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Zocdoc CEO Oliver Kharraz came to Wharton to speak at MGMT231, a venture initiation class taught by Patrick Fitzgerald focused on helping student founders working on startup ideas. During the session, Oliver shared more about how he got into the world of startups, how he started Zocdoc and how they grew the marketplace into a billion dollar company. Today, Zocdoc is currently valued at over $2B.
Zocdoc CEO Oliver Kharraz sharing wisdom to aspiring student founders
Growing up
Oliver grew up in Germany where he started his first company in high school. He shared, “It was a pre-internet company and it started out when I was teaching myself to code, and I decided to build an Internet software service business that I sold in 1994.” The proceeds from that sale helped Oliver pay for medical school. After being a practicing doctor for 3 years, Oliver decided that he wanted to go back to the business world.
He shared, “I joined McKinsey to learn about business. But I ended up staying for 7 years in the healthcare practice.” His exposure to various healthcare companies and systems would provide him with the network, expertise and knowledge of the healthcare industry to start Zocdoc later on.
Quitting McKinsey
While all of Oliver’s friends told him not to quit McKinsey, Oliver had discovered an opportunity in healthcare to help doctors and patients through a platform that would maximize a doctor’s time.
He shared, “At the start when I had the idea, all of my friends told me that no doctors would use that platform because if the idea works, somebody would have already done it, along with a host of other reasons related to adoption.” Despite the negative feedback, Oliver knew that there was an opportunity in this space given that patients were taking an average of 3-4 weeks to see a doctor but doctors were only being utilized 60% of the time.
Pursuing Zocdoc
Because of his strong belief in the opportunity, Oliver decided to quit McKinsey in 2007 to pursue the idea for Zocdoc full-time. He shared, “When I quit McKinsey, I was emotionally ready to not have customers for a year. You cannot do something half-heartedly. If it’s actually worthwhile doing, somebody is going to do it with 150% of his or her time. I set a goal for myself and I had a hypothesis to prove and I knew it would take time.”
Subsequently after quitting McKinsey, a few months later, Oliver and the Zocdoc team made it to the final round of the TechCrunch40 (now called TechCrunch Disrupt), which was a huge opportunity for them to launch in front of 800 journalists. So they worked 16 hour days trying to make sure that their website was operational by the time the event came.
First Few Patients
Yet after launching in front of all these journalists, there was not a single patient that booked. Oliver recalls, “The entire first month, we had maybe 5 appointments. 3 of which were entrepreneurs trying to figure out what we were doing and 2 were actual patients. It was a terrible experience.”
Oliver shared the story of one of their first patients who had booked an appointment with a doctor that actually had their office closed that day. What did Oliver do? He raced the patient to the doctor’s office while picking up flowers on the way, waited on the door and apologized for the experience. This is when he realized that building this marketplace was going to be hard and he really had to put all his eggs in one basket and go all in.
Over 6 million patients use Zocdoc today each month!
Building up the Marketplace
Oliver and his team new that it would be hard to build up the marketplace to the point where there was liquidity but he was in acceptance that the marketplace wouldn’t be perfect at the start but they just needed to keep moving until they reached the point of a liquid market.
He shared, “We realized early on that the office manager was a key player in helping us overcome the relative friction of adoption on the doctors side. So I started doing the little things like showing up to every doctor’s office with café latte’s and being the office delivery person. Too many times we think that it’s the actual dollar that makes things move but people are affected by emotional reasons to so you want to be that guy they want to work with.”
Another thing that Oliver and his team did early on to get physicians onboard was reverse engineering the systems of these doctors and finding a way to make it super easy to integrate with Zocdoc. He added, “We assumed the office manager couldn’t do all the work and needed the help of our software solution.”
Scaling the marketplace
After a few months and years of grinding to build the marketplace up, Oliver and team found the right mix of density and specialties of doctors that a city needed to have a good conversion rate. Today, they grow nearly exclusively through word of mouth. He shared, “You just need to get the initial experience right. Once we had that, we had a playbook on how many doctors per city we needed and then we’d send a swat team that would get the market in that city into a state where the marketplace could start driving itself.”
Today, over 6 million patients use Zocdoc every month and the platform has more than 1,800 medical procedures across 50 specialties with doctors paying a repeat flat fee of $3000/year.
Creating Moments of Crisis
Whether it was sprinting through building a functional product for TechCrunch or having to race that first patient to the doctor’s office, Oliver is a big believer in putting yourself in moments of crisis in order to get more done and make progress with your startup. He shared, “It’s really something you want to create since situations where you have a time crunch are one of the best forcing mechanisms at your disposal. There’s nothing more deadly for a startup then saying, let me sit on this a little longer and think about it more. You want to create artificial deadlines that seem completely unreasonable until you meet them.”
Today, Oliver spends most of his time recruiting employees, speaking with clients and managing the team, investors and the overall strategic vision of the company. But he still remembers the nitty gritty of the early days, and knows that this is only the start in his quest to build a generation defining company.
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About the Author: David is a senior at Penn studying Cognitive Science and Computer Science, originally from the Philippines. At Penn, he’s heavily involved in the startup scene as an investment partner at Dorm Room Fund. Currently, he’s working on SkillStackers, the easiest way to scale work using a virtual workforce. Previously, he started a nonprofit organization called YouthHack which has gone on to scale to do programs in over 8 countries in the last 3 years. David enjoys meeting new people and sharing the stories of exceptional entrepreneurs!