for docs

When Dr. Tom Doerr started his own medical software company, he learned that it helps having a venture capitalist in the family.

By Adam Lashinsky, Fortune senior writer

(Fortune Magazine) -- For most people, having a doctor in the family means free medical advice. For St. Louis internist Tom Doerr, having an older brother who is one of Silicon Valley's most successful venture capitalists is even better.

Doerr the doctor, 49, is the co-founder of a privately held but extremely well-funded company called Purkinje (pur-KIN-jee), a provider of electronic-medical-records software. Doerr the financier, 56, has pumped $27 million of his own money - out of the $40 million raised in total - into Purkinje, which is named for a 19th-century Czech medical researcher (let's just say if you were a brain surgeon, you'd think the name was cool).

Brother, can you spare $27 million? Tom Doerr (left) hit up John.

Purkinje has existed in one form or another since 1999, but it's launching an ambitious new version of its software, a subscription site that helps small practices manage their billing, patient records and medical information for $399 per month per doctor. Think of it as for docs.

The challenge is daunting. Nearly three-quarters of all physicians in the U.S. work in small practices, but selling to them is costly: Pinched by insurers, they aren't big on buying nonmedical technology. John, whose firm, Kleiner Perkins, successfully invested in health-infotech company Healtheon in the 1990s (it later merged with WebMD), says the opportunity is rich because Purkinje has figured out how to aim low. "Healtheon never targeted small physicians," John says.

Purkinje focuses its sales efforts on a collection of trade groups called Independent Physicians Associations (IPAs). Tom says selling through this channel will give it a leg up on its many competitors, including Allscripts (Charts) and AthenaHealth, which focus on bigger practices. So far, Purkinje has signed up about 100 physicians to the new service.

Low cost and a unique sales strategy are Tom's key tools, but his secret weapon is his famous big brother. John dropped everything recently to schmooze customers at a national IPA conference; internally the VC also serves as chief motivator.

"Three years ago he told us he wants to be the No. 1 or No. 2 electronic-medical-records company," says Tom. What if Purkinje doesn't meet those goals - would John fire his brother? Tom says he'd put family first. "I'd resign before he'd fire me," he says. "I don't have an ego investment in the company."  Top of page