Business Breakdowns - Doximity: The Hub of Healthcare

Episode 236 | Colossus Podcasts
Host: Matt Russell
Guest: Jim Jones, Partner and Analyst at William Blair Asset Management
Date: December 5, 2025

Overview

This episode dives deep into Doximity, a powerful but lesser-known platform often referred to as the "LinkedIn for doctors." With an astonishing adoption rate—80% of US doctors are members—Doximity has created a sticky, high-value network for healthcare professionals. Host Matt Russell and guest Jim Jones break down Doximity's origins, business model, competitive edge, and growth dynamics, focusing especially on its unique blend of B2B media, digital workflow tools, and dominant ad-based revenue streams.

Key Discussion Points & Insights

What is Doximity? Who Uses It?

• Professional Community Platform:
  • Doximity is described as a purpose-built digital workflow platform for healthcare professionals—physicians, nurses, nurse practitioners, PAs, students, etc.
  • Originally a "LinkedIn for doctors," it now combines elements akin to DocuSign, Zoom, Slack, and even a clinical newsfeed. (04:36–05:25)
• Core Feature Set:
  • Job postings, professional networking, referral systems, medical news aggregation, digital document signing, secure messaging, telehealth, continuing medical education (CME), and increasingly, AI-driven tools for scribing and clinical reference.
  • "We're taking a bunch of household technologies and putting them on the platform." (Jim Jones, 05:25)
  • Provides HIPAA-compliant communication and productivity enhancements specifically tailored for medical needs.

Business Model: How Does Doximity Make Money?

• Advertising Engine:
  • Doximity is primarily an ad-based business. Pharma companies pay to place highly targeted digital ads due to precise user profiles (e.g., "I’m a radiologist in Milwaukee"). (06:30–07:02)
  • The platform’s audience is extremely valuable because of its quality and high engagement.
• Enterprise and Freemium Elements:
  • While doctors can access most tools for free, hospitals may purchase enterprise “Pro” licenses for advanced features. However, this represents a much smaller revenue slice (12:46–13:09).
  • The strategy revolves around maximizing engagement to drive higher ad inventory/prices.

Origin Story & Evolution

• Founder Background:
  • CEO Jeff Tangney previously founded Epocrates—a digital drug reference tool—giving him unique insight into digital healthcare needs.
  • Doximity launched in 2010 and IPO’d in 2021. (07:20–08:00)
• Platform Expansion:
  • Added workflow productivity tools incrementally (digital signing, telehealth, clinical news, CME credits) to become a daily-use “Bloomberg Terminal for doctors”. (10:00–12:07)

Competitive Landscape

• Direct and Indirect Rivals:
  • Competes with fragmented point solutions (telehealth, secure messaging, newsfeeds) and the traditional pharma sales rep model.
  • The value of Doximity lies in combining many point solutions—making it the one-stop workflow hub. (08:30–09:20)
• Persistent Moat:
  • The unified, always-on platform with high engagement and integrated tools creates stickiness—“the moat that keeps point solutions from taking attention.” (Jim Jones, 28:27)

Advertising Trends & Market Dynamics

• Growth Drivers:
  • Pharma industry spends billions annually to reach doctors. Digital advertising is growing at 5–7% per year.
  • Pharma is lagging other industries in digital adoption (~35–40% digital vs. 75% for most sectors), creating a long “runway” for further shift (13:29–14:46).
  • COVID accelerated digital ad adoption; many doctors now prefer digital outreach and limit in-person sales rep visits (15:31–16:15).
• Direct-to-Physician vs. Consumer:
  • Policy changes (e.g., forced lengthier risk disclosures in TV ads) may decrease pharma DTC ad attractiveness, redirecting spend to digital doctor-facing channels (16:50–17:57).

Financials & Margins

• Highly Attractive Metrics:
  • 90% gross margins, 55% EBITDA margins, and comparable operating margins. (20:16)
  • Low incremental costs—new ad inventory doesn’t require significant spend, fueling high operational leverage and growth (20:16–21:09).
• Capital Allocation:
  • ~$900M in net cash; recent strategy includes stock buybacks and acquiring clinical/AI tools to deepen doctor engagement (21:34).

AI: Opportunity and Risk

• AI Offerings:
  • Integrated scribe tools using AI have proven extremely popular—“The Scribe tool makes doctors incredibly happy because they’re not spending their evenings writing reports or putting together charts. The AI can do that for them.” (Jim Jones, 23:03)
  • Acquisitions aim to further enhance clinical reference and scribing capabilities—growing platform engagement (21:34).
• Risk Perspective:
  • Main threat is if a point solution provides a far superior experience for a key workflow (23:03–24:05).
  • Doximity’s strength is “good enough” integration and convenience—not being best-in-class at every single tool.

Growth Upside and Strategic Focus

• Digital Shift & Wallet Share:
  • As the industry migrates advertising budgets to digital, Doximity is positioned to capture share, not just from pharma but potentially from medtech and diagnostics (24:29–26:21).
  • New biotech/pharma entrants are often “digital-first,” adopting Doximity early (24:29).
• Subscription Potential:
  • While ads dominate, modest doctor-facing subscriptions, especially for advanced AI tools, are possible—but management is cautious not to erode doctor engagement (26:47).
• Platform Stickiness Key Risk:
  • Losing sight of doctors’ needs or letting engagement slip could open the door for competitors. Focus must remain on “saving [doctors] time and increasing productivity.” (27:39)

Valuation and Market Perception

• Difficult to Comp:
  • Unique model straddling software, healthcare, and ad-tech; cash flow-based valuation preferred over comparables or price-to-sales alone (29:33–30:43).
  • Market sometimes undervalues Doximity due to perceived “ad-tech” risks; guest argues engagement and unique platform are more durable (31:15).

Notable Quotes & Memorable Moments

• On Doximity’s Value Proposition:

  “Physicians know who Doximity is. It’s a digital workflow platform that is purpose built for healthcare professionals … They spend a lot of time on the platform.”
  —Jim Jones (04:36)

• On Combining Point Solutions:

  “What Doximity is, is really taking a lot of those point solutions and putting them on a platform … so hospitals or doctors have one place and all of the services available.”
  —Jim Jones (08:30)

• On Ad Model Robustness:

  “The idea is we want to have the doctors and medical professionals on the platform as often as possible … then Big Pharma will advertise their drugs to the prescribing doctors.”
  —Jim Jones (06:40)

• On Platform Stickiness and Moat:

  “It's having all the point solutions on one platform that's open all day long that is the moat … If you have a point solution that is just far and away better than anything else, then maybe you do that outside the platform. What Doximity is doing is just trying to be good enough to keep you on there.”
  —Jim Jones (28:27–29:06)

• On Doctor-Centric Focus:

  “The doctor-centric nature of Doximity is not just something they say, it’s something that they do and care a lot about.”
  —Jim Jones (32:44)

• AI’s Immediate Impact:

  “The Scribe tool makes doctors incredibly happy because they’re not spending evenings writing reports … The AI can do that for them.”
  —Jim Jones (23:03)

Timestamps of Key Segments

• [04:36] — What Doximity is and who uses it
• [05:25] — How Doximity fits into a doctor’s daily workflow
• [06:30–06:40] — Doximity’s advertising-driven business model
• [07:20] — Origin story and founder background
• [08:30] — Competitors and the unified platform advantage
• [10:00–12:07] — The shift from networking to a workflow productivity platform
• [13:29] — Macro ad trends and secular digital shift
• [15:31] — Effect of COVID on adoption and pharma ad trends
• [16:50–17:57] — Where ad budget share shift is coming from
• [20:16] — Margin profile: 90% gross, 55% EBITDA
• [21:34] — Capital allocation: cash, buybacks, acquisitions
• [23:03] — AI risk and opportunity: tools, retention, workflow
• [24:29–26:21] — Digital shift as the central growth lever
• [26:47] — The risk/benefit of adding subscriptions
• [27:39–28:10] — Key risks: losing focus on doctors’ needs, platform engagement
• [29:33–31:15] — Valuation approaches in absence of ideal comps
• [32:44] — Key business lesson: value proposition + long runway + margins

Takeaway Framework & Lessons

• Enduring professional networks, when paired with workflow integration, can create irreplaceable business platforms.
• Doctor-centric product development fuels high engagement and revenue opportunities, provided the platform remains the most convenient one-stop shop.
• The transition of massive B2B ad markets to digital can drive years of compound high-margin growth—but sustained success relies on never losing sight of the user’s core pain points and needs.
• AI can cement future stickiness and monetization, but only if thoughtfully integrated in alignment with practitioner workflows.

For the full list of Business Breakdowns episodes and resources, visit joincolossus.com.