Behind the counter at Drugstore.com
By Dawn Kawamoto
Staff Writer, CNET NEWS.COM
Peter Neupert is no stranger to the Net, as one of the
main players behind MSNBC online.
But after 11 years with Microsoft
in various senior management roles, Neupert decided he was ready to test
the waters on his own. The executive left Redmond last July to lead
start-up Drugstore.com as president
and chief executive.
Stepping behind the counter at Drugstore.com gives Neupert the opportunity
not only to be the head of a promising company, but an influential player in a burgeoning industry that he says will be the next big thing.
Drugstore.com, which sells prescription medication, over-the-counter drugs,
and healthcare goods on the Web, is looking to capture some of the $89.1
billion prescription drug market, as well as a piece of the $19 billion
over-the-counter medicine business.
After the site is launched tomorrow, Neupert will have to use all his
business savvy and flash to guide the fledging company in the rapidly
Competitors like PlanetRX are also
looking to stake a claim in the online pharmaceuticals market, while
established retail pharmacies ready plans to launch their own Net stores.
Drugstore.com received seed funding from venture firm Kleiner Perkins Caufield & Byers. Today, the venture firm was joined by online bookseller Amazon.com (also backed by Kleiner Perkins), which announced a "significant" minority investment in the online pharmacy. And, in an unusual move, KPCB partners John Doerr and Brook Byers both sit on Drugstore.com's board.
Neupert recently looked into the industry's future and that of his company
in an interview with CNET News.com.
NEWS.COM: What is going to drive people to buy their medication or
healthcare products online?
I think the most important thing is convenience. If you can avoid going to
the drugstore by making sure that you're going to get the products you want
when you want it, with a guaranteed home delivery and from the privacy of
your own home, why not?
Healthcare products can be heavier to ship than drugs, so how much money
are consumers likely to save using an online service compared to going to
the local drugstore?
Although I think people are very focused on price because some of the
online commerce people have got them very focused on this, I don't think
that'll be the primary reason people will buy these products
think the primary reason people will buy these products will be things that
are different than price. It's got to be a fair price, and a low price, but
I don't think their objective is to try to save a ton of money by buying
these products online. I think their objective is to say, 'I want to save
20 minutes. I want to get it delivered to my home. I want to get the
products that I want.'
What age group will use this service most? It seems senior citizens are
the biggest buyers of prescription drugs, but they aren't a majority
I think it'll be broadly distributed, just like I think you see it today in
e-commerce. As for seniors, 20 percent of people over 50 are online, and
there's 47 million online users. That's over 9 million people to go after.
That's a big bar and I'd be happy with that.
NEXT: Building a store from the browser up