Business Breakdowns
· Matt Reustle
[00:00:00] S0: This is Matt Reustle, and today we are breaking down one of the more impressive B2B media businesses that I've come across and that is Doximity. It's been called the LinkedIn for doctors, and with 80% of doctors on their platform, I think that's a fair categorization. But Jim Jones, partner and analyst at William Blair Asset Management, helped explain exactly how this one works as a business. So Jim gets into the community engine that works around medical professionals and for medical professionals, and yes, there is a social network, but it's the add-ons like the required continued education that doctors can do on platform, script signing, and all of those little tools that make a doctor or medical professional's life much easier. But the revenue engine is advertising, and you can probably imagine why this audience would be so valuable to a certain set of companies. But Jim gets into the nuance of how that spend works, why this is the business model that they've chosen. And I can tell you, when I was in the weeds of Colossus operations, I always looked at B2B media as the most attractive model, and Doximity's story is the perfect example of why. Now, please enjoy this breakdown of Doximity. Alright, Jim, I am excited to have you here to cover Doximity. As I was just telling you before we hit record, it's one that someone near and dear to my heart in terms of this idea of taking a professional community and building a great business around it, and I don't think it's particularly well known to many people walking the streets. To a lesser extent, it might be known to investors, but maybe you could just kick us off with an introduction to how you would describe what Doximity does, who uses it, all those details to paint a picture for the business.
· Jim Jones, Matt Reustle
[00:00:00] S1: Excited to be here. Doximity may not be known by the common person walking around the street, but physicians know who Doximity is. It's a digital workflow platform that is purpose-built for healthcare professionals: doctors, registered nurses, graduating students, nurse practitioners, physician assistants. Those are the people that are on the platform, and they spend a lot of time on the platform. [00:00:00] S0: What are the use cases for them in a day-to-day? Obviously, it's gonna be different for someone still in school versus the doctor or surgeon or whoever might be using it that's in the workforce, but what would be some of the day-to-day use cases for them in terms of how they're using Doximity when they log in? [00:00:00] S1: It started as a LinkedIn for doctors. There was a little social networking, medical referrals, job postings. Over time, they've added a number of technologies that are more in the doctor's workflows. Now it's a platform with capabilities that are similar to DocuSign, Zoom, Slack, a newsfeedlike The New York Times sort of thing, and then increasingly scribe functionality and ChatGPT. We're taking a bunch of household technologies and putting them on the platform. To the investor, it would be like a Bloomberg or a FactSet that you're just on all the time. To the advertiser, it's more like a Facebook because doctors will tell you who they are. "I am a radiologist in Milwaukee." Then advertisers know exactly who they're targeting and can direct to the right place.
· Jim Jones, Matt Reustle
[00:00:00] S1: It started as a LinkedIn for doctors. There was a little social networking, medical referrals, job postings. Over time, they've added a number of technologies that are more in the doctor's workflows. Now it's a platform with capabilities that are similar to DocuSign, Zoom, Slack, a newsfeedlike The New York Times sort of thing, and then increasingly scribe functionality and ChatGPT. We're taking a bunch of household technologies and putting them on the platform. To the investor, it would be like a Bloomberg or a FactSet that you're just on all the time. To the advertiser, it's more like a Facebook because doctors will tell you who they are. "I am a radiologist in Milwaukee." Then advertisers know exactly who they're targeting and can direct to the right place. [00:00:00] S0: In terms of the business model itself, what does it look like in terms of subscription revenue? Is it primarily ad-based revenue? How do they approach that? [00:00:00] S1: It's primarily ad-based revenue. The idea is that we wanna have the doctors and the medical professionals on the platform as often as possible, giving eyeballs and spending time on the platform, and then big pharma will advertise their drugs to the prescribing doctors. [00:00:00] S0: Makes sense. When you know where the fish are, you can fish in that pond. You mentioned when they launched it was a social network, primarily the LinkedIn for the medical professional. When was that, and what was the storyline for evolving over the years? How much history is there in this business?
· Matt Reustle, Jim Jones
[00:00:00] S0: Makes sense. When you know where the fish are, you can fish in that pond. You mentioned when they launched it was a social network, primarily the LinkedIn for the medical professional. When was that, and what was the storyline for evolving over the years? How much history is there in this business? [00:00:00] S1: The current CEO, Jeff, he's had a previous business, Hippocrates, and Hippocrates helped doctors make decisions about prescriptions and patient safety while on the go, so it was kind of a digital drug reference guide that was founded in the late 1990s as mobile phones were becoming a thing. Eventually went public and then ultimately sold to Athenahealth. He started Doximity in 2010 with a guy named Nate Gross and a woman named Shari Buck, really focused on the intersection of technology and healthcare, and then they went public in 2021. [00:00:00] S0: There's a definite history just in terms of the founder being around this space and probably understanding the pain points. Still somewhat of a youthful business in terms of being founded within the past 15 years and a shorter public lifespan than that. In terms of competition in this space, what exists? Forget about LinkedIn. That's gonna be a different bucket and way more generalist. Do they have other competitors in the medical professional network space?
· Matt Reustle, Jim Jones
[00:00:00] S0: There's a definite history just in terms of the founder being around this space and probably understanding the pain points. Still somewhat of a youthful business in terms of being founded within the past 15 years and a shorter public lifespan than that. In terms of competition in this space, what exists? Forget about LinkedIn. That's gonna be a different bucket and way more generalist. Do they have other competitors in the medical professional network space? [00:00:00] S1: There are competitors. So when you think about how pharma companies are trying to reach doctors, historically it's been banner ads trying to chase doctors as consumers, trying to find them on golf.com or other places. Pharma reps can be viewed as competitors, so pharma reps going into the hospitals and trying to educate the doctors on recent studies or drugs that are coming out. There's a bunch of point solutions. There's telehealth providers and there's newsfeed providers. What Doximity is, is really taking a lot of those point solutions and putting them on a platform so that the hospital or the doctors have one platform and have all the services available to them.
· Jim Jones, Matt Reustle
[00:00:00] S1: There are competitors. So when you think about how pharma companies are trying to reach doctors, historically it's been banner ads trying to chase doctors as consumers, trying to find them on golf.com or other places. Pharma reps can be viewed as competitors, so pharma reps going into the hospitals and trying to educate the doctors on recent studies or drugs that are coming out. There's a bunch of point solutions. There's telehealth providers and there's newsfeed providers. What Doximity is, is really taking a lot of those point solutions and putting them on a platform so that the hospital or the doctors have one platform and have all the services available to them. [00:00:00] S0: When I think about the doctors interacting with who is advertising towards them, but also trying to take in information from the network itself, what does that look like? If I'm a doctor, can I do independent research in terms of new medicine that's out there? Is that something that's offered, and how does that interact with the advertising? Because obviously you always have this balance of the information and what's being fed to you, sponsored content, educational content, all of that. I'd just be curious to hear how they've approached that and found that effective balance.