ZocDoc is a free online service which allows patients to book appointments at doctors and dentists instantly. The company has raised over $90 million in funding since launching in 2007, and today we have the co-founder and CEO of ZocDoc, Cyrus Massoumi, for an interview on The Startup Project.
ZocDoc is clearly a very unique startup – can you share the story behind the company? Where did the idea come from?
In 2007, I boarded a flight from Seattle to New York with a head cold. As the plane was landing, I felt a sharp pain and realized that my eardrum had burst. My father is a doctor and I knew I needed to see an ENT to get the best treatment. I turned to my insurance company’s website and began dialing down the list of doctors, only to find that many of them were no longer accepting new patients, or had no open appointments in the near future. I couldn’t get in to see a doctor for four days and I knew there had to be a better way. After all, I book my travel, make restaurant reservations and even order groceries online – why shouldn’t I be offered the same efficiency in accessing medical care? I approached my colleague at McKinsey, Oliver Kharraz, MD, a doctor himself and an expert on the healthcare industry (now co-founder & COO), and a former colleague from Trilogy Software, Nick Ganju (now co-founder & CTO), and they agreed that this was something we should create. We spent months building it and selling doctors. I even got thrown out of several dentist offices, all of whom are now ZocDoc clients, and we were able to launch at the original TechCrunch 40 conference in September 2007.
Considering the sensitive nature of the industry, customer service must be a major area of focus for ZocDoc – can you shed some light on how the company approaches this area? What advice can you offer to fellow entrepreneurs in this regard?
We are so proud of the level of service we provide to our patients and doctors. In an industry like healthcare, where a minor inconvenience can become a major health issue for a patient, we reach out to patients proactively to solve problems before they happen, and apologize and make it right when a hiccup occurs. We measure our success by our net promoter score – a number that indicates how likely or unlikely a customer is to recommend your product to his or her friends in the future. Our score ranks up there with Amazon and Apple, and we will do whatever it takes to maintain that quality as we grow. The word of mouth generated by the recommendations of our patients has been a huge factor in our ability to grow this rapidly. When you’re starting a company, you often can’t afford to spend money on marketing and advertising at the massive scale it takes to be effective. By investing in your customers’ satisfaction, you’re building a more cost-effective way to spread the word about your brand.
The medical industry is one which – at least on the surface – appears to be comparatively unwelcoming in regards to technological progression. As a company relying on the cooperation of this industry, how did you approach this issue? What steps have you taken to resolve it?
Healthcare represents the largest sector of this country’s GDP, and it’s a highly complex industry with many stakeholders. In order to affect change in such a massive, complicated industry you need to stay laser focused on delivering real value to your core customer – in our case, both the patient and the doctor. Many people have told us along the way that ZocDoc wouldn’t work because doctors aren’t technologically savvy, and are uninterested in investing in the latest technology. We believe that this is a misconception. If you create something that benefits the doctor – in our case, helping them bring in new patients and become more efficient – they see the value in that. Pricing ZocDoc at $250 per month per doctor was a strategic choice on our part as well. Doctors find that the service pays for itself with just 1-2 new patients per month. At the end of the day, doctors are business owners who are paid variably based on the number of patients they see. We help them see more patients, and they have adopted our technology because they understand and value the benefit it delivers.
ZocDoc has rapidly expanded to service 11 cities in the US, as the founder how did you ensure that process was a fluid as possible? How would you advise fellow founders approach this?
We began offering ZocDoc’s service in New York only in 2007, and we stayed here for two years, perfecting the business, developing the product and learning as we grew. We only expanded to Washington DC, our second region, once we felt confident that we had learned enough to be successful. That kind of focus takes real dedication. Many people will tell you that you need to expand geographically right away, or add new products and services before you’ve really figured out your core business. We were able to resist that kind of pressure and I think it’s been a key to our success.
Finally, what advice would you offer to an aspiring entrepreneur looking to jump into the world of startups?
We’ve been fortunate enough to have a world-renowned group of investors and advisors to help us along the way. Vinod Khosla told us that the first 20 people a company hires set the tone for every employee that follows. We’ve taken this to heart, because we believe that a company can’t succeed without an exceptional team. When you’re actively looking to hire as many people as we are, it’s tempting to lower your bar and bring someone on board based solely on a great resume, or strong recommendations. I’m so glad that we’ve been able to resist that pressure and keep our standards as high as they were with our first hires. Hiring the wrong person is far worse than waiting for the right person.
