http://www.redherring.com/Home/22791
Baltimore-based asset manager Legg Mason led the latest round and was joined by New York City investment bank Allen & Co.
Launched in September 2006, Sermo.com has become the largest physician social network in the country with almost 30,000 members, said Dr. Daniel Palestrant, the company’s founder and chief executive.
But with an estimated 600,000 doctors in the country and other sites like docsboard.com, socialMD.com, and doctornetworking.com vying for attention, at least part of the latest round will go toward attracting more physicians to the site through promotions in trade journals, industry conferences, and e-mail lists.
“There’s still plenty of room to add more,” said Steve Murray, a partner at Softbank Capital, which joined Longworth Venture Partners in injecting $9.5 million into Sermo in January. All told, the company has raised about $39 million.
Sermo is free to join though membership is restricted to verified U.S. physicians. Rather than pepper its members with advertisements or charge a subscription fee, Cambridge, Massachusetts-based Sermo plans to generate income by charging outsiders for access to its community.
For instance, a pharmaceutical company might want to conduct a survey or a hedge fund might want to gauge doctors’ experience with a particular drug.
“It could be as simple as a financial investor interested in a drug they’re considering investing in,” Mr. Murray said.
Sermo, however, is primarily used by doctors to consult on difficult cases with a nationwide community of physicians whose credentials have been verified.
To further secure trust, the site, which agreed to an alliance with the American Medical Association in May, allows doctors to rank their peers with an eBay-like star system.
In one recent post, a respiratory specialist reported the puzzling case of a 68-year-old woman who was convinced she had cancer when small lung nodules showed up on a PET scan. The doctor doubted cancer because she had never smoked, appeared otherwise healthy and the nodules looked “very hazy and indistinct.” A bronchial biopsy showed “severe lymphocytic inflammation.”
Within one day, 13 doctors had responded.
Dr. Palestrant, who said he founded Sermo to tap “the wisdom of crowds,” raised $2.2 million in funding for an earlier company, Azygos, that he sold to BioNetrix (now BNX Systems) in 2001.
Robert Gleeman, Medical Journalist for EMR Update.com Email: robert@emrupdate.com Tel: 1-650-968-6359 Skype and ooVoo user name: robertgleeman EMR progress is a matter of fact. EMR Update supports your right to know.
I am not allowed to sign up for Sermo.com's forum becuase I am not a doctor, but I sure wish one of our members would give me a clue: What the heck does a forum do with thirty million dollars?
Nick? What would you do with EMR Update if you had that much money to work with? You are always talking about the community aspects of EMR Update. Sermo.com proves that you are correct: Community Thinking is powerful medicine!
I have looked at their website, http://www.sermo.com/about but I still don't see why they need so much money. It does appear that a doctor can actually MAKE money from Sermo.com!
(By the way, many thanks to Dr. Alberto Borges for the tip on this story! Like so many other issues, Al's sharp eyes have once again "hipped" me to something I never knew about before.)
Interesting business plan. It looks like what they are doing is giving physicians a forum to discuss various topics. In order to generate physician interest, there are two incentives:
1. The ability to have curbside advice on difficult cases
2. The ability to make money on your advice.
This is free to physicians. The value of this, presumably, will be in tracking trends, and seeing where potential emerging markets are, and selling that information to businesses. By getting large volumes of physicians responding to questions, they can potentially foresee developing trends (ex: "we no longer use xyz antibiotic for this problem...we use abc..." This info can then be trended and used by those companies with stock in both xyz and abc antibiotics to either develop a market or retreat from one.
This is my general understanding of what is going on. Initial infusion of capital is probably to pay the physicians until data trending is established to the point that data is worth something.
I finally checked out the site yesterday, and I'm not sure how well Sermo will do. Here are some of my findings:
I personally prefer to use Google and Medscape for my medical searches. The content is free and very thorough.
Al Borges, M.D.
● Oncologist in a Small Group Practice in Virginia
● My website URL: http://msofficeemrproject.com/
azalea_runner & alborg,
Thank you both for the excellent investigative reporting on Sermo.com!
I have a much better idea of what they are doing. It's a beautiful idea, and we do some of the same work in our Medical Forum. I hope that Pfizer will also give a few million to EMR Update. I would surely put the money to good use! ()
Robert Gleeman:
Robert: Good to see you've got your priorities in the right order!
Nick Harrington email me or Skype: nickharrington emrupdate.comIf I have seen further it is by standing on the shoulders of Giants" Sir Isaac Newton 1676
Nick Harrington: Robert Gleeman: Robert: Good to see you've got your priorities in the right order!
Nick, I knew you'd be proud of my conservative spending ambitions because I left out ,, and !
You might want to read this about Sermo...has cooled down a bit now, but was hot a few weeks ago, the folks at Medgadget questioned the privacy issues of Sermo keeping a physician's name private and confidential.
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Now I know more about Sermo-
Sure beats any P4P. No "big boy" EMR needed.
Heck, can you imagine- my 3265 emrupdate count would have netted me $64,330.00 at Sermo!
Hey that is an idea my 3265 emrupdate count would have netted me $64,330.00 at Sermo!
Hey that is an idea
my 3265 emrupdate count would have netted me $64,330.00 at Sermo!
Instead of points, Nick can put in those $ or Pound signs (could not find it on my computer)- Like SOU (somebody owe's you)
Cheers
joseph: Pound signs (could not find it on my computer)
Pound signs (could not find it on my computer)
Press and hold the Alt-key, type 156 and release.
joseph: Hey that is an idea my 3265 emrupdate count would have netted me $64,330.00 at Sermo!
Hmmm, ah, but, then, well, maybe ... actually I would like to pay every physician for Medical Related content ...if only I could find a way to monetarize your learned content. I was already musing how we could both fire-up the medical section and then find some Pharma company to seed the research questions.
Any Docs or Pharma companies want to drop me a note to info@emrupdate.com or robert@emrupdate.com with ideas on the above.?
>>> I was already musing how we could both fire-up the medical section and then find some Pharma company to seed the research questions.
The thing would be to see:
I get offered cash about 4-5 times a week. Most of the time I have to do a meeting or spend time on the phone answering questions. The Sermo way is much better- simply type in your responses- short, focused and sweet.
This is an old game - bnx.com seems to be gone - a guy raises money, pays himself a lot - gets a cash flow then bails before the mark finds out the "snake oil" doesn't work and moves to the next town. Webmd started as the same thing - eventually gave up, was sold multiple times and became more a consummer site with paid ads. As PT Barnum said ... It amazes me such gullible people have money like this to invest?
The idea is flawed - depending on doctors to provide the content. It didn't work before and won't work now because it is a format like an intern with a bunch of students - the docs that can truely help, researchers and the like won't have time for the flamers and egos.
Medscribbler Getting you there sooner!
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CEOMike, our doctors are giving Sermo.com a clean bill of health. Who is better at sniffing out a scam than Dr. Alberto Borges? He says it smells clean!
I bet they could sell Sermo.com for a billion dollars right now. Remember the selling price of that silly website, U-Tube?
Nick could sell this website for well over a million dollars if he was interested in doing so. But he can wait until he makes it really valuable.
Communities are more powerful now than ever before.
Today, if you can deliver a cohesive community of 30,000 doctors, you have something of great value.
Never underestimate the value of Community. Nick believes in it very strongly, as you will see in the years to come.
When You tube appearred I had my guys start work on a video immediately - there were only six videos about anything health, medical etc. We also bought land in Second Life but never developed it because it was going no-where. I doubt they could sell Sermo for one million let alone a billion - real business men ask the question "what is its valuation" cash in vs investment return - You tube / facebook etc purchases are all attempts not to be left out of what Google did - (huge IPO because they had positive cash flow) Sermo is the same - problem - where is the cash flow going to come from - the only answer to match this kind of investment for a decent valuation is DRUG COMPANY ADVERTISING - so the question on a 26 million valuation of Sermo is whether you think drug companies will pay $10,000 a month on long term contracts for a rotating banner ad - - maybe but not enough of them. Viagra was good for a year of intensive advertizing, now it is sleeping disorder pills, next year it will be a new flavour - never enough to provide a broad based revenue stream - the real money for the drug companies is the patient not the doctor.