Excellence in the practice of Dental Medicine is a proud tradition in the Spodak family. Dr. Craig Spodak is a third generation dentist who earned his Doctor of Dental Medicine degree from the acclaimed Tufts University, graduating with highest honors. He joined his father, Dr. Myles Spodak, in his practice in Delray Beach, Fla. in 1998 with a dream to change the way patients experience dental care. He inherited the company in 2006 and immediately began to develop a new vision for the modern dental practice with a goal to deliver comprehensive dental care from a team of general and specialty dentists in one convenient, 13,000 square foot, state-of-the-art, LEED Gold Certified facility.
His dream was to change the way patients experience dental care and worked tirelessly to reinvent the patient perception of just how great a dental appointment could be. All phases of dentistry are performed from a team of nine dentists in 18 operatories and surgical suites, in addition to having an on-site lab with lab technicians and master ceramists who provide same-day dentistry. He also places a strong importance on living out the company’s core values, which enables the team to provide patients with the highest caliber of comprehensive dental care while consistently exceeding expectations.
Dr. Craig is a pioneer for eradicating childhood tooth decay and founded the All-Star Smiles Foundation with Marlins’ All-Star fielder, Giancarlo Stanton, in 2016.
He is also committed to helping other dentists uncover costly fees they’re paying for their 401(k) plans and was recently featured in Tony Robbins’ new book, Unshakeable: Your Financial Freedom Playbook. As the brand ambassador, he is introducing the world to a next generation 401(k) plan.
Dr. Craig has also committed himself to expanding his own professional skills and has garnered various advanced credentials, including becoming a Top 1 Percent provider of Invisalign®. He also lectures nationally about the benefits of this teeth-straightening method.
Beyond his professional interests, Dr. Craig is very active in the Delray Beach community and currently serves on the Board of Directors for the All-Star Smiles Foundation that he co-founded with Marlins All-star fielder, Giancarlo Stanton; as a partner with Dr. Peter Boulden on the Bullet Proof Dental Practice podcast; as a partner with Chuck Blakeman on the Get off the Treadmill Summit (GOTT Summit); on the Board of Directors for Aid to Victims of Domestic Abuse (AVDA); has served as Chairman of the Delray Beach Planning and Zoning Board; is a national lecturer for creating team culture in business; is a fitness and motor sports enthusiast; a champion of ecological responsibility; an accomplished private plane pilot; and is conversant in five languages. Spodak Dental Group was named a 2017 Inc5000 fastest-growing business, and Dr. Craig was also featured on the February 2017 cover of The Progressive Dentist Magazine and was named the 2012 Business Person of the Year by the Delray Beach Chamber of Commerce. Along with his wife Zaicha, he lives in Delray Beach, Fla. with their two children, Sage and Gavin.
VIDEO - DUwHF #1060 - Craig Spodak
AUDIO - DUwHF #1060 - Craig Spodak
HOWARD: It's just a huge, huge honor for me today to be podcast interviewing one of my role models, mentors, and idols, Craig Spodak, DMD, all the way from Delray Beach, Florida, who also has a podcast, Bulletproof Dental Practice. He's had forty episodes. I'm a big fan of his show. Excellence in the practice of Dental Medicine is a proud tradition in the Spodak family. Dr. Craig Spodak is a third generation dentist who earned his Doctor of Dental Medicine degree from the acclaimed Tufts University, graduating with highest honors. He joined his father, Dr. Myles Spodak, in his practice in Delray Beach, Florida in 1998 with a dream to change the way patients experience dental care. He inherited the company in 2006 and immediately began to develop a new vision for the modern dental practice with a goal to deliver comprehensive dental care from a team of general and specialty dentists in one convenient, thirteen thousand square foot, state-of-the-art, LEED Gold Certified facility.
HOWARD: His dream was to change the way patients experience dental care and worked tirelessly to reinvent the patient perception of just how great a dental appointment could be. All phases of dentistry are performed from a team of nine dentists in eighteen operatories and surgical suites, in addition to having an on-site lab with lab technicians and master ceramists who provide same-day dentistry. He also places a strong importance on living out the company’s core values, which enables the team to provide patients with the highest caliber of comprehensive dental care while consistently exceeding expectations. Dr. Craig is a pioneer for eradicating childhood tooth decay and founded the All-Star Smiles Foundation with Marlins’ All-Star fielder, Giancarlo Stanton, in 2016. He is also committed to helping other dentists uncover costly fees they’re paying for their 401K plans and was recently featured in Tony Robbins’ new book, Unshakeable: Your Financial Freedom Playbook. As the brand ambassador, he is introducing the world to a next generation 401K plan. Dr. Craig has also committed himself to expanding his own professional skills and has garnered various advanced credentials, including becoming a Top 1% provider of Invisalign. He also lectures nationally about the benefits of this teeth-straightening method. Beyond his professional interests, Dr. Craig is very active in the Delray Beach community and currently serves on the Board of Directors for the All-Star Smiles Foundation that he co-founded with Marlins’ All-star fielder, John Carlo Stanton; as a partner.
CRAIG: John Carlo. He's actually a Yankee now, but wow this is a long bio, bro.
HOWARD: Alright. You're Tony Robbins dentist, right?
CRAIG: Yes, I can say that safely because he put me in this book as such. I'm not violating HIPAA standards with that.
HOWARD: I had him on this show and it was the only one where the video file was corrupt. It’s like you kidding me, I got Tony Robbins on the show and it's a sound only file. Do you think he would want to do that again? I mean, is he still promoting his 401K company?
CRAIG: Getting Tony to commit to an hour of time. He's going to be pretty limited.
HOWARD: Do you call them? Do you talk to him?
CRAIG: Yes. Tony actually texts me.
HOWARD: Well he’s lecturing in Phoenix with Gary Vee. Tell him I would do anything if him and Gary Vee stopped by the house for just thirty minutes. I'm right here in Phoenix. I'm ten minutes from the airport. Him and Gary Vee, come by. Dentists have the big 401K’s. So, it'd be a great target market for him to get the 401K business. To have Tony Robbins and Gary Vee on the show in my house in Phoenix when they fly in to do their seminar, that would have to be the coolest experience on earth.
CRAIG: Hey, there's no harm in asking me to ask him, but he’s a busy guy and I like to respect his privacy, but if it comes up and there's an opportunity for you to do that, you have a really large podcast and a big voice in Dentistry.
HOWARD: But you know why he'll do it is because the same reason he came on my show, Grant Cardone came on my show twice. I've had the CEO of billion dollar dental companies like Stan Bergman of Schein and Marco of Straumann, successful people always find the time. Same thing at work. If you really have to get something done, you always give it to the busiest person in your deal. And then most people look around and say, “Well, oh surely she's not doing anything. She hardly does anything. I'll give it to her and she won't get it done”. So, people like Tony Robbins, because they just make time for everything. I remember when I called Stan Bergman, I mean he's a S and P five hundred. I think he's ranked like two hundred and thirty on the deal.
And he's like, “Absolutely! Tell me when”. I'm like, “Tell you when? You’re the man. You tell me when”. That guy would have done it at three o’clock in the morning if that was the only time to do. It's just amazing how totally successful people make a religion out of availability and they just always find the time. They always do what matters. And they have a natural flare for marketing. They're always running for Mayor but anyway, so I'm a big fan of your podcast and I'm a big fan of your YouTube videos. Your YouTube video, This is my Life's Purpose, Dr Craig Spodak.com. What makes us Different is Everything. So, tell us about your journey. How did you become all that you became?
CRAIG: I've always questioned why, I've always kind of been an observer of why we do certain things. And, when I got into Tufts, I loved the academic atmosphere of having all the specialists and all the lab under one roof. And my dad and grandfather were general dentists and my dad had a really kind of Brady Bunch style practice when I grew up. It was like, it was built in the seventies. So, here we are in the mid-nineties and it still had the split pea green carpet and the wood paneling. And I just couldn't wrap my head around being a dentist because I couldn’t understand doing it a different way. All I knew was my mom working the front desk, my dad doing his thing. And then, I remember going into a Starbucks early on in maybe 1994 or 1993 in Washington, D.C when I was at the American University.
CRAIG: And I saw this whole shift in the way retail and where you could build the design space. And the people knew my name and I had this Frabbadachino and it had a whole different language to it. And it really opened up my eyes that retail is shifting. And I've always viewed dentistry as a branch of retail. And I just had an idea that my patients don't want to be shuffled around from spot to spot. A lab was located thirty miles away and oftentimes I'd have to send patients down to the shitty lab where they'd have to do a custom shade in the back of a shopping center. And I said I want to control the whole experience and make it better for them. And I'm obsessed with quality and I'm obsessed with dentistry. I love it. If we started talking dentistry, that'll be a good hour of just talking.
I love teeth, I love everything about dentistry. So, my vision was to create a one-stop shop where everything was performed under one roof. So, we had the academic nature of school and the comradery of school and all the very best technology and all the brains under one roof. That’s what gave birth to the idea. But it wasn't a business idea based on how to make more money. I actually made a conscientious decision that if I was going to make less money, but do it this way, I'd rather do it this way. So, the constant conversation is what's the best dental model, how can you make the most amount of money? I kind of had the opposite. It was developed out of what I thought was best for the patient. I thought money would show up as a product of that.
HOWARD: Well, you mentioned the Brady Bunch, your father had a Brady Bunch family. You know what I never understood Ryan about the Brady Bunch. You remember what his dad was on the show?
HOWARD: Nope. He was an architect. An architect was six kids in a two-bedroom house. Does that make any sense?
CRAIG: In the seventies, it does. In Japanese culture, a two-bedroom house probably housed ten people.
HOWARD: So, your dad was the Brady Bunch, six children in a two-bedroom house, but now you've got a thirteen thousand square foot entree. I got so many questions for you. Now. All these dentists, do you own the whole thing or are they partners? How does that work?
CRAIG: I'm in the process right now of taking out my first partner, a girl that's been with me for almost ten years.
HOWARD: Dr Patel.
CRAIG: No, actually Patel got engaged to a guy that lives in Chicago. I love her. She's a rock star dentist and she's moving to Chicago. But, she’s moving to Chicago for love and family, so I got to forgive her for that. But it leaves a vacancy in our practice. So, if someone's listening and wants to be a part of our practice, feel free to apply. We're looking for a rock star, but now it's Dr Dudley, Dr Tiffany. She's going to be my first partner and then the plan is to take on all additional doctors as partners. I have a big thing, I say that people don't wash rental cars and I think that if you want to create something, if you want to cultivate an ownership mentality and I want all the doctors to have that ownership mentality. There's nothing that really gives it to them like actual ownership. Howard, in your practice, do you have partners or you the sole owner?
HOWARD: Well, that's a great question. I'm the sole owner of everything. I own 100% of everything. I have no partners. You say people don't wash rental cars. It's so true. Let's just get to Dentistry Uncensored. Let's get to the nasty. These big DSOs, if they were really profitable, they really returning profit on capital invested, they'd all be publicly traded on NASDAQ, but not one of them are. Now, you and I are old enough to remember when I got to school in 1987, thirty years ago, orthodontic centers of America, they did a big rollout. They made it onto the New York Stock Exchange. But the problem was that every orthodontist, the practice that they bought. It was a roll up and he’s got $1,000,000 line of credit in start rolling up these orthodontic practices.
They'd say, “Okay Craig, you got to save me three years”. Well, in three years, in one nanosecond, they all ran. And, then they replaced that guy who was a stud muffin and with some young kid that came out of school and the sales plummeted and it was delisted and fell apart and all this kind of stuff like that. When I talked to a practice management consultants like Sandy Pardue, Laura Hatch, any of these people, they sit there and say, “When I'm lecturing all these big group practices, the owners taking all these notes and is totally focused. And then all of the associate dentists are sitting there on their smartphone surfing Facebook and Twitter and LinkedIn. And then when the person owns his own car and you got a toothache, [inaudible 11:07] and they're saying, “Man, my tooth hurts”. And you say, “Well, it's a molar root canal, it's going to be tough. I'm going to do it”. And he's incentivized. He's got a bunch of daddy owns a practice and he doesn't. The associates is like, “Oh, you need an endodontist”. Or he says “Oh, you need an oral surgeon”. And you know, they just refer. They just sit there and refer all day long. They don't take any heart. And so, in my walnut brain, I've already seen the whole publicly traded thing from NYSE orthodontic centers of America, who goes on NASDAQ. I already watched all of those implode. And then they went away. Now they're all back and they're all saying they're taking over the world, but Wall Street doesn't even want to talk to them. And, their associate turnover and private practice and DSOs is incredibly high.
HOWARD: These millennial dentists, they only working a year or two. And in dental school, they say, “Well, you know what, I'm a woman and I want to have some babies. I think I just want an eight to five job and then I want to concentrate on being mom and I don't want to worry. I don't want to be a business owner in evenings and weekends. I just want to be a mom”. And I said, “Okay well, if that's a really great idea, then your class of 2018, so go back to like class of 2013, five years ago and write down a list of all these women dentists who had the same great idea and are still working at those DSOs”, because what I see as they do that for about a year. Then they all quit.
CRAIG: Statistics show otherwise. There's this statistic that if they work in a corporate, like a DSO, I don't want to paint with broad brush strokes here, but if they work at a DSO for more than two years, that statistic probability is they'll stay there for seven to ten. So, it's either they go in and go out, like almost like an AEGD or GPR or they get stuck after two years and they're stuck for good because it does kind of shape you, I think working in that environment.
HOWARD: Well, what percent jump out before two years and what percent pass the two year tipping point in say seven?
CRAIG: From what I heard, most jump out prior to two years.
HOWARD: What is most?
CRAIG: 80%, 70%. That’s what I remember learning from a reputable source that most will jump out. But you got to remember when Heartland and all these places are sponsoring your freshmen orientation, you're entrenched in the educational system. Like Hu-Friedy made our instruments at Tufts. I got out and got Hu-Friedy instruments or A-Dec had our chairs. So, I wanted A-Dec. So, imagine if you know the big DSOs are sponsoring your freshman orientation or the social. It's kind of like they're part of your ecosystem.
HOWARD: Yeah. So, so you want your associates to have skin in the game. So, you saying that Dr Tiffany Douglas, is that what you said? Dr Tiffany Douglas is going to be your first partner?
CRAIG: Yeah, I mean you got to understand too. Historically I've done some pretty massive risk-taking endeavors. I went from four thousand square feet and $6,000 a month in rent, to aa thirteen square feet and $35,000 in rent. So, people have not always wanted to jump on. I've had partnership conversations with other people, back when we were doing two or three million in gross. And I'm like, “Hey, I think this is a really good time”. And they like, “wow, you're freaking crazy man, I don't want to jump out with this”, because, it takes some fortitude and some vision. So, I think this point, the practice is stable, and the growth is good and I'm not building another thirteen thousand square foot rooftop addition. So, people can feel more good about long-term investment and I want my doctors to share in that long-term reward because I do believe that a practice like ours is sellable or has some intrinsic value. So, I don't want them to just be hired guns. Aah, who's that?
HOWARD: My granddaughter Lexi. She turned seven yesterday.
CRAIG: Big girl
HOWARD: The prettiest girl in the world.
CRAIG: I just want them to have skin in the game. I've done a lot of research on employee owned companies. AESOP's. There's a local grocer down here that's all employee on. I just think when everybody's pulling on the rope in the same direction at the same time, it creates better alignment. And, let’s face it, the end of the day, a practice like mine or a practice like yours, if someone wanted to write a big fat check to us, they'd say, “Hey Howard, Craig, you need to stick around for blank number of years”. You'd be handing out money to your associates anyway. Like, “Hey Dr Jones, I know you've been working for me for ten years. Stick out another three”. So, between now and then, and even if I don't sell, I have no plans to sell, but between now and then it's great to have that alignment and I think people, Dr Dudley in particular, she's the type of person that's acted like an owner this whole time. It's not like I'm giving her some golden carrot, like, “Hey, step up your game and think like an owner”. She actually behaves that way. So, that’s my only advice. If you have someone that's already acting like an owner, treat them like one. If you think you have someone that's disengaged and a little bit of money from it changes their behavior. No way. That's my advice.
HOWARD: So, do you have specialists too? Do you have oral surgeons? What specialists do you have?
CRAIG: Oral surgery, perio, prostho, endo and I have a couple like an independent contractor and anesthesiologist to put people to sleep too.
HOWARD: And, so you have a full time oral surgeon who comes in once a week ago? Go through the oral surgeon, periodontist, prosthodontist,
CRAIG: Oral surgeon, perio, prostho, endo. Endo is always two days a week, to like kind of three quarter days and he wanted to just be one day a week. So, now he has this crazy one day a week where he's literally eight to five. And then, oral surgery was always historically full time and that drove a lot of my decisions. I was really adamant about having full time oral surgery because there was one time that a kid in the local high school got hit with a lacrosse stick and broke his jaw. That was really cool to help full time oral surgery. I don't know if necessarily that model makes sense for my type of practice. So, now we have just a couple days, one day a week actually, sorry two days a week for oral surgery.
CRAIG: Perio is one day a week. Prostho, he's like a super duper dentist. He's like a jack of all trades. So, he's four days a week and he's doing a very wide scope. My practice, I'm just entirely doing Invisalign by myself. I practice a lot. I do a lot of dentistry. The people in my local community would have no idea that I actually see patients because they figured out like I’m some CEO type. I do a lot of dentistry. I love dentistry. I don't know if it's a good thing for me. We all do things that we love to do even though they may not be the highest and best use of our time. I'm looking at that right now. I'm making sure that that's a really good use of my time because I do enjoy it. So, I just do it.
HOWARD: Yeah, I meant mental health is a big thing. So, oral surgeon one day a week, periodontist one day a week.
CRAIG: Two. Oral surgery is two.
HOWARD: Oral surgery two, perio one, prostho four, endo one.
CRAIG: And then GPs.
HOWARD: How many GPs to support that? How many GPs do you have?
CRAIG: We have five. Two or actually departing for life reasons that had been with me awhile. So, that’s creating a little bit of a challenge. I'm a firm believer on this spiritual guy believed that God gives you only what you can handle. And I believe that there's something good coming out of this, but it’s a little bit of the challenge right now because the timing is wrong. They're both kind of departing at the same time. They've been with me for many, many years.
HOWARD: Dentists always tell me their HR blues and everything. And I always tell him, “Dude, that's the only problem in all of manmade organizations”. I don't care if you're the New England Patriots, I don't care if you're the Arizona Cardinals, if you go to the New England patriots, they don't say, “Well, my problem is the stadium and we don't know if it should be grass or artificial grass or Instagram account. That is nothing. If you think your biggest problem is trying to figure out molar endo, then you're not even wise enough to know what your biggest problems are. My book, Uncomplicate Business, you only manage people, time, and money. People's 80% of the game. And it'll be your biggest source of stress when you're eighty years old. I don't care if you won the super bowl five years in a row. Eventually your Peyton Manning is going to get a cracked broken neck or whatever. You’re always one employee away from starting the whole process over.
CRAIG: Human beings are messy.
HOWARD: My Leah just celebrated her nineteenth anniversary with me the other day. My Lori is twenty next month. I got Kent, Tom [inaudible 20:00], Colby. I got a whole mess of people that have been with me twenty years. Oh, I had an assistant just one month shy at thirty years, moved on. HR is everything. But mastering how to attract and retain quality key people is an art. So, I want to ask you that these kids get out of school, they associate for three or four years. It seems like most of the associates around in Phoenix that I talked to in a podcast and they associate for about five years in that five years, they'll have like six or eight different jobs in five years and then they open up their own.
HOWARD: So, my question to you is, leadership. A lot of them are worried about leadership. People get accepted to dental school got A's in Calculus, Physics, Geometry, they’re introvert or shy. A lot of them are like tiny little girls. And if you're a tiny little girl, I want you to go see the movie Ruth Bader. what was your last name? RBG, Ruth Bader, what was her last name?
HOWARD: Ginsburg. And that was amazing because she was a little tiny person, but man, her mind was the largest person on the Supreme Court bench. So, you're six foot five, you're tall, dark, and handsome. Do you think a lot of your leadership is because you were just born a six foot five leader? They say all the presidents of United States were all over six foot tall. What advice would you give to a little five foot four, little shy girl who's going to go buy a practice and then she's got to be a leader.
CRAIG: Okay, so here's my spin on this. So, there's real leadership and there’s storybook leadership and people are appointed a leader or manager and all of a sudden, they put on this air that they have to start bossing people around and tell people to do shit and delegate, put a suit on. Someone that’s never worn a suit in their life. They're like, “I'm a leader, I'm going to do this”. And I think real leadership is putting other people's needs above yourself. Real leadership is a servant leadership. It's the ability to think of yourself literally last. Everybody before yourself. And I think the storybook leadership, whether it’s William Wallace from Braveheart or these iconic tails, these tall, dark, and handsome people. That's not really effective leadership.
CRAIG: I think there's tons of leaders that are like the dentists you're talking about, five foot nothing and demure. You got to understand, there's not one style of leadership and what we are taught is storybook leadership. The guy charging out in front with the sword drawn leading troops into battle. That's bullshit. That doesn't actually help as much, that's not even effective leadership. There's tons of tails like when you read Jim Collins, Good to Great, or all these other business books, there's amazing leaders that are out there that you never knew existed because they made their teams feel like they were the ones coming up with the idea and executing. The best leader’s the one you don't even feel. Lao Tzu had a wonderful quote. He says, and I'm paraphrasing it, “A leader should actually be so far back behind the scenes that the team actually feels like they came up with the idea, they executed it themselves when the leader actually did it”.
CRAIG: So, that is the highest form of leadership in my opinion. The people that cast big shadows and I do cast a big shadow physically and emotionally, I'm intense. I could be a subtractor and not a magnifier or multiplier. There are many different types of leadership and I don't want people ever telling themselves that they don't have what it takes. Because if you can put other people's needs ahead of your own, you are a leader. If people are coming to you asking for advice or support, you are a leader. If people are becoming more because of you, you're a leader. That's my little monologue on that, but I think that the tall people that cast big shadows physically and emotionally actually do more harm than good. They leave vacuums. Look at Lee Iacocca, this iconic leader that locked in, Chrysler, he was? He’s like no one. Steve jobs like you couldn't even bring up an idea around Steve Jobs. He’d jump down your freaking throat and he actually said, “I'm going to die soon. I'm going to give you guys my whole executive team, the next five years of ideas”, he left a vacuum when he passed on. So, I think the best leaders, are the ones that transformed culture and replace themselves.
HOWARD: My favorite example of a leadership is, as I always tell people, in my lifetime, very few companies, stocks have passed a 30,000 % growth. These are the biggest, fastest growing companies in my lifetime. And one of them was Walgreens. And I always say, “Who was the CEO of Walgreens who led this 30,000% march?” Can you give me his name?
CRAIG: Sam Walton.
HOWARD: That’s Walmart. Walgreens?
CRAIG: No never heard of him.
HOWARD: And, that's the purpose. That's the classical S and p five hundred CEO, Greg Watson. They're operators. They put everybody before themselves. They don't take any credit. They're back in their desks. They're back in their cubicle. Hollywood, exactly, they want the CEO to be this larger than life character that drives a Ferrari and has all the hot chicks and blah, blah blah. And that's not what they are. They’re operators, they're introverts. They're quiet, they're shy, they're operators, and that is the majority of all the S and P five hundred billionaires and small businesses that do three to $5,000,000 a year. They're all introvert, quiet people who put their team members first. If they need a press conference, they got a person in marketing that'll do that. They also lead with a very long lease.
HOWARD: They attract the best people and get out of their way. I think the only reason I got a dozen people who have been with me twenty years is, because I don't micromanage their job. If this is your department, it’s your department. In fact, one of the most common emails back to my team, they'll say, “I'm thinking about doing this or this, what do you think?” And I go, “Well, it's your call”. My job is to find the best people and get out of their way. If I owned a football team, I'm not going to sit there and be calling in plays. My only job is the owners. If you're the head coach to my football team, are you the best head coach? I'm not going to manage you during the season, during the game, any of that, but at the end of the season, at the end of your contract, maybe we had to reevaluate if you're the best person to lead this team, but you just don't micromanage. Give them a long leash. A lot of people are probably wondering, for this big machine you have, a thirteen thousand square foot, how many operatories?
CRAIG: Eighteen operatories.
HOWARD: Eight operatories. How do you feed that with new patients? Do you have like a marketing department or are you a marketing machine? What percent of collections do you spend on marketing? Do you do it in-house? Do you outsource, 2%?
CRAIG: Yes. So, we do have an in-house marketing person, but everybody that I meet wants to pick my brain on our marketing. They want to know what magazine ads or what we're doing with Google and stuff like that. And, I'm always surprising them when I tell them we don't really have a large marketing budget. The marketing, the 2% of our collections that we allocate towards marketing, of that maybe forty, 50% is spent right back on the patients. So, things like that we give them, we do a lot of promotions and we reward refers with a contest that we do. When you refer a patient, you entered into a draw, you get a lot of cool stuff from that. But, as far as like magazine ads and doing stuff like that, we don't really do that.
CRAIG: We think that our marketing is highlighting and amplifying our culture. In business it's always the customer's always right. In our practice, it's not the patient that is always right, it’s the team first concept. And we put our team ahead of everybody else. That's what we try to do because we want our patients to feel loved and they can't feel love unless the team feels whole and supported. Obviously with people that have twenty year tenure, you're doing that just automatically, Howard, that's how you operate. But for many of us dentists, we go to dental school and the minute someone starts giving us an idea, we jump down their throat saying like, “Where'd you go to dental school? Why are you giving me ideas?” We’re a frail league, some of us. So, I think it's really supporting the team as a way to market your practice because patients are looking for that experience and even though you can deliver the most careful chairside care and do all the right things, if your team is disengaged, unhappy, your work isn't as good.
CRAIG: So, I believe that marketing has to start with wowing your team and creating raving fans out of your team. And then secondarily that will create raving fans out of your patients. If your patients don't know who you are, you know how many times I’ve asked a patient, “Who's your dentist?” They have no idea who his name is. They tell me, “He's right by Walmart”. I'm like, “Well, how long have you been going?” “I don't know, ten years”, they don’t even remember his name. It's just that they're commoditized, they're dentists, they don't really have any affinity towards them. If your patient doesn't know who you are, and it has that level of affinity, you have really nothing but a tenuous relationship with them that's ripe to be changed, the minute you decide to go out of network with one insurance company or change your hours.
HOWARD: Well, I don't think lot of people in dentistry and medicine realize how their success turned them into a commodity. I mean, you go back into, last century, you go back into the early 1900s, all the way to 1950 dentists, physicians and there were so much quackery going on. Hell, there was so much quackery going on, the greatest book I ever read in Healthcare was Paul Stars book that's got a Pulitzer Prize, The Rise of the American Healthcare System. It was so bad in one fell sweep, the government set up fifty state boards and told them that every medical school and dental school had to be licensed by the state board. Every doctor that came out had to be tested and licensed. So, these state boards became the judge, the jury, the executioner, because medicine and dentistry was so quackery.
HOWARD: All these people riding through the hillside saying, “Oh, take this lotion or potion”. They all had the same ingredients, heroin, opium, cannabis, alcohol.
HOWARD: Cocaine and it was so bad that these state boards, they’re worse than anything the Maudi Sung every did. They sit there, and they can close down a middle school. When they did that fell sweep, they closed down 90% of all the medical and dental schools in basically a year. They called them diploma factories and so then medicine started their ascent of being an evidence-based deal. Well, they got so damn good that when you listen to people talking, “Yeah, my husband had his appendix ruptured another weekend. We called the ambulance. They took him to the hospital”. Well, they called the ambulance. They didn't tell the ambulance where to take him. They just took him to the hospital.
HOWARD: They assume every emergency room is the same. They're all high quality and you say, “Well, why did you go to Chandler? Why didn't you go to Scottsdale Memorial?” “I don't know? That was the closest one”. So, we got so good that the consumer, and a lot of the DSO chiefs are picking up on this, that even though they have rapid dental turnover, that the mindset of the American and the Australian is that, if you're a dentist, I'm sure you know how to do a filling, a crown, or root canal. So, we got so damn good. There's not even a question that maybe Chandler Memorial Hospital isn't as good. Maybe you shouldn't go there if you have an emergency heart attack and need a bypass, maybe you should go to another hospital. Or maybe you should go to Gilbert [inaudible 31:59], Glendale, Phoenix. So, we got so good, we became a commodity. That’s kind of interesting. I want to go back to marketing though.
CRAIG: By the way, same thing with the airlines, Howard. I was like forever, my Dad was flying this airline called Allegiant, which is a regional carrier where we are and I'm like, “Dad, they're flying all the shit planes that I don't want you flying on that”. “Like what do you mean?” “Well listen, if it's the FAA clears this airline, it's going to be fine”. Sixty minutes just did a story on them just recently that they've had so many violations and so many maintenance shutdowns and mid engine failures and all this stuff. It's true, the American public is dumped into this idea that it wouldn't be legal if it wasn't safe. Like right now we have like what? Twenty, 30% of dental lab work or being sent to places like China. There's little to no regulation. So, when I try to tell patients that, they're like, “What are you talking about you? You’re not even allowed to put Chinese drywall in my house, how can you put Chinese crowns on my teeth?” Interest from my brainstem, so the American public, we're a little bit asleep at the wheel presuming that the government is here to protect us, and its buyer beware. You got to know what you're dealing with and I think there is a now awakening to that. And now people, when you go to a restaurant and the waitress, you ask them, “Hey, what do you recommend?” They say, “Well, I've never eaten here before”. Consumers don't resonate with that. If you go to Carrabba's now, there's this whole story even at a chain restaurant, will give you the story about the food, the experience behind it, line caught whatever fish and it's marinated by Uncle John’s recipe or whatever.
CRAIG: So, people are contriving stories and you got to go into your marketing conversation. Marketing as a definition was, hiring a company to create a compelling story about you. My thing that I always say is either craft a story that's compelling enough to talk about or pay some Jackass who doesn't even know you to craft a story that's compelling. The more authentic ways to make yourself worthy of being talked about, so if you can create a great experience, but that means where the patient actually feels loved and connected. That's what a patient wants. The patient of today, doesn't just want it faster and better and less expensive. They want it all that plus I want to make sure that doctor that cared for me actually, I feel like he loves me or cares about me or she loves, she cares about me. That's the new standard, I think in my opinion.
HOWARD: Well, you talked about it Allegiant and they come to Mesa too. It's kind of an interesting niche play. What they do is, they do nonstop to all these smaller cities that the big boys like Southwest can’t go to. But look at Southwest Airlines. They always told us at MBA school that quality, service, price, pick two. Well, I'm pretty sure Southwest picked all three because they just now had their first death in the airline. I remember when USA Air, a plane fell out of their sky every year for eight years in a row. So, to fix that they decided to buy America West and then they were swallowed up by American. And, Southwest Airlines, number one in take off and I always fly Southwest because I have to speak. I can't do the American deal where you go there and the plane's half empty, so they cancel the flight and hotel. Southwest Airlines number one take off and landing. And there's no loss of luggage because you're flying point to point. There's no [inaudible 35:25]. But they just finally had their first death because a piece broke off an engine, broke the window and sucked this lady’s head out. I used to always sit by the window, but now I make Ryan sit by the window and I sit by the aisle.
CRAIG: He looks like a big guy. He could probably take a piece of shrapnel pretty easily.
HOWARD: And also, I think the emotional like people are always worried about airlines when thirty thousand Americans die in a car and Phoenix is ground zero for driverless cars, they have Uber down here, they have Google. What's Google's Waymo? They had their first death in Tempe and it was headline news around the clock and not one media company reported the story that that same day a hundred people were killed in a car driven by a human. Journalism is only about selling ads. I mean they just don't engage you with hysterical stories. They don't want to do any journalism.
CRAIG: Well, when someone dies in a car, somehow the human brain says it's their fault. When someone dies in a plane, they're a victim and we can all identify with the fact that they had no control over it. But to your point, you are so much more likely, you could fly every day per vehicle mile, aviation is so much safer. But you’re right, I fly privately, I'm a private pilot and every time a small Cessna, like a little one seventy-two, goes down in any part of the United States or the world, it makes national news. On [inaudible 36:49] here in south Florida, there's probably fifteen people that died today. You're not going to hear about them, but Allegiant, to speak to profit and maintenance, they were the most profitable airline actually. They were kicking ass profit wise because they weren't maintaining their planes. So, to the DSO correlation, DSOs can maintain a huge metric of profitability because they're praying and I'm not saying all DSOs are bad.
CRAIG: I don't want to go into that whole rabbit hole, but they can maintain a very high degree of profit because the American public says a dentist is a dentist, a crown is a crown. Why would I pay you fifteen hundred or $2,000 for a crown and a Nobel implant, when there's a guy down the street that will give me the implant and crown for four hundred bucks. And then we as dentists have to say, “Hey, well that implant comes in a box, it’s $20”. They're making their lab work in China. I don't want that in my mouth. Why are we having to carry that value proposition to the patient? That's the frustrating part and unfortunately, patients can ascertain their quality. If patients could ascertain the quality of the dentistry being done, this conversation would be moot because they'd be gone and people like, they care, but they don't know. They just know that the guy was nice, it didn't hurt. And even if the root canal fails in three years, the guy who did is probably going to take it out and do an implant. So, they manage their own failures. So, the dentist is like kind of graduating them through all their different dental treatment.
HOWARD: Interesting, interesting. I always talk about the funnel, I want you to go through your funnel. The average dentist is collecting about seventy fifty and they're taking home one seventy-five. The average specialist is collecting about a million and taking home three thirty. So, let’s look at the general dentists, collecting seven fifty, taking home one seventy five or seventy four. They do that at the end of this funnel and the funnel is hundred people have to land on their website before three engage and call the office. Three people have to call the office before the receptionist can convert one to come in and three people have to come in with an interproximal radiographic cavity and a bitewing before one person converts to have a filling, drill, fill, and bill done.
HOWARD: So, to do that seventy fifty and take home one seventy-four, to do that one filling, three had to come in, for three to come in, nine had to call. For nine to call, how many would have had land on the website? Well, if a hundred people had to land on the website for three to engage, three have to call for one to come in. And three have to come in to do one filling, so do so back out the math on that. So, for one filling, three have to come in, for three to come in, nine have to call. For nine to call, three hundred people would have to land on your website. So, I mean talk about the funnel. Then you ask the dentists, “Well, what are you doing this weekend?” “Oh, well Gordon Christensen is coming into town and I'm going to go spend the whole day learning about bonding agents”. I'm like, “Dude, is that your problem? All your fillings with deep bonding are falling out?” “No, I don't have that problem”. “So, what are you doing this afternoon?” Well, he's going to talk about wear rates of micro fills and both fills”. “And so that's your problem. All your fillings are falling out and wearing down”. “No, I don't have that problem”. “Then why then why are you spending eight hours learning from the God of dentistry about bonding and fillings?” Which I think is insane because I just got one rule of thumb on supplies. If you sell a billion dollars a year, this stuff to dentists who have eight years of college are the most anally retentive, paralysis by analysis people.
HOWARD: 3M sells over $1 billion in stock a year. I'm sure it works. Ivoclar over a billion a year, Danner $17 billion. Dentsply Sirona four billion. You can't sell $4 billion worth of stock to doctors of dentistry because it doesn't work. I'm sure if you buy a bottle of glue from Ivoclar, it's extremely gluey. So, let's go back to that funnel. So, three hundred people after land on your website for nine to engage, for those ninety engage, only three come in. And those three come in, we do one filling. So, if you fix anything on that funnel, you could double your practice. So, talk about the funnel.
CRAIG: Well, when you're talking about that, I can't help but think of Starbucks. So, Starbucks comes along, twenty years ago, thirty years ago. And, wants to sell a $3 and fifty cent cup of coffee. No one will invest with Howard Schultz because he thinks he's freaking bonkers because the average cup of coffee at that time was thirty-five cents. Who's going to buy a $3 fifty cent cup of coffee? And whenever I go anywhere now, there is a line around the corner for Starbucks. Starbucks could pry raise their prices 20%, 30%. The lions of Starbucks in Vegas, like when you go to the conventions, I can't even go to Starbucks, I can't access it. Starbucks has created such a value proposition that people want that, they want it. They took a lot of capital to convince the market that they wanted to get a Frappuccino when all they really wanted was a cup of coffee.
CRAIG: They didn't even know what all that stuff was, but he convinced the market that that's what it needed. And I love this thing that said, Henry Ford says, “If I would've listened to the public, I wouldn't have built a faster horse”. So, the consumer does not know what they want. They don't know that they want to have the crown, they don't even know what the crown could be done in a day. They don't know that going to the dentist could be an experience that they look forward to. They don't know that there is a dentist out there that will ease their anxiety and they'll finally be able to have dentistry comfortably. They only know dentistry is a scary place because no one's reinventing it. No one's doing it differently. So, every day patients come to our practice and say, “This feels very different”.
CRAIG: Some people are like, “This is crazy. I don't like this, it's so big. I really want to go back to my old guy”. That's fine too, but if you are going to slip into the sea of sameness and do what everybody else is doing, you're going to get the same results and you have to compete on that level. So, what I say the funnel is, yes, if you don't have a compelling offer or experience, you're going to have to kiss a shit ton of frogs to meet the right people. But if I'd say, if you would invest in your team and your experience, you could differentiate yourself enough that you could affect your funnel both in the intake and the acceptance rate, but a couple of percentage points. Everybody thinks they need to grow things by fifty, 60%. You just need to grow ten things by two or 3% and that will give you the that will give the exponential success.
CRAIG: Everybody looks for the one fell swoop of success. Just make sure that 98% of the people that leave your practice have another appointment booked. That's the single metric that actually creates the most amount of value for your practice. Are they walking out with another appointment booked? It's not production per patient, it's not a patient seen. It's just that. So, you need a massive freaking funnel. If 50% of your patients are saying, “I'll call you for a next hygiene appointment”, you're going to lose them. We all talk about new patient count. No one talks about net patient growth, so it's the number of new patients you've got. Everybody's so proud. They got hundred patients, fifty patients, eighty patients. How many patients in that given month that you got eighty, became eighteen months and one day late on their hygiene. Because if you got fifty new patients and sixty became eighteen months and one day past due, you actually lost ten patients that month. Net patient growth, negative ten. Why is no one talking about that? That's what retail talks about. Starbucks is like, “Yeah, the average McDonald’s customer goes once every seven days. Can we sell a product that they'd go once or twice a day, or can we sell a product where they go five times a week?” That's what Starbucks did.
HOWARD: Don't you think Starbucks should have a marketing campaign where they have Paul McCartney sing, Latte it Be?
CRAIG: You know what I'm going to do? I'm going to email Howard Schultz, tell him its my because I think that's so genius that could make millions of dollars.
HOWARD: Ryan started singing Latte it Be.
CRAIG: Starbucks didn't have an advertising budget. They didn't advertise. I know they do now, but the first couple of years they didn't. Look at Disney. Look at how people are buying, you can't even get a reservation at the new restaurant at Disney, which is overpriced and crazy. For two years, Disney cruises are the most expensive cruise line out there. You can't get on a Disney cruise this whole summer. You can get on Royal Caribbean. You can get on Carnival right away. So, why in dentistry we just talking about like holistically dentistry. Why is it that we're all the same? We have to differentiate yourself and the guy that's going to Gordon Christensen to learn how to polish is perhaps better. To your point, that is not the best and highest use of his time. Everything in dentistry is an upsell.
CRAIG: The only thing medically necessary is an extraction, everything else is an absolute. You don't need your teeth, it's nice to have them. You don't need them. So, that’s retail. So, we have to think of things in retail segments and that's what Pete and I are always trying to work on with our podcast, is really trying to push it to the next level. And I learned a lot from him. And, that's our zone. If you want to talk about how to get more patients, just sign up on every insurance, take [inaudible 46:22], take capitation, you'll be busy. You want to be busy, there's a million ways for dentists to get busy.
HOWARD: You're talking about Disney though, and you just gave me an ulcer and I'll tell you why. Netflix stock passed Disney. Now we're talking about rodeos. The greatest thing about being fifty-five years old, besides all my amazing grandchildren, is that I graduated high school in 1980 and the economy tanked. Interest rates 21%. We had double digit inflation unemployment and then they all came back and then in 1987, I graduated at dental school in May, then October is Black Monday and the market fell a quarter in one day. And then it went on a long haul, the internet boom, and then that all came to an end. The Y2k Internet boom, March 2000. That bubble popped and then it went for about eight years and then we had Lehman's Brother Bay and, September 15th and that popped.
HOWARD: Well now it's 2018. What am I seeing today? You just mentioned Disney and Disney Cruises and Disneyland and Disney World and Disney Europe. Netflix is an internet company that now has a higher valuation than gosh darn Disney. And Amazon is about to reach the market cap of a trillion dollars and doesn't have any profitability. American Airlines has more profit than Amazon and Uber's valuing at $80 billion a year. How they lose two billion a year and we're back to that same damn thing that I lived through from 1994 to 2000 where people were saying, they don't have any profit. Dude, they got two thousand clicks a day. And their websites visited by forty thousand cookies a day. It's like when you go to Starbucks, can you buy coffee with fricking clicks. In my world, you have to pay with money.
HOWARD: You look at the value of Uber and Airbnb and, “Yes, absolutely. Netflix is worth more than Disney. Oh, you're absolutely right there, buddy”. “What was your next best idea?” We are in bubble territory in stocks, real estate and bonds and the geniuses that I listened to that get little things like Nobel Prizes in Economics, like Schiller, he thinks the market is 50% overvalued. Same thing with real estate. All you got to do is track rental rates or mortgage rates. Anyway, it's insane. Thanks for giving me that ulcer again.
CRAIG: Well, there wasn't to talk about their valuations because we're on eight or ten years of a bull market. Corrections happen every five. We’re way overdue, but the point I'm trying to make is that there are cruise companies that are going to the exact same ports of call as Disney's. Disney’s is sold out at a 30% premium and Carnival can get you on this weekend. So, why in dentistry are we saying us as dentists, you have to differentiate yourself. It doesn't mean you have to have a thirteen thousand square foot practice like mine. I'm not here to tell anyone that the way to do dentistry is my way. Dentistry could be done any way you want, but it has to be done with some form of value proposition to the patient. If you want to be open for twelve hours, that probably could be your cheapest form of marketing is convenience.
CRAIG: If you want to be seven to seven or there could be a concept where you want to just create the Airbnb of dentistry where you could take this guy that closes at five and pimp out his office or rent out his office from five thirty to ten. Just share the facility, but there is other ways to differentiate and it's us, it's incumbent upon us as business owners to innovate. Business is innovation. So, Airbnb, Uber, all these companies that just gave you an ulcer, what they did do really well, and maybe they don't make money yet, but they innovated. They just flipped everything on its head and that's what we as business owners need to do. We need flip everything on its head and create a value proposition that's unlike anybody else's.
HOWARD: Well, you could say the same thing about Apple versus Android or Samsung. Apple still, they had the highest profit margins because they know there's a market for just excellence. I mean, if you're going to be staring at your smartphone for hours a day, why would you want a droid? Why is Warren Buffet buying? And I'm not saying anything bad about any of these companies, I love Netflix and Airbnb. Their business models are great. Nothing to do with that, but stocks at the end of the day are a weighing machine and they only weigh earnings. And I'm going to explain price earnings really quick to these young kids because I can explain it real simple. If a price earnings is thirty, that means that if I buy your company for a dollar, it'll take you thirty years to pay me back.
HOWARD: Now, when you buy things on earnings and dental offices and you know it's four to six, think about this. If you bought a dental office and worked it hard and all the profit went back to payback the dentist in four to six years, you'd say, “Well, okay, that's a good deal. I'm going to do. I'd rather do it in four years and six, but at four to six times multiple EBITDA. That's good”. Well, what if the guy said to you, “No, it'll take you thirty years. It’ll take thirty years. I'm twenty-five. I’d be fifty-five and I'm not going to work for you for thirty years to pay back the price”. Well, that's what you're doing with stock when it's trading at thirty times earnings, it's complete insanity. So, just because something's good doesn't mean that you're willing, look at when they used to bring people over to the United States were indentured servants. How long did an indentured servant have to work the farm for the price of his transfer, seven years? Now, would’ve the indentured servant done it for thirty? Hell no. So, why are you doing something an indentured servant wouldn't have done two hundred years ago?
CRAIG: Can I tell you why? Because when you're talking about price to earning ratio, you've got to also look at the forward appreciation of the stock. Everybody was laughing at me when I said I'm going to buy a Facebook at $20 a share, because like, “What are you doing?” I was paying money to Facebook on a monthly basis. They're like, “What are you paying money for?” I'm promoting some of our posts online and promoting some of our social media and now you've got Facebook at one hundred and eighty-five, which is what like two, three years ago. And their PE at thirty, meaning their earnings are $6 times thirty. They’re eighty. But if they're growing fast it could be worthwhile and that's to just bring a correlation to dentistry because I know we got kind of tangential here is, I'm asking the dentist to invest in their business as well.
CRAIG: I'm asking the dentist to say, if your consult room is a converted bathroom and there's still the toilet there with a table over it. If your carpet hasn't been changed in seven or eight years and you're going off to Gordon Christensen, learning how to polish your prep more, realize that patients are grasping at value.
CRAIG: They don't understand your quality of your margin. They don't understand the quality of your dentistry. I wish they did. So, the inferring value, perceived value from the way your team treats them and the way your place looks. The number one indicator of how people recommend hospitals, funny enough, is the perception of how it looks. You know when you recommend that crappy Mexican restaurant, you have to kind of describe it to your friend. Like, “Oh you got to go to Casa. Whatever. It's a real crap hole. It's a real dog is in the back of a shopping center. But trust me, the food is really good”. You feel bad about making that recommendation. You don't feel bad about saying, “Go to this hospital. They're just in a brand new cancer center there. It's like twenty foot ceilings”, And I'm not saying you have to do twenty foot ceilings. I want to be careful because I don't want people to think they have to do it my way. If your office is three or four operatories and it hasn't been painted in fifteen years and you have that sliding glass thing and a clipboard that tends to make patients like you less, is all I'm saying. Give people a reason beyond just your dentist, to like you more. Give them some Chapstick, put on protective eyewear, invest in a pair of headphones so they could listen to something while you're drilling on that offer nitrous. Train your team to take better care of that. And that's all I'm saying.
HOWARD: Back to on that funnel, where three hundred people have to land for nine to call. Nine have to call for three to come in and three have to come in. And by the way, I wish dental insurance companies would share more information. They just really have a very dysfunctional relationship with dentists because they know the insurance company might give you $300,000 in a year. And they only hear from you one time because they didn't cover something. And you writing this letter, “Dear insurance, you're horrible. You're this, you’re bad”. I mean every Fortune five hundred company, they all network and party and vacation with their value chain.
CRAIG: No, not their value chain, no. They have a very functional relationship with profit and a dysfunctional relationship with the dentist, but they're going to work hard to take the dentist out. Delta Dental is opening up their own clinics. They don't need the dentist. We're not their value chain. We're not their supply chain. When you end up buying CDS, you realize where the future of the insurance companies going. They're going direct to consumer. They're not here to make us happy.
HOWARD: Let's talk about being fifty-five years old and [inaudible 55:45]. Thirty years ago, Cigna thought the same thing. They thought, “Well, why am I going to pay Craig and Howie to do all this dentistry and they make all this money. I'm just going to start open up my own dental clinics”. And what do they do? They opened up a ton of dental offices and who was the other one? They did it at Kaiser Permanente. A nonprofit. They opened up nine.
CRAIG: Cedars did it.
HOWARD: Yes, Cedars did it. So, let’s look at two big insurance companies. Let's just look at Cigna and Kaiser Permanente. Kaiser Permanente opened up all these dental offices. They were losing their [inaudible 56:13]. Then what did their CEO's decide? They said, just like you said, “People don't wash rental cars”. And they realize that all their employees, associates weren't hustling. They're referring out all the molar endo. They would want to schedule on an eight hour day, eight single patients and each one of them needed a DEO on a bicuspid and they were losing. So, what did Kaiser do, they shut down all their dental offices, except for in Oregon, where there was a legal trust issue where they said, to provide medical and dental and then they closed down the dental. They were in violation of their trust Cigna, the same thing. They had all these dental offices, they closed them all down And Sears. Everybody thinks it's easy money. But what you said, people don't wash rental cars. When you graduated at school, three to $400,000 in debt, and the average liquid practice on the market at seven fifty and you find yourself a million dollars in debt. Did you see the front page of the Wall Street Journal today?
CRAIG: Yes, I did. That one million in debt orthodontist.
HOWARD: So, when that orthodontist. Guess what? Let me tell you something bad. A student loan default rate, if you have less, almost all the student loan default rates are under the $20,000 owed mark. You were never serious to begin with. Once you have over $100,000 of student loans, there is almost no default. You’re working and committed. So, guess who's going to be the hardest working orthodontist? I mean his name is going to be Mike Meru. He's on the cover of the Wall Street Journal.
CRAIG: He’s working for corporate.
HOWARD: Well, that guy, he can't go bankrupt. He's an orthodontist in the richest country in the world. He will figure out a way to do this. It's a crazy story, but the bottom line is, if Cigna and Delta Dental and Kaiser Permanente, if they all want to go out and open up a chain of dental clinics, knock yourself out. Because history repeats itself. I've already seen this Rodeo and they'll probably do it. They'll fail again. If I live to be eighty, I'll see someone trying it all for the third time. I want to go back one thing to marketing.
CRAIG: Try again, Howard. They were pioneers and listen, I'm not on their side. These guys don't give a crap about us, but they were pioneers in the seventies and eighties. Now, they have a successful model to go. So, they look at the Heartlands and the Aspens and the Sage, and all these different corporations that are doing it successfully. Now, there are seasoned operations people that run five hundred dental clinics across the country and they're doing it well. They're making money. So, why is it not that they would just copy that. You can say they tried and they failed. They're going to get smart. They're smart people. Our DSO’s getting better. In general. The DSO tried. They tried to make a push in the eighties as well and they'd bail. They came back around, they learned a lot. The first car wasn't really that well. It's smoked a lot and made a lot of noises and people stuck to it. And now cars work.
HOWARD: So, speaking of DSOs, you had on Scott Leune, a new model of the DSO. What are your thoughts on Scott Leune and his new model of DSO?
CRAIG: So, I don't know Scott very well. I'd heard him lecture and Pete brought him on the podcast. Interesting guy. I don't know enough about what he's doing to comment, but what I do believe is that right now we've seen generation one and generation two DSO. So, if we were to equate it to the hotel world, we've seen the Days Inn and Holidays Inn and the Ramada Express of the DSO. I do believe that I'm actually working a repeater. We're trying to shape something, I believe there's a generation three DSO. It will be well run, and it would be like the high end place or Ritz Carlton where there's actually a valued proposition. I think that many people go to the DSO right now. Fifty-five, sixty-five, “Screw it. I can't take it anymore. Let me pull my chips off the table and give me money”.
CRAIG: And then in three years, in one nanosecond, I'm released. But that is not a long-term value proposition for the DSO. The DSO, retaining doctors and giving them a piece of the upside is where it's at. So, Pete and I are working on this concept together where we're trying to formulate something where dentists can come on board and work together to create more organizational value. I think that's third generation DSO. So, you'll get some amount of your practice, but the real value is growing the parent organization. Creating that alignment, the same way I want doctors buying in at my practice at the local level, I want doctors coming together for organizational value at the top level. And, I think there's a lot of people that are just accumulating two, three, five and ten dental offices to just literally pump them up as an aggregate and dump them out.
CRAIG: Because if you could acquire a practice at a five or six EBITDA, maybe a four EBITDA. Accumulate and aggregate them into a group of ten or twenty. So, say if ten $1 million practices, but each practice is kind of crappy. A bag of ten $1 million crappy practices does not make a beautiful practice, but the market thinks so. And the market will pay you a ten or eleven EBITDA on that aggregate and then it all falls apart.
CRAIG: We've seen PE come in. PE does not typically help companies. There's statistics that show that PE does not make companies more profitable. Like they tell that they are. They extract profit for short term goals and they flip you and then it kind of poop you out and hope some other PE buys you. And I just think that cycle is abusive to dentistry and is abusive to the profession and it hurts our patients and our hurts our people and I don't want to see dentistry get abused in that fashion. So, that's my monologue on that. I just think the current state is bad for dentistry and I want to fix that. I want to be a part of that change.
HOWARD: Well, it's simply a hot potato. Nobody wants to hold it. A private equity will go roll up ten or twenty. Then they flip it to another private equity and that guy will buy ten or more and they just keep flipping it. If it was a working business, we'd go to Wall Street that’s been there since 1850, standing underneath a tree and they would do an IPO and it would be on NASDAQ. And, you and I and all their employees and the DSO. I mean talk about, people don't wash rental cars, if it was publicly traded, they could always be taking earnings, buying back shares of stock, and then giving it to their employees, their dentist or hygienist or their team, their staff. But it's not a working business model.
CRAIG: This is Wall Street's governing it. So, if you can buy at this valuation, pump it together and have this valuation, there's an arbitrage of the valuation. So, all you need to make your business model successful is keep consuming or aggregating dental offices. And we all know as we spoke about, money is really easy right now. So, when you got people giving the PE billions of dollars, all you have to do is aggregate dental practices. But it's more of a Ponzi scheme than an actual business model. Because if you stop consuming, then what do you really have? Our same store sales growth happening and most of these DSOs, I don't know if they're all like that.
HOWARD: I want to ask you, this is dentistry uncensored. I can't believe we already went over an hour. My God, I could talk to you for forty days and forty nights, but I got an hour and three. I got to wrap this up, but I got to keep going. You are a pioneer for eradicating childhood tooth decay and founded the All-Star Smiles Foundation with, used to be at the Marlins, signed with the Yankees, John Carlos Stanton. But, when you go into pediatric dentistry, they only have one dentistry uncensored polarizing issue where it split the hurt in half and they kind of get nasty with each other and it's with silver diamine fluoride. And that stuff is sold in your backyard. There's only one FDA approved silver diamine fluoride that’s in Florida. What do you think of that?
CRAIG: Oh wow. You're asking something really out of my wheelhouse power. I got to be honest, I don't have any opinion on it. The charity, I'll speak to the charity. We have pediatric dental advisors on the charity, but John Carlo is the highest paid athlete in the history of sports. He has a $325 million contract and part of that contract was he had to stipulate that it was a charitable donation. He got hit with a ninety-five mile an hour fastball to his face in 2014 and broke all of his teeth and he was sent to me through a friend I know in LA. And I used the Cerec on him. I made him a four to six tooth into a bridge. And, we were doing a lot of charity at the time and he could kind of feel our culture and our noble cause beyond just making money.
CRAIG: And he decided do the charity with me. So, now I'm charged with creating a national alliance of dentists that want a partner to help children's dental decay. Because the number one reason why a child was in the emergency room or missed school because they have dental pain, which is kind of crazy in a first world country like America that we have that problem. But, it's allstarsmiles.org and we're putting together a national day of treatment in February. So, if you're interested, please contact that website. As far as the fluoride issue, I don't have any information or opinion on that. I'm sorry Howard.
HOWARD: Well they are in your backyard. So, I'm going to make you have to go visit those guys. Let’s see what city they’re in.
CRAIG: I will.
HOWARD: They’re in West Palm Beach, Florida. And you're in?
CRAIG: Delray. Yes, it's twenty minutes away.
HOWARD: It's twenty minutes away. They're having a new charity. It's called GV Black, The Father of Modern Dentistry and they're having Back in Black, a charity campaign and Jeanette Mclean, pediatric dentist, has been on the show. It's on the cover of the New York Times talking about this. She actually bought one of those shirts and gave it to me and she must think I'm a pig because she sent me a two xl. Ryan, will you tell her I'm only five seven. Five seven fatties only wear an xl. Where six foot five fatties wear a two xl. But anyway, I wish you would really get together then because it is an extremely polarizing issue. I never thought I'd live long enough to see a debate between two pediatric dentists.
HOWARD: They're kind of like endodontists and oral surgeons. They all agree on everything. They only start disagreeing when you get into occlusion and TMJ or TMD. And then all hell breaks loose and you're looking at like ten major world religions all saying all these different things. That's what's confusing to the kids at dental school is they always think, “Well, how do you explain TMD if the elders can't even agree on TMD?”. But pediatric dentistry, they agree on everything. But this issue, and I would love to have your amazing mind and they have an amazing charity, but I don't like that shirt anymore. I wore it all the time that, I just tweeted it out to my Twitter followers, that shirt with GV Black because it really was a throwback to my brain last night when I went and saw the notorious RBG Ruth Bader Ginsburg and when Sandra Day O’Connor who is from Arizona was the first female Supreme Court Justice and Ruth Bader was number two.
HOWARD: So, for like the first couple of hundred years, it was all men. And then I was thinking during that show, when they were talking about that we tolerate GV Black as a father and mother and dentistry. Well that's kind of sexist. Well, who's the mother of modern dentistry? So, that’s what I want to do, Back in Black for GV Black, I want to find out who is the mother. Ryan, why don't we make a poll on that? We'll do a poll on that. And then Americans are nationalist, so they always say GV Black was the father of modern dentistry, but when you go to Europe, they say it’s Pierre Fauchard a hundred years before that. And, as luck would have it, when I was lecturing in Paris, I went to the Pierre Fauchard museum and guess what I saw?
CRAIG: The GV Black exhibit?
HOWARD: Closed for remodeling. Come back in three months. And I'm like, “Are you kidding me?” So, I'm going to have to go back.
CRAIG: Like Wally World for you.
HOWARD: Yes, I mean it was under a remodel, But, everybody in Europe says that Pierre Fauchard was the father of dentistry. And then of course America, everybody says GV Black, but it's so sexist. I almost felt dirty. I'm really aware of the sexism because I grew up with five sisters and I saw so much in my own house. We lived a hundred yards from the Arkansas river. I could go swimming, fish twenty-four hours a day, but my sisters couldn't get within ten feet of the edge. I had one older sister, Jean Marie that could’ve kicked my butt and my best friend’s butt any day of the week. She was a track star. She was five foot nine. Her thighs were the size of my waist. She'd run down like she was on a motorcycle, yet she couldn't swim in the Arkansas river because she was a girl.
CRAIG: Can you say that river?
HOWARD: Yes, its Arkansas River, but once you cross into Arkansas, it’s the Arkansas river. But, if you call it the Arkansas River in Kansas, you're going to get your butt kicked. Maybe not if you a six five.
CRAIG: That just hurt my ears when I heard you say Arkansas, but that's fine. That's cool. I just want to make sure.
HOWARD: My God, I love all that you do for dentistry. I love your mission. And what I'm also hearing is, when you talk about the final plots, is that every business model is always reinventing itself. It just keeps going and going. So, you're saying we're on the third generation DSO, but what I'm waiting for is in healthcare, their DSOs with our brother physicians, they've done things at the high end. They have Mayo brothers, and the Mayo Clinic, they have the Cleveland Clinic, they have MD Anderson, they have Scripps. The Mayo brothers were the ones in Minneapolis, St Paul with a good midwestern heart people and the Mayo brothers, just thinking, “Oh my God, when these old folks have millions of dollars of assets, they've been wheat farmers for three generations and now mom has got breast cancer”.
HOWARD: They will literally sell the farm for the best care. And the Mayo brothers were the first one that says, “Man, people value their life more than their cars and houses and iPhone”. Go to your own wife and say, “Honey, Sage and Gavin have a disease and they're going to die. And the only way we can save them is we have to go to Scandinavia and give this guy $3 million for a pill and it will cure the disease”. Would your wife sell every single thing you have and fly to Scandinavia?
CRAIG: Such a morbid thought. Of course, man, of course.
HOWARD: I know but dentistry DSOs is still just convenience twenty four hours a day. Take your insurance. Where the physicians are a century ahead of us and the Mayo Brothers said, and by the way, they've only set up two satellite locations one’s here in my backyard in Scottsdale, one’s in your backyard in Florida, where people realize that grandma will sell everything she's got. If she's got a chance at maybe beating this disease and living a couple more years to see her granddaughter's Bar Mitzvah, Bar Mitzvah for her grandson.
CRAIG: For that little bit of Jewish knowledge, I'm proud of you man.
HOWARD: Look at Cleveland Clinic. I go to the Cleveland. Cleveland’s so amazing. It has the Rock and Roll Hall of Fame. But Cleveland Clinic, you go there, you would think you're standing in the Middle East. I mean there are patients are flying in, anybody who's got money. When you go around the world, they have a joke, they say, “When you're in the Middle East or in Asia or South America or Africa, when you get sick, you don't need a doctor. You need a pilot and you need to go to America” and if you had all the money in the world, you'd fly to America and go to the Mayo Clinic, the Cleveland Clinic, MD Anderson and Scripps. But dentistry is DSOs.
CRAIG: Howard, there are equivalents in dentistry though. There are, maybe not on the scale of the Mayo Clinic, but there are people that fly around the world to go see Dr Michael Apa in New York. There are people that go to him and they fly to in his clinic and Dubai. So, we have the beginnings of the Mayo brothers and Michael Apa is the Apa Aesthetic Institute in Dubai. Multiple doctors lab everything. People are getting on planes and flying around the world to see him. We can't just say people don't value their teeth like they value their health, some people do, and they pay more. They pay hundreds of thousands of dollars to him sometimes to get it done. So, I think that shift is beginning. But there's always been guys like that though. Even back in our early ages, there were guys that were the guys to go to. So, I see dentistry shifting that way as well.
HOWARD: I have scores of patients who fly over a thousand miles to treat me. Of course, they're all family members from Kansas getting free dentistry, but still.
CRAIG: So, it doesn't matter. You don't have to disclose the last part of that. You just say to your patients, I have scores of patients flying thousands of miles to come see me and who cares why? Then you have to tell them that's your family. It's free, but you just leave it at that.
HOWARD: And I even have to buy their damn plane tickets. The more I keep talking the story, the worse it gets.
CRAIG: Yes, leave that part out too.
HOWARD: Hey buddy, love you to death. Love everything you've done for dentistry. Love your podcast. Thanks for uploading on Dentaltown. Yeah, upload on Dentaltown the podcasts. I can't believe there's now sixty dentists uploading their podcasts on Dentaltown and some of these guys, like there's one podcast called, Ideas to make your practice going. Just on Dentaltown, he just passed six hundred and fifty thousand views because what they're doing is, they're getting in their car and they got an hour commute to and from work. A lot of these people email me and say they listened to ten hours a week of dental podcast and there's guys like you who put out one show a week, so they have nine more hours.
HOWARD: I noticed people get tired of me when they're watching on YouTube much faster than when they just listening on the audio file. So, you have the face for YouTube. I have a face for iTunes, but they're listening to dental podcasts because they don't want to hear about Benghazi and emails and Trump and Hillary and Putin and all this stuff. But hey buddy, Craig, thank you so much for giving an hour of your life coming on the show and talking to my homies.
CRAIG: I would like to acknowledge you as well for all you've done for dentistry. I got a lot of my formative information on Dentaltown, back when I was just in that rapid consumption of knowledge stage of my career and I really appreciate all you've done and your commitment to dentistry and your love for our profession. So, it's really been my honor here, Howard, and I'm very grateful for this opportunity. Thank you.
HOWARD: Well, if you're really, really grateful, then you'll write a damn article in Dentaltown magazine, which goes to a hundred and twenty-five thousand dentists every month. That'd be a great article.
HOWARD: Nice. Send them an email and talk to Tom Jacoby. He’s been the editor since 2000 and he's been on my team eighteen years and he's an amazing guy. Sam is the editor, but Tom Jacoby, he’s a dentist in Chandler, Arizona. But, I really loved that because they need more motivation, leadership, inspiration and maybe you should address, address anything you want, but there's two major themes there. Will they ever be able to pay off their student loans? And number two, my office is in the middle of the Midwest and my office has been flat for ten years. They just need something to kind of get it going again. You know what I mean? You're an inspirational, motivational, leadership guy. And thanks again for all you do.
CRAIG: Thank you, buddy. I appreciate being here. Thank you so much.
HOWARD: All right. Thank you. Ryan.
[CRAIG]: Quality experiences, quality dentistry, quality interactions, and good relationships. Those are the most important metrics of the business. I’m a third generation dentist. So, dentistry is my life mission, absolutely love creating this type of environment where we're team centric, they really care about our people. I really feel this is my life purpose. I really feel that it's not just dentistry, its not just taking care of patients. It’s taking care of the community and inspiring people. It's what I live for.
DANIEL: Dental anxiety is extremely common. When I have patients come in all the time and they tell me, “Oh, I'm nervous. I haven't been to a dentist in years”. I tell them that they're normal, that they're not abnormal.
KAVITA: I don't think that anyone should feel like they're the only one that ever feels that way because most people feel that way. Even I felt that way.
TIFFANY: People find that this is a totally new experience and it's a pleasant one and leaving here they say, “I will never have to worry about going to the dentist again because I know you guys care about me and we'll take the very best care of me”.
KENDRICK: I was a police officer for twenty years and of those twenty years I spent sixteen years as a member of the SWAT team. But interestingly enough, one of my true fears has always been going to the dentist and Spodak Dental was the one place of all of them that was able to take that fear away from me, from rolling into the parking lots and the time that I left was just so different and professional and meticulous and clean and technologically advanced. I don't fear the dentist anymore and that's why I'm a lifelong Spodak Dental patient.
DARIEN It doesn't smell sound or feel like a dental office and that's what Dr Craig went for. He wanted it to be like a spa. People want to connect with their environment. You go into a building that doesn't have any windows and you feel awful. You can't see outside. You don't know if it's raining or if it's sunny or cloudy or what. So, you come into this building and everywhere you look, it's transparent. You can see through the walls, through the building, and you see green everywhere
SAMIN: To come here for the first time you're in for a surprise as to how pleasant at dental appointment can be.
JESSICA: We strive to be different, strive to give a different experience beyond that of the dental cleaning or “I need a filling”, or “My child needs a checkup”.
ERIKA: It's wonderful to work here and you have this sense of freedom. Freedom to pursue your growth and learning as we grow and as we learn ourselves, we can translate that to our patient care.
DANIEL: It's a lot of fun just coming to work and having a lot of smiling faces. It affects the patients and it affects the doctors. It's not just the smiles, but also the location, the facility, the daylight, the trees, everything makes the people that work here, and the patients feel good.
MYLES: I started the practice in June of 1976. This is our second and most recent location. After forty-nine years of dentistry, I've accumulated a vast amount of knowledge. So, I have the opportunity now to teach dentistry to help some of the new dentist handle some complex situations
SAMIN: it's easy to work easy because you never alone. The whole idea of the culture here, everyone being on the same page from the front receptionist, to the surgeon, to the restorative dentist, to even our cleaning lady, has the same values as all of us do. We're on the same page.
KAVITA: So, Kodak is unique because we have all of the specialists under one roof and I'm honored because I get to be one of the general dentist. So, I'm like the quarterback of the treatment. So, I get to coordinate between all the different specialists so that when we have a patient that has an extensive treatment plan, we keep everything organized and in sync with each other.
Speaker 1: We live in a very fast world now and people want, you know, in and out, so we give them exactly what they want. They come in for a cleaning, get a filling or a root canal extraction, implant, bonding, whitening, whatever. All in one place, all in one day.
MYLES: It's just a very efficient to do dentistry that way and I think it's the way of the future and I think my son has really captured that in this practice.
MARY: Their integrity in the community, how professional they were. I just knew they were a dental group that would definitely get the best of care to their patients.
CRAIG: My life work is to recreate dentistry and it doesn't necessarily have to be here. What we do within these four walls can be a prototype for other offices so that they can learn and do things that we do. I want people to copy, I want patients to benefit. It's for me, it's all about the benefit of the patient and if we're doing our job well and we're inspiring others to do more in the industry and our dental field then I feel an immense sense of completion.