Dentaloptics E245 final presentation

dentalOpticsAmit Desai, Aaswath Raman,AshwinMadgavkar, AlokVasudevRevolutionizing dental diagnosticsthrough non-invasive imagingFinal PresentationInterviewed: 72 people

The A-TeamAmit Desai AshwinMadgavkar Aaswath Raman AlokVasudevPh.D., Mat. Sci MBA/M.S. Ph.D., App. Physics Ph.D., EECambridge, BCG, UT Austin Microsoft, Harvard UT AustinNC StateMentor: Ethan Bloch dentalOptics

Dental lighting isripe for innovation dentalOptics

Original Idea : Inside-Out DentalLightingBring the light-sourceinside the mouthProvide better, moreconsistent illumination dentalOptics

OverviewI. Understanding our CustomersII. Finding Customer & Value Proposition FitIII. Building the Business: Channels, Partners & RegulatorsIV. Introducing.. periOptics dentalOptics

Version 0 The A-Team • Prototyping • • Personal• Manufacturers • Design Improved • Dentists • diagnostics service Manufacturing • Hygienists• Resellers • Marketing • Training & • Sales • Better • Specialists customization demos• Distributors • Service• Marketers • Superior patient • Chains• Trade • Stanford experience • Direct sales • Dental organizations • Trade schools • IP • Lower price shows • Hospitals • Human • Dental • Our network schools• Human resources • Compliance • Product sales• Manufacturing • Warranties &• Marketing support • Licensing (physical & IP)• Sales • Legal • Accessory sales dentalOptics

Getting out of the building dentalOptics

Three major dentist archetypes Most typical dentist • Primarily concerned with patient care Care • Worried about costs providers • Optimizes lifestyle and income Uses technology to up-sell additional procedures • Typically in high-income areas “Bentley” • State-of-the-art facilities and technologies dentists • Early adopter of dental devices Equipment handled by purchasing department • Uses financial metrics to make decisions “Chain” • Technologies standardized across all offices dentists dentalOptics

Caregiver Business Owner dentalOptics

Version 0 The A-Team • Prototyping • • Personal• Manufacturers • Design Improved • Dentists • Manufacturing diagnostics service • Hygienists• Hypotheses Resellers Tested: • Marketing • Training & • Sales • Better • Specialists customization demos• Distributors • Service • Intra-oral lighting• provides value for all Marketers • Superior patient • Chains dental professionals• Trade experience • Direct sales • Dental • Channels • Stanford organizations • Trade • IP • Lower price schools shows • Hospitals • Human • Dental • Our network schools• Human resources • Compliance • Product sales• Manufacturing • Warranties &• Marketing support • Licensing (physical & IP)• Sales • Legal • Accessory sales dentalOptics

Immediate changes• Current lighting was satisfactory for most uses• However dentists expressed interest in better lighting for particular sets of procedures dentalOptics

Immediate changes• Current lighting was satisfactory for most uses• However dentists expressed interest in better lighting for particular sets of procedures• Redid customer segmentation: Segment by Procedure Length dentalOptics

Version 0+ The A-Team • Prototyping • Personal• Manufacturers • Design • Improved service • Procedure • Manufacturing diagnostics • Training & length• Resellers • Marketing demos • Sales • Better • Continuing• Distributors • Service customization education - Short - Medium• Marketers • Superior patient - Long• Trade experience • • Stanford Direct sales organizations • IP • Lower price • Trade • Human shows • Our network • Reduced time • Distributor• Human resources • Compliance • Product sales• Manufacturing • Warranties &• Marketing support • Licensing (physical & IP)• Sales • Legal • Accessory sales dentalOptics

Version 1 The A-Team • Prototyping • Personal• Manufacturers • Design • Improved service • Procedure • Manufacturing diagnostics • Training & length• Resellers • Marketing demos • Sales • Better • Continuing• Distributors • Service customization education - Short - Medium• Marketers • Superior patient - Long• Trade experience organizations • Stanford • Direct sales • IP • Lower price • Trade • Human shows • Our network • Reduced time • Distributor• Human resources • Compliance • Product sales• Manufacturing • Warranties &• Marketing support • Licensing (physical & IP)• Sales • Legal • Accessory sales dentalOptics

Version 1 The A-Team • Prototyping • Personal• Manufacturers • Design • Improved service • Procedure • Manufacturing diagnostics • Training & length• Hypothesis Resellers Tested: • Marketing demos • Sales • Better • Continuing• Distributors • Service customization education - Short • Lighting needs differ - Medium• Marketers on procedure based • Superior patient - Long• length Trade experience organizations • Stanford • Direct sales • IP • Lower price • Trade • Human shows • Our network • Reduced time • Distributor• Human resources • Compliance • Product sales• Manufacturing • Warranties &• Marketing support • Licensing (physical & IP)• Sales • Legal • Accessory sales dentalOptics

Procedure length learningsProcedure length Short (< 1 hr) Moderate (1-2 hrs) Long (> 2 hrs) dentalOptics

Procedure length learningsProcedure length Short (< 1 hr) Moderate (1-2 hrs) Existing lighting solutions Long (> 2 hrs)  Surgical microscope  Loupe light  Clamps Anesthesia Patient comfort / movement no longer an issue dentalOptics

Procedure length learningsProcedure length Short (< 1 hr) Identified key procedures:  Root canals  Crack detection Moderate  Color matching (1-2 hrs)  Done by all dentists Long (> 2 hrs)  Lighting critical Segment by Procedure Type dentalOptics

Version 1 The A-Team • Prototyping • Improved • Personal• Manufacturers • Design diagnostics service • Procedure • Manufacturing • Training & type• Resellers • Marketing demos • Superior - Root canal • Sales • Continuing patient• Distributors • Service education - Crack experience detection• Marketers • Reduced - Color• Trade procedure matching organizations • Stanford time • Direct sales • IP • Trade • Human shows • Our network • Distributor• Human resources • Compliance • Product sales• Manufacturing • Warranties &• Marketing support • Licensing (physical & IP)• Sales • Legal • Accessory sales dentalOptics

$200 MM/yr US market size $25 B dental equipment industry • 180,000 dentists • 2300 visits per year average • Consumable for each patient TAM: $2B • ~$5 cost per consumable • 10% of visits • $0-100 cost per tool $200 M serviceable • 20% of dentists diagnostic tool marketSource: US BLS, ADA, dentist interviews, industry research dentalOptics

$200 MM/yr US market size $25 B dental equipment industry • 180,000 dentists • 2300 visits per year average • Consumable for each patient TAM: $2B • ~$5 cost per consumable • 10% of visits • $0-100 cost per tool $200 M serviceable • 20% of dentists diagnostic tool market Consumables are keySource: US BLS, ADA, dentist interviews, industry research dentalOptics

Version 1 The A-Team • Prototyping • Improved • Personal• Manufacturers • Design diagnostics service • Procedure • Manufacturing • Training & type• Resellers • Marketing demos • Superior - Root canal • Sales • Continuing patient• Distributors • Service education - Crack experience detection• Marketers • Reduced - Color• Trade procedure matching organizations • Stanford time • Direct sales • IP • Trade • Human shows • Our network • Distributor Key Learning:•• Human resources component drastically Consumable • Compliance • Product sales• improves revenue potential & Manufacturing • Warranties • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics

Version 2 The A-Team • Prototyping • Improved • Personal• Manufacturers • Design diagnostics service • Procedure • Manufacturing • Training & type• Resellers • Marketing demos • Superior - Root canal • Sales • Continuing patient• Distributors • Service education - Crack experience detection• Marketers • Reduced - Color• Trade procedure matching organizations • Stanford time • Direct sales • IP • Trade • Human shows • Our network • Distributor• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics

Version 2+ The A-Team • Prototyping • Improved • Personal• Manufacturers • Design diagnostics service • Procedure • Manufacturing • Training & type• Hypothesis Tested: Resellers • Marketing • Superior demos • Sales • Continuing - Root canal patient• Distributors • Service education - Crack • Lighting needs differ experience detection• Marketers on procedure type based • Reduced - Color• Trade procedure matching organizations • Stanford time • Direct sales • IP • Trade • Human shows • Our network • Distributor• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics

Segmenting by Procedure Types Intra-oral light benefit Procedure  Increased visibility in  Root canal tight spaces Reduce procedure time  Multiple teeth  Crack  Dentists at once detection Improve Diagnostic Capability  More natural  Color light matching dentalOptics

Best response: Transillumination Intra-oral light + imaging benefit Procedure  Track crack/defect  Root canal Reduce progress procedure time  Multiple teeth  Transillumination  Dentists Improve at once for Cracks Preventative Diagnostic Capability  Proactive  Color detection vs. Drive patient waiting for matching loyalty and patient pain return visits dentalOptics

Prototyping Transilluminated tooth using fiber or LED source dentalOptics

Prototypes dentalOptics

Form & Function function form dentalOptics

Physical prototypes help!• Handing dentists a crude clay mockup got us better, more actionable feedback• A great way of gauging whether new functionality satisfies a need dentalOptics

Interest, but not excitement Dentists generally liked the prototype Key TakeawaysDentist # Imaging back teeth is essential 5 Market would be somewhat 4 limited / niche 3 2 1 None Neutral Very Positive Interest in prototype dentalOptics

Version 2+ The A-Team • Prototyping • Improved • Personal• Manufacturers • Design diagnostics service • Procedure • Manufacturing • Training & type• Hypothesis Tested: Resellers • Marketing • Superior demos • Sales • Continuing - Root canal patient• Distributors • Service education - Crack • Lighting needs differ experience detection• Marketers on procedure type based • Reduced - Color• Trade procedure matching organizations • Stanford time • Direct sales • IP • Trade • Human shows • Our network • Distributor• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics

Version 2+ The A-Team • Prototyping • Personal • • Reduced service • Crack• Manufacturers Design • Manufacturing procedure • Training & time detection• Resellers • Marketing demos • Sales • Continuing• Distributors • Service • Improve education preventative• Marketers diagnostics• Trade • Increase # of organizations • Stanford • Direct sales procedures • IP • Trade • Human • Provide a shows • Our network patient record • Distributor• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics

Keeping our ear to the ground..We were tipped off to a potentially larger diagnostic market: dentalOptics

Keeping our ear to the ground..We were tipped off to a potentially larger diagnostic market: Non-invasive gum disease detection “This would be a game changer!” “A new standard of care” dentalOptics

This should get poked into yourgums 192 times during a dentalvisit …there must be a better way dentalOptics

Version 2+ The A-Team • Prototyping • Personal • • Reduced service • Crack• Manufacturers Design • Manufacturing procedure • Training & time detection• Resellers • Marketing demos • Sales • Continuing• Distributors • Service • Improve education preventative • Periodontal• Marketers diagnostics imaging• Trade • Increase # of organizations • Stanford • Direct sales procedures • IP • Trade • Human • Provide a showsCustomer Insight: • Our network patient record • Distributor • Periodontal imaging could be• Human resources • Compliance • Product sales larger market a• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics

Version 3 The A-Team • Prototyping • Personal • • Reduced service • Crack• Manufacturers Design • Manufacturing procedure • Training & time detection• Resellers • Marketing demos • Sales • Continuing• Distributors • Service • Improve education preventative • Periodontal• Marketers diagnostics imaging• Trade • Increase # of organizations • Stanford • Direct sales procedures • IP • Trade • Human • Provide a shows • Our network patient record • Distributor• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics

Version 3+ The A-Team • Prototyping • Personal • Design • Reduced service • Crack• Manufacturers • Manufacturing procedure • Training & time detection• Hypothesis Tested: Resellers • Marketing demos • Sales • Continuing• Distributors • Service • Improve education • Periodontal imaging is of preventative • Periodontal• Marketers interest to greater diagnostics imaging• dentists Trade • Increase # of organizations • Stanford • Direct sales procedures • IP • Trade • Human • Provide a shows • Our network patient record • Distributor• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics

Version 3+ The A-Team • Prototyping • Personal • Accuracy• Manufacturers • Design service • Crack • Manufacturing • Reduced time • Training & detection• Resellers • Marketing demos • Sales • Patient comfort • Continuing• Distributors • Service education ✔ • Increase # of procedures • Periodontal• Marketers imaging • Improve records• Trade organizations • Stanford • Direct sales • Patient • IP education • Trade • Human shows • Our network • Reduced • Distributor malpractice• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics

Version 3+ The A-Team • Prototyping • Personal• Manufacturers • Accuracy• • Design service Manufacturers • Manufacturing • Training & • Periodontal • Reduced time• Resellers • imaging• Resellers Marketing demos • Sales • Patient comfort • Continuing•• Distributors Distributors • Service education • Increase # of•• Marketers Marketers New hypothesis: procedures • Improve records• Trade Trade organizations organizations •• Stanford Insurance companies • Direct sales • Patient • IP • Trade could be strategic partners education• Insurance • Human shows companies • Our network • Reduced • Distributor malpractice• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics

Version 4 The A-Team • Prototyping • Personal• Manufacturers • Accuracy• • Design service Manufacturers • Manufacturing • Training & • Periodontal • Reduced time• Resellers • imaging• Resellers Marketing demos • Sales • Patient comfort • Continuing•• Distributors Distributors • Service education • Increase # of•• Marketers Marketers procedures • Improve records• Trade Trade organizations organizations • Stanford • Direct sales • Patient • IP education • Trade• Insurance • Human shows companies • Our network • Reduced • Distributor malpractice• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics

Version 4+ The A-Team • Prototyping • Personal• Manufacturers • Accuracy • Design service • Manufacturing • Training & • Periodontal • Reduced time Hypotheses Tested:• Resellers • Marketing imaging demos • Sales • Patient comfort • Continuing• Distributors • • Service Insurance companies • Increase # of education• Marketers would embrace this procedures technology • Improve records• Trade • FDA compliance is not • Direct sales organizations • Stanford • Patient prohibitive • IP education • Trade• Insurance • Human shows companies • Our network • Reduced • Distributor malpractice• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics

Key Partner: Insurance Largest dental insurance provider in California“Periodontal probing is the single most inaccurate piece of datawe get from dentists. Fraud and abuse are common” dentalOptics

Key Partner: Insurance Largest dental insurance provider in California“Periodontal probing is the single most inaccurate piece of datawe get from dentists. Fraud and abuse are common”Dental Policy Committee• Meets regularly to evaluate new technologies• Determines which technologies will be added to annual contracts based on efficacy and cost savings to insurance companyWilling to recommend use of new technologyNeed more clinical data, but are enthusiastic about the idea! dentalOptics

What we make Device cost (one time) ~$2000Dental DentistOptics Disposables ~$2.50 per patient dentalOptics

What the dentist normally makes $250 Insurance Membership $250 Co-pay Dentist Patient Equipment / Variable CostsNote: Assumes 50/50 copay-insurance split dentalOptics

What we’d add for the dentist Device creates $250 additional Insurance periodontal procedures Device cost (one time) Membership ~$2000 $250 Co-pay Dental Dentist Patient Optics Disposables ~$2.50 per patient Equipment / Variable CostsNote: Assumes 50/50 copay-insurance split dentalOptics

Three classes of FDA Devices Criteria FDA Requirements Minimal health and safety Need to register with FDA but Class I risks, established precedent not get approval before putting it (eg, dental on the marketpick, gloves, toothbru sh) Presents safety and health risks Submit 510-K application to Class II that arent completely controlled FDA, include detail about (eg, dental by GMP (good manufacturing device, marketingfillings, ceramics, drill processes) materials, device safety s) features, and other paperwork Invasive, inflammable, or Very thorough process similar to presents other significant drug approval. Requires clinical Class III significant safety risks. Often trails and mountains of(eg, stent, implantabl times a new type of device paperwork e pacemaker) dentalOptics

Some regulatory risk Device key risk: Proxy suggests our device misdiagnosis will be class IIDevice carries little direct risk Intra-oral, non-invasive laser light• Intra-oral, non-invasive probe caries (tooth decay) detector• Uses non-harmful wavelengths of radiation Approved as class II medical device. Clinical tests conducted to prove accuracyKey risk: misdiagnosis• Clinical evidence required to establish efficacySource: Iowa Dental Supply dentalOptics

Class II FDA approval processMonth 0 3 6 9 12 15 18 Feasibility study Class II device FDA trials and approval • Construct device • Determine predicate device(s) prototype • Enroll 4-7 sites and 10+ periodontists in study • Determine device • Fix critical end-points based on device capability diagnostic capabilities (eg, 1 mm measurement error) • Begin FDA 510(k) • Submit 510(k) to FDA and obtain approval documentation • Enroll 1-2 periodontists in preliminary efficacy study Without a predicateTrial Size 30 patients 200-400 patients 1000-2000 patientsCosts $200 K $200 - 400 K dentalOptics $1,000 – 2,000 K

Version 4+ The A-Team • Prototyping • Personal• Manufacturers • Accuracy• • Design service Manufacturers • Manufacturing • Training & • Periodontal • Reduced time Hypotheses Tested:• Resellers • imaging• Resellers Marketing demos • Sales • Patient comfort • Continuing• Distributors •• Distributors • Service Insurance companies • Increase # of education•• Marketers Marketers would embrace this procedures technology • Improve records• Trade Trade • FDA compliance is not • Direct sales organizations organizations • Stanford • Patient prohibitive • IP • Trade ✔ education• Insurance • Human shows companies • Our network • Reduced • Distributor malpractice••• Human resources Manufacturing • • Compliance Warranties & ✔ • • Product sales Licensing (physical & IP) Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics

Version 4+ The A-Team • Prototyping • Personal• Manufacturers • Accuracy • Design service • Manufacturing • Training & • Periodontal • Reduced time• Resellers • Marketing imaging demos • Sales • Patient comfort • Continuing• Distributors • Question asked: Service education • Increase # of• Marketers procedures • How do we sell our • Improve records• Trade product? organizations • Stanford • Direct sales • Patient • IP education • Trade• Insurance • Human shows companies • Our network • Reduced • Distributor malpractice• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics

Channels Direct Sales Big Distributors Private Practice Institutional Purchasing Dentist Dentist Department dentalOptics

Channels Direct Sales Big Distributors 80% Market Share 30% Margin Private Practice Institutional Purchasing Dentist Dentist Department dentalOptics

Channels Continuing Education Magazines Trade Courses & Email Shows Direct Sales Big Distributors 80% Market Share 30% Margin Private Practice Institutional Purchasing Dentist Dentist Department dentalOptics

Dental Charting SoftwareEntrenched incumbents in the management/charting spaceWill accept new images: intra-oral cameras do this already withoutneeding explicit partnerships (anything beyond images will require deepintegration)Our own software: extra barrier for many dentists based onconversations, but some tools have succeeded dentalOptics

Version 4+ The A-Team • Prototyping • Personal• Manufacturers • Accuracy • Design service • Manufacturing • Training & • Periodontal • Reduced time• Resellers • Marketing imaging demos • Sales • Patient comfort • Continuing• Schein/Patt. • Service education • Increase # of• Marketers procedures • Improve records• Trade • Stanford • Direct sales organizations • • IP Patient • Trade education• Insurance • Human shows companies • Our network • Reduced • Patterson/S malpractice chein• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics

Version 4+ The A-Team • Prototyping • Personal• Manufacturers • Accuracy • Design service • Manufacturing • Training & • Periodontal • Reduced time• Resellers • Marketing imaging demos • Sales • Patient comfort • Hypothesis Continuing Tested:• Distributors • Service education • Increase # of• Marketers procedures • Value Propositions are• Trade • Improve records strong enough to sell • Stanford • Direct sales products organizations • • IP Patient • Trade education• Insurance • Human shows companies • Our network • Reduced • Patterson/S malpractice chein• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics

Our Sales Pitch dentalOptics

Patient experience is key • Accuracy  • Reduced time ☐ • Patient comfort Value Props • Patient education  • Reduced malpractice exposure  • Up-sell procedures  • Improved record keeping  “This seems reasonable” “I’d write you a “We would have “It would be cost check today!” the discussion” prohibitive”Cost Props $1000 $2000 $8000 Per patient consumable cost < $5 dentalOptics

Version 4+ The A-Team • Prototyping • Personal• Manufacturers • Accuracy• • Design service Manufacturers • Manufacturing • Training & • Periodontal • Reduced time• Resellers • imaging• Resellers Marketing demos • Sales • Patient comfort • Continuing•• Distributors Distributors • Service education • Increase # of•• Marketers Marketers procedures • Improve records• Trade Trade • Stanford • Direct sales organizations organizations • • IP Patient • Trade education• Insurance • Human shows companies • Our network • Reduced • Patterson/S malpractice chein• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics

Version 4+ The A-Team • Prototyping • Personal• Manufacturers • Accuracy• • Design service Manufacturers • Manufacturing • Training & • Periodontal• Resellers • • Reduced time imaging• Resellers Marketing demos • Sales • Continuing•• Distributors Distributors • Service • Patient education comfort•• Marketers Marketers • Improved• Trade Trade records • Stanford • Direct sales organizations organizations • IP • Patient • Trade• Insurance • Human education shows companies • Our network • Patterson/S chein• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics

Version 5 The A-Team • Prototyping • Personal• Manufacturers • Accuracy• • Design service Manufacturers • Manufacturing • Training & • Periodontal• Resellers • • Reduced time imaging• Resellers Marketing demos • Sales • Continuing•• Distributors Distributors • Service • Patient education comfort•• Marketers Marketers • Improved• Trade Trade records • Stanford • Direct sales organizations organizations • IP • Patient • Trade• Insurance • Human education shows companies • Our network • Patterson/S chein• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics

dentalOptics dentalOptics

dentalOptics periOptics dentalOptics

Our Product: periOptics dentalOptics

Our Product: periOptics $2000 per unit $2.50 per silicone sleeve Distributed through: Patterson Dental & Direct Imaging Resolution: < 1mm dentalOptics

$400 MM annual total addressable marketfor Periodontal Diagnostic Device Total addressable market ($MM) 450 $320 MM $400 MM 400 350 300 250 200 150 100 $75 MM 50 0 Device sales Consumables Total • Device cost - $2000 • $2.5 consumables per • Amortized over 4 years patient • 128 MM patients per year dentalOpticsSource: Department of Health and Human Services

Growth PlanMonth 0 6 12 18 24Regulatory Feasibility study Class II device FDA trials and approvalProduct Early Prototype Dev. Product Cycle I Product Cycle IIDevelopmentScale-up Planning with ManufacturersPreparationCosts $300 K $1.5-2 M dentalOptics

Growth PlanMonth 0 6 12 18 24Regulatory Feasibility study Class II device FDA trials and approvalProduct Early Prototype Dev. Product Cycle I Product Cycle IIDevelopmentScale-up Planning with ManufacturersPreparationCosts $300 K $1.5-2 MUnit Economics Cost to Dentist: $2000 Cost of Goods Margin Distributor $500* $900 $600 Revenue *At scale: 10K units dentalOptics

Lessons LearnedPhysical prototypes engage potential customersConsumables are key to revenue models in dental devicesListen to your customers for new directionsCaregivers don’t think exclusively like businesspeople: thepatient experience is paramount“Hi, I’m a Stanford student…” gets you a conversation withpretty much anyone dentalOptics

Appendix dentalOptics

Version 2 The A-Team • Prototyping • Improved • Personal• Manufacturers • Design diagnostics service • Procedure • Manufacturing • Training & type• Resellers • Marketing demos • Superior - Root canal • Sales • Continuing patient• Distributors • Service education - Crack experience detection• Marketers • Reduced - Color• Trade procedure matching organizations • Stanford time • Direct sales • IP • Trade • Human shows • Our network • Distributor• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics

Version 3 The A-Team • Prototyping • Personal • • Reduced service • Crack• Manufacturers Design • Manufacturing procedure • Training & time detection• Resellers • Marketing demos • Sales • Continuing• Distributors • Service • Improve education preventative • Periodontal• Marketers diagnostics imaging• Trade • Increase # of organizations • Stanford • Direct sales procedures • IP • Trade • Human • Provide a shows • Our network patient record • Distributor• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics

Version 4 The A-Team • Prototyping • Personal• Manufacturers • Accuracy• • Design service Manufacturers • Manufacturing • Training & • Periodontal • Reduced time• Resellers • imaging• Resellers Marketing demos • Sales • Patient comfort • Continuing•• Distributors Distributors • Service education • Increase # of•• Marketers Marketers procedures • Improve records• Trade Trade organizations organizations • Stanford • Direct sales • Patient • IP education • Trade• Insurance • Human shows companies • Our network • Reduced • Distributor malpractice• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics

Version 5 The A-Team • Prototyping • Personal• Manufacturers • Accuracy• • Design service Manufacturers • Manufacturing • Training & • Periodontal• Resellers • • Reduced time imaging• Resellers Marketing demos • Sales • Continuing•• Distributors Distributors • Service • Patient education comfort•• Marketers Marketers • Improved• Trade Trade records • Stanford • Direct sales organizations organizations • IP • Patient • Trade• Insurance • Human education shows companies • Our network • Patterson/S chein• Human resources • Compliance • Product sales• Manufacturing • Warranties & • Licensing (physical & IP)• Marketing support • Accessory sales• Sales • Legal • Consumable sales dentalOptics

Periodontal care right now Considerable undertreatment 70% of offices don’t regularly do a full probe test of all teeth! Time & effort 50% of US population has mild-severe periodontitis, only 5-10% of are treated “The number-one reason dentists are sued is failure to diagnose periodontal disease”* 30% of patients don’t feel the need for the recommended treatment* Increases with aging population dentalOptics *K. Esler, Sidekick (2009)

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Dentaloptics E245 final presentation

by steve blank on Mar 14, 2012

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Dentaloptics E245 final presentation Presentation Transcript