Oliver Kharraz, MD’s, healthtech startup, Zocdoc, has not only attracted hundreds of millions of dollars in investments, but has become the largest marketplace of its kind.
On the Dealmakers Show Kharraz shared his insights on the framework of a great business, building marketplaces, pricing models, and the key to unlocking becoming an effective CEO for a larger organization. Plus his experiences in selling a company, startup fundraising, sales led versus product led companies, and redesigning your company culture.
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Going Out On Your Own
Oliver Kharraz grew up in Germany, before becoming an exchange student to the US, and catching the entrepreneurial bug.
His mother was German, from an artistic family. Oliver’s father was — a political activist, who was kidnapped and tortured by the secret police. In fact, Kharraz says he has only known his father as having paralyzed arms due to that experience.
This has acted as a constant reminder of his father’s sacrifice and leadership to make the world better, which has driven Oliver to do big things, and have a great impact through his own work. A character trait which he says has helped attract great people to come along on Zocdoc’s mission, to give power to the patient.
His father was a big believer that once you turn 18 years old you should be able to stand on your own two feet, and earn your own money.
So, in college Oliver started his first tech company— a pre-internet company, before the likes of AOL were famous. It was a bootstrapped business that focused on making profits from its cash flow. In fact, it was doing so well that he decided to drop out of school for a while to focus on preparing to sell the company.
After that was complete, he returned to his studies in med school, and then worked as a physician for a few years.
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The Framework For A Successful Startup
Eventually recognizing that he probably sold his first company too cheap, Oliver says he vowed to go at it again, with more knowledge.
This led him to join McKinsey as a consultant to round out and further build his business acumen. He stayed long enough to make junior partner.
During this time he took a deep dive into health care technology, and developed great insight into this industry.
He also began defining the framework of what would make his next startup a great success, and a huge company.
This specifically included:
- Having a great company mission
- Being in a large market
- Having a substantial moat around the business
- Based on contrarian insights, that would provide a headstart in digging out that moat (in the case of Zocdoc, our contrarian insight was that there is a hidden supply of care)
Oliver’s latest company, Zocdoc, has now raised nearly $400M across several rounds of funding.
Storytelling is everything which is something that Oliver Karraz was able to master. Being able to capture the essence of what you are doing in 15 to 20 slides is the key. For a winning deck, take a look at the pitch deck template created by Silicon Valley legend, Peter Thiel (see it here), where the most critical slides are highlighted.
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
While many might think coming from a background of being at McKinsey when going out to hit Sand Hill Road to pitch investors would be a great asset and advantage, Kharraz says it was surprisingly actually more of a hindrance. In fact, after many pitches, turn downs, and no term sheets, he finally learned from one investor that it was the fact that they were consultants that was really getting them turned away.
So, he traded the khakis and buttoned down shirts for jeans and t-shirts. That’s when the term sheets started rolling in. Despite the fact they were trying to raise their first round of equity capital back in the pit of the 2008 financial crisis.
In spite of raising so much capital Kharraz told the Dealmakers Podcast audience that they have continued to be “extremely prudent about how we spend our money and the money we spend,” and have not let money replace critical thinking and ingenuity.
One really important factor in fundraising according to this founder is to “think about what’s the milestone that you want to deliver for the next financing.” Make sure that you really start thinking about this before you even have the prior financing closed. This will help you better position yourself, and know what you can promise, and deliver on.
Oliver Kharraz is currently the CEO of Zocdoc, a healthtech marketplace born out of the need 16 years ago to fix the broken healthcare system. Specifically, Zocdoc helps patients find and book care with the provider who best meets their needs,The company speeds up patients’ access by uncovering the “hidden supply of care,” meaning the 20-30 percent of appointments that become available last minute due to cancellations and rescheduled appointments.
Zocdoc now boasts the largest telehealth service in the country.
Additionally, they have expanded into 200+ medical specialities, with services in every major city. Enabling patients to make around 50M appointments each month, and connections to 12,000+ different insurance plans, and building a sizable team.
The Key To Unlocking Becoming An Effective CEO Of A Larger Organization
While entrepreneurs need to be confident in their own skills and capabilities, Oliver says that he has learned from his board members that in order to really grow a big business you must delegate more, and let others do the work their way.
You may be 20% better than much of your team in many areas, but you’ll never be 20% better than everyone. So, you absolutely must delegate jobs out completely, and accept how they do things.
Listen in to the full podcast episode to find out more, including:
- Pricing and business models
- Building marketplace businesses
- Growing your business through crises
- Redesigning your company culture
- Sales versus product led businesses
- Working in highly regulated industries