Watsi: ‘Giving Back’ through crowd sourcing!
Watsi, one of the fastest growing non-profits in web history, represents the next generation of charities. It connects medical patients in the developing world who can’t afford the medical procedures they need with donors via the web who can donate as little as $5 to total amount of the surgery cost for a patient. While a not-for-profit, the company aims to be 100% financially sustainable through tips and corporate partnerships.
Watsi, one of the fastest growing non-profits in web history, represents the next generation of charities. It connects medical patients in the developing world who can’t afford the medical procedures they need with donors via the web who can donate as little as $5 to total amount of the surgery cost for a patient. While a not-for-profit, the company aims to be 100% financially sustainable through tips and corporate partnerships.
Operating Model
Watsi enables anyone to directly fund life-changing healthcare for people around the world. The way it works is that patients who cannot afford medical treatment, when they visit a partner hospital, are given details about Watsi. The patient can opt to share their story on Watsi after which the hospital creates the patient profile. Once the profile is approved by Watsi, it is posted on the Watsi platform until donors fund the patient’s healthcare. The hospital in critical cases starts the treatment even before the funds are fully raised and Watsi works with the hospitals to ensure the patient receives the required donations. Post the treatment, Watsi transfers funds to the hospital. The hospital submits a post-treatment update of patients to the donors.
Value Creation
The value creation happens to three primary players in the eco-system: patients, donors & hospitals
For the patients, the platform provides them the ability to share their story with the rest of the world. Also, a digital system like Watsi makes the operations more lean and cost efficient leading to higher use of the donations towards the end cause and lesser to support operations.
For the donors, they are able to know who they are making the donation to and for what particular cause which creates a sense of ownership and a higher degree of satisfaction as compared to donating to a charitable organization. As with patients, the donors get a much higher efficient use of their donation as the operations costs / leakages are minimal in a digital platform.
For the hospitals, it means higher patients that they are able to treat and higher revenues.
Value Capture
The source of value capture for Watsi is through optional tips that donors can make to Watsi. The tips are used to support the operational cost of maintaining technology, staff costs etc. 100% of the donations are used directly for the patients’ healthcare and the optional tips are the source of value capture for Watsi.
Opportunities
A platform like Watsi provides huge opportunities to revolutionize the way charitable organizations operate. Watsi makes it possible for the donors to customize their contributions to the causes and individuals they want to direct it to while operating at a much lower cost structure than existing organizations. While healthcare in developing countries is where Watsi started off, the remaining key areas being funded by charitable organizations is where Watsi can move to once they build enough scale in the healthcare business.
Challenges
While the business model presents a great opportunity, it brings some challenges as well. Transparency is a big issue the company will need to handle well. There is a balance between how transparent they want to be vs. how much of patient confidentiality they want to maintain. So far, Watsi has done a phenomenal job with both confidentiality and transparency. Their financial transparency is to the extent that anyone can view the detailed financials of Watsi online (Transparency Document: https://docs.google.com/spreadsheets/d/1tZq47h6jg7NX4ddhTS_H8JFVfLZiDbxwwdQD47_ow64/edit?pli=1#gid=842368430). Another challenge is around the turnaround time needed between posting a profile and receiving the funds. In traditional organizations, they have funds which they can use as they decide to do while with Watsi the challenge around turn-around time needs to be mitigated. One way they are doing this is by having monthly subscriptions which helps them build a fund for emergencies. While this is a challenge it also protects their model by building barriers to entry. As the business scales and they have more donors on the platform the turn-around time will come down organically and builds the direct and indirect networks effects which we have seen in the earlier module.
This sounds like a great platform. This should definitely also operate in the U.S., there are also plenty of people here who cannot afford their medical care. Also, I wonder if people who donate are able to use it as a tax write off?