Thought Leaders in Mobile and Social: Tom Abshire, Senior VP of Products, Marketing and Member Engagement, Virgin HealthMiles (Part 3)

Sramana Mitra: Let me ask you couple technology questions, since you’re talking about cloud computing. How is this happening architecturally? Are employees from different employers on the same system, or does each employer have its own private social network?

Tom Abshire: It’s a traditional SaaS model, so each employer has its own instance on the same platform. From a Connections and social standpoint, for us, it’s all about giving employers control first and then allowing individual employees to manage. Employers have a choice of using our Connections social networking tools, having a walled garden only for their employees, or opening up their social network to other clients who are interested in using Connections on a more open basis.

SM: Do people choose the walled garden? Do more people choose the open function? How do you see the customer base ramping up?

TA: In the past six months, in terms of most recent client choices, 60% have been give me the walled garden. About another 25% have said, I’m open to sharing experiences with other employers. And about 15% have said that their organization isn’t ready for social networking yet.

SM: What is your business model? How do you charge? Is it per user, per organization size?

TA: It’s primarily on a per participant basis. We only make money when people actually engage as opposed to a [per capita] model, which is traditional to industry. The majority of billing is based on the number of employees who actually use the system.

SM: How many customers do you have?

TA: We have about 150 customers on our system, which represents close to 800,000 employees.

SM: Are these very large companies? What’s your sweet spot?

TA: It ranges. We tend to work with a lot of companies in the 5,000 to 10,000 employee range. But we have a couple of customers with 150,000 or more employees and a number of them with 1,000 to 2,000 employees.

SM: Cool. That’s good. Now, how is it that this is happening inside of Virgin?

TA: I think it goes back to two elements that go back to the core of Sir Richard Branson. First, is his long-term interest in global health issues. From a philanthropic standpoint, he started investing in global health issues back in 1978. AIDS and the AIDS epidemic in Africa were his first areas of focus. But the problem of preventable lifestyle-related diseases is really a global health issue. Here in the States, we’re leading the world in things like obesity, [type 2] diabetes, and coronary disease. But a lot of countries across the world, even countries in South America and Asia are closing the gap quickly, unfortunately. This is another one of those global health issues that’s still emerging and still getting attention. It’s got a huge impact from a longevity and global economic standpoint. The average cost for a family health plan in the U.S. now is $15,000. If these trends continue, leading industries such as technology or finance are going to see somewhere between, on average, 10%, or 15% if they’re highly profitable companies, or 25% of their profits disappear in the next 10 years if we can’t turn this around or raise prices or reduce costs in other places. The other element that Sir Richard is passionate about is finding companies that can do social good. We’re kind of the intersection of his wanting to work on this issue of lifestyle-related diseases and build a profit-making company that has a social impact. Our mission is to build a successful company that actually delivers that social good.

SM: You obviously have a keen eye toward what’s happening in the cloud, mobile, and social world vis-à-vis health care applications. Would you give me some thoughts on what you’re seeing in terms of trends, in terms of interesting applications, interesting ideas, and where you think there are open problems?

TA: I think the key trends that we’re focused on fall into that realm of consumerism. These are decisions that people make. They may not be paying for some of these programs, but they’re definitely paying with their time, their efforts, and their interest. I think treating it not as an education problem but a consumer motivation and engagement problem is one of the trends that’s starting to get some recognition. That’s why I think you see companies like Virgin have been leading the way in game mechanics and social, in the use of incentives to get people to take the right steps they need to take to live more healthful lives.

We find mobile to be perfectly exciting because so many times, the things that we want to do, engage with our friends – from a social standpoint – or track what we’re doing in terms of steps or calories against our goals don’t happen anymore in front of our PC screens. We’ve attempted and have made some great strides in putting the vast majority of the functionalities that we can provide online on the smartphone so people can track; they can engage with their friends and social communities; they can see what challenges are in front of them; they can find out what incentives they’ve earned, all right from their smartphones. We see that ubiquity of access and then a smart consumer application will be one the things that will turn this from being something that’s done outside of us, and to us, into more of an internally motivated, healthy life decision and emotion. That’s what’s going to drive down costs and improve longevity.

This segment is part 3 in the series : Thought Leaders in Mobile and Social: Tom Abshire, Senior VP of Products, Marketing and Member Engagement, Virgin HealthMiles
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