Taking the Right Risks

On my last working day of 2020, I recalled an interesting discussion that I had with my friends recently and reflected on myself about what type of person I am and what I want to be. Hope my self-reflection can also be inspiring to some other friends.

Beginning of the story: a startup pitch

One of my best friends Joe (not his real name for privacy purpose) is working on a healthcare marketplace startup. Here’s some basic information about his startup. I found the business very promising and therefore shared the pitch with a couple of friends this week to hear their feedback.

Company Name
TeleCancer (fake name, since the company is still in stealth mode)
HQ Location
Problem Statement
Due to the unbalanced distribution of healthcare resources (mostly talented doctors), many cancer patients in developing countries or underdeveloped regions within certain developed countries are eager to seek a second opinion from the other doctors once these patients get diagnosed with cancer because they do not fully trust the local doctors. It is not surprising that the cancer patients are doing so since they want to seize every opportunity to increase their chance of surviving.

For the rich population, there are some existing solutions – they can either visit the top doctors in the country (e.g. many cancer patients living in the 3rd-tier cities in China go to Beijing or Shanghai to seek a second opinion, see report from China here) or use the premium cross-border healthcare service, which will take care of the patient’s travel plans, hospital appointments, as well as translation (See here and here for examples in China).

However, for the middle-class population, particularly for the cancer patients living in small developing countries, the premium cross-border healthcare service is not affordable or even not available.

On the other side, even some patients can afford the premium service, they might not want to travel due to their poor health condition.
TeleCancer is building a teleconsultation platform that connects the middle-class cancer patients in developing countries and the cancer doctors in the US.

A patient will upload their medical records to the platform. The platform will match the patient to a cancer doctor in the US based on the patient’s primary diagnosis.

The US doctor will provide teleconsultation service to give a second opinion (not a formal treatment plan) to the patient and his/her primary doctor.
Go-to-market Strategy
B2B2C approach

One of the co-founders has deep relationships in a small Asian developing country. He has helped the team to form a partnership with a big local cancer hospital, which has agreed to refer its patients to TeleCancer to seek second opinions.

Once the model has been validated in this Asian market, the team will expand to similar developing countries (e.g. Pakistan, Bangladesh, Nigeria, Egypt, etc.) where the local healthcare resource is relatively poor and there’s a relatively big group of middle-class. For each new market, the team will hire a local BD team to build partnerships with the local cancer hospitals.
Value Proposition
To the target cancer patients: (1) this platform offers an affordable solution to get premium healthcare service; (2) this platform enables these patients to receive premium healthcare service without traveling abroad.

To the partner hospitals/primary doctors: (1) since the patients will anyway seek second opinions from the other doctors, the primary doctors can avoid losing the patients to their competitor hospitals by referring the patients to their partner TeleCancer and therefore retain the patients. (2) the US doctors might be able to share some experiences that can be helpful to the local cancer doctors.

To the US cancer doctors: make extra income after retirement or during their spare time.
Three co-founders.

Co-founder A (owns 50% equity) used to work as an executive in a large US tech firm for 10+ years with rich business experience and strong relationships in his own country (the small Asian country mentioned above).

Co-founder B (owns 30% equity) is an oncology doctor who has deep insights about the doctor community and the benefits that the US doctors can offer.

Co-founder C (owns 20% equity) is a business strategy person working at a large US tech firm with rich BD/go-to-market experience.

Different Ways of Assessment

Here’s the most interesting part. I was very confident that this business would look promising to many people. But surprisingly, people have very different ways of assessing it due to different mindsets.

I shared this idea with my friend Sarah (fake name again for privacy) and her boyfriend James (fake name). Both of them came up with a lot of questions regarding almost every aspect of this business – from the supply side to the demand side, to the execution part of the business.

Here’s a list of questions they asked and how I responded.

Q1. Does the demand really exist? My grandpa was also diagnosed with cancer, but he did not seek a second opinion.
My response: Yes, this demand widely exists. See the news articles here and here.

Result: Unfortunately, Sarah and James were still very skeptical about the existence of this demand and its size.
Q2. How would you measure the value of the teleconsultation service? If it’s not measurable, why would the patients pay for it?
My response: It is true that it is hard to objectively evaluate the value of this type of service since every cancer case varies a lot. However, it does not necessarily mean the service has no value or the patients will not want to pay for it. It also doesn’t matter if people aren’t doing this for effective treatment but for psychological reasons.

Result: Sarah and James were not convinced. They insisted the business model would only make sense if the effectiveness could be proved.
Q3. Do you think all the US cancer doctors will be better than the local doctors? How could you guarantee that you can source enough qualified US doctors to work on this platform?
My response: On average, the US cancer doctors should be doing better than the doctors from the developing countries. The platform will only recruit the right doctors who have decades of experience in the relevant cancer domains. It is not impossible to sign up enough qualified doctors – for example, there are thousands of oncologists in the US, and this is likely easy money for them to make.

Result: Sarah and James were not convinced. They still believe it’s very hard to find enough qualified US doctors.
Q4. How different could the second opinion be? How could you guarantee that the suggestions are implementable in the patient’s home country?
My response: Similar to my response to Q3. The fact that many Chinese cancer patients are traveling to the US for cancer treatment has indicated the big difference among the doctors in these two countries. For the other developing countries, the gap can only be bigger than that between China and the US. To make sure the second opinion would be practical and implementable, the TeleCancer platform will involve the primary doctor and also remind the US doctors about the available resources in the patient’s home country.

Result: Sarah and James were not convinced. They think the US doctors will very likely give some suggestions that are unimplementable.
Q5. How much willingness-to-pay (WTP) would the patients have for this? Could this business ever be profitable?
My response: It is too early to say if the business can or cannot be profitable. However, even in the worst-case-scenario where TeleCancer keeps burning money, it is not a deal-breaker since many large tech firms are still burning money after many years of operation.

Result: Sarah and James were not convinced. They still believe the patients’ WTP will be low due to the value that is difficult to quantify.
Q6. Does this business meet the regulations at all?
My response: Teleconsultation is not a new thing in most countries. However, I agreed that it’s still a grey space that lacks clear and proper regulations. However, people see more value from teleconsultations than the potential downside. People/governments are generally feeling positive about teleconsultation and will be unlikely to ban it. Here are more discussions about the legal framework (or the lack of it) in Europe.

Result: Sarah and James still believe the regulatory risks are very high given the lack of clarity.

Based on their concerns, Sarah and James gave a 0 to 1 (out of 10) to this new business.

However, here’s how I and some of my investor friends assessed this business. We gave the business an entirely different grade – 8 to 9 (out of 10).

The way we are assessing the business is following this framework:

Part 1: FundamentalsAssessment
Demand: does the demand exist?YES. Widely observed. See the examples above.
Supply: does the supply exist?YES. It might take some time to identify and source the best US cancer doctors, but it should not be a big problem or a deal-breaker.
Market Size: is the market potentially big?YES. This demand widely exists in many developing countries due to the huge quality gap of available healthcare resources across different domestic regions and countries. The business model is replicable since it does not require a lot of upfront investment to expand to the 2nd, 3rd, 4th… market.
Competition: is this market crowded/saturated?NO. Most of the existing cross-border healthcare services are targeting the rich population. While the middle-class segment in developing countries has not been tapped.
Regulation: is this business legal?Low legal risk. There could be some legal challenges in certain countries. But overall, given the value of teleconsultation and the already existing teleconsultation practice, the legal risk should be low and manageable.
Part 2: Non-critical QuestionsAssessment
Profitability?Given it is a marketplace that will charge commissions from each consultation, the biggest cost diver will be the customer acquisition cost (CAC) on the patient side. It is possible that the team can maintain the CAC at a reasonable level and make the business profitable.

Need to try and validate during operation.
Patient’s willingness-to-pay or capability-to-pay?This is a question related to profitability. It is hard to predict at this point. But it is possible that the team can manage the cost well and make the business profitable.

Need to try and validate during operation.
Competition from large international healthcare service or equipment providers?They are not targeting the small potatoes (the small developing countries) now. But they can become competitors in the future. However, these large players also have their disadvantages: they usually move slow, and they are not good at developing high-quality consumer products/experiences and acquiring patients cost efficiently.

A potential risk but not a deal-breaker.
Scalability?Given the business model, it is very likely that the model can be copied to similar markets in a moderately easy way – hiring a local BD/partnership team, acquiring patients, done.

Depending on the team’s execution. Need to try and validate during operation.
Part 3: OverallAssessment
UpsideVery attractive – strong demand from many developing countries.
RisksThere are certain challenges (e.g. how to fully align the interests among the patient, the primary doctor, and the US doctor; future regulations). But most of these risks are manageable and should not be a deal-breaker.
Conclusion8-9 out of 10

1. The demand is absolutely there.
2. The supply is there for sure, though it might take some time to acquire the doctors – it’s not something impossible.
3. The upside is very attractive. If the model works in the first market, theoretically it can be copied to many other markets such as Bangladesh, Pakistan, Nigeria, and Egypt, etc. It can be a Pinduoduo for cross-border health service (an affordable version of a premium product/service).
4. The solution could work. The interests of different stakeholders are basically aligned, and the value has been proved by the existing services targeting the rich groups.
5. The team has a first-mover advantage. They already formed a partnership with a cancer hospital in an Asian country and is about to validate the first market, which is the most difficult one. Once the model is validated, the team can raise funding to hire local BD teams in the aforementioned countries to develop partnerships with the local hospitals and start scaling up.


This experience has reminded me of a couple of things.

  1. Never say impossible (early)

    There are many ways of evaluating opportunities. We need to know what are the upsides and what are the risks, but not solely focusing on risks.

    To innovate, to improve, and to change the world, there is never a 100% safe way. If we do not take any risk, there will be no innovation – and we will still suffer from the same problems we have today.

    When it comes to risks, we need to be smart and take the right risks. It is stupid to take all the risks or the unnecessary risks – which is similar to gambling, and it is also not smart to not take any risk. We should know if the risks are manageable and know how to price the risks so that we know if the upside can beat the potential losses.
  2. Do it first

    The biggest learning from my 9-year experience as an architecture student is that: you should do it first – and then you will know where to improve and how to achieve your final goal. For every architectural design that I did, we built tens, if not hundreds, of models (both digital and physical) to verify the idea and iterate.

    I once spent 3 months sitting in front of my desk reading books and thinking about my graduate thesis, but I ended up with nothing after spending the months as I never tried or experimented with anything. My professor Juan Du asked me that “Why not start doing something and get your hands dirty first? You will never come up with a good thesis by sitting there.”

    We will never be 100% prepared for any opportunity. Once we have confirmed that the fundamentals make sense and the risks are manageable, we should start doing but not wait for a “perfect” idea or solution.
  3. Empathy

    Surprisingly, I also realized that being open-minded was somewhat similar to having empathy.

    Over the past 5 years, I met many people who were shocked and thought I was lying because they have never seen what I described to them.

    I told them “many parents in China today are still forcing the daughters to send most of their income back to support the sons (many people in rural China still have a strong preference for boys to girls)”.

    I told them “some parents were forcing their kids to sell drugs in China”.

    I told them “a lot of people in China still do not have a high-school degree and only 3% of the Chinese population went to a college (42% for the US and 45% for Japan)”.

    I told them “many people in LatAm still do not have access to 4G network and favor text-based apps”.

    I told them “many people in Xinjiang do not speak Mandarin Chinese and have very different religious beliefs, and it is reasonable for them to want to build a new nation”.

    I told them “many cancer patients do not have access to high-quality healthcare resources in their poor hometown and always dream of going to Beijing/Shanghai to seek second opinions”.

    I learned about these cases when I met my friends in the Chinese army, when I was traveling to the rural areas in Xinjiang and LatAm, and when I was listening to my close friends about the sad family stories that they never shared before.

    The fact that you never experienced those weird things does not mean these people/things do not exist. To me, being open-minded also means being empathetic to different groups of people and trying to understand their pains (even they might sound unbelievable) and solve their problems.

    Before Pinduoduo became popular in China, no one had noticed that there were a huge group of 800 million to 1 billion poor rural population that was underserved in China. Even after Pinduoduo came out, many people still did not believe it would succeed as the Chinese e-commerce market was already very saturated in 2015. By serving this underserved segment, Pinduoduo grew its monthly active user base to 343.6 million and its GMV to $38.5 billion in 3 years. These underserved population are now spending on average $6 per order on Pinduoduo, while the users from top-tier Chinese cities spend $30 and $60 on Taobao and JD on average respectively. See more about Pinduoduo here.

    The best lesson from Pinduoduo is that, be open-minded and empathetic, and you will find the gold mine when fixing the overlooked problems.

As I grow older, I feel more grateful for having grown up in a lower-middle-class family. This experience has enabled me to be empathetic. Each of the lower-class families may be facing different problems, but I am always happy to listen to them, understand their pains, and try my best to help them.

This is also why I always enjoy traveling to the developing countries in LatAm and Africa. The rich’s worlds may always be similar, while poor people can suffer from different pains (unfairness, lack of access to resources, etc.) for different reasons (e.g. mostly social reasons). With a better understanding of their pains and how the world is being operated in different places, I become more empathetic and more motivated to do something for change.

As I grow older, I also feel more grateful for understanding “never say impossible” and “do it first”. I experienced the benefits of taking the right risks – by moving from Hong Kong to Beijing for a summer internship at the age of 28, by joining an amazing autonomous driving startup for my MBA summer when every classmate went to iBanking/consulting/big corporate firms, by taking a fantastic job that pays much lower than the average post-MBA level but offers a lot of great growth opportunities, and by believing in and helping many amazing founders who are making changes happen.

Hope this self-reflection can be helpful to my friends. Happy holidays!


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  • Fan, I just discovered your website (through LinkedIn), and this was the first article I read. It is a true peak behind the scenes of so many aspects of our society and culture. I really appreciate that you took the time to write this and share it. Thank you…and how is the stealth startup doing? 😉

  • Hey Howard,

    Thanks for the note! I think they’re doing well – they have found some early patient customers through the partner hospital, and they’re trying to build the tech to support the scaling of the business.

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