This is not Hugo Stephenson’s first rodeo. A medical doctor by training, the serial entrepreneur has built a number of businesses from the ground up.
In fact, his success at a company called DrugDev, provides some insights on the buy and build blue-print he has in place at Induction Healthcare PLC (LON:INHC), the AIM med-tech firm.
What he did at DrugDev, with the financial backing of investment giant Invesco, was to consolidate a number of apps popular with doctors involved in drug development to create an enterprise platform adopted by the pharmaceutical industry.
The popularity of a collaboration tool called Investigator Databank was key. “We created a resource that within a year or two managed to get 70-80% of clinical trial doctors on board,” says Stephenson.
It then went out to buy ‘point solutions’ used in the day to day work by medical researchers that could be plugged into that “backbone of users”.
“We bought three companies in that process and demonstrated we were able to both leverage their sales and were able do a reasonable tech integration,” says the Induction chief executive officer (CEO).
In doing so it created a software as a service platform used by the industry, generating significant recurring revenues.
It is this ground-up approach Stephenson is now deploying at Induction.
Here in the UK, its free Induction messaging app for hospital doctors has seen widespread adoption. Around 120,000 health professionals use it, which is “roughly 60-70%” of that particular population.
At the same time, Induction has been buying up ‘point solutions’ to provide services that make doctors’ lives easier.
One of those is an app called MicroGuide, which is a clinical guidelines management platform used by 80% of NHS trusts and has almost 170,000 users.
“We have already seen a significant increase in sales [since it became part of Induction], both in the UK and ex-UK,” says Stephenson.
Then last month it unveiled plans to buy a technology firm called Zesty, in a predominantly paper deal worth more than £12mln at current prices.
It is acquiring a platform that provides an integration layer with a hospital's electronic patient records.
Crucially, it adds utility for the end-user by allowing patients to manage their hospital outpatient appointments, read their administrative and clinical correspondence, attend a video-based consultation and store a personal copy of their clinical record.
Stephenson said the company now has what he calls “the backbone” of the core induction app. So, the plan going forward is to “continue to delight the end-users in UK hospitals”.
His team also intends to expand horizontally to provide the app to professionals working in aged and primary care parts of the health service.
Internationally, Induction will be rolled out in Australia, Canada, and mainland Europe, while a series of premium features have also been added.
“We are shifting from that development phase into sales and acquisition,” Stephenson says.
The Induction chief executive says he expects the business as it stands should get to a “position of cash neutrality” within two years; however, he remains ambitious: “We will continue to look at acquiring. In doing that we would be looking at raising more cash.”
In wrapping up our chat, Stephenson comes back to the important point made at the start of the conversation. The Induction app, he emphasises, is as much about bottom-up engagement with doctors as it is about its messaging capabilities.
“Our focus is on delivering for healthcare professionals tools they want to use. Delivering what they want to use then guarantees that the tools that the enterprise wants them to use will work much, much better,” he concludes.