Why John Doerr is bullish on disrupting healthcare

Healthcare is six times bigger than the global advertising market, says the Kleiner Perkins VC

John Doerr has always been about backing entrepreuners with really big visions. That's how Kleiner Perkins Caufield & Byers, the firm he's served since 1980, ended up investing in Series A rounds for both Google and Amazon in the 90s.

So what does he see as the next big thing?

Nobody would disagree that the global advertising industry, which topped $500 billion in spending last year, is a huge market.

But healthcare, says Doerr, is six times bigger than that—$3 trillion. In a conversation with Paul Martino (General Partner at Bullpen Capital) on stage at Post Seed today, Doerr pointed out that if the heathcare industry were its own country, it would be the fifth largest by gross domestic product (GDP) after the U.S., China, Japan, and Germany.

"Who knows how much healthcare procedures really cost?" Doerr asked the audience. One person raised their hand.

"Doctors don’t even know," said Doerr, explaining that patients, providers, and payers are not linked in any rational way. Just like in the era before Google, when advertisers and consumers had no transparency or accountability, the reality of the heathcare indusry today is that it's a crap shoot.

Doerr is optimistic that entrepreneurs will bring innovation "into the belly of the healthcare system" and disrupt its "oceans of money" from the inside. "And that will be a good thing."

While he's right about the need for disruption in healthcare, how that will happen is another thing. All the regulatory red tape and built-in complexity has made it challenging for new ventures to make a difference. Though there are thousands of startups trying, healthcare has yet to see its Google moment. Doerr believes that moment is on the horizon.

The only other area "equally or more screwed up" as healthcare, according to the venture capitalist, is public education. Though a smaller industry than healthcare when it comes to financials, it is plagued by many similar ills.

Of course, as one of Uber's late-stage investors, Doerr and Kleiner Perkins have also fueled transformation in another monster industry: transportation. Doerr says Uber's financials are growing bigger and faster than any company he and his colleagues have ever seen, and that's incredible when you consider the company they keep.

When batteries are three times better than they are today, Doerr argues, electric will suddenly be cheaper than internal combustion engines. And when you factor in that cars are a top expenditure for millions of people, then you have the recipe for a market rivaling the healthcare industry.

Where is Doerr bearish?

While he tended to talk about the sectors and ventures he's most optimistic about, there is one area he's not particularly keen on: virtual reality. On the other hand, he thinks augmented reality--which is already more mainstream today--will be more important in the long run.

Doerr added a pretty hefty disclaimer to all his predictions: "By the way, i’m probably wrong about a number of these things." We'd love to hear your opinion in the comments: do you agree or disagree with Doerr?