In this episode we are deep-diving into the Vietnam startup ecosystem and specifically the healthcare and insurance market in Vietnam with Duc Anh Ngo, the CEO and Founder of Medici, which is a digital healthtech and insurtech startup with footprints and more than 30 provinces in Vietnam. Most recently, they became the first healthtech company in Vietnam to secure an insurance brokerage license from the Ministry of Finance, a new addition to the whole ecosystem they are building around digital health access for Vietnamese people. 

Highlights and Timestamps

1. 00:28 Paulo introduces Duc Anh;
2. 01:42 Opportunity in Vietnam’s healthtech landscape and the origins of Medici; “When we look at China, we see that players like Alihealth, JD health, Ping An Good Doctors bag billions every year providing healthcare services & supplements to customers or PharmEasy, Practo also made strides with rapid growth by connecting millions to quality healthcare service. But there is no such company in Vietnam yet.”
3. 04:23 Vietnam healthcare issues in doctor-to-patient ratio, self-medication, fragmented market data, and insurance under-penetration; 
4. 08:18 Medici’s B2B2C2F model and the story of a Vietnamese employee; “Medici’s ecosystem has fully embraced individual’s and family’s health journey, and accordingly maximizing our CLV.”  
5. 10:53 Building trust is the key to scaling in healthcare; “To scale in healthcare, trust is the key…building trust is challenging, but once we accomplish it, we can create a significant barrier of entry for other competitors.”
6. 13:57 Behind Medici’s first-mover entry into the insurance space as a healthtech company; “Our business launch in the insurance market also leverages the existing synergy in our system. Owning a direct-to-customer distribution, we understand customers’ behaviours, their needs and pains.”
7. 16:08 Value proposition for Medici’s corporate and insurance partners; “Service providers such as insurance companies and pharmaceutical companies see potential in Medici’s large existing distribution network across Vietnam, especially in 2nd and 3rd-tier cities.”
8. 18:16 The role of technology and data in Medici’s ecosystem; “To a health-tech and insurtech start-up, technology is the backbone.”
9. 20:01 Advantages and challenges of being a local Vietnam founder; “Being a Vietnamese founder doing business in our own motherland also gains us significant advantages. The language, the culture, the local connection is in our DNA. Market understanding has really navigated our business strategies and speed up our rapid nation-wide penetration.”
10. 22:11 How Anh brought together a management team of former tech unicorn execs and corporate leaders; “The law of attraction has brought them to me, though it may sound cliché.”
11. 23:36 Vietnam’s healthcare industry and Medici in the next five years; “Five years from now, our foothold will be spreaded across regions and industries, and cover every healthcare and insurance services. Hopefully we can become the next AliHealth and Wedoctor in Vietnam.”
12. 25:34 Rapid Fire Round;

About our guest

Duc Anh Ngo is the CEO and co-founder of Medici, the digital health startup with footprints in more than 30 provinces in Vietnam. Prior to Medici, Duc Anh co-founded and ran his own media company – one of the leading creative media companies in Vietnam. Before that, he had worked closely with drivers and transportation companies on the ground at Grab Vietnam. He completed his MBA at George Washington University under Fulbright Scholarship, granted by the Ministry of Foreign Affairs, United States of America.

Transcript

Paulo: It’s been a privilege for insignia to be partnered with and be working with you on this. So I think all our listeners must be really curious how you decided to start Medici coming off from your previous ventures and working with Grab Vietnam, and deciding to zero in on healthcare, in Vietnam?

Duc Anh: Healthtech remains a primitive market in Vietnam, hence there’s a lot of room left to do big things. When we look at China, we see that players like Alihealth, JD health, Ping An Good Doctors bag billions every year providing healthcare services & supplements to customers or PharmEasy, Practo also made strides with rapid growth by connecting millions to quality healthcare service. But there is no such company in Vietnam yet. 

So late 2019, after I exited my previous startup, which was in the media space, I sat down with my big brother. He is also a serial entrepreneur and co-founder of a tech unicorn in Vietnam. We talked on and on about the start-up landscape then came to the same conclusion: Health-tech would be the future of healthcare and a growth engine for the start-up ecosystem in Vietnam.

My personal experience also shaped my decision about Medici. With my mother being a doctor, healthcare was always easily accessible to me. I took this privilege for granted and believed all people had a similar experience to me. But I soon saw the reality when I joined Grab. When I asked drivers on the ground “What do you fear the most?”

“Being sick”, they said. And why is that such a big problem for these drivers? Well, the drivers are often freelance drivers, families’ breadwinners, coming from rural areas, and they rarely have any type of health insurance. They also rarely receive routine health-checks and only go to the hospital after they have a serious problem. Being sick means they have to skip workdays, have no income for their families, and have huge medical expenses. 

Meanwhile, many people in rural areas, who are scared of going to the hospital, are being trapped by fake news on the internet and resort to buying low-quality drugs & supplements and unwanted insurances.

So me and my mentor, my big brother, decided to start Medici with our goal to use technology to provide affordable and accessible healthcare, health protection, and insurance products to every Vietnamese.

“When we look at China, we see that players like Alihealth, JD health, Ping An Good Doctors bag billions every year providing healthcare services & supplements to customers or PharmEasy, Practo also made strides with rapid growth by connecting millions to quality healthcare service. But there is no such company in Vietnam yet.”

Paulo: It’s really great that you’re able to bring everything together from your past experience and even your own, personal background, with your mom being a doctor and then your experience in Grab talking to all the drivers and then finding out that they have this pain point of not being able to act medical services, health services, even medical insurance. And now that’s exactly the kind of pain point that you’re addressing through Medici. Right. 

And to give our listeners some context, it’s worth mentioning that in 2019, when you started Medici, you didn’t start right away with all of these products and services that you have today. You initially started off in the telemedicine route and worked on an agent network, linking hospitals, clinics and doctors especially to second tier, third tier cities. My question is how did you zero in on that go-to-market of telemedicine, linking the hospitals, clinics and doctors to, sort of an agent? 

Duc Anh: First, we identified the problems within the Vietnamese healthcare industry: Compared to the regional healthcare industry, Vietnam has a long way to go. The average doctor-to-patient ratio is 1:1000, one of the lowest in the region. Healthcare quality also runs inconsistent from rural to urban areas. Therefore, juggling one’s schedule to travel, waiting in a long queue for 45 mins just to have a 1-minute check-up with a doctor in a tier 1 hospital is not a rare case in Vietnam. That’s what drives us to tap into telemedicine, building a 4-tier doctor network from renowned doctors to external doctors, medical assistants, and AI-based doctors, to address patients’ needs with credibility, professionalism, speed and efficiency.

With regards to the drug and supplement market, many people, especially those in 2nd and 3rd-tier cities, would always opt for self-medication rather than doctors’ prescription. Doctor and hospital visiting are always their last resort, used only when their symptoms turn serious. As a result, they may fall victim to inflated prices, unclear product origin, or drug misuse, due to low healthcare literacy. Therefore, we are triggered to roll out Health-Mall, where 100% of customers are educated by influencer doctors, healthcare communities, then consulted by a medical assistant, before they buy our product. We ensure every single product is sold to be the best fit for our consumers, bringing not only medical solutions but also transparency and security.

Thirdly, fragmented market data is also a pain point addressed by the Medici business. The way health records are stored hardly changed, I guess, in the last 30 years. A hard copy in an envelope gets sent to your home address and may become your kids’ drawing paper the next day. In 2nd or 3rd-tier cities, diagnosis is even given by doctors’ verbal words only, not even papers. Therefore, it’s challenging for doctors to access patients’ medical history, for service providers to access insights for market-fit product development. That’s where we jump in. We centralize, analyze and draw insight from every single medical activity of our patients.

Last but not least, Vietnamese are highly financially vulnerable to health and well-being incidents. Low insurance literacy results in a surprisingly low penetration rate, about only 2.7% compared to 3.3% of other emerging markets and 9.6% of advanced markets. Therefore, health & life incidents often cost an arm and a leg, and may take away years of saving of people in low-tier areas. This informs our decision to enter the insurance market, to design and distribute a custom-fit financial cushion to every Vietnamese facing uncertainty.

“Vietnamese are highly financially vulnerable to health and well-being incidents. Low insurance literacy results in surprisingly low penetration rate, about only 2.7% compared to 3.3% of other emerging markets and 9.6% of advanced markets.”

Paulo: Thanks for sharing all those numbers. I think it really illustrates to our listeners the intensity of the problem, especially in the lower-tier cities, which is where Medici really was able to grow its solution. 

And then certainly that online to offline approach or approach, in terms of creating that access to medical services has also birthed into what you guys call the B2B2C2F business model for healthcare in Vietnam, which is quite interesting, cause we’re all familiar with B2B2C, but then you also added this component of reaching out to consumers also creates network effects within the families as well.

So can you illustrate specific scenarios of how Medici impacts the lives of Vietnamese families and how the various aspects of the ecosystem, which you’ve already mentioned, work together. I’m sure listeners would love to hear a specific story. 

Duc Anh: Let me tell you a story about one of our customers, Mr Kien. Mr.Kien is 32 y.o, works as the factory supervisor for a company in Bac Ninh. The company is Medici’s corporate customer, hence he received our annual health screening services. His health data is tracked in our system and followed by our doctors, who would give him frequent periodic telemedicine checkups to ensure his health status. He also gets covered by Medici’s health and accident insurance, paid by his company as a part of their middle-level employee benefit.

Ms. Hoa, Mr. Kien’s wife is 28 y.o, with typical dermatology and gynecological issues. She follows our influencer doctors, joins our health communities and eventually buys our product under the consultation of our medical assistant. Being satisfied with Medici’s products and services, they became the recurring customer of Medici, and in Ms. Hoa’s pregnancy, she continued to use Medici’s supplement and health insurance, introduced by her personal medical assistants. After she gives birth, her kid is followed by our pediatrician until 5 years old, and is provided with suitable Medici’s supplements.

Mr. Kien’s dad, who has diabetes type 2, is also taken care of by Medici’s medical assistant team and uses our supplement, a package bought by Mr.Kien under Medici’s family care special offer for corporate employees.

Zooming out of this story, we can see that Medici’s ecosystem has fully embraced individual’s and family’s health journey, and accordingly maximizing our CLV (Customer LifeTime Value). We want to serve every single Vietnamese family as we have done with Mr.Kien’s family. 

“Medici’s ecosystem has fully embraced individual’s and family’s health journey, and accordingly maximizes our CLV.”

Paulo: Yeah, I think that’s a really great story. A lot to take away from that, actually. Interestingly enough, in the story that you mentioned, the worker was working for one of your corporate customers or partners, and it also impacted the whole family.

So I think that’s really great that you’re not just able to create impact for individual customers, but also their whole family and the larger community as well. That impact has not only been massive for Vietnam but also Medici as a business. So I’d like to congratulate you guys for achieving 100% quarter-on-quarter, top-line growth, and 20% monthly user growth in less than two years since you guys started. With all this fast growth, I’m curious what has been the biggest challenge for the company sustaining or building Medici as an ecosystem? 

Duc Anh: To scale in healthcare, trust is the key. Health is wealth, how can you hand it to those you don’t believe in, right?

However, unluckily, in the Vietnam market, trust is the lost key. Insurance scams, falsified drugs, even self-proclaimed doctors have betrayed our customer’s beliefs and taught them to be skeptical about any private name and new service in the market. And our biggest challenge from day one until now is re-creating ourselves the key of trust to open the door to customers.

Fortunately, I have veteran entrepreneurs as teammates, and their deep market understanding and on-the-ground experience have enabled us to re-educate the market and build a very local-fit distribution channel.

Vietnamese are community-based. When it comes to health issues, they may ask around their trusted circle first, instead of a doctor. Therefore, we have made great efforts to penetrate their trusted circle. We build friendly, wise, professional influencer doctors and supportive health care communities of chronic diseases, general health on social media, and until now have received thousands of engagements every day. We know our efforts paid off when supplement orders via our influencer doctors and online communities finally arrived, and increase tremendously month by month. We also made local community leaders, such as village heads, heads of women’s unions, as our representatives to introduce our products & services such as supplements, insurance to their neighbors.

Moreover, partnership with the Ministry of Information and Communications also consolidates our credibility, especially where the government has strong influence like low-tier cities. In Ninh Binh, Bac Giang and Quang Tri where we are piloting telemedicine with the Ministry of Information and Communications, our penetration rate has risen from 0 to 86%, with 57% active users. Try walking in a village in rural Vietnam and talking about insurance, people will think you are a scammer. But if you do so with a government representative, it would be a whole different story.

Building trust is challenging, but once we accomplish it, we can create a significant barrier of entry for other competitors.

“To scale in healthcare, trust is the key…building trust is challenging, but once we accomplish it, we can create a significant barrier of entry for other competitors.”

Paulo: It’s really important that you mentioned that, right? We’ve been talking about the various aspects of the Medici ecosystem, but I think really that it’s all built on a foundation of trust.

And that trust, as you mentioned, is created through building credibility, and certainly I think that credibility and trust come into play as well as you’ve recently secured the highly competitive insurance broker license from the Vietnam Ministry of Finance. And once again, congratulations on that. Now that you’ve acquired this license, our listeners and I are pretty interested to know and hear from you. What is the thinking behind bringing insurance services into the Medici platform? What are the potential synergies with insurance and Medici’s other services?

Duc Anh: The insurance industry in Vietnam is strictly governed by the Ministry of Finance, with only 21 companies granted the broker license since 1993. The criteria and issuing procedure itself is demanding, requiring 30 different qualifications and at least 1 year to be fully completed. Medici is the first and the only start-up with this license up to now. Therefore, it has increased the competitive barrier between us and other industry players.

The license also legally enables us to perform the full scope of insurance services: from distribution to underwriting & co-developing product and claim management. We can fully support our customers and make the insurance process an undisrupted, convenient journey to ensure their benefits. 

Our business launch in the insurance market also leverages the existing synergy in our system. Owning a direct-to-customer distribution, we understand customers’ behaviors, their needs and pains. This insight will support our insurance product development and distribution, accelerating the business efficiency accordingly. Moreover, our medical system including doctors, clinics, and hospitals can promptly assist our customers in policy consulting, claim management, etc, adding more value to their relationship with Medici.

This broker license is a step further of Medici’s towards being a full-stack healthcare platform,  maximizing CLV and our business resources.

“Our business launch in the insurance market also leverages the existing synergy in our system. Owning a direct-to-customer distribution, we understand customers’ behaviours, their needs and pains.”

Paulo: Insurance has really been a natural progression for you guys or maybe cheat because you already own the distribution consumer. And then you also have a lot of this data, from the e-profiles, then financing these health services makes a lot of sense. Then the second is that you guys are really the first healthtech startup to actually acquire this license, which really provides a strong moat for Medici.

And then I think another moat which you guys have is also partnerships that you have with corporates and insurance providers as well. I’m interested to know what is the value proposition for these corporations? What do you actually tell them that they can benefit from working with you guys? And what is the impact of these corporate partnerships to the distribution of your services? 

Duc Anh: A win-win situation, that’s what bonds us and our partners in a long-term relationship. Service providers such as insurance companies and pharmaceutical companies see potential in Medici’s large existing distribution network across Vietnam, especially in 2nd and 3rd-tier cities. It will cost them a lot to place their footholds into by their own. Moreover, we also own a large corporate customer base with more than 70 big names and SMEs, more than 70,000 employees, and a potential customer pool with high spending power. Last but not least, our partners also value Medici’s customer insights for more effective, market-fit product development. All in all, partnering with Medici will accelerate their nationwide expansion with minimum acquisition cost.

Take DK pharma as an example. Under our partnership, we have co-developed DK Betics Gold, a diabetes supplement derived from herbs and other natural ingredients. Medici built personal branding for the product advisor, Dr. Tran Van On, nurtured the social community around diabetes on social media and has an in-house medical assistant team to directly consult and support the customers. We have driven 100% quarterly growth, with nearly 50% recurring rate for the product.

We invest in every single partnership that we make with our financial, human and technological resources, and it bears fruits for both sides.

“Service providers such as insurance companies and pharmaceutical companies see potential in Medici’s large existing distribution network across Vietnam, especially in 2nd and 3rd-tier cities.”

Paulo: This goes back to that example of that story that you mentioned earlier, where

one of the employees of these corporate partners eventually benefited as well from these services that you offer and provide. And you even co-develop with some of these partners. It’s like telling these corporations that you don’t just benefit in terms of the business sense, but also your employees as well come out healthier through this partnership. So I think that that’s a really great proposition. 

One other aspect that I’d like to cover is also the role of technology and data, so what is the role of technology and data in supporting the growth of Medici’s ecosystem? 

Duc Anh: To a health-tech and insurtech start-up, technology is the backbone.

At the core of our business is customers’ e-health profile, where we drive insights for the customized product development and efficient distribution. For example, if a customer is pregnant, but having pregnancy diabetes, we would suggest special supplements for her that aid the treatment of pregnancy diabetes. After that, our medical assistant will recommend her the most value-for-money health insurance, best covering her check-up and test expenses, since she may have to visit the hospital more than a normal mom-to-be. 

Technology also creates a cross-function connection in our business. All stakeholders can reach out for others easily, from doctor, to patient, and agents to customers. Especially for a nationwide, full-stack, and integrated business like Medici, technology is inevitable to sync everyone and everything.

We also want to offer a data-backed, systematic tool for all stakeholders with technology. Doctors and agents can use tools such as AI-assistant, Medici’s insight hub to build the best approach for their customers, which will significantly boost their efficiency and performance.

“To a health-tech and insurtech start-up, technology is the backbone.”

Paulo: It’s really important that you emphasize that data is really the backbone and the profiles provide the data to underwrite insurance products, to identify what are the needs in terms of the supplements and all these other telemedicine services you provide.

And now we’ve talked a lot about Medici, right? So I think by now our listeners have a pretty clear idea of what Medici does and the impact that you have and what sets you apart from the incumbents and competition as well in Vietnam.

So now having shared a lot about Medici, one of the reasons why I am excited to have you on the show today is because you are a Vietnamese founder. In season one, we had Linh Pham from LOGIN and then in season two we had Huy Nghiem also talking about Vietnam and now season three, now we have you as well to also share your own thoughts or your own perspective on the Vietnam star ecosystem. We would love for you to share what have been the unique challenges as a Vietnamese founder. What advantages do you have? 

When I was talking to a founder previously, he mentioned that the Vietnamese  startup ecosystem was mainly driven initially by a lot of I would say like foreign founders and foreign startups but it’s only more recently that you see local founders coming up like yourself. So what advantages do you also have as a local founder? We would love for you to share those things. 

Duc Anh: Compared to other markets, Vietnam startup entrepreneurs face some disadvantages. The biggest one I think you can see just by comparing the number of unicorns in Vietnam and its number in Singapore and Indonesia. We have less regional and international exposure since big VCs and start-up hubs are based in Singapore or Indonesia, and our market is still behind those. That’s a challenge, but also motivation as a founder to learn more, read more, meet more and build cross-border partnerships with regional VCs and partners, keeping ourselves in pace with the international moves.

On the other side, being a Vietnamese founder doing business in our own motherland also gains us significant advantages. The language, the culture, the local connection is in our DNA. Market understanding has really navigated our business strategies and speed up our rapid nation-wide penetration. After all, Vietnam is still a young market with dynamic growth, and expected to rise even more strongly post Covid-19. We are gaining momentum, and getting ready to ramp up the race.

“Being a Vietnamese founder doing business in our own motherland also gains us significant advantages. The language, the culture, the local connection is in our DNA. Market understanding has really navigated our business strategies and speed up our rapid nation-wide penetration.”

Paulo: Even with the disadvantages that you’ve mentioned, there’s really a lot of merit to local founders coming up, building these ventures, like you are doing with Medici, and some of our other portfolio companies as well, LOGIVAN, and then also Finhay, really moving the ecosystem forward.

So, kudos to you guys, with all your work there and speaking of local startup leaders, coming into the scene, one thing I’d like to mention to the listeners as well, is that a lot of your management team. Are really experienced operators coming from various multinational corporations as well as tech unicorns, from Grab, Sea Group, Chubb Life, Citibank, Vingroup, Vietcombank. So how did you manage to get such an all-star team?

Duc Anh: The law of attraction has brought them to me, though it may sound cliché. 

It is said that if you are obsessed with something, it may become your reality. Almost two years working day and night with Medici, I am obsessed with Medici’s vision of bringing equal healthcare access to every Vietnamese, offering values to all stakeholders on our ecosystems, etc, and never hesitate to voice these ambitions within my circles. 

This circulates around and gradually, Medici’s missing pieces, those of mutual vision, core values, strong will, and diverse experience, come and together as we sail this ship. I don’t have a special approach really, just be passionate, aim high, work hard, and share it with others and you will attract people with similar traits.

“The law of attraction has brought them to me, though it may sound cliché.”

Paulo: I guess it’s easier said than done but you put it simply and succinctly, which is, if you’re passionate about it, then you have the laws of attraction working in your favor. And it has certainly paid off dividends for Medici really having this leadership team, I presume has really helped the company grow to where it is today.

Speaking of sailing the ship moving forward, one thing we love to ask the founder CEOs on our show is, where do you see the industry that you’re in right now, the health tech and insurtech industry in Vietnam moving forward in the next five years? And more importantly, what role would Medici play in this landscape by that time?

Duc Anh: Healthtech industry in Vietnam will sprint in the next five years, after gaining strong momentum during Covid-19. Healthcare is among a few industries that record positive growth amid Covid-19 in Vietnam. As healthcare becomes top spending priority, even among the low-tier and working classes, people are increasingly willing to pay extra for quality, credible healthcare services. Moreover, as Vietnamese grow more tech-savvy, they also became more adaptive to health-tech, such as teleconsultation, e-pharmacy, than the common human touch medical practice. Looking back two years ago when we started, telemedicine sounds uncertain and visionary to even my family members. But now my mom has already mastered giving diagnoses via video call. Can you imagine how the whole industry would transform in the next five years?

Medici would be a one-stop, go-to destination of Vietnamese when it comes to healthcare. Five years from now, our foothold will be spread across regions and industries, and cover every healthcare and insurance services. Hopefully, we can become the next AliHealth and Wedoctor in Vietnam.

“Five years from now, our foothold will be spread across regions and industries, and cover every healthcare and insurance service. Hopefully, we can become the next AliHealth and Wedoctor in Vietnam.”

Rapid Fire Round

Top 3 Skills of a CEO? 

Duc Anh: Number one is working hard. The whole industry is sprinting, if we can’t pace up, we will be left behind. That’s why I work non-stop, prepare myself physically and mentally well, and inspire my team to do the same. 

Secondly, a CEO must have excellent human skills. As a business leader, he or she must be able to communicate, show compassion, inspire and drive his team towards the company’s vision, or else no quantum leap can’t be created.

Last but not least, he/she needs to be a visionary. Working just hard is not enough, only working hard with strategies can change the game. Sometimes we have to sit back and think about the strategy, so that we can adapt well with the situation.

Advice for founders raising their first round? 

Duc Anh: Be passionate and confident. Also, you really have to be able to DO. People only invest in real doers, not a storyteller. Show them your ability to get things done. 

We’ve all been students once (and always are arguably) — most memorable class you’ve been in? 

Duc Anh: In my MBA program at George Washington University in D.C, under Fulbright scholarship, I was really impressed with the “Lean startup” class. My classmates were MBA students who came from diverse backgrounds: politics, healthcare, military of different cultures: Asian, Africa, Latin America and US. You know, that’s D.C. We come together to discuss business ideas and run entrepreneurship projects, and their point of view really transforms my mindset in business management.

What do you do to de-stress / take care of your (mental) health? 

Duc Anh: Running and kickboxing. 

Anything else to share with our audience? 

Duc Anh: I want to take this opportunity to thank Insignia. Without Insignia’s support and VCs like Insignia in the region, startups like us won’t be able to make it happen. I am really grateful for you and other VCs in the region to lend support for us.

Also, your podcast is really helpful. It gave me an insider’s point of view into other regional businesses. When I am held back for some reason, I turn on the podcast and get inspiration from other startups to move forward.