As a boy, Cyrus Massoumi ’03 saw firsthand how difficult it can be for a doctor to manage patient appointments — and how that creates a lose/lose scenario for doctors and patients alike. Massoumi's father was a physician, and one of his major frustrations was dealing with the steady stream of appointments that were either missed outright or canceled at the last minute. These not only had an impact on the family's income, but had a deleterious effect on other patients: people who could have benefitted from immediate access to a doctor had no way to learn of sudden openings, and sometimes had to wait days to be seen, even as Massoumi's father coped with unwanted downtime.
“Today, we call this the hidden supply of healthcare,” Massoumi says. “It accounts for up to 25 percent of a doctor’s calendar.” Entrepreneurial insight, however, has now converted a father’s pain point into a son’s business brainstorm. By making the connection between two acute concerns — doctors’ need to maximize efficiency (and income-producing hours) and patients’ need for prompt medical attention — Massoumi saw the opportunity that became ZocDoc. The online service helps patients schedule an appointment that will get them in front of a doctor within 24 hours, which he notes is 18 times faster than the national average.
“By resurfacing these timeslots that would otherwise go to waste and making them instantly available online, we’re able to improve a doctor’s efficiency and profitability,” Massoumi says. “With millions of patients searching for their doctors online every day, there’s an undeniable business opportunity for a doctor — both as a means to bring in new patients as well as to cater to the desires of current patients.”
That early experience underscored the importance of soliciting and responding to feedback from the consumers whose participation will be the primary driver of sustained success. “Our number one core value is Patients First — a promise to patients that we’re making their healthcare experience better,” Massoumi says. “We constantly ask patients how we’re doing in that endeavor — and, more specifically, how doctors on our service are doing.”
Not that having an initial vision for a business isn't important: Massoumi says that ZocDoc as it exists today is about 80 percent true to his original strategy, but his success stems primarily from modifying the other 20 percent in response to what the market wants.
One key element of his original strategy was to operate only in New York for the first three years. While that left the fledgling business open to facing copycat competition in other markets, it allowed Massoumi and his team the time they needed to solidify their operations before they took on the challenge of expansion. It also meant that the company wasn't overextended when the global financial crisis struck a year after the launch.
Today, ZocDoc's start-small strategy seems like both a wise move and a distant memory. The company operates nationwide, offering service to 60 percent of the US population via its website and apps for iPhone and Android. Millions of patients use ZocDoc each month, and the company has forged partnerships with independent practices as well as the country’s biggest health systems. It maintains offices in New York, Arizona, and India and employs a staff of more than 600. In August, ZocDoc announced the closing of its latest round of funding, which raised $130 million. Including those investments, the company has achieved a valuation of $1.8 billion, which ranks among the highest for privately held businesses in New York.
That growth has depended, in part, on a core belief that has guided Massoumi and his partners from the company's earliest days. “My co-founders and I have been invested at every level since Day One and we have always operated the business with a great amount of financial discipline,” he says. “I’ve always believed that you should never raise money when you need it. When you rule that option out, the financial choices that you make for the business are more strategic, deliberate, and sound.”
As ZocDoc scales up, Massoumi faces the challenge of hanging on to the virtues of being small. Earlier this year he told Inc. magazine that the Affordable Care Act has been good for healthcare startups because “change is always good for entrepreneurs, because large companies can't innovate as quickly as smaller ones.” He believes that the time his company spent mastering the complexity of the healthcare system in its early days will serve it well, because its slow and steady accretion of expertise regarding the intersection of healthcare and technology creates a barrier to competition.
Massoumi counts his Columbia MBA classmates among his earliest investors and credits the School with helping him to achieve his entrepreneurial goals. “The professional and personal connections that I came away with have been instrumental in my success today,” he says. He has, in turn, become one of the program’s most acclaimed and accomplished graduates.