Venture Capital: A virtual doctors lounge to open its doors
By JOHN COOK
Social networks — traditionally the domain of the young — are increasingly moving into the professional ranks.
There are social networks for lawyers (Avvo), real estate agents (Active Rain) and marketers (AdGabber).
Now, a Seattle startup wants to create an online community — complete with forums, profiles, messaging and other tools — for the more than 800,000 practicing physicians in the U.S.
IMedExchange, which is launching this month with $2.5 million in angel funding, hopes to create a place where doctors can openly exchange medical advice, business tips and even chat about wine, sports or other personal pursuits. The network is open only to practicing physicians, with Chief Executive Tobin Arthur saying the company hopes to create a virtual version of the doctors lounge at a hospital.
“At the end of the day, physicians want to talk to one another about a whole lot of things, clinical and otherwise,” Arthur said. “And they want to find great content, and they want to do that efficiently, because they are very time-starved.”
The 15-person company already has lined up support from physicians. Taking a page from Sonicare — the Seattle electronic toothbrush maker that expanded its business with the backing of dentists — iMedExchange has tapped doctors to finance the business.
All but two of the 40 angel investors in the company’s $2.5 million financing round are physicians. An additional 225 doctors or so have received a small equity stake in the startup as part of joining the company’s advisory network.
That’s a lot of shareholders to manage for a small, privately held company, but Arthur said the network of physicians already has opened doors and provided valuable product feedback.
“It’s been uncanny how powerful that has been for us,” he said.
IMedExchange faces some tough competition, most notably Sermo. The Cambridge, Mass.-based company, dubbed by some as “MySpace for physicians,” claims more than 65,000 doctors as part of its network. It also scored $26.7 million in venture funding from Legg Mason Capital Management, Allen & Co. and others last fall.
Other online physician communities include RelaxDoc and Within3.
But even though others have a head start, Arthur believes there is enough differentiation with his company’s business model. It plans to make money through advertising. Arthur notes that pharmaceutical companies spent about $1 billion on online advertising last year.
Sermo, on the other hand, doesn’t accept advertising. It makes money by charging a subscription fee to financial institutions, health care companies, government agencies and others that want to post questions to the community.
In development for more than a year, iMedExchange studied how sites such as LinkedIn, Facebook and Craigslist could be applied to physicians.
Clifford Chirls, president of iMedExchange, said the company came up with the idea to treat “physicians as human beings first and physicians second.”
In order to attract users, the company plans to reach out to about one-third of the doctors in the U.S. through direct mail and radio campaigns. The company also hopes that its partners — including financial planning from Abernathy Financial Services and an online job board from PracticeMatch — will help drive adoption.
It hopes to have 25,000 doctors signed up by the end of the year, with a goal of 75,000 by 2010. And because doctors are a lucrative demographic, it expects to reach CPM rates, or the cost per 1,000 ad impressions, of $60 to $100.
Of course, doctors have only so much time in the day. And they are widely known as late adopters of technology.
“Our experience and certainly Sermo’s … have showed that physicians will absolutely embrace new technologies. They are hungry for them,” Arthur said. “That said, they are very busy people, and they are certainly not going to mess around with things that don’t demonstrate some value.”
Proving that to busy doctors is now the next step for iMedExchange.