Disruptive Business Models
Digitally inspired commerce comes to the dental technology industry.
Pam Johnson; Daniel Alter, MSc, MDT, CDT
The age of digitization has fostered an onslaught of disruptive business models that are challenging the establishment and fostering a new buying culture among consumers eager to bypass traditional brick-and-mortar business outlets and their conventional business models. Think how quickly Uber disrupted the taxi industry, Amazon changed retail buying patterns, Bitcoin challenged traditional currency, Tesla reshaped the auto industry, and Airbnb upset the hotel industry. What is most disturbing for traditional businesses is how quickly we, as consumers, have embraced and adapted to the new digital purchasing/ordering landscape and upset the growth potential and conventional business models of major providers within these industries.
Today, these same types of disruptive business models are popping up in the dental and dental technology industries. On the clinical side, one such business strategy is set to disrupt patient-dentist loyalty by playing on consumers’ penchant for getting the biggest bang for their value-based buck. Brighter (brighter.com) provides that experience for dental services. Patients who want to comparison shop for dental services in their area can log onto Brighter as a member and shop for a dentist that meets the limits of their pocketbook. Dentist members list their practice address, contact information, years of experience, and the patient out-of-pocket cost for basic services based on the dental insurance information provided by the patient. The website provides dentist members with online appointment scheduling services, patient reviews, and automated patient re-care reminders to help keep them on track.
Dentists are often reluctant to change laboratories, but that loyalty is being challenged and disrupted by entrepreneurial dental laboratories offering a range of digital and consulting services for dentists who invest in digital impression technologies. One such business model is Digital Dental Leaders (digitaldentalleaders.com). Dentists accessing this digital service can order model-free crowns, bridges, and inlays/onlays by sending the digital impression file to the laboratory, taking advantage of shortened turnaround times and competitive pricing. The laboratory also provides a wide range of consulting services, from helping dentists select the best impression scanner for their practice and providing business advice on boosting ROI for the scanner to training clients on digital scanning techniques and providing educational material about the digital process.
Another digital upstart, Smile Direct Club (smiledirectclub.com), was started by two entrepreneurs completely outside the industry, Alex Fenkell and Jordan Katzman. Their only connection to dentistry were the braces they wore as teenagers and the expense borne by their parents to provide the teeth straightening service. They wanted to do for braces what Crest White Strips did for teeth whitening—make orthodontics more accessible, more efficient for the patient, and less expensive. What they came up with was an at-home impression kit ordered online. The patient would take an impression of his or her teeth and send the impression back to the company. The impression is then assessed by one of the company’s country-wide network of Smile Direct Club associated dentists and orthodontists, who would formulate a treatment plan for that patient. The patient is then sent a series of aligners each month to correct tooth misalignment until the treatment plan has been completed. In the past year, the two opened up 12 “SmileShops” across the country for patients to walk in and receive a free 3D impression scan of their teeth. As noted in Inc. magazine’s May 2017 “30-Under-30” article, which celebrated the success of 30 young business entrepreneurs, the Smile Direct Club business model caught the attention of Align Technologies. In July 2016, Align acquired a 17 percent share in the company for $46 million dollars.
Click and Connect
Connecting to potential new clients has always proved challenging for large and small laboratories alike. But what if there were an online marketplace where the laboratory could showcase its products and services and then be matched up with a dentist needing those very products and services? ApollonixTM (apollonix.com) is looking to solve this challenge in the dental profession by creating a centralized platform that will facilitate connections between dentists and dental laboratories. Founded by Jessica Shin, Terri-Ann Brown, and Paul Shin and launched in October 2016, Apollonix is a B2B HIPAA-compliant platform that allows for all-digital communications, electronic file exchange (3D file, images, etc), payment, and a marketplace designed “to be an advocate to the laboratory and create a one stop shop.” The dentist fills out an online prescription for the desired restorative specifications, and laboratories can bid on these new cases and communicate directly with the dentist. The dentist transmits payment of the services directly to Apollonix, and Apollonix, in turn, pays the laboratory directly upon case completion. This process not only ensures payment for services rendered but also provides a significant reduction for the laboratory’s accounts receivable cycle. Apollonix further helps laboratories by providing laboratory owners with sales lead generation via the Apollonix Marketplace. Each laboratory member has a profile page which showcases their work and offers testimonials from their existing clients. A dentist or laboratory may post their needs on the marketplace with the intention to connect with another member who can perform their needs. Membership is free to both the dentist and laboratory with a 10% transaction fee per case. There is also a peer rating system within the marketplace which rates timeliness, responsiveness, and overall quality. Currently, Apollonix hosts 45 dentists and 25 laboratory members and is experiencing considerable interest from both communities. Since concept, the executive team has won several awards, including second place in the SUP-X Pitch Competition and second place in the Miami Herald Business Plan Challenge, and it was one of 10 companies selected to participate in TechCrunch’s first Miami Pitchoff Meetup, all resulting in raising funds.
And if any, or all, of these digitally based business models sound innovative, on July 1, 2017, the public presale of Dentacoin (dentacoin.com) took place. Dentacoin is the first blockchain concept designed specifically for the dental industry that aims to not only improve dental care worldwide but also make it more affordable for patients. Much like the blockchain concept of Bitcoin, which uses tokens as an acceptable means of payment between Bitcoin holders and partners, Dentacoin would provide token currency for patients to receive dental care from Dentacoin partner dentists and dental clinics. Dentists can use their accumulated Dentacoins to buy materials and equipment from Dentacoin partner manufacturers. According to its website, Dentacoin won’t be ready for full launch until 2019. Perhaps we will have an update next year.