This article first appeared in Personal Wealth, The Edge Malaysia Weekly on April 22, 2019 - April 28, 2019

Serial entrepreneur Azran Osman-Rani has spent more than 15 years building brands that provide the mass market with more affordable products and services. These include low-cost airline AirAsia X and video-on-demand service iflix.

Recently, Azran turned his focus to health. He wants better health to be an attainable goal for all and he wants to do this through digital therapeutics.

Health has always been his personal passion, says Azran. About 14 years ago, he was overweight and unhealthy. He had also lost his father and family members to diabetes, cancer and heart disease. Chronic diseases run strongly in his family, he adds.

“I did a DNA analysis on myself several years ago and found that I have the obesity gene, hypertension gene and high-cholesterol gene — basically the all-in-one package. I know that I am not alone. I am a typical Malaysian example,” says Azran.

“We are the most unhealthy nation in Asia. Two-thirds of Malaysian adults are at risk of chronic diseases. Almost half the population is overweight and half the working population have mental health challenges.”

The challenge here is not everyone has the resources or access to the level of care needed to change their lives for the better, he adds. Only a fraction of the population can afford to have a personal coach, a therapist and a personal physician. The majority of Malaysians have to be in long queues and wait months to finally be able to sit down with a specialist to talk about their health and well-being.

While Azran thought that the problem was prevalent, he did not have a solution back then. So, he kept this on the backburner until he visited some former university mates in San Francisco a few years ago.

They were working for a company called Omada Health. It provided online coaching programmes to help everyday Americans prevent chronic health issues such as diabetes using a mix of behavioral science, user design and human interaction.

“If you think about it, they were trying to solve the same problem that we had been trying to over at AirAsia X and iflix, that is, to provide the service to the mass market. When we started iflix, more than 100 investors rejected us because they said we did not stand a chance against Netflix,” says Azran.

“What the investors did not realise was that these were not iflix’s target demographic, they were Netflix’s — those who love sophisticated English-language shows, which they watch on a big flat television screen in the living room with a fibre broadband connection of 100Mbps. That is not how 80% of Malaysians and 90% of Indonesians live. iflix created a product that people could watch on their phone with 3G connection and it provided more locally relevant content. That was how iflix scaled very rapidly.”

This was very similar to Omada Health’s situation, he points out. The company was not trying to serve a specific population, it was trying to make better health more accessible to all. So, he took this as inspiration and tried to validate the idea back home by talking to key industry leaders.

That was when Azran saw the statistics — chronic diseases are an unbridled double-digit growth expenditure. Although many parties have tried to bring costs down via prevention awareness campaigns, none have been significantly successful as the problem does not lie in awareness and education, he says.

“The problem lies in the behaviour gap. When someone gets diagnosed by a doctor and told that he is diabetic, he is told to change his diet, manage his lifestyle, cut down on stress and take medications. But a whopping 74% of these people do not actually follow the advice. When they leave the hospital, there is no one stopping them from returning to their old lifestyles.

“When they are home, there is no one stopping them from lighting another cigarette. Their physicians cannot do anything to prevent them from going out with their friends and hanging out at a mamak stall for supper and sugary drinks.”

To solve this problem, Azran proposed setting up Naluri, a digital therapeutics service that assigns an individual a professional health coach who will check in with him regularly online. It also provides users with structured programmes that are personalised to their emotional, mental and physical needs. The goal is to help users achieve better health outcomes by building the necessary mental resilience to cope with their specific health challenges.

Digital therapeutics is an emerging health discipline that uses technology to augment or even replace active drugs in disease treatment. According to non-profit trade association Digital Therapeutics Alliance, service providers deliver evidence-based therapeutic interventions to patients that are driven by high-quality software programmes to prevent, manage or treat medical disorders or diseases. These are used independently or in concert with medications, devices or other therapies to optimise patient care and health outcomes.

A report released by PwC early this year revealed that investors poured a staggering US$12.5 billion into digital health ventures in 2017 and 2018. This was largely due to the digital therapeutics segment which, when paired with Internet of Things devices, has continued to see tremendous growth. Compared with 2013, this level of investment represents an increase of 230% in funding, says the report.

With the aim of providing psychological help, Naluri started with a team of qualified psychologists who had been trained to deal with the pressures of chronic diseases and lifestyle changes, says Azran. “Most people tend to associate psychologists with clinical mental health disorders such as schizophrenia and bipolar disorder. That is why there is a stigma. If they are diagnosed with cancer or heart disease, they do not think that they need psychological help.

“Actually, they do need it. Their mental health is at risk and there is a very strong correlation between mental and physical health. If they are diagnosed with a chronic disease, they are likely to think about their situation, the possibility of losing their jobs, who will take care of their children or how their life is going to change.

“Even if they are aware that they need psychological help, they are reluctant to get it because it is very uncomfortable for them to go out, meet someone and talk about it. The younger generation is more comfortable doing it online because there is a safe distance.”

Another factor that makes digital sessions better than face-to-face ones is their regularity, he says. Normally, if one were to see a psychologist at a private hospital to lose weight, for example, they would need to attend 16 to 24 sessions worth RM300 each over a span of six months. Because these sessions are so far apart, it is hard for one to make significant progress, he adds.

Naluri, on the other hand, costs less than RM150 a month for unlimited coaching sessions. Its professional team also briefly checks in with users every single day.

While psychologists are good at motivation issues, some users do need very specific health and wellness advice that psychologists cannot help with. Acknowledging this, Azran brought in a team of medical specialists such as cardiologists, oncologists, pediatricians, family medicine specialists, obstetricians and gynaecologists as well as general practitioners.

The Naluri app, meanwhile, comes with features such as a food journal, allowing users to easily track their food intake. Users do not need to count calories as the company’s dietitians will rate their efforts and give them feedback.

Another handy feature is the thought journal, on which users can log their thought patterns and behaviours. Naluri’s coaches will also help users better understand themselves and assist them in coming up with steps to prevent negative recurrences.

As the digital therapeutics concept is still new in Malaysia, it will take time before Naluri sees a significant take-up, says Azran. “It is like trying to sell retirement planning to Malaysians. It is really hard because they prefer to spend now and think later. That is why about 80% of Malaysians do not have enough to retire. It is like an uphill battle.”

That is why the company works closely with insurers and corporate employers — two groups that are very concerned about the rising cost of chronic diseases. For insurers, offering Naluri’s service to its policyholders who have been diagnosed with a chronic disease is a risk mitigation measure. Those intending to purchase insurance who are deemed to be of higher risk could get the opportunity to enjoy lower premiums.

“Actually, a lot of people today are rejected for insurance because by the time they want insurance, they are already overweight, hypertensive and their blood sugar is through the roof. What our insurance partners can do is go through the rejected customers and inform them that it will insure them and give them Naluri,” says Azran.

“If they use Naluri and get healthier, the insurer will provide them with rebates. The healthier they are, the lower their premiums.”

Betting on people

Apart from running Naluri, Azran Osman-Rani is an investor and adviser to a number of technology companies and start-ups, including video-on-demand service iflix (where he was previously its Malaysian CEO and group chief operating officer), financial technology (fintech) remittance company MoneyMatch, cognitive behavioural science firm Cognifyx and shipping and logistics player Yellow Porter.

However, Azran says he is not a portfolio investor and he does not actively look for deals. Instead, he looks for the perfect team to bet on.

“Start-ups are inherently risky. So normally, early-stage venture capitalists would take the portfolio approach. They would invest in more than 30 companies in the hope that two or three will give a good return on investment,” he says.

“That is not how I do it. I do not invest in the business, I invest in founders. I only invest in founders I know well because I know their business plan will change in 6 to 12 months’ time. It is not about the merits of the business, it is about whether I believe these people have the ability to learn, pivot, adapt and grow. That is why I must know them personally.”

Thus, Azran rejects a lot of investment and advisory requests he gets on sites such as LinkedIn. No matter how good a business idea sounds, he will not take the risk of investing in the company if he does not know the founders personally.

For example, Azran met the founders of MoneyMatch when they first came up with the idea for the business. He mentored the team through WatchTower and Friends — the company’s first accelerator. He spent two years mentoring the team and observing how its business model had evolved over the years.

“MoneyMatch’s original idea is nothing like its current business, which is remittance. Back then, the idea was that people do not want to use credit cards overseas because credit card companies charge exorbitant foreign exchange rates. That is why Malaysians will line up for an hour at MidValley Megamall’s currency exchange counters,” says Azran.

“Initially, MoneyMatch wanted to match people who wanted to sell their excess foreign currency with people who wanted to buy it at a rate better than those offered by money changers. Today, its primary business is low-cost cross-border payments.”

The same goes for Yellow Porter, he adds. Azran had worked with the company’s founder Vimal Kumar at both AirAsia X and iflix. That is the reason he believed the start-up would have a high chance of succeeding.

“To me, the relationships matter a lot more than what the investment vehicle is. Also, I think it is best for people to invest in something they know well and have a passion for because they have to prepare for the downside of the investment,” says Azran.

“If they are only investing for the money, they will get very stressed out when things go down. But if the product or investment is something they feel strongly about, they will find the energy to roll up their sleeves and work through the tough periods.”

Although he is currently not looking to make new investments in start-ups, he still actively mentors budding entrepreneurs through accelerator platforms such as WatchTower and Friends, endeavor and Lean In.

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