Challenge Cup Winner Reliefwatch Uses Mobile Phones to Solve Systemic Stockouts
During a trip to a pharmacy in rural Egypt, Daniel Yu spotted stocked out and expired products lining the shelves—a major problem. Then, he noticed that pharmacy employees all had mobile phones—a potential solution.
Out of this observation, his company Reliefwatch was born.
Reliefwatch is a platform designed specifically for organizations in the developing world to track supplies via mobile phones. This idea—and Yu’s compelling case for his business model—propelled the two-year-old startup to success last month at 1776’s Challenge Festival, where judges named Reliefwatch the Challenge Cup Global Winner in the health category.
Yu’s pitch for Reliefwatch helped him beat out 19 other health entrepreneurs from around the world. On a practical level, it works like this, he told the audience: Reliefwatch works with organizations that run health clinics by sending automated calls to clinic workers to query them about products’ stock levels. The call asks the workers how many bottles of a particular drug or vaccine they have in stock; when the clinic employee keys in the number, that information is stored in a cloud that a supplier can see and hopefully resupply the clinic before the facility runs out.
Reliefwatch isn’t just a nice pitch, either: The idea has really taken off in the developing world. The product is currently being used in Honduras, Nicaragua and Panama in Central America. The company also is in the process of expanding to four more: Uganda, Liberia, Central African Republic and Haiti.
“In very few instances, do we have anybody actually dismiss us, and say, ‘This is stupid,’” Yu says. “I think people recognize the value of what we’re doing. A lot of them didn’t understand how it would implement or really what the benefits were.”
Yet, one person who recognized the company’s potential was investor Jessica Droste Yagan, CEO of Impact Engine, an investment fund that focuses on early-stage tech startups that have products that attempt to solve social issues.
“The idea itself was really appealing because of how simple it was, yet how broadly it could be applied. In the U.S., inventory management is not an issue [since it’s automated],” says Yagan. “(In Africa) because they don’t have electricity or don’t have Internet in many cases, they use basic mobile phones. It really clearly solves that gap.”
Since she started working with Reliefwatch, Yagan has watched the company adapt and change its product.
“From a product perspective, it’s been great to see them … make it better and expand into more markets,” she says. “I think even just Daniel, he has specifically come a long way in terms of being able to appreciate advice and input, what he knows, where he might be wrong and where he might learn more.”
Meanwhile, Josh Middleman, Reliefwatch’s vice president of business development, is very aware of the difficulties facing an organization like his.
“The challenges in the space is that information is so fractured,” he says. “Given the nature of how projects are rewarded and how funding is obtained has caused the industry to create little fiefdoms. And create a system in which information is very difficult to gather and share. The challenge for us is being able to reach the organizations we want to reach or to partner in ways we want to partner. It can be kind of challenging … given how people work together currently.”
Middleman, whose role is to bring in new business, says his approach is three pronged. The first target is non-governmental organizations that work with clinics across the globe. His second target is large consulting firms that work with supply chains. The third and final piece of his approach involves working directly with administrative health officials and organizations that could benefit from what a company like Reliefwatch has to offer.
“It can be challenging to engage organizations in the space around a new innovation,” Middleman says. “They’re just challenges that are not unique to Reliefwatch but that are systemic. We have to, as a player in the space, deal with them like anyone else does.”
Yet, Middleman says working for a startup has its own benefits. He advises others interested in working for or creating startups to make a list of all their assumptions and then cross them off one by one.
“If it’s a startup, you don’t really have a role. You have a task—drive revenue—but at the same time, you have to be thinking more broadly than your own role,” he said. “You have to be thinking, ‘I’m here to make this company a success and (what) are ways in which I can do this, i.e. new ideas or ways to approaches to what we are doing.”
As a result, Middleman says he sees the Reliefwatch team maturing every day.
“We’ve learning very quickly from our mistakes, and being open and receptive from the feedback we get,” Middleman says. “All of those things are the mark of organization that’s maturing as a result of a real desire to grow and learn.”
Yu also realizes how Reliefwatch has changed in the past few years. He credits his company’s improvements to communicating with clients more effectively.
“A lot of our improvements have been, how do we speak the language to these organizations in terms of innovation?” says Yu. “The multinational-NGO space is not known as being particularly innovative. In fact, I would describe them as having a lot of resistance to change and innovation. How you actually communicate, sell, implement a new idea or a process is a very, very tricky thing.”
Of course, Reliefwatch has had help along the way. Yu joined Chicago-based incubator 1871 almost four years ago, and he became involved with 1776 through the regional Challenge Cup competition there last November.
“Being a part of the 1776 community is very valuable since a lot of what we do is focused around organizations in D.C.,” Yu says.
Yu says he made promising connections with companies during Challenge Festival. Those connections look like they could turn into good potential partners and customers in the long run.
“There’s a lot of potential for doors to open up there, as well as to connect more broadly with the global entrepreneurship community, which is what I really appreciate the most about 1776’s Challenge Cup,” he said. “It really did have a global focus.”