Dentistry Uncensored with Howard Farran
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1210 The Jazz Imaging x-ray sensor subscription by Rick Henriksen : Dentistry Uncensored with Howard Farran

1210 The Jazz Imaging x-ray sensor subscription by Rick Henriksen : Dentistry Uncensored with Howard Farran

6/17/2019 6:12:16 PM   |   Comments: 0   |   Views: 113

Rick Henriksen joined DEXIS in 1998 and immediately took on the task of establishing processes to drive strong organic growth. 


VIDEO - DUwHF #1210 - Rick Henriksen 



AUDIO - DUwHF #1210 - Rick Henriksen



Assuming a leadership role, Rick established the Dexis model as a new standard in best practices, and the business flourished. After leading the team through the sale of the company to Danaher in 2005, Rick took on leadership of Gendex and Imaging Sciences (iCat), building the number one imaging business in the world.



Howard: it's just a huge honor for me today to be talking to Rick Henriksen who joined Nexus in 1998 and immediately took on the task of establishing processes to drive strong organic growth assuming a leadership role Rick established a nexus model as a new standard and best practices and it flourished after leading the team to the sell of the company to Danaher in 2005 Rick took on leadership of Gen Dex and imaging Sciences ikat building the number one imaging business in the world and now and we've been friends for my gosh twenty thirty years twenty years I got in and we're both the same age and both have the same number of grandkids we're both up to five so man we've seen so many - when I first met you we were in a we were talking about micro Arab ratios creative which was sold through Patterson whatever happened to micro Arab region 

Rick Henriksen: I love my creative unit man I loved it but my assistant is it made a mess I think I think I think lasers you know all but cannibalize that technology the dust was a you know kind of a prevailing concern and a lot of practices just didn't like the big elephant trunk that sucked in the dust you know that remember aluminum oxide powder forced you know kind of and so I think it just you know I think our lasers took  its space and they kind of disappeared still I think there are those that use for small less expensive devices for you know some itching and scuffing surfaces but it's just not around

Howard:  that is amazing so now you're on so now you're with Jazz imaging how old of the company is jazz imaging when did that start yeah

Rick Henriksen: we launched the business about a little over two and a half about two and a half years ago not just short and you know really what it was about was the  sensor market has been you know pretty stale for a long time right you've had digital x-ray technology has been around since the late 80s price point has hovered in that eight ten thousand dollar price range for twenty twenty-five years the technology itself has been largely homogenized and it's become you know it's kind of returning back to a commodity you know markets change and yet digital x-ray space is all but stayed the same and so few things happened I left an R in 2010 I just wanted to go you know try some other startup opportunities the guys at Fairchild imaging who were actually the  founders of digital radiography technology they invented the first trophy sensor back in the late 80s they made Sirona sensor they made our Dex is classic then ultimately our Dex is platinum and then the gen Dex sensors and that business had been around a long time semiconductor business making sensors for dentistry as well as you know imaging devices for deep-space impact the Hubble telescope been around a long time so that business sold in 2012 we had some unique patents on the DEXA sensor at the time and those patents began to expire in 2014 Todd Miller who was the project manager at Fairchild at the time that you know we had spent time getting to know each other was tracking those patents had a great idea regarding a subscription option for sensor replacement or additional sensors and so for the next several years they began to design a next-generation Dex's like single size rounded corners angled cable all things come made that product great did a few things to improve on it and we've got about 10 percent more active area but the big deal was a subscription model so instead of $10,000 for sensor plus warranties every year it's 1999 dollars and you sign up a subscription 12 or 24 months and we send you the sensor the Rinne kits everything you need get going and so we've really changed kind of the economic model with the return back to you know an operating expense versus that big capital expense

Howard:  so instead of buying the sensor you said earlier the range was has been staying at between eight and twenty five thousand dollars where does all right but where would you say the median is

Rick Henriksen: it's about $8,500 is the median between the three prime between the three primary players which I would refer to as and maybe you could add genex in there but I would say DEXA Shick and Carestream are the larger players and when we were doing some cost analysis and market map and getting into this new business you know it was crazy how close they all had hovered around that protected price 

Howard: so the three major players are Nexus shik and who care stream I would take gen decks you know is kind of in that call it four primary providers so Dex's is uh is index is owned by Danaher it is and what about sick owned by Sir ona sick so sick is Sirona and then care stream is by itself independent that's closer than gen Dex is owned by right  Danaher owns on two of them so of the soar players Danaher owns Dex's and Gen Dex so dinner her then her owns two of the four players Dex us and Scheck caroms owned by care stream no  Texas and excellent index Texas and gen Xer Danaher sickest Sirota care streams independent as are we okay let me get that one more time um then her owns Dex's and Jen Dex who owns chick Serrano Chet did they buy that from David chick they did a merger David was gone a long time ago when he got himself into a bunch of trouble iMac in the late 90s yeah some stock yeah there was some sec locations and when that happened he sold it to uh Jen decks or Sirona where he was he was kind of out and then Jeff sloven came in and Jeff was actually running schick and then they did a merger with Sirona and then you know then sloven was running Sirona for a period of time so Rana had their own issues a couple years ago if you remember and some of the senior management team was three dogs three of them three of them resigned in one day yeah so so they so Danaher owns Texas and Jen Dec six oldest aronia which in married DENTSPLY and then you got care streams so those three are those four brands by three companies would you say that's eighty percent of the u.s. digital x-ray market I think it's very I think that's about right okay so so where did you get the cojones to go compete with those boys so I mean Danaher that's the biggest four hundred pound gorilla in all a dentistry probably the next brace gorilla doesn't even weigh three inner towns what gave you a fortitude to go after and compete against Danaher 

Rick Henriksen: well a few things one you know if I told you that markets change you would say thanks Rick for the brilliant insight and let's end the call however as I've pointed out this particular market is not doctors and their teams have been charged with paying for these sensors at that price for a long time and warranties have to come along with it and so we know that you know the vast majority of market eighty five percent has digital x-ray of you know some shape or form they paid twenty to thirty thousand dollars to get it installed they  paid for the warranties for several years that were 1500 2000 2500 bucks a year they didn't need replacements they didn't get software updates and they never called support so they're asking themselves why am i paying all this money and then the sensor fails when they've dropped the warranty and now they realized why they paid the money because now they're looking at another eight to ten thousand dollar bill well this is this is prevalent throughout the market where these practices and this model has gone on for some time they're frustrated by the price points they're frustrated by the money they're spending they're frustrated that they know that you know that the parts to this this sensor or a thousand bucks they're not ten and so the markup you know may be a little bit exorbitant at this point so we just decided because we know how to make sensors and we don't have to ship and out all that work we do it all in-house in San Jose California we knew that we could construct a model that didn't have those layers of cost right we're not sold through distribution largely some but we price in parity we don't have huge operating and overhead expenses it gives us the ability to keep price down the idea behind the subscription is that you pay for this product anyway right the idea of sensor ownership is an illusion you know III get into this discussion often with doctors who want to talk about is it Elise I like to buy my cars and I tell them I get it I like to buy my cars - the difference is  when I'm done paying for my car and my extended warranties come to an end if something fails with the car I can have someone get it fixed for relatively inexpensive price that's not the case with digital x-ray sensors once they're dead they're dead so  you know across the industry officers are starting to realize I'm getting sick and tired of all this money that's going out to digital x-ray sensors and I'd much prefer a low upfront investment a hundred and thirty nine dollars a month and I never have to worry about sensors again it's kind of that return to film right I mean there was a day when you bought film you didn't know how much you bought you knew you had to have it had a per patient kind of cost it was a consumable and you had to have it so you bought it well we're kind of going back that day instead of your capex dollars going toward cents or spend them on a real capital expense item and let us handle your sensors we plug right into the software you have every major software we know officers don't want to change their software so you literally could just call us up give us $1,999 we send you the sensor the key software key we login we do all the installation we set up the you know we calibrate the help calibrate the two beds so you maximize your image quality plug side-by-side with the sensors you have and so we just make this kind of a no-brainer why would you spend ten thousand when you could spend two and if you've got to pay for a warranty anyway why not just have it on a subscription and not worry about it

Howard:  so the subscription is $19.99 one-time fee one-time setup fee yep comes with everything you need then how much a month

Rick Henriksen: sign up for a 12 month plan it's 159 bucks a month sign up for a 24 month plan it's 139 bucks a month during that term I get phone support updates and sensors replaced if and when they fail no deductible there is no warranty because you're on the subscription at the end of the subscription you can either send it back and move on you're not into it for 20,000 bucks so it doesn't feel that painful if something else game-changing presents itself some brand new technology that's meaningful how much you could so much 1:39 okay so 130 okay continue 159 for one year 139 for two years at the end of the term if you want to send it back and move on you can and if you want to stay on the subscription you simply make $139 a month automatic credit card payment and you don't worry about digital x-ray anymore 

Howard: so you so do you automatically ding the credit card so they give you your credit card the automatically corrects and what it what is that subscription model and economics called where you ding a credit card every month like Netflix subscription  just subscription model and Wall Street is just in love with these models I mean they were valuing Netflix the same as Disney just because they had that guaranteed monthly subscription now Amazon does it a year late you know they bill you yearly what made you go monthly dinging a credit card monthly instead of yearly what was your thoughts 

Rick Henriksen: well you know one it helps it helps with the cost to get the company off the ground right subscription models are valuable when they're flying but they're expensive when they're starting you don't get that chunk upfront to run the business and so I think this was a nice blend between a small initial setup fee and a monthly subscription that would be typical to what anybody out there they're still using film there's just there's absolutely no good reason to do that they're spending more now monthly and filmed chemicals amounts let alone time and satisfaction the patient and 

Howard: when did when did yes when did you start doing these jazz imaging subscriptions about two years

Rick Henriksen: we launched in Chicago midwinter of what is this 2017 in 2017 to the head 2017 yeah and how how's it going how many how many you guys got signed up for this yeah we're well into the thousand plus we're growing at about 40 percent year-on-year that the you know the amount of doctors and Facebook traffic and positive commentaries continuing to climb you know I'll tell you it's it was it was a little surprising for me quite frankly having been in this particular space for quite some time and having you know kind of submitted to a traditional model you start to think that that's the way it works and you can kind of get stuck in your own way of thinking Todd had this great idea I thought it was a great idea and even when we first started I continued to think you know this is going to be that one hour presentation they're gonna need to see it in the office they're gonna want to compare it to the nether to companies and nothing could have been further from the truth I mean I think one of the things I learned was that the that the dental community by and large recognizes digital x-rays arrived this isn't a is it here yet is it good enough yet can I diagnose from it that that there's this there's this idea that they all produce good quality images and  if you were to lay all the senses side-by-side you know the only two that would look unique would be DEXA sonars because of the single size and the rounded corners and the angled cable but aside from that all the others look exactly alike and I think because of that homogenous ation of Technology it's become much more of a price consideration and so for us making that move to provide an opportunity for doctors and their teams to have some technology that could replace what's dying or add more because they didn't get enough to begin with their Chokin their workflow at this point you know I remember you gave us you know one of your lecturers talked a lot about  the importance of expanding chairs for the purpose of opening up space for new patients right I remember you talk about this maybe 20 years ago right and you gave the example of the shopping aisle and how you know they have all these aisles for a reason and sometimes they have to grab five people and they have to expand because flows eb right and so you want to be in position to handle that well a lot of that doesn't happen at Dell practice and so there's one Sasser there's 2 hygienists there's 3 hygienists there's 2 sensors there's 2 doctors they don't have enough and so they're waiting and it's a silly wait it's 139 bucks a month to take the weight off the table so  for us  we've solved a couple of issues one offices are tired of spending that kind of money on sensors they're largely dropping warranties unsuspecting of the fact they're gonna have to come out ten thousand more dollars I mean we'll have Dex's practices call us now saying should I keep my warranty or should I just wait and when it dies I can call you  set up these the same prices the warranty let alone buying a sensor so so that we solve that kind of problem and we and that is who we get in mass at this point additionally practices are starting to realize there may be and some of the workflow and they don't need to do that right if I've got 45 minutes to knock down hygiene appointments and I've got to wait five to ten minutes to get the sensor I'm bitching at the end of the day because I can't get done in time and you know you know I'm Rick's trying to get the film out done and Jenny's hogging the sensor and it's making me look bad and so easy elimination to add just a little more technology to make that workflow a little bit smoother 

Howard: and I just want to be clear that I don't do any commercials on my podcast they're all free my guests are free all that goes up so the reason I had you come on is because my god if you do a search for jazz imaging on dental town it just I mean you guys have taken over their digital x-rays I'm sitting thinking I know that dude so  that's why I called you that great notice

Howard:  my that brain works our marketing our social media marketing guy our into court and he's done a fantastic job of you know we think this 

Rick Henriksen:we think your community is a great fit for who we are right we're disruptors we're not interested in maintaining status quo we believe we've solved a problem that makes life a lot easier at least as it relates to digital x-ray right we've got a very simple single size solution we know it's better than two sizes if it can be avoided we plug right into the software you have and we make the decision you know the economic decision very easy and so as a result of that we've really were really shaking up this digital x-ray universe  and your crowd is you know they're kind of wired like that I mean look at you I mean you're a you're a nut and so you know they love that right so we like it we like thinking differently and outside the box and let's solve real issues and we think we've done that create we think we're freeing up cash the doctors can invest it in other things well for the business and better for their patients 

Howard: well you know the greatest sewing machine in the world most people would say is what singer  and saint you see it wasn't the best a sewing machine at all he was just the first one to change everyone else went in $50 for their sewing machine and he saw the Irish diaspora and all the jobs were in textiles and they could make $3 a week if they owned the $50 sewing machine but they couldn't get a job they didn't have one so they were the first ones to start handing out a sewing machine for $1 week financing and they bankrupted the rest same thing everybody always talks about Henry Ford they don't end understand why Henry Ford why they shut down that that plant it was because GM started GMAC financing and Henry Ford you need to give them all $689 and GMAC financing said no let's finance that and so you have changed the bismal but i want to get more technical format when you talk about these four major players Dex's gen dax they don't actually make the center like jazz imaging you don't have a billion-dollar factory that's making this not not all of it right there are there pieces that are sourced that's right and are all of you buying the same pieces from the same source no 

Rick Henriksen: there's you know chic has their own dan has their own they share with Gen Dex right they leverage that relationship care stream as their own we have our own huh there's not a ton of people that are making the parts right so there is some there are other companies that make and then and then private label through many of the other smaller you know kind of players like you know soda imaging or you've got oh shoot I'm blanking there's just fewer those smaller few those smaller players that there is a company that makes for them but we do we're one of the few that actually gets you know makes parts acquires parts and does all assembly in-house and 

Howard: you do all that in Reno our theatres in San Jose California being in a high tech San Jose part of the magic formula or could you have done this but

Rick Henriksen: so Fairchild imaging was our partner at Texas for a long time Fairchild you know goes back to making cameras for the US Air Force in 1915 they designed and developed CMOS and CCD chips in the 50s they you know their chips are in deep space impact and Hubble telescope they were a defense contractor for Lockheed Martin and this was a division that made these sensors and this team that's now our team was that team at Fairchild and then when it's sold many of them were off doing different things that was mm so I left hander in 2010 Fairchild sold the business in 2012 patents began to expire on the DEXA sensor in 2014 Todd who was the project manager who we worked together because we were kind of a commercial business and Dex's we didn't make anything that they were fully assembled by Fairchild that's not the case now with Jazze we do the assembly and so the idea there was they're all in San Jose there was an opportunity around a great idea and that's you know and that's kind of the birth child of you know of of jazz kind of where we are and what was that idea it was it mostly a financing deal of the enterprise innovation it was the big idea was about how to how to shake up the space with a low barrier to enter to a high  quality product you know everybody wants three things right you learn this in the science of selling everybody wants the highest quality product they want the best customer care and they want the very lowest price and those things don't come around very often they're very tough to find right you kind of choose at Dex's we had the best quality product and the best customer care for many years that it was the highest price and so I think what we feel like we've accomplished which is a which is a read it's a really big is the ability to provide a high quality product that plugs right into the software you have doesn't require you to eliminate your other sensors you can just add ours into what you're already using into the software you have and do it at a at a price that you know you just get you're not gonna get it you're not gonna get out there the fundamental difference is this if you're a doctor that wants to buy sensors and you don't want to pay for the warranty and you want to play that game then we're not for you if you're a doctor that pays for warranties or struggles with the idea of paying for warranties would prefer not to pay for warranties and spend ten thousand bucks up front we're perfect for you right so instead of the 10 it's 2 and instead of the 1500 our warranty or 2,000 or whatever year it's 139 bucks a month and everything else is the same game so why wouldn't

Howard:  you do it you talk about your revenue model being different a subscription instead of buying upfront on did you also disintermediate the middleman I mean do they get these through their patterson shine banco Burkhart reps are only direct 

Rick Henriksen: we have a handful of distribution partners that we work with and and we also work direct we don't work through any of the big-box dealers and so you know Benko many of the MDC groups we've maintained price parity so we provide a discount to the distributor it's not your traditional heavy discount but it's enough to make it worth it to them and it's enough that we can keep the price the same so the customer doesn't experience any disconnect between whether they call us directly or they work through one of our one of our distribution bars 

Howard: so who are your distribution partners so today it's Benko 

Rick Henriksen: as I said some of the NDC groups I don't if you know them anyway I am you see wish and the NDC is kind of the mothership it's kind of an organization a dealer's smaller dealers would fear our website national district is that it no that's I you know I don't know I don't go to their website if you search MDC I'm sure you'll find and there's their trade for dental distributors Yemen or its kind of an organization that provides some leverage by you know creating an umbrella if you will of a organization leadership that kind of helps the smaller dealers work in more coordination get a little more leverage with manufacturers defend themselves maybe a little bit more against the large dealers that have a little more power and pushing manufacturers to eliminate dealers so that they don't have the same levels of competition and

Howard:  so Benko is your big one and then after an NBC in DC in DC

Rick Henriksen: but yeah the collection inside that is Midway dental Nashville dental IQ dental reliable dental you know a bunch of these kind of smaller distribution partners that you know that understood what we're doing and decided they wanted in on the action 

Howard: so is Darby one of those yes so 

Rick Henriksen:Darby is our biggest call center partner and actually it's going very well they've been responsive and I feel like the Darby relationship that we have is a great fit because as you know they're a call team - right this idea of eliminating those layers of cost and adding more value back to the customer we kind of have a similar approach 

Howard: well it's um you know the only secret to lower prices is lower cost I mean if that's Arkin Airlines just said you know we're just gonna match Southwest Airlines well then they're gonna be absolutely out of business and so you have to lower your cost in your business model and so so what would you say were the main things that lowered your cost in your business model 

Rick Henriksen: well the obvious are call team right so we don't have the same you know outside sales representation that has to make a living - we don't have the infield service technicians who have to make a living - so for us because we can handle everything remotely and electronically you know imagine right you go to the website to place an order right you respond to an ad one of our inside team members gives you call we answer any questions you have you place your order on the website or through your distribution partner we ship you everything we need you need we log in we do all the work with you for you it's 139 bucks a month and you don't have to worry about that anymore if by chance something happens to the sensor we all know sensors fail it's a phone call it's a remote in it's a quick diagnosis and it's a sensor sent out to replace it if it's dead you drop yours in the box and and everybody's happy and so there's no need for all that resource out in the field

Howard:  so what do you think of these business models being my am my sister my oldest is our living like Elmo forever and every time I went up there I would stop by and see Pete for shadow Patterson now I don't even know what Patterson's unique selling proposition is I mean the world is changing so fast and then whatever you go to these conventions and everybody's worried about Amazon and then here's you trying to sell direct through a call center so let me just back up I was a lot at once the what do you think of distributors now and do you think Amazon is who's been at the Greater New York meeting every year for three years in a row and they look like men in black it's like two guys in suits with an Amazon deal no one will go they're just all everybody's like oh my god is that Darth Vader I'm so Amazon what is that gonna be a major player

Rick Henriksen: well I would offer that I don't know that Amazon you're so I think about distribution into categories primarily one is you know the consumable stuff right the  goop and the cotton balls and you know what you want and you're just looking to buy it at a lower price I don't I think that Amazon could certainly and may certainly play a significant role in that it's clear that they've got the you know the big the big distributors you know a little uneasy I'm not sure it's happened as quickly as everybody had thought it might and that may be just a matter of Amazon learning the space but I think that the consumable thing makes sense right if I can eliminate layers of cost to your point I can buy that stuff for a lot less and it's the same stuff it's not any different same box of stuff I was getting from those guys I can get from these guys I think where it changes a little bit we actually listed our products on Amazon the jazz club we get very little traffic and my belief is  it's still a technology there's still an equipment element to it there's still questions that you're gonna have about how it works and does it integrate and what happens if it doesn't give me what I want and who's gonna be there for me and I think there's more involved in the technology equipment side of the equation I question whether Amazon's gonna be able to gain any real traction there as long as they try to stay an internet-only kind of non-human interaction model so if they change that model which I had been told several years ago there was intent to add a hundred field reps at some point in the future then I think that changes the equation but in but in today's world I don't think there's a threat to technology or equipment companies based on the lack of human interaction huh 

Howard: so I'm if you were the CEO of Paterson what would you be trying to do 

Rick Henriksen:well I think the challenge that they face and I know you know I've been closer to shine and might in my time because of my Dex's days and you know I was there when we negotiated that relationship with which we had a lot of success with that relationship with shine I think that you know this is the interesting thing right when you look at the tectonic plates the shifting that may go on inside this market you ask yourself the question you made the comment about value how does the distributor that doesn't make things add value when they're marking it up thirty percent forty percent 25 percent whatever the number might be how do they articulate that value it's a difficult thing to do and I think that's been some of the challenges that many of the companies have gone through I think you know one things I think shines been smart in is they own pieces of lots of companies then you've got Danaher who is now you know disconnected themselves from the mothership right they're their own company inside dentals so they're no longer tied to the big machine they're their own thing giving them a lot more flexibility to make their own decisions so to be clear on that they separated their stock into two to stock categories and it just analysts its own dental is its own business now and we would wind it Danaher separate out dental those months not here you know not a year months ago and who's gonna be I'm gonna be running their ID and who's gonna be running that unit now it's the same gentleman I can't remember his last name is first named Sameer he's running the business now and he's been in he's been at the head there for a few years now so I think the question you know from a strategic perspective is when you're talking about cost and price and you're talking about value right how do you articulate that value and what does that mean to large manufacturers like a Danaher right who has all of kur and all of the equipment brands and  do they ask themselves the question we don't really need a distributor why are we using a distributor it doesn't make any sense we have three four hundred reps between all of our brands across the country we've got technicians out there supporting ikats and pans and other things we've got marketing capabilities and support mechanisms already in place why the twenty thirty forty percent and I think Suraj Shakur probably asking them and dense fly right all tied together probably ask themselves the exact same questions question on any jazz imaging thread the first question

Howard:  my homies asked and I love them the fact that this surfers question they they won't know if the quality's the same so so that's the overwhelming deal am I paying less money because I'm not gonna own a Mercedes and now I own a Chevy so talk about your so talk about the diagnostic quality of the image yeah

Rick Henriksen: I think the evidence is when we plug it in side by side with the sensor that you have and so one of the ways that we've helped eliminate this concern given you know as well as I do if I'm on a trade show floor and I'm looking at x-rays I'm looking at the best x-rays they've ever taken right I'm not looking at the right because there's plenty up and so you're only getting the best it's like it's like when a doctor asks me can I speak to someone who's using it I say of course but you realize I'm only gonna send someone that loves me and loves the product and loves the company so you kind of know what you're gonna get before I send you the name but that's fine you can talk to him I think I think for us by providing this 14-day 100% money-back performance guarantee it's given us the ability to lower some of those concerns right just sign up let us ship you one we'll plug it in you see for yourself use it for two weeks if it works and you love it you keep it and if it doesn't I give you all your money back and you're out nothing for how long two weeks 14 days

Howard:  so you get two weeks to the site if this thing image works it's exactly right and and and what's your return later are you finding out that um that that's an issue or it's 

Rick Henriksen: no it's very low it's very low it what it's what it's done for us I think there's a few things that have helped our rapid growth one is you know our guitar engineers are the guys that it you know we're on the team that invented the first digital x-ray and we've been making sensors ever since 30 years so a long history of making sensors for all the brands you know the second is is that this particular product the jazz solo sensor is really a best-in-class in terms of its design we have 10% more active area than the existing DEXA sensor but the footprints the same I can lay my sensor on top of a kodak sized one and it's the same size but I get the image area of their size too so I don't need multiple sizes to accomplish the same thing and then because we've got a price point that's not you know not that scary and then a 14-day performance guarantee where where our team doesn't work right we ship it to you we contact you we do the install we help calibrate the two beds if you've got existing sensors we make sure there's no disruption in your ability to acquire on that workstation and then we give you the freedom to play with it yourself for a couple weeks and decide and as a result of that you know it's you look it's a little bit of a puppy dog clothes right I get it take the puppy home and tell me if you like the puppy puppies don't come back very often but  you know but it's but it works and it's right you know it's we give them the flexibility to just send it if they don't if it's not giving them what they want and we and honestly our you know I always had this kind of mentality whereas if you're not happy as a customer I'd rather you be happy somewhere else cuz I don't want you unhappy as a customer right I want you to enjoy your experience in your actual house does it doesn't sort money right doesn't serve me at all 

Howard: yeah I reminds me of something totally separate um you know when people don't pay their bills these dentists taking the small claims so now they live in a town of 5,000 and there's some farmer lady there that he took the small claims and for the next 50 years she's gonna hate him what I always did is the week of Christmas holiday I knew anything over 120 150 I knew is dead so I just erase off the counts at the end of the year made a Christmas card and said hey we had a great year but I'm concerned about your ear because you haven't pay your bills so the spirit of crystals around the corner I have zero dollar bill and all I ask is that in the future for your continued referrals the friends and loved ones oh my god they come in crying with cakes and grass really it's fantastic it's like you weren't gonna get any money so what you wanted to make her a mortal enemy now I was there when she was down and she'll never forget it 

Rick Henriksen: so yes you know it's not just that one mortal enemy it's all the friends of the mortal enemy right and mortal enemies have a tendency to grow armies they're gonna tell everybody what an ass you are so you know it feeds on itself and and conversely you know so does it when you take good care of others 

Howard: and by the way if you haven't read all the the jazz imaging threads on Downton basically it all comes down these people are all saying well why would you buy a sensor for eight grand and pay two thousand dollars a year for a warranty I mean it's just and everybody's just saying it doesn't make sense what a lot of people want to say I'm one of the  second question so this how am i home he's saying first was are we comparing apples apples is the same quality the second is what are the most likely ways a sensor can break and how would you prevent that what causes most sensors to break 

Rick Henriksen: well and please my gosh most sensors to fail right so what causes them to fail is the the poor handling of team members dropping electronic pieces of equipment on hard surfaces all day long so they have to take care of it they have to treat it like it's an electronic piece of equipment I mean I'm not talking about you know and glove but I am talking about you know caring for it there's a little garage that could hang on the on the cabinet so you hang it there you don't you don't drop it you don't use high-alcohol base to clean it right it'll break down the rubbers and the plastic so you have to make sure you're using you know appropriate approved cleaners and there's plenty of them out there's nothing proprietary here and the third primary is  that they don't use the Rin holders and so they'll get away from Rin holders and then you'll start having biting on cables and biting on plastic and putting undue pressure in the wrong points the fourth and I and I would liken this to the competition is  the set is the cable position so if you look at our sensor it comes out at a 45 degree angle if you look at all other sensors they come out at a 90 degree angle and that the challenge with that 90 degrees is that if you need to get the apex of a root of an anterior tooth and you've got that thing vertical and that cables coming straight out the bottom and now it's getting in the way making the sensor effectively even longer than it was to begin with and now the team is trying to bend that thing to get it out of the way they're creating a lot of torque and that's where you know some of the failures happen as well we don't experience that ours comes out at 45 degrees virtually no torque at all so we don't have that kind of same limitation but you know it's mostly user you yeah but you have offices I mean I still have you know I still have some friends that word exes customers fifteen years ago that have the same sensor and then I've gotten you know and our guys were the ones that made those sensors and I've got officers that call us up and say I'm replacing sensors you know they're Dex's customers whatever they're replacing sensors every six months but the user issue is a big deal and you know unfortunately it's hard to manage that because the because doctors you know doing work he can't be walking around making sure they're handling the technology the right way every day 

Howard: we have a new specialty now and that's the 10th one out sets or it's a dental anesthesiology the one before that was dental radiology the radiology people a lot of them don't like the word x-ray are you calling this a dental set sir a Dental radiograph Center or do you use the forbidden term x-ray what's your thought on that word

Rick Henriksen: oh I don't know I didn't know it was I didn't know it was bad so x-ray but we call it a sensor I mean I've always called it sensors but we'll call it an x-ray sensor so I don't I don't know I haven't I didn't get the memo on that we need to eliminate that word from speaking that

Howard:  do you have any dental specialists oral maxillofacial radiologists on your team or is that really not nothing because there's 

Rick Henriksen:an intraoral sensor it's largely a GP kind of application right I mean they're the ones taking full mouth series they're the ones taking bite wings and oftentimes this specialists are just using the x-rays that are coming from those practices so you know not a ton of that it's not you know we don't pay we don't pay a lot of people to talk about us you know we you know there's one of the ways we keep our costs down right we think we've got a compelling story and  we believe that from  a team and from the technology and from the pricing model that it and it holds up and in today's world of social media marketing and the ability to leverage you know vehicles like your own when you've got you know a lot of lot of officers doctors that are you know they they come to this place to find out the true story about about what it is they're being told and so I you know there's lots of ways for us to do what we're doing today without kind of that old traditional do you have all the you know the big expensive Kol s they we would just not kind of stop really our business

Howard:  so when you talk about sensors failing it was improper handling don't play with my alcohol use your ring holders cable needs to come out at angle what percent is the first one improper handling or is it basically are they getting the song

Rick Henriksen: it's so hard it's yeah it's so hard to know because it doesn't leave any physical damage right you can't see it you know you'd have to slam it to put a dent on it so it's just tough to know you know it's it's but but you know I mean we we've had you  get some of these bizarre stories right like a like a team member that used to finger caught over the sensor to finger place and when it was done and they went to cut the finger cut off they cut the cable at the same time and you know whoops forgot it was a cable you or whatever right you'll hear some of these strange stories very rare rarely you know the vast majority is is just kind of normal wear and tear and  from our perspective because there is that element of unknown where is it coming from and why it makes a lot more sense to not have to worry about getting it replaced and for offices that are dropping warranties because they're sick and tired of the cost and no value coming back right because they spent all the money up front the ideas I just gave you ten thousand bucks how much more do I need to give you right so we don't do that do you give me two thousand bucks and you give me the same money as your were G dollars and don't think about it anymore and it doesn't matter right it doesn't matter now you just can go focus on other things you got plenty in a dental office to worry about you shouldn't be worrying about taking x-rays as you well know you got to have them right I get the reason they're important is because I can't if I can't if I can't take an x-ray I can't bill and I can't treat so I have to have one so we've just tried to take all this you know noise confusion price cost concern and eliminate it we plug right in we give you two weeks to try it your dollars are negligible focus on other things 

Howard: I'm gonna play Trivial Pursuit with you right now who was the first American dentist to take an x-ray in the United States oh gosh that's it yeah Charles Edmond Kells DDS who lived 1856 to 1928 he took the first dental x-ray in New Orleans in 1896 and if you don't if you weren't reading I would have thought wow that's quite a memory you've got but it's amazing how far these things have come and then I want to tell you another thing is that you know what year did Renkin invent the radiograph Google that one year how about 1947 ah no nineteen not hang on hang on 1891 1895 very but let me point something out because a lot of times you need the historical perspective to see what's going on there was no dental insurance till about 1948 is about three years after war too and nobody from 1895 to basically 1950 use these in dentistry it wasn't until dental insurance came out and covered x-rays at 100% and it was a domino effect from the Pacific where that started in California Oregon and Washington and just rolled all the way to New Jersey so if you're talking to anybody with a PhD in economics I'll always tell you incentives matter and insurance matter and when there's not an insurance code it has had a profound impact on how dentistry or medicine has been treated so don't ever forget that lesson but um so basically this is very  disruptive do you do you feel like it's a real disruptive I mean 

Rick Henriksen:  oh yeah our you know our tagline I first came out was the dental disrupter so you'll still see that on the website you know our objective was to disrupt a space that had gotten stale and we believed that wasn't adding the value back to the customers and we had an opportunity to do that and so you know that's what I love about this country right we have an opportunity to get an idea and to go execute that idea and those who execute the best they went and so I find that we're in a really unique position in that we you know we've got a team of experts there's no knows how to make it we've got in a commercial team that understands how to interact with customers in a considerate respectful way giving them an opportunity like I say to see for themselves if it's gonna give them what they want and then you know and then the ongoing support and service that I just think has eliminated this I'm tired having this conversation about digital x-ray sensors

Howard:  I don't want to switch gears and totally change everything around on you but I do because of one of my homey says I want to know more about Rick Hendrickson and they google your name they're also gonna find you with guru dental so you're you know your name comes up with guru down a lot so what is guru dental gimmick Ginoza 

Rick Henriksen: is a it's a teaching tool it's designed to provide kind of a custom and yet standard work approach to visually teaching patients involving them in the learning process and driving conclusion to to you know decisions on the care that they need so you know you know that you learn a lot more when you see things than when you hear things most dental practices don't do a very good job of teaching patients you know we know that that that the that the link between the mouth and the body is real we know that bacteria pumping through you know bleeding gums and into the you know into the heart is a bad idea and so we just don't think a lot of Americans or patients around the world understand the importance of good oral health my experience has been you know doctors and dentistry are caught between a little bit of two worlds some of its insurance reimbursed as you suggest and those things get high acceptance rates because if it hurts or someone's paying for it at least that's how it feels I'm happy to have that work done but the second you're asking me to reach into my pocket now I'm making a discretionary spending decision and I have a finite amount of resources and so if I've got ideas on how I want to spend my money and you've just presented a thousand dollar non reimbursed procedure that may be in my best interest but I don't really understand it it's probably worth it to you to make sure I do and so what guru does is it provides 3d animated video it allows us to pull in patients specific information you can do we've got intellectual property protection on stopping the video and drawing on it you can record the dialogue and then when it's over I can add CareCredit financial options all the things you and I discussed I can email it we stream it through the cloud server I can email it to your home you know these decisions are being made at home not in the chair right if I have to reach into my pocket for a thousand bucks I'm gonna ask my wife I'm not saying yes here and so I have to now understand what you told me which I didn't I have to go home and tell my wife because I remembered it which I didn't and now I have to try to convince her we shouldn't be doing that thing we should be doing this thing and that becomes difficult to do and so gurus about raising the level of understanding through visual teaching involve learning we reinforce it at home where you can sit and watch the exact presentation you got chairside right in its entirety your voice Dr. Farran and the videos that you chose to use the presentations are all pre-built so all I have to do is pick the x-ray and choose the presentation and I start teaching I can stream at home if you watch it the office gets an email that says hey Howard watch the presentation now would be a great time to follow up now rather than calling up and talk to front desk people and asking what they hate the most it's picking all the people that never chose the care and having to make phone calls all day trying to get them to come in right they didn't get it the first time they're not gonna get it now and so this then has we also have a reminder system that's focused on not appointments but treatment so if you happen to come in and if we took you through that process and if you slip through the cracks 30 days after you didn't schedule our tool sweeps the scheduler and sees that you didn't schedule and then it grabs the treatment codes of the of the presented care the treatment plan and then it packages it up into an automated reminder it's a video reminder of why the important that why the care is important to them and to the to the doctor so what we're trying to do is raise the level of importance of all of we don't think it rises to a high enough level of importance in the mind of patients we know that because 80 plus some percent of Americans have gum disease right if I asked you do you do you know you're supposed to brush and floss how many people would say yes and yet all these people come in with all these problems they don't understand it and that's really what we're about helping them understand why they should be choosing better care

Howard:  I know you don't want to play favorites and I don't it's called channel conflict but if some we just had six thousand kids graduated from dental kindergarten school last week if they're going out to set up their own practice do you have any practice management software recommendations does digital radiography storing the images billing insurance with the images or any of them easier faster cheaper than the others 

Rick Henriksen:  you know there but we happen to partner with app Terrax it's an imaging software so they they're a third party that makes softwares now they've started to brand their own for me the reason I like them as a partner is the architecture is wide open it makes it possible for you to plug in what you want you know I've heard similar stories about open dental one of the reasons that it's you know it's growing is because they don't tell you what you can and can't use in this softwares you know I think it's one of the frustrations that many of the care stream customers we have that come to us you know we've been able to figure out how to heat the sensor directly in their software worthy only is that to my knowledge we're the only non Carestream sensor that could shoot in that software a lot of those offices they don't like the fact that they're told what they can and can't use I think that others are trying to open that architecture up more and I think a lot of the cloud products are improving rapidly and so you know for me I'd probably look at and look at some of the cloud products that you know that you could they're easy to update right easy to swap easy to change you start to get in these products that you still need you know CDs to download and upgrade and you know it's a little bit archaic so it's I don't you know I'm not super connected to the practice management side but but from an imaging perspective I think gap tricks opens you know is more open than others and  as a result the easiest to work with which one was easiest actrix as an imaging 

Howard: so yeah so you've been to the app jerks um and so talk more about that there in Akron Ohio it's basically a custom software development company in downtown Akron specializing development of custom applications so what do they do with dental imaging 

Rick Henriksen: well they make an imaging software that allows for the connection to a practice management software right with a clean link so that all the informations pulled in and connected and then they also make it possible for you to choose the hardware that you're interested in is that cone beam is it and is it sensors is it cameras whatever you want to use they make it possible to use it unlike some that you know will implement some cripple wear where they'll make it you know possible but not as advantageous if you use their own stuff but you don't like their own stuff as much if you remember earlier I was taught about the Carestream sensors are you know they're big and not particularly comfortable they've got the 90 degree cable so it's hard to place but there's a but  a lot of the officers love some of the other products right they  love you know their digital pants they love their cone beam machine whatever it might be but they don't want to be told they have to use this if they're gonna use that and so they'd like to be able to choose a little bit more and some of them and I think that this opening up of the architecture is a trend that's been taking place now for several years because I think office has just got tired of this proprietary kind of game playing with their software and their hardware when there's hardware they may might prefer to use so like it you know

Howard:  I switch to oh I was on soft end for 30 years or done by care soon I just open dental I can take the image and put it directly into open dental but then I would lose a lot of the features of that after excited deal so do you recommend just taking the x-ray and putting it straight and open dental or would you recommend go through actrix

Rick Henriksen: I leave it an app track so you've got all the you know the features and the functionality right anything that you might do measuring maybe adding filters for some you know clarity that might give you a little better view you've got brightness and contrast that you can play with the shades of gray those features are always going to be inside the imaging software so because there's no there's no issue with your you know your though I'm kind of refer to the front office right practice management and the back office image management all of my imaging is in the backend and all my patient stuff is in the front-end and they connect and that's all that I really need them to do as long as I can easily bill attach you know attach images build do all that stuff and it doesn't matter if it's an open dental or if it's in my imaging software 

Howard: let's go to the cloud I noticed when people start using voice for the phones over it's voice over Internet Protocol they you asked him before that well how is your internet connection they're like dude I'm in Phoenix Arizona I mean the city's a million the metro is four million Internet school out here and then they switch to VoIP and when it started affecting their phone they realize damn my internet is not as good as this where  is where is the Internet at 2019 it's it's June 10 2019 is cloud for the biggest files are radiographs it's the biggest file is in what grandma's name is it's you're damn right yeah where are we at in cloud storage of digital x-rays in Twentynine absolutely

Rick Henriksen: it's  still a little slower you know that if you've got something hosted locally the recall you knows more seconds some do it better than others and so what I would just encourage is if you're if you're looking for cloud software then you take a look at you know at a few and and  the nice thing about cloud software is  that you know the hardware becomes less of a barrier right I don't have the same conflicts that I have if I'm working in a local environment with the software that might conflict the drivers might conflict with something else it's there so the cloud you know software kind of eliminates all that stuff I mean we even have offices we do not shoot directly into mac environments but we do have offices that will have a Mac cloud practice management solution that is connected to imaging solution that's maybe Windows driven and and I can now capture because I'm not using the PC to do it I'm using I'm using you know the cloud application to do it so it's it you know it's  better for sure it's not quite as quick and it's probably worthy of just kind of doing a little bit of research for yourself but it's the right question that if I'm if you one of your doctors this is listening and interested in cloud solutions you know they're gonna want to test them put them in the office take x-rays give them the shortlist I mean there's so many there's tab 32 a dental saw data backs then attention I yeah soft evidentiary that's like you know the guys that I've been closest to that have kind of reached out to us have been have been identifed they're a Bay Area business evidently a I know that they're you know working on adding some applications cloud dendrix ascend right is now made their move I think one of the issues is you've got to make sure that hardware's can get shot into that cloud product and I think that was part of the gap is that we launched this cloud product but we don't have hardware's that can work in it yet and so how does that work is a little bit of a chicken and an egg discussion I haven't been close to how that list is expanded of the ability to shoot particular hardware's into those cloud served products but you know those are kind of those kind of three or four that I hear about

Howard:  the private practice guys they're obsessed with doing the dentistry on the DSO is there they  master the business so are you focusing on DSOs because it's always easier to if something makes business sense it's a lot easier to get Rick workman to agree at Heartland than it is to get one of my drinking buddy Sam are you having much success with DSO so 

Rick Henriksen: I would say yeah I would say I might I might challenge that in that it might be oh it'd be easier for me to get your drinking buddy to say yes then Rick workman at Heartland but it would be hard for me to get 300 of your drinking buddies to say yes at the same time so right it's a scale it's a leverage game I do think we're well positioned for that space we are beginning to work with a couple of groups one happens to be Lone Peak dental we've got a couple others I'll hold off on because we're not there yet but we do think there's an opportunity there we do think they understand you know obviously the business side of the equation much better they're not particularly keen on the subscription model and for that reason and for others you know few of our officers they want to buy it so you do have the option to purchase the sensor they like to capitalize so from you know from an economics perspective they want the capex benefit that year versus the subscription dollars and an operating expense so a little bit different and even as though as of this most recent 80s oh we spent a bunch of time starting to work our way into this world asking lots of questions you know there are those practices that come in the 20 30 40 50 kind of group that are still thinking about controlling cash and creating value for the purpose of selling that business to one of the big dogs so you know we there was a little bit of a mixed bag if you're a certain size the subscription seems to make a lot more sense they really were drawn to it if you're big cash isn't the problem if private equity dollars are sitting in the bank they want to you know they want to get the benefit of that this year so we will you know we're not we're agnostic but if you want to be a customer we want to find a way to make it happen 

Howard: and you've seen a lot of changes that we both have in our 30 years work where do you see the DSO going 

Rick Henriksen: well you know some of the data that I've seen over the past years showed that by 2021 it would be about a quarter twenty five percent of the market would be owned by DSO as I've seen some things more recently that suggests it's even faster than that I do think that you know cannibalization taking place and you've got those private practitioners who are focused on wanting to run an effective small business and I think that there's lots of resources out there whether it be you know some consulting work whether it be in my belief companies like ourselves who are looking to take off some of the burden some of the cost burden there's lots of ways to do it but I do think those that don't run the business particularly well are probably better off selling their business sooner than later because every day that large groups continue to grow and cannibalize inefficient poor run small practices the less value they have so you know they're probably worth the most right now so I think you know you'll see a continued consolidation around groups I'd certainly don't think that's gonna change I think it's gonna continue to increase you know you the question around managed care how much of that is gonna start to eat into this space what's gonna happen with you know the regulatory environment as it relates to dentistry will that put such erroneous burden on the small guy that he can't compete with the big guy right those things happen to small manufacturers in competition with large manufacturers today so there's a lot happening but I don't think it's a you know for those that love the small business which I do I don't think it's a lost cause right I'd much prefer to go to a private practice where a doctor has a high value for continuing to advance his skills for making sure that his team you know is is a warm friendly knowledgeable competent environment that he invests in his business unis understand I would say this one thing and I and I found this over the years I think that those dental offices that don't understand the importance of a high quality office manager are missing it badly you can't run the business from the chair and so if you're gonna make an investment make it there find a competent office manager who knows how to grow your grow your company

Howard:  I just want to do a shout out I mean when I think of you I think that Kim kuch love that Denison Oregon Stewart Rosenberg still e Bill Brown love you guys gosh with so many memories stored on this conversation but seriously right thank you so much for coming on my show today and talking about all things jazz imaging x-ray sensors I found it truly fun and very informative thank you so much 

Rick Henriksen:well I appreciate it very much thank you for the time it's great to connect we haven't had a chance to speak in some time I also very much appreciate your listening audience if there's any way we can be of service jazz imaging comm and let's let us know fill out a little card and one of our courteous phone guys will give you a shout and see if there's a way we can help I can't believe you didn't say your phone number it ends in jazz 5 yeah it's uh it's five six seven two three four jazz five two nine nine is that because you're from I'm six seven two three four yeah I'm sorry is that because you're a big fan of the Utah Jazz is that where they came from the NBA it's because we're from the Bay Area we love jazz music and we got the band back together so we wanted to we wanted to you know a little bit of a double entendre a little play on words and so you know our software is called harmony and fusion and the sensors called solo and  you know in jazz is the company and I think you know we're I think you know we're having a great time you know kind of at that place in our live and you and me both right where we want to enjoy the work we want to enjoy the people we work with and so you know we really feel like we're solving something you know there's space out there that's penetrated there's a lot of costs involved there's a lot of officer to drop warranty and we you know we get a lot of calls where officers are thanking us for doing will offices that aren't ready for one and they'll just want to understand and say thanks for shaking stuff up we've been tired of this you know for too long and so we're having a lot of fun we're growing we're having fun we're taking great care of our customers and you know we'll add more stuff we're already working on some other things so there'll be more to come here in the next you know 12 months well keep us posted on Delta

Howard:  I appreciate you posting on dental town I really love it when you guys go in there and do that so I tell ya all right well I hope you have a rockin hot day and to you buddy thanks very much)  

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