CArmel DeAmicis in PandoDaily: “Dr. Gregory Kurio will never forget the time he was called to the ER because a epileptic girl was brought in suffering a cardiac arrest of sorts (HIPAA mandates he doesn’t give out the specific details of the situation). In the briefing, he learned the name of her cardiac physician who he happened to know through the industry. He subsequently called the other doctor and asked him to send over any available information on the patient — latest meds, EKGs, recent checkups, etc.
The scene in the ER was, to be expected, one of chaos, with trainees and respiratory nurses running around grabbing machinery and meds. Crucial seconds were ticking past, and Dr. Kurio quickly realized the fax machine was not the best approach for receiving the records he needed. ER fax machines are often on the opposite of the emergency room, take awhile to print lengthy of records, frequently run out of paper, and aren’t always reliable – not exactly the sort of technology you want when a patient’s life or death hangs in the midst.
Email wasn’t an option either, because HIPAA mandates that sensitive patient files are only sent through secure channels. With precious little time to waste, Dr. Kurio decided to take a chance on a new technology service he had just signed up for — Doximity.
Doximity is a LinkedIn for Doctors of sorts. It has, as one feature, a secure e-fax system that turns faxes into digital messages and sends them to a user’s mobile device. Dr. Kurio gave the other physician his e-fax number, and a little bit of techno-magic happened.
With a third of the nation’s doctors on the platform, today Doximity announced a $54 million Series C from DFJ, T. Rowe Price Associates, Morgan Stanley, and existing investors. The funding news isn’t particularly important, in and of itself, aside from the fact that the company is attracting the attention of private market investors very early in its growth trajectory. But it’s a good opportunity to take a look at Doximity’s business model, how it mirrors the upwards growth of other vertical professional social networks (say that five times fast), and the way it’s transforming our healthcare providers’ jobs.
Doximity works, in many ways, just like LinkedIn. Doctors have profiles with pictures and their resume, and recruiters pay the company to message medical professionals. “If you think it’s hard to find a Ruby developer in San Francisco, try to find an emergency room physician in Indiana,” Doximity CEO Jeff Tangney says. One recruiter’s pain is a smart entrepreneur’s pleasure — a simple, straightforward monetization strategy.
But unlike LinkedIn, Doximity can dive much deeper on meeting doctors’ needs through specialized features like the e-fax system. It’s part of the reason Konstantin Guericke, one of LinkedIn’s “forgotten” co-founders, was attracted to the company and decided to join the board as an advisor. “In some ways, it’s a lot like LinkedIn,” Guericke says, when asked why he decided to help out. “But for me it’s the pleasure of focusing on a more narrow audience and making more of an impact on their life.”
In another such high-impact, specialized feature, doctors can access Doximity’s Google Alerts-like system for academic articles. They can sign up to receive notifications when stories are published about their obscure specialties. That means time-strapped physicians gain a more efficient way to stay up to date on all the latest research and information in their field. You can imagine that might impact the quality of the care they provide.
Lastly, Doximity offers a secure messaging system, allowing doctors to email one another regarding a fellow patient. Such communication is a thorny issue for doctors given HIPPA-related privacy requirements. There are limited ways to legally update say, a primary care physician when a specialist learns one of their patients has colon cancer. It turns into a big game of phone tag to relay what should be relatively straightforward information. Furthermore, leaving voicemails and sending faxes can result in details getting lost in what its an searchable system.
The platform is free for doctors, and it has attracted them quickly join in droves. Doximity co-founder and CEO Jeff Tangney estimates that last year the platform had added 15 to 16 percent of US doctors. But this year, the company claims it’s “on track to have half of US physicians as members by this summer.” Fairly impressive growth rate and market penetration.
With great market penetration comes great power. And dollars. Although the company is only monetizing through recruitment at the moment, the real money to be made with this service is through targeted advertising. Think about how much big pharma and medtech companies would be willing to cough up to to communicate at scale with the doctors who make purchasing decisions. Plus, this is an easy way for them to target industry thought leaders or professionals with certain specialties.
Doximity’s founders’ and investors’ eyes might be seeing dollar signs, but they haven’t rolled anything out yet on the advertising front. They’re wary and want to do so in a way that ads value to all parties while avoiding pissing off medical professionals. When they finally pul lthe trigger, however, it’s has the potential to be a Gold Rush.
Doximity isn’t the only company to have discovered there’s big money to be made in vertical professional social networks. As Pando has written, there’s a big trend in this regard. Spiceworks, the social network for IT professionals which claims to have a third of the world’s IT professionals on the site, just raised $57 million in a round led by none other than Goldman Sachs. Why does the firm have such faith in a free social network for IT pros — seemingly the most mundane and unprofitable of endeavors? Well, just like with doctor and pharma corps, IT companies are willing to shell out big to market their wares directly to such IT pros.
Although the monetization strategies differ from business to business, ResearchGate is building a similar community with a social network of scientists around the world, Edmodo is doing it with educators, GitHub with developers, GrabCAD for mechanical engineers. I’ve argued that such vertical professional social networks are a threat to LinkedIn, stealing business out from under it in large industry swaths. LinkedIn cofounder Konstantin Guericke disagrees.
“I don’t think it’s stealing revenue from them. Would it make sense for LinkedIn to add a profile subset about what insurance someone takes? That would just be clutter,” Guericke says. “It’s more going after an opportunity LinkedIn isn’t well positioned to capitalize on. They could do everything Doximity does, but they’d have to give up something else.”
All businesses come with their own challenges, and Doximity will certainly face its share of them as it scales. It has overcome the initial hurdle of achieving the network effects that come with penetrating the a large segment of the market. Next will come monetizing sensitively and continuing to protecting users — and patients’ — privacy.
There are plenty of data minefields to be had in a sector as closely regulated as healthcare, as fellow medical startup Practice Fusion recently found out. Doximity has to make sure its system for onboarding and verifying new doctors is airtight. The company has already encountered some instances of individuals trying to pose as medical professionals to get access to another’s records — specifically a former lover trying to chase down their ex-spouse’s STI tests. One blowup where the company approves someone they shouldn’t or hackers break into the system, and doctors could lose trust in the safety of the technology….”