors play in accelerating trends, shaping a community or even country’s economy, but yet how little this responsibility is spoken about in the investing circles. We place so much emphasis on finding the right business, the right management team, the right social impact, that sometimes we get lost in our own capacity to recognize what really is innovative and what truly deserves to be funded. So, from my experiences, here’s what I think an investor’s responsibilities are on top of the typical investment work:

1) Investors need to live in the future. 

This is a point I feel very strongly about. If you’re an investor: VC/PE and particularly if you play in the startup and impact investing work, (as Fred Wilson pointed today in his blog post and what Paul Graham said):  you should live in the future and see what is missing. So well said. I’m currently in an environment (yes, I recognize that I am in Africa – so feel free to shower stereotypes), where I know investors who are still using yahoo mail, internet explorer and Windows 2003 (true story!). Not to say that there are anything wrong with the products, but more so – I think it’s so important to be keeping up with the trends in the world, technology being one of them. How can you expect to identify an investment that is ‘ground-breaking’ if you’re not even following the newest trends in your sector? Taking this a step further, if you are following these global trends vs. local trends, it is then our responsibility to seek out entrepreneurs who can close this gap and further elevate the developing world, or the developing world would forever be playing ‘catch up’.

2) Don’t be a sheep. 

This responsibility is particularly important in the impact investing space. Given that we’re playing in a field that is largely uncharted, risk is high and typically, most investors are unable to size up a new market and end up relying on the opinions of other investors. aka. I’ll invest if someone else will too aka. a sheep. Impact investors say that they are risk tolerant, but few translate this tolerance into signing along the dotted line. A very chicken and egg situation. Hence, I have to constantly push myself to understand what is the right balance of being a market leader but also not be a reckless investor. Balance is key.

3) The need to close and disburse faster

There are a lot of delays that occur in [impact] investing. The courting of investors and [social] entrepreneurs, the dance between finding the right termsheet, the issue of making sure that the social impact actually has an impact, and [insert your traditional delays in investing here]. This is the norm. This is my challenge to investors: recognize that the longer the delay, the bigger the strain on the business/organization. From an entrepreneur perspective, you’re constantly watching your ‘runway’ aka. how much money do I have before I run out, and a delayed closing round and disbursement is to the [social] entrepreneur’s disadvantage as well as to their customers. If we’re really standing with the poor, then deals need to close quicker with clear and simple terms, as the longer the delay, the more people are missing out on potentially experiencing the product/service.

This is by no means supposed to be an exhaustive list of responsibilities, but instead ones that I feel are most important given my experience. As investors, we are in a privileged position to start/continue or end trends. I think it’s time that we started thinking a little harder about where our responsibilities lie.

My Week’s Discoveries: Healthcare & Design

I’ve been spending a lot of time in the healthcare world for obvious reasons, and have been immersing myself with knowledge from all angles. One of the more fascinating angles is the cross section of healthcare and design. Here’s a couple of my favourite findings:

1) Cutting for Stone by Abraham Verghese

It’s been a while since I’ve read a work of fiction and I was highly recommended this book by my Acumen Fund colleagues. I finished this book over the weekend and was so captured by the story, outraged on behalf of the protagonist, delighted by the intensity, and overall overwhelmed at how beautifully written this book was. It’s a story that takes place from Ethiopia to New York, about love, medicine and the intertwining of fate.

We are all fixing what is broken. It is the task of a lifetime. We’ll leave much unfinished for the next generation

– Cutting for Stone, A. Verghese

2) Butaro Hospital in Rwanda 

When you look at East Africa’s healthcare landscape, Rwanda stands out as a medical success. Health indicators have improved on all counts since the genocide, all primarily due to the success of a universal health insurance, where the poorest 25% of Rwandans get free medical care. One of my favourite things about the Rwandan healthcare landscape is a hospital, Butaro hospital that was designed by MASS Design Group The hospital has no hallways, so patients can’t gather in close spaces, and the air in the wards are changed more than 12 times per hour to prevent patients from being infected by other patients – particularly, with multi-drug-resistant TB.

Image taken from: ArchDaily by Iwan Baan

3) Future of healthcare is Social – Fast Company 

I recently was in Tanzania attending and speaking at a mobile health conference organized by USAID and the MInistry of Health of Tanzania. The theme at hand was the increasing technology and mobile penetration that is changing the health landscape in Africa. There are over 500 mhealth projects deployed around the world with the majority of projects (over 30%) being in Africa. I really enjoyed this article by Fast Company on the increasing social nature that comes along with the increased technology presence in healthcare. Also worth reading is another article by Fast Company, on 5 steps to designing a better healthcare system.

4)  Design for trust – UX Magazine 

Good design isn’t beautiful. Good design builds trust. As an investor, when I evaluate healthcare interventions, I look to see how the service accounts for factors that matter to a person’s dignity: they way they are being treated, training of healthcare staff and accessibility of information. This is especially important when dealing with the poor, who are used to being marginalized, and not receiving proper service. The article is more web-based trust, but relevant nevertheless, when thinking about how you interact with a patient. At the end of the day, when receiving medical news, everyone wants information that is “correct, complete and unbiased.”

7) Designing Handwashing – Core77

An older article, but a goodie in addressing one the most fundamental issues in healthcare: Handwashing. A great read in exploring: Movement Design, Muscle memory, movement scripts and fluidity.

Leaning Into Risk

I’ve been in Nairobi for almost three months now and life seems to have taken to me thinking in fragments and bullet points. My mind had been flooded with learnings, lessons, business plans, fragments of news, discussions of development, conflict, life of expats, impact assessments and where to make investments count. It’s hard to segment out the which bullet points are worth sharing but to give some context on the dominant thoughts floating around, here’s a blog post that was published a while back on the Acumen Fund blog on Oct 22nd. A little dated, but still relevant questions.


Originally published on Oct 22, 2012 on the Acumen Fund blog. Republished with permission. 

In the world of impact investing, there is next to no time to rest. There is a sense of urgency to explore the boundaries of this sector and uncover the dynamics of success of a potential investment. In the best cases, you get an investment approved and everything goes as planned according to your initial memo. In the worst cases, you get stuck in the trenches, pre- and post-investment, fighting to make each dollar count.

In this continuous process of exploring boundaries, here’s a couple of lessons I’ve learned and questions that I’m constantly asking myself, which perhaps, you might be too.

Humanizing Market Creation

As I dive in deeper into the healthcare and nutrition sector in East Africa, I was reminded by a colleague of a great video by Seth Godin at last year’s Investor Gathering.

Seth Godin discussing market creation at the 2011 Investor Gathering

The driving questions at hand: how do we humanize market creation? How do we teach people to use products they have never used before? How do we convey the value of our services and products of our portfolio companies?

This is when we aim to have two-way stories—to become part of the fabric of the community and co-create alongside the investor company. Market creation is more than just getting consumers to use our services and products. Good market creation is about teaching and fundamentally changing consumers’ behaviors.

The Unreliable Narrator

I’ve become increasingly distrustful of my internal narrator lately. I’m slowly discovering that impact investment evaluation is skewed heavily towards my inherited prejudices of traditional investments, at the expense of taking into account the social impact. When I stop to contemplate my actions, I find myself wondering whether I am really listening and being objective, or just narrating back to myself what I think I heard.

It’s hard sometimes to fully comprehend the impact of what we evaluate, especially if you have not experienced what it is like on the ground. This distrust means that when we are surging forward in a sector that is fraught with uncertainty and trade-offs, we need to be mindful of the context of the investment.

An Ode to Value

As an impact investor, our role is so much more than just being a transactor of debt or equity to potential investees. We have an opportunity to become an ecosystem builder, and to lead the charge to solve market inefficiencies. My daily challenges are thus: are we creating value pre and post our investments and where do we draw the line of support? How do we value a business that has negative cash flows? How do we encourage organizations to move away from grant reliance? How far do we lean into risk for the sake of value?

Storytelling & Four Shifting Forces

Back in New York, I attended one of the best Creative Mornings sessions, a captivating talk delivered by Jonathan Harris on the storytelling. I’ve blogged before on deconstructing the power of storytelling, and if you’re looking to understand more about this, Jonathan Harris’ projects are absolutely remarkable. They have ranged from documenting an Eskimo whale hunt to capturing human emotion on the interwebs to interviewing Tibetans on happiness. Here’s his Creative Morning talk and my visual notes from that day:


















So my notes couldn’t quite capture the tail bit of his talk (I basically ran out of space!), but essentially, he highlights key trends that he is observing in our evolving world of tech and storytelling:

1) Rise of Social Engineers: Never before has there been such a small subsection of society ( aka. software developers in tech startups who are having a big effect of millions of human through design of software.

2) Urges & Outcomes: All tech extends some preexisting urge. What is the urge within humans that needs to be enhanced?

3) The Ethics of Code: How can we regulate software? Could there be a self-directed ethnics from the creators of software? This ties in back to point 1 on the responsibilities of a social engineer, given their wide-spread influence.

4) Healers & Dealers: Startups are basically falling into two buckets: healers and dealers. Healers: marketplace companies that connect people. e.g. kickstarter. Dealers: Attention economies that take up your finite resource aka. time by convincing people to spend time on their product/sites. e.g. facebook.


All in all, I was very struck after the end of his talk with this question(s): what kind of presence do you want to have in this world? Am I a healer or a dealer? As our world’s language continues to trend towards a technology-based one, how do we position ourselves to become creators once more, instead of just curators of information?

For now, I suppose I am satisfied with being a Healer in the investment world. The bigger picture of all of this, is wondering, as an investor, what trends in society do I want to help accelerate…

Goodbye Vancouver, See you later New York, Hello Nairobi!

2012 has been my year of being in between stories.  A process that involves embracing uncertainty to explore possibility, constant iteration in future plans, packing and repacking my belongings into two luggages, moving between continents and trying to make some sense out the disorientating dance of the familiar and unfamiliar.

In the beginning of the year, I left my job with the intention of beginning a new adventure. It wasn’t an easy decision. It was especially hard as I had grown to deeply respect my company and had mentors at the firm that I still treasure to this day. But there was this nagging little voice inside of me that pushed to me to leap. To be bold and pursue my interests: one that thrives in the intersection of impact investing, design thinking and change.

“Once in a while it really hits people that they don’t have to experience the world in the way they have been told to.” -Alan Keightley

There is a myth of consistency in life stories. People tend to expect a familiar story, a journey that they have heard before and unsurprisingly, we impose this ‘familiar story’ on ourselves. We fail to leap because we believe that our capacity to dream is in accordance to our inherited prejudice of what we have been told/come to expect. When faced with uncertainty, people tend to intuitively, move to find a solution quickly. They tend to rush down a path, usually towards familiarity, at the expense of the insight and engagement that uncertainty can bring. It is in these situations that I am slowly realizing that our courage and faith must be addressed to the dreams we have been afraid to dream, either because they are too difficult, or because it has been too breathtaking to even comprehend how they could possibly exist within our current constraints.

My journey for 2012, has brought me out of Vancouver, to New York, to Malaysia and now to Nairobi, Kenya where I am working everyday to not only “willing to challenge the status quo, but understand the world as it is and have the audacity and moral courage to build the world that could be” – Jacqueline Novogratz.

The work of embracing uncertainty requires the discipline and wisdom to make trade-offs, the best way we can. It is about knowing when to pick up your belongings and leave. When to fight and when to concede. When to listen and when to lead. When to be generous and when to be humble. When to hold your breath and when to breathe through it. When to be adventurous and when to be grounded.

It is these trade-offs, that forces a shift from uncertainty to possibility, from reality to abstract and back again: one of the most fundamental processes by which we unlock our imaginations and open our hearts to new insights. To understand our stories is to embrace uncertainty.

With that, I bid you farewell Vancouver, see you later New York and jambo Nairobi!