Practice by Numbers · B2B · software for dental practices
Add analytics on top of the software dentists already use, not replace it
Became the wedge for the later all-in-one platform
What they did
What happened
In their words
How He Bootstrapped Dental Software to $16m
… acceptance, for example? What's going on? Is my sudden marketing working or not? Or am I spending money in the right place? Is my hygienist doing the right thing? There's a lot of little, little, little things that a business owner, like a dentist who's never really trained to be a business owner, they have to make all these decisions that they can't. And they don't have the right data. They don't have the right skills to make those decisions.
And that's what she would come to me. And I would run stretch sheets and I would run, you know, SQL queries for her in the database in the backend and try to figure out, give her answers. Which of these solutions did you build first? I'm sharing your website right now. The numbers part was built first, right? And the whole business analytics was built first, right? Business analytics, the practice IQ portion of it, the revenue analytics, be able to mine the data. This exists very heavily in the medical space. It just didn't in the dental space. So we built that on the dental space side.
What databases were you mining for data or what other tools in the space were you trying to connect with APIs and webhooks so that your wife could put together these dashboards? It's their PMS, their practice management systems, to be able to bring out all the information from their practice management system, from their QuickBooks, from the phones, from the Google Analytics. You try to bring this 360 degree view of the practice to understand …
… just can't move at the speed at which we can move. They don't have the technical skills or even the people to be able to build software the way we can. So one of the ways that I try to understand is someone truly the integrator of data in their space. So I just go to their footer or I go to their integrations page and I see how many they have listed. You only have five listed here. Do you actually have a lot more that you're just not listing?
So dentistry, even though it's quite fragmented, it is dominated by the five that we have listed. You could go integrate with somebody who has like a thousand locations. that doesn't really move the needle. So that's what we are focusing on right now is to get 70,000, 80,000 dental offices covered. What's the average dental practice paying you today? So at this point, we are reaching about $12,000, $13,000. And that's the average. Per year? Yes, per year. And some people reach almost all the way to like $17,000, $18,000.
Some customers who are paying us $100,000, right? So I'm talking about per location. And some customers have one location. Some customers have 40 locations. Okay. So your largest customer would be 40 locations times 18,000 per year, which would be 720,000 per year just from that one customer. Is that right? Not quite. Our largest customer is about 250,000 because they don't have all the features, right? Because you can build your package …
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More from this episode
- Grow on dentist referrals, great support and a few trade showsARR ~$2M -> $12.5M from 2021 to 2025
- Stay bootstrapped and grow 35-40% a year instead of buying revenue$12.5M ARR, 22-24% EBITDA, ~$1.5M free cash flow in 2025
- Grow one tool into an all-in-one suite sold as packages~$12-13K per location a year on average; up to ~$18-19K
- Call existing customers to switch their card payments to you for a cut~$190M processed of ~$2B possible; profitable but switching is hard
- Charge a percentage of the practice's revenue instead of per-feature fees
- Answer a real business owner's data questions by hand before building
Tags: analytics-wedge, system-of-record-layer, pms-integration, vertical-saas