Channels Lean Launchpad: Digital Health

UCSF Entrepreneurship Center!October 15, 2013

Abhas Gupta, MD!Mohr Davidow Ventures!

@abhasguptamd

Customer Growth

This Week

Next Week

Who sells your product and where does the sale occur? How does the product get from your company

to your customer?

Recommended Reading

"Selling To The Fortune 500, Government, And Other Lovecraftian Horrors"http://bit.ly/1fvxsb0

"Strategies for Building Marketplaces"http://bit.ly/17pS3FE

BIG IDEA:!Acquisition vs. Distribution

Cus

tom

er

How do you acquire and activate potential customers?

!Next Week’s Focus

Who “makes the sale” and where does it occur?

!This Week’s Focus

Acquisition Channels Distribution Channels

Company Website

Vir

tual

C

hann

els

Phys

ical

C

hann

els

Direct vs. Indirect Channels

Who makes the sale?

Direct You make the sale

Indirect Others make the sale

Web Distribution

Channels

Your CompanyWebsite

E-Commerce SitesApp Platforms

2-step Distributions Aggregators

Social Commerce Flash Sales

Physical Distribution

ChanelsDirect Sales

OEM Distributors

Dealers, Retailers Value Added Resellers

System Integrators

Digital Health Distribution Channels

... and numerous other domain-specific ecosystems

Pop Health Platforms

Cloud EMRs

Wellness Platforms

Benefits Platforms

General Enterprise Platforms

BIG IDEA: Complexity & Channels

Incr

easi

ng M

arke

ting

Com

plex

ity

Web / Telesales

Increasing Solution Complexity

Retail

VARs

Direct Sales

Systems Integrators

TPAs, Payers

Field Sales, Consultants

Payer-Provider Platforms

Walgreens, Best Buy, Wal-Mart, Target

Higher c

omple

xity so

lutions

can

require

higher

value

chann

els

Case Example

Omada Health Website

Direct Sales!!

Wellness Platforms!!

VARs

Direct Sales!!

System Integrators

Omada Health!Digital pre-diabetes intervention

Consumers Providers(Integrated)

Self-Insured Employers

$30$20$15$35

Channel Economics

App Store (Indirect) Sales Example

Direct Sales Example

Choosing indirect vs. direct sales channels depends upon profit margins, volume, customer access, and solution complexity

$10$30$10$15$35

COGS OpEx Sales* Profit Reseller Discount

* Sales is usually categorized under OpEx, along with R&D and G&A costs, but is separated here to illustrate channel selection’s impact on company sales’ costs

For Next Week

What are the distribution channels?

Channel diagram and channel economics

Channels Lean Launchpad: Digital Health

UCSF Entrepreneurship Center!October 15, 2013

Abhas Gupta, MD!Mohr Davidow Ventures!

@abhasguptamd