Discover more from Hard Pivot
Why "Airbnb for Medical Tourism" is a Bad Startup Idea
All startups fail until proven otherwise
Previous post: Pivot Idea: The Airbnb for Medical Tourism ?
Michael Seibel (over email):
I would be careful with consumer products / marketplaces with no clear why now.
If this hasn't been created in the past 10 years — and many have tried — it's safe to assume it's not just the lack of good ideas that has prevented it.
Has something changed that makes this business possible now?
All prior attempts at medical tourism marketplaces failed, pivoted, or achieved modest scale.
Failed: MedBnb, Doctours, Ovally
Talent acqui-hire: Emissary
Pivot to hospital SaaS tooling: MedRepublic/Pulse Protocol, QunoMedical
Their site says they have served 644k patients or 920k patients (not sure which number is accurate).
4k reviews, 970 hospitals, 3400 doctors, and 46 countries.
Dental Departures: 1,721 doctors, 1,090 clinics, 12 countries
Medical Departures: 6,179 dentists 2,146 clinics, in 40 countries
100,000 bookings to date according to their LinkedIn
Not sure how many actual facilitations they’ve done.
Sophie Chung, the CEO of QunoMedical, seems to have perfect founder-market fit.
MD — but only practiced for 2 months.
McKinsey — 5 years
ZocDoc, Direct of Healthcare Strategy — ZocDoc is probably the biggest and most relevant success story in the space.
If she wasn’t able to pull this off, why would I or anyone else be able to?
From the conversations I’ve had and my own reading, these are the reasons why an “Airbnb for Medical Tourism” might be hard to pull off.
Travel and lodging — moving people between countries and then finding them a place to stay.
Medicine/health — lots of edge cases with medication, allergies, complications, with inherent downside risk. Pre and post-operation work + need to find domestic doctor in case of complications.
Cultural and language barriers
Compliance and billing is different in each country.
Hyper-fragmented by home, destination, and medical category.
Hard to imagine one company doing dental, fertility, cosmetics, stem cells, etc.
Even harder to imagine one company doing all those things across US, Mexico, Thailand, India, Europe, etc.
Offline services marketplace are some of the hardest marketplaces to build.
Most prone to disintermediation.
Low frequency and low repeat transactions, which makes it harder to build mindshare, stickiness, and LTV.
Medical tourism trips are planned 3-6 months in advance on average.
Inherently means the learning is slower and the pay-back-period is at least that long.
I gathered this table of data on the most relevant companies in this space.
ZocDoc and Practo (ZocDoc for India) are the biggest medical care marketplaces, and the best success stories to look up to for an “Airbnb for Medical Tourism”. Something that surprises me about ZocDoc is that I feel like it should be bigger and even more well known than it is, given that they raised $375M.
I’ve used ZocDoc only one time when I had acid reflux and heart burn. The doctor gave me advice to stop drinking coffee and eating spicy or acidic foods. It was a 15 minute telemedicine call. It costed $500.
I asked an India healthtech entrepreneur who is also looking into medical tourism about Practo. He said something similar.
Practo f***d it up: they were in pole position to grab a big piece of healthtech, ended up lost & confused.
Still the largest doctor booking platform in the country, generates revenues but nothing mind blowing giving they were first to market.
At least in India, Practo couldn’t make much impact beyond care areas that aren’t life threatening and thus are sort of elective too — say Dental, Derma, OBGyns etc. Other areas doctors weren’t willing to shell out money — they felt Practo was cannibalizing their own patients.
Makes me think that marketplaces might be a poor business model for medical care, in general, even if you can build the category leader in the massive American healthcare market.
That’s a lot of reasons for why this is a hard / bad idea. But there are also reasons for this might be a good idea.
Let’s start by reframing some of the points above from “hard” to “good.”
Hard ~> Good
What makes things hard is also what makes the barrier to entry high for competition. So if a company does succeed, it is that much more defensible, in theory.
Extreme fragmentation is hard to overcome, but solving fragmentation is the point and business of marketplaces.
Getting around disintermediation is hard, but that means if you can do that, you must genuinely provide a lot of value to both parties, and doing more than lead gen and concierge service.
If you are truly able to provide some sort of interoperability and standardization around patient data, billing, and compliance between countries, then that alone is an accomplishment, given that we can barely do that for two doctors in the same city in the US.
Now, let’s take a look at some broad, secular trends of US healthcare that might make me bullish on medical tourism, and healthcare more broadly.
The cost of healthcare continues to outpace inflation. People in the US are still going into bankruptcy and debt from hospital bills, ambulances, and ER visits.
Distrust of healthcare institutions — big pharma, FDA, big insurance, hospitals — continues to increase.
Medicine is increasingly being consumer-driven. One Medical bought by Amazon for $3.9B, Tend Dental raising $300M from folks like Warby Parker. Preventative medicine, wellness, and health as lifestyle choices are trending. Mainstream adoption of wearables like Whoop, Apple Watch, Oura, Garmin. Longevity and biotech startups popping off.
Healthcare spending will increase over the next 2 decades as boomers retire. Healthcare is already 20% of the US’s $20T GDP. It is not a coincidence that some of the best healthcare destinations — Mexico, Costa Rica, Colombia, Thailand — are also warm places where people retire or want to buy real estate.
Medical tourism is actually a fairly mature and uncontroversial thing in Europe (Western Europe → Eastern Europe & Turkey), the Middle East (Dubai, Abu Dabi, Israel), and Asia (Singapore, Thailand, India, Indonesia). The American market still has room to grow, especially given the fact that America has the most expensive healthcare by a wide margin.
Healthcare is recession-proof overall.
Post-pandemic, we’ve seen the rise of the location-flexible laptop class. These people are not fully nomadic, not sedentary, but a third, more complex thing.
These bicoastal elites enjoy apartment-swapping between SF, LA, and NYC.
In January and February, they (we?) go to Mexico City and LATAM. In the summer, they go to Europe, namely Lisbon, Berlin, etc.
The Network State has gotten mindshare, spearheaded by Balaji and crypto people. Charter cities like Praxis and Próspera are making progress. People recognize that the American empire is low-key falling apart, with infrastructure like healthcare, education, cities, transport, and in decline.
Web3: Medical tourism is unfortunately a good use case for crypto (borderless payments) and blockchain (decentralized medical records).
AI: Having been in SF for the past 2 months, what I can say is that no one really has any idea how AI will play out over the next 10 years.
Pretty level-headed people I know here, not even maximalists, acknowledge that AGI, civilizational collapse, and post-scarcity are all possible outcomes.
That said, healthcare and other regulated and real-world industries do not exactly change even when there is 100x better technology. AI has been able to read cancer scans much better than human oncologists for years, but it doesn’t get adopted because that isn’t the only job oncologists do, because of liability and compliance reasons, entrenched interests, etc.
So to be honest I largely like medical tourism right now because I know it’s vertical I could work on for decades, while waiting for the dust to settle on AI.
Thanks for reading. Next week, I will publish a post on What Hasn’t Been Tried in Medical Tourism. Subscribe if you want to get emailed when it drops.
Also, I am organizing a webinar on fertility on Friday, March 17th at 9am Pacific with some fertility founders. DM if you are interested in attending.