Healthengine, page-11

@Ace1989,

I am not sure how you are defining "miles ahead":

Size:

• Health-Engine used to be the largest player - the most important metric is number of sites
• 1ST is now larger than HealthEngine (~9,500 sites for 1ST v ~15,000 practitioners for HealthEngine, with a single site having multiple practitioners)
• I expect 1ST Group to be at about 15,000 sites within 12 months

Reputation:

• Reputation is incredibly hard won and incredibly easily lost
• https://www.abc.net.au/news/2018-06-25/healthengine-sharing-patients-information-with-lawyers/9894114
• disallowed/healthcare/very-poor-gp-booking-service-healthengine-sanitises-patient-reviews-20180608-p4zkb6.html
• disallowed/healthcare/healthengine-chief-unreservedly-apologises-for-editing-patient-reviews-20180611-p4zkq8.html
• https://www.healthcareit.com.au/article/healthengine-saga-continues-data-breach-notification-continued-denials-wrongdoing-and

Momentum*:

• 1ST Group hasn't lost a multi-site deal to HealthEngine since HealthEngine funneled hundreds of users' health data to lawyers, and boasted to advertisers it could target users with marketing based on their symptoms and medical conditions...

Addressable Market Size:

• 1ST are strategically choosing to play in the allied healthcare space not the GP market
• In the private practice segment, the allied healthcare space is more than 8x the size of the GP market
• In the GP market, HealthEngine is rapidly losing share to HotDoc and other players
• In the allied healthcare space, 1ST operates primarily with no significant competitors

Innovation:

• 1ST have a full set of complementary products such as EasyCheck-Ins, not offered by HealthEngine
• The fact that Medibank chose 1ST in a competitive tender is testament to its superior capabilities and strict privacy

Reputation is everything in this space. I don't think it will be likely for HealthEngine to be around in 5 years time, given its incredibly high levels of cashburn** and its declining market share. Unfortunately, I suspect HE will be another failed Telstra Investment.

Ultimately, I would much rather have my cash with a growing and undervalued 1ST Group at a ~$25m market cap, than an overvalued and stalling HealthEngine at a $100m+ valuation.... I expect the valuation of 1ST group to continue to climb and overtake HealthEngine in the not too distant future.

Notes:
* Previous discussions with management
** Health Engine made a $15.3 million loss in FY17 (AFR)