Starting a company may be the easiest part of running a venture. The challenge is in overcoming the teething troubles.

Arvind Kumar and his friends – V. Ramakrishnan and S. Parthasarathy – will attest that. They also realised that the correct business model, right management and good angel investors make the sailing smooth for a start-up.

The three have been together for a while. They were together in DSQ Software. Later, Arvind and Ramakrishnan moved to iSoft to be part of a core team to build a healthcare platform. Arvind then pursued an MBA from IIM Calcutta. He then joined with Ramakrishnan and Parthasarathy to start Attune Technologies, a healthcare company based on the cloud platform.

Attune's HealthKernel is a Web-based solution for hospitals. It integrates the hospital's departments and branches in different locations. All that the hospitals/branches need are low-end personal computer and Internet connection. Attune takes care of the rest of the IT infrastructure and software. Clients need to pay a monthly fee for the service. Attune annually handles nearly 12.50 lakh patient records.

The start

They started Attune in 2009 with Rs 50 lakh. “We brought in domain knowledge with the advice of a leading city-based cardiologist,” says Mr Arvind Kumar, CEO, Attune Technologies. It took nearly 18 months to develop the product. They visited nearly 200 labs in Chennai to understand their operations. They did not have any product but told the labs that they had software for them. This went for nearly three to four months.

“When we were working in the earlier company, we were part of a 200-member team that spent nearly five years to develop a product, which actually never came in to the market. We were disappointed and did not want to repeat the same mistake in our company,” says Arvind. They had roped in Grace Hospitals and Dr Diagnostic Labs as customers even before they had the product. The promoters had the full backing of their families. Each of them had quit their well-paying jobs.

Challenges

It came as a shock to the promoters when one of the investors, who had committed to give Rs 40 lakh, backed off at the last minute. Attune pays its employees their salary on the seventh of every month. “I called this investor on the sixth to remind him about the payment. He said he may not be able to pay,” recalls Arvind.

The three turned to their friends and relatives to bail them out. The senior management did not take salary for nearly six months but made sure that the employees got their salary on time. This phase lasted for almost six months, in the second half of 2009. “We completely exhausted our money. My sister and Ramki's sister helped us by giving money.”

Despite those trying times, the promoters were firm that they would not close down their venture. They were reminded of what Sourav Ganguly had remarked once when he was captain of the Indian cricket team. In an interview, on India's poor track record, Ganguly had observed “we cannot do worse than this.” Says Arvind, “our situation was almost similar.”

Attune's promoters decided to approach those working in the US and the UK for help. They succeeded and many of their friends and relatives working abroad chipped in and helped them tide over the crisis. The three entrepreneurs had “unshakable faith” the product would work even though it was still early days for the cloud-based model. Despite misgivings in some quarters, they firmly believed that they had chosen the correct model.

Most clients have built in healthcare information technology systems in silos. For instance, there are different systems for scheduling, billing, hospital information, laboratory, radiology. Attune HealthKernel Platform can be deployed in a single general physician clinic to a national hospital information system network. The product is today used in hospitals, labs, imaging centres, day care centres, dialysis centres and clinics.

It offers the service on both private and public cloud and also local cloud (client-based). A client can move to the opex model from capex in this and need not worry about software obsolescence. “We can claim that we are the only cloud-based technology company providing such a system,” says Arvind.

They are bullish on the cloud-based model even though it is tough convincing investors. Attune gets a monthly rental as opposed to a one-time fee of say Rs 10 lakh for a product.

First Break

The first break was with Aarti scans in 2010. Interestingly, they went to sell their products but ended up meeting their first angel investor – Ravindran Govindan. “He was impressed with our product. He asked us why are you guys not big. We said we do not have money. He went back to Singapore and sent Rs 75 lakh from his personal account as part of the first tranche of investment.” Today, says Arvind, Attune is at an inflection point. “We are today not a start-up but in an adolescent stage and moving towards growth. We are going for the next round of funding that will help us grow in the next couple of years.” Attune boasts of the top five diagnostic labs, including Metropolis and MedAll, as its customers.

At Metropolis, Attune's system is the lifeline starting at 6.30 am till the reports are generated. The lab operates 24/7 and throughout the year. Once implemented at Metropolis, the system can annually nearly 10 million samples would be tested and our software will be used to keep the records. The system helps clients track the sample right from the origination.

For instance, if a sample is taken in a village near Madurai, if it is a simple test, it will be done locally. However, for any specialised test, it should go to Mumbai. All these are tracked and stored. Metropolis has around 450 centres and 30,000 affiliates. It is bigger than the national project in Singapore. With MedAll, Attune started nearly 18 months ago. They gave Attune a centre in Puducherry to test the product for six months.

The opportunity is huge. In India, there are nearly 1.40 lakh hospitals and about 70,000 independent labs. Small clients are comfortable moving to public cloud while large players have private cloud.

The promoters now plan to raise $3 million to expand. In the first round in January 2010, they raised $700,000 from various angel investors.

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