In the news

In exciting news, there was an article on LifeSpring in my favorite Indian newspaper, Mint, which partners with The Wall Street Journal.

In an article that came out yesterday called "How Services Firms in India are using Disruptive Innovation", the reporter writes:

“If price is to be the basis of competition—as it so frequently is in emerging markets—first establish the competitive price and create a rough cost structure. Then work backwards to determine what processes and resources are needed to meet the price requirement. Careful observation of customer needs will allow you to offer unique value tailored to the local market, even at low prices,” wrote Matthew J. Eyring, president of Innosight, a consulting firm started by Christensen, in a Financial Times blog in January.

This is what was done at LifeSpring Hospitals Pvt. Ltd, which tries to bridge the yawning gap between the substandard maternity services offered by underfunded public hospitals on the one hand and expensive ones available in private hospitals on the other.

Anant Kumar, chief executive officer of the Hyderabad-headquartered company, was working at Hindustan Latex Family Planning and Promotion Trust, selling condoms and pills to stop unplanned pregnancies, when he came face to face with “the crumbling government infrastructure” where the supposedly free maternity services could be accessed only after paying “bribes to security guards and nurses”.

Kumar had the business model of low-cost airlines in mind when he sought help from audit and consulting firm KPMG to offer low-cost and high-quality maternity services. The nine LifeSpring Hospitals in Andhra Pradesh charge Rs4,000 for a normal delivery, compared with the Rs6,000 charged by small nursing homes and Rs30,000 by large corporate hospital chains, he says.

Acumen Fund, which invests in businesses that focus on their social impact, has invested $1.9 million (around Rs8 crore today) for a 50% stake in LifeSpring Hospitals. Funding from Acumen and 50% ownership by HLL Lifecare Ltd(formerly Hindustan Latex) has helped the firm grow from its opening in 2005 to nine hospitals today.

For full article, click here.