Vinod Khosla Puts Money in Healthcare Startup ZocDoc

Venture capitalist and Sun Microsystems co-founder Vinod Khosla has backed a New York City-based healthcare startup ZocDoc.

Vinod’s VC outfit Khosla Ventures led ZocDoc’s Series A round, which raised $3 million.

ZocDoc, which went live in September 2007, lets users make online appointments for primary care, dermatology, ophthalmological and dental care in New York City.

The fledgling hopes to add more specialties and locations soon.

ZocDoc plans to use the funding to expand its network of practitioners and lay the foundation for a nationwide rollout.


ZocDoc’s gameplan is to use the Internet to improve patient access to healthcare. Patients are supposed to be able to see real-time availability of doctors in their area, find those that accept their insurance plan and read feedback from real patients.

Haven’t we heard this nonsense before. Hello, anyone remember the early days of the Healtheon/WebMD venture?

ZocDocs claims that patients can book an appointment,  including same-day and next-day appointments, instantly online.

Same-day and next-day appointments with doctors in the U.S.?

With vets, quacks or real doctors. We want to know.

In the usual PR blah-blah-blah, Vinod Khosla blabbered about how ZocDoc was addressing a real need in healthcare and the “Internet has the potential to fundamentally improve access to care, and the company has gained initial traction towards this long-term vision.”

Based in Manhattan, ZocDoc is founded by ZocDoc CFO Cyrus Massoumi, COO Dr.Oliver Kharraz and CTO Nick Ganju (sounds like a desi).

How does ZocDoc make money?

We initially had no clue because the bozos at the PR firm Porter Novelli did not say in the press release and our call to them went to a voice mail.

So we called ZocDoc directly and spoke to marketing manager Trevor Leb, who told us the company makes money by charging a subscription fee to healthcare practitioners to be represented on its Web site. Leb wouldn’t disclose details on the fees except to say that it varies by the medical speciality.

Leb was also evasive on how many medical practitioners had signed up on the ZocDoc Web site. He initially tried the bullshit trick of throwing some number like 90,000 appointments last month.

When we held Leb’s feet to the fire, he told us ZocDoc had several hundred medical practitioners on its roster. Given Leb’s initial evasive replies and the vague several hundred we are skeptical of even this number.

Free for Consumers

ZocDoc’s Leb told us that the healthcare appointment service was completely free for consumers. But consumers have to register to access the service, which has been live for the last 12 months.

When we asked Leb about the number of consumer registrations, he again gave us some gobbledygook nonsensical number of 35,000 users last month. Again when we specifically asked for the number of consumers that have registered for the service, we got no answer. Do you think it’s an embarrassingly low number?

In the next 12-18 months, ZocDoc expects to be in another metropolitan area. Which one? We have no clue and we suspect neither does ZocDoc yet.

Leb referred to an online poll on the Web site and mentioned that Washington DC and San Francisco were high on the poll result.

When does ZocDoc expect to be profitable and how much more money does it need to raise? We asked and got no answer.

Our Verdict on ZocDoc

After watching several Internet healthcare startups in the U.S. for the last 10 years, we think ZocDoc will also fail.

1. The U.S. healthcare system is in near complete collapse. Did you know that 75 million Americans are either uninsured or underinsured? Getting decent medical care in this country is impossible unless you are stinking rich or have a great insurance policy. The number of people with medical insurance is falling every day in the U.S. and thereby reducing ZocDoc’s consumer registrations.

2. Breaking the mindset of patients of picking up the phone for an appointment is not that simple.

3. How do you get the word out to consumers in a big enough way to ensure scale?Â

4. Medical practitioners are squeezed by Health insurance companies, Medicare, Medicaid, high malpractice insurance and patients who can’t/won’t/don’t pay. What is the incentive for medical practitioners to sign up with ZocDoc? If it’s savings alone, is it significant enough to warrant the fees, time and attention? Then, there’s the scale issue. How do you sign up so many medical practitioners quickly so that when a consumer signs up, he sees his preferred doctor on ZocDoc?

5. What about the IT integration with the physicians’ office and the health insurance folks.

6. Initiatives like ZocDoc, Healtheon/WebMD etc are isolated attempts and will flounder unless there’s a national initiative in the U.S. to fix the healthcare disaster. And we don’t see any signs of that happening.

7. Khosla Ventures does not have much experience in the healthcare arena.

8. We’ve never heard of any of the ZocDoc founders before. Yes, that’s a big negative.

We think the challenges are almost insurmountable for a startup like ZocDoc, barring a miracle.

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