Beat The GMAT - the MBA Social Network

In the summer of 2007, Cyrus Massoumi was on a cross-country flight to New York for a McKinsey consulting project. He was accustomed to frequent travel, but this trip had become particularly unpleasant. A sinus infection had prevented him from getting any rest, and when the plane landed his eardrum burst. In need of immediate medical care, Massoumi scoured his insurance company’s website and called dozens of New York City practices before finally making an appointment. It took him four days.

Frustrated by this troubling experience, Massoumi approached his McKinsey colleague Oliver Kharraz, a physician who advised clients on electronic health records. “Why can’t you book a doctor as easily as you can book a restaurant?” Massoumi asked. Kharraz’s eyes lit up: “You’re right—we should quit our jobs and start this company!”

Last Monday, five years after he founded ZocDoc, Massoumi visited Harvard Business School for his company’s first official MBA recruiting event. Speaking in front of a packed Aldrich classroom, the CEO highlighted the benefits of working at ZocDoc, but also gave students a glimpse into how he grew his fledgling start-up into a 350-employee company serving 2.1 million patients per month in 34 markets across the United States.

Massoumi and two co-founders started ZocDoc with the simple mission to increase timely access to medical care. In the United States, a patient waits 20 days on average to get a doctor’s appointment. Then, roughly 15% of scheduled appointments are canceled last-minute or become no-shows, increasing the inefficiency of the system. The Affordable Care Act, which will extend health coverage to millions of previously uninsured Americans, will only intensify the battle for appointments.

ZocDoc aims to “reveal a hidden supply of medical appointments” by offering an easy-to-use online booking system that allows patients to search for a doctor by specialty, location, gender, languages spoken, and insurance accepted. Thirty-five different physician specialties are offered and dentists are also in the database. A new feature dubbed “ZocDoc Check-In” enables those with confirmed appointments to fill out and save routine new patient forms prior to visiting the office.

Doctors benefit due to increased efficiency and a higher volume of patients. They also see their patients sooner, leading to better outcomes. ZocDoc is free to the consumer. Doctors pay $300 per month to be listed.

The results speak for themselves: 40% of patients booking through ZocDoc secure an appointment within 24 hours and 60% within three days, and 36% of appointments are made while the doctor’s office is closed. The company has raised $95 million of venture capital from an impressive list of investors including DST Global, Goldman Sachs and Amazon CEO Jeff Bezos.

In 2007, however, the company had many skeptics. A month after launching ZocDoc, only 20 patients—10 of them fakes—had made appointments through the website, a statistic that encouraged The Wall Street Journal to feature the company as proof of another technology bubble. Naysayers abounded: “Do you think you can really disrupt the healthcare ecosystem?”

Massoumi remained persistent. “Many times, as an entrepreneur, you need to be a contrarian,” he said. “Amazon had to prove that people would buy books over the Internet. In our case, we had to prove that people will book doctor’s appointments online.”

To convince doctors to sign up, Massoumi spent six months going door-to-door offering product demos. He personally signed up the company’s first 50 physicians. Three offices kicked him out on the spot (they are now all ZocDoc subscribers).

Massoumi, who has an MBA from Columbia, told the students in attendance that a sales strategy role at ZocDoc will give recent graduates a chance to see firsthand how a tough sale is made, a skill he believes every entrepreneur should possess.

“Knowing what it takes to lead a sales force is a crucial part of being an entrepreneur,” he told the audience. “You’re interacting with senior executives, learning how to close deals. That’s the life blood of business.”

Culture is another one of the company’s major selling points. Crain’s New York has rated ZocDoc one of the best places to work in New York City for three consecutive years. Employees are encouraged to share personal passions during lunch time “show and tells” and Massoumi sits in a cubicle with others in the middle of the office floor. Moreover, the company seeks employees who want to help others and make an impact on the world. That mantra should sound familiar to HBS students.

In large part due to ZocDoc’s culture, Massoumi has great expectations for his company. “I plan for ZocDoc to be the last thing I ever do. I’m probably going to die in a ZocDoc conference room,” he joked.

“It’s our hard-working people that have allowed us to achieve what no one thought was possible,” he continued. “Some businesses today get one billion users on day one, but as we have seen, that often means you can lose one billion users on day two. The cool thing about our business is that there is not one big thing that makes ZocDoc great. It’s the culmination of 1,000 incremental changes over the years.”

Massoumi said that ZocDoc is not solely an appointment system, but a valuable healthcare platform at the entry point between patient and provider. “Healthcare is so massive that we could spend the rest of my natural life and probably many more just innovating and disrupting the industry,” he said.

A student then asked, “How big can ZocDoc be?”

“Let me see, what can I tell you that’s not confidential?” Massoumi said, chuckling. “Really big.”