AUDIO - DUwHF #1270 - Ophir Tanz
Howard: It's just a huge honor for you today to be podcast interview Ophir Tanz is an award-winning entrepreneur and technologist he is the founder and CEO of Perl and artificial intelligence company focused on solving fundamental and challenging problems in the dental industry. Previously Ophir founded and led gumgum a company focus on applying AI and computer vision to the media category which he grew to several hundred million in revenue globally Ophir received his bachelor's and master's from Carnegie Mellon University he's an active member of the Los Angeles startup community. Ophir actively advises invest in startups has been featured on the cover of Entrepreneur Magazine and has been the recipient of multiple business and entrepreneurship Awards. Now when I read your bio I expected all that because you're the son of a dentist.
Ophir: That's right
Howard: You were born you already born on a third base so as was your dad Josh being a dentist obviously connected to your first company being called gum gum?
Ophir: I dont think so
Howard: Oh you just ruined the story, just make something up.
Ophir: I mean look I think the father-son relationship and dynamic is an important one so maybe that's been controlling all the decisions but yeah my dad was a dentist I grew up very much in the dental office I used to watch him sort of work on and operate with patients when they would allow it for hours on end I was always very fascinated by it I'd also like to say before we get into it first thanks for having me on but also you would thank you because I've been listening to your podcast increasingly as a as a non-native to the industry and I've been learning a lot so it's a great resource.
Howard: Ah thanks man and tell your dad I congratulations on his son and I so he's retired he doesn't do it anymore right?
Ophir: Yeah he's retired now but he practiced for almost almost 40 years and yeah my mom ran the office I think very much your traditional sort of story so you know they were entrepreneurs in their own right as all dentists are.
Howard: Yeah they really are aren't they, because they are they own their own business. I can't tell you all my friends that are physicians they my boys even picked up on that so my boy you know we lived in the same place for 32 years and I would tell these boys you know we go to the local restaurant and then I started talking to the manager, so say your the manager I'd say so Ophir so you know like how what is your overhead in this place I mean what is your food costs about like 30 percent and they start saying you know I don't really know or but the ones you say well you know we try to run food cost we try to keep food costs at about thirty thirty to labor under 20 but but if they didn't know their number my boys knew two three years later they they weren't gonna be there.
Howard: and my physician friends that work in hospitals they don't even they don't have a clue of anything but dentists who own their own building they are tethered to financial accounting reality and... so you started gumgum you sold that and and now and and that now is are you still an owner a gumgum or is this totally different?
Ophir: Yes I'm still I'm so the largest individual shareholder of gumgum we didn't sell it I started a company sole founder granted for eleven years and grew it considerably and then earlier this year made the recommendation to the board that we spin out our healthcare division which is the dental oriented effort and that I go along with it which I think was a surprising decision to a lot of people but I felt that gumgum had reached a level of maturity and stability and profitability that I could you know meaningfully sort of move on to another opportunity to create new value and I'm super excited obviously about what I think we're going to be able to do in this category as you bring these technologies to bear on the industry.
Howard: So gumgum is more immediate technology?
Ophir: It's really everything that gumgum does is all driven artificial intelligence and more specifically computer vision. So really we're taking the same technology stack that was applied to things like analyzing television broadcasts to identify sponsorship valuations for creating a brand safe environments on the internet replacing marketing messages all these things that we did at gumgum were always driven around computer vision and as we were more and more successful as a company we started to apply that technology more widely and that's why dental was being incubated there.
Howard: Is it fair to say okay so there's no such thing it's artificial intelligence yet I mean hasn't been invented yet right?
Ophir: I think well it depends on how you define it so there's something called artificial narrow intelligence and there's something called ASI which is artificial superintelligence so I think these terms you get confused very often so when you say artificial intelligence people tend to think about you know Terminator and killer robots and sort of this Jetsons oriented stuff but if you look at artificial neural intelligence they're all a variety of tasks and challenges that computers are far better at than humans and these are the sorts of tasks that require some level what you could all reasoning so if you look at the game go or to look at jeopardy or if you look at chess we've developed effectively artificially intelligent machines right there's sort of a poor man's copy or power of our brain functions and they're able to beat the best players in the world at these games and you know they can't have a conversation with you or or make you a cup of coffee but they're incredibly capable at these very very narrow tasks so it really depends on how you define what intelligence is I would say that they're not conscious but they are able to learn with data in much the same way that humans do and they're able to solve problems and complete tasks that superhuman levels within very narrow parameters so I would say that we've arrived at some level of artificial intelligence I'll be at a very narrow one.
Howard: Is it as narrow as human intelligence I mean even Einstein said two things are infinite the universe and human stupidity so when people talk about artificial intelligence I say well it's got to be better than natural intelligence, natural intelligence is a pretty low bar to get over but I was just wondering though but back to gum gum it sounds like it was more immediate media focus so out of all the industries in the s&p500 why dentistry why did that be your interest?
Ophir: Well I'm interested in the application of this technology widely to be fair so we did actually explore other applications of the technology in the agricultural space in the security space and in the healthcare space my personal goal at this stage of my career is continue to find the highest possible and uses and applications of what is a very powerful and new technology and I had actually initiated this data collection effort for dental radiographs as far back as almost three and a half years ago now so I had an inkling several years back that it would be a good idea to start collecting this data and training on it never knowing with certainty whether or not that would turn into a business but as we got to a point at gumgum where we were to launch a new division and we're looking at the options available to us and looking at the dynamics of the dental category and where it was at and how we thought we might slot in that's ultimately what we decided to pursue. Obviously I've been exposed to dentistry from young age I feel even I'm not a dentist obviously I'm very comfortable in the environment and I just think that this is a category whereby you have people that are very forward-thinking they're not afraid of technology and they're also able to make decisions that could impact doctors and practices at a faster velocity then you typically see in medicine because there's more Authority and ownership over these types of decisions versus say selling through to a hospital which tends to be a totally different kind of effort. So if you're looking at radiology and using AI to read radiographs for any sort of medicine that's the kind of thing that you're seeing happen in various fields of medicine and there's a variance of success but there is an inherent pushback in a lot of those industries because ultimately you have radiologists for example who are fearful of the technology or somehow feel that it's threatening to them whereas in dentistry dentists typically aren't radiologists that's part of what they do in order to serve patients and you just don't have the same kind of inherent fear of the technology at least that was the thinking at the start and I think so far that's turned out to be the case we found a very accepting market in a very excited market in a market that wants help they want data they want insights they want better margins they want to be able to make better decisions they want to be able to serve patients and these are the kind of things that I think we're delivering.
Howard: and where do you think it's going to transform dentistry the most the fastest where do you think this beast is gonna land first?
Ophir: Right so good question so we have a number of products a number of use cases for the technology some subset of those products require FDA approval so for the patient facing second opinion capability we're reading a radiograph and diagnosing it in partnership with a practitioner that requires FDA approval so inherently even though I think that will probably be the most impactful for the industry because there's a lot of sort of services and products and capabilities around that one capability that will be very impactful to practices and to DSOs and the like the reality is that we have applications currently in dental laboratories and with insurance partners and also sort of helping facilitate decision-making with the DSOs that don't require FDA approval and those are already landing so I would say that those are gonna land firs.
Howard: and is I noticed that when you're first gumgum there's media you can see when you look at you go to your website hellopearl.com second opinion is and smart margin is yeah is AI more a visual thing at this point is is the volume of geometry more data rich then just say accounting numbers Financial Accounting?
Ophir: Yeah this is a good question so there's different forms of AI those different flavors of it my particular interest is in computer vision and that goes all the way back to my days at Carnegie Mellon but there's lots of companies and entities that folk on something focus on something called NLP which is natural language processing which doesn't look at imagery at all there's elements of the industry that focus on audio those elements of the industry that focus more on sort of predictive analytics versus making sense of some subset of data so artificial intelligence is really a catch-all term but within artificial intelligence you have different subfields computer vision is one machine learning is one expression how to go about using AI to solve a particular problem and which has yet another subset so we focus on the vision side but you know lots of other companies focus purely on text.
Howard: and so what are you most passionate about I mean how long is on soso what's taking on now if you go to hello pearl the future of dentistry powered by AI and you go to their products your second opinion practice intelligence smart margin do you want to go through those three and talk about those three in general or what would you like to talk about.
Ophir: Yeah sure so what's interesting about what we're doing is we have a core set of capabilities around imaging and reading imaging and automating tasks but if you look at how that could be applied to all the constituents in market whether they're x-ray sensor manufacturers or PMS systems or practitioners or DSOs or dental labs or insurance companies there's all types of applications for these different situates because ultimately what we're doing is we're taking vast quantities of unstructured data and we're structuring that data once you structure data it suddenly becomes something that could be queried and understood at a much deeper level so if you look at what we're doing in partnership with insurance companies for example we're helping them to selects and sort of automate parts of the claims process we're also at helping with fraud waste and abuse of which that you know this is a pretty significant issue we found.
Howard: With what?
Ophir: Fraud waste and abuse yeah and for DSO is one of the things that we're doing that's kind of an interesting application is these DSOs are obviously out there trying to purchase dental offices and that's a difficult decision because you could you know offer a multiple on EBIT ah and you might arrive at terms you might purchase that dental practice what you don't know is has there been fraud in this practice what's the quality of denture oral scans what does the patient population look like has there been over treatment and what is the individual practitioner performance all of these things right so what we're able to do is help bring technology to bear to answer some of these questions to shed light on the sort of intricacies of what's going on inside of practices. As it relates to second opinion I think this is something that you will a lot of people need mystery do there's a lot of inconsistency with how people read x-rays we've done studies that show that dentists agree with themselves about 70 percent of the time they agree with each other a lot less and bringing a technology that's been trained across tens of millions of radiographs and thousands of practitioners in order to identify a B pathology an issue that appears for each patient with a high degree of certainty and confidence helps with liability issues it helps with treatment planning and it's just a service that's intended to sort of facilitate the interaction with the patient and take a little bit of load off the dentist's shoulders which is already you know very significant load that they're that they're always carrying around.
Howard: Well you know it's a big complaint among hygienists I mean and you know they say okay if this crown has an opening and he can get like a little stick then he tells the patient this crown needs to be redone but if he just did it that's his problem it's all good and and then a lot of them are in a very abusive situations where they asked the dentist's about that they'll say you know well what is about that and they snap and say well they you should go to dental school and I when hygienist asked me that question I just say quit you're not gonna you're not gonna change some toxic weirdo I mean he should be a mentor to you he should be growing you know yeah I'm not making you feel bad so so yeah the dentistry is not a standard product I mean I know you could I mean whenever it's been done I mean it started off with a long time ago as Reader's Digest I'm had a great guy and he took an FMX and he went around to 30 houses and they had a cover story that is your dentistry yeah because they went to 30 different dentists and got 30 different treatment plans so how is dentistry a standard product it's just not.
Ophir: I think that's and I think that's to its own detriment and I think the more sunlight that you can shine on to this category and there really any other category the better that category is going to be in the long run for example one of the things that we've noticed in working with with large sets of practices is that and you know this well I'm sure is that you know experience matters a lot when you're looking at reading radiographs somebody who is a year out of college is going to be generally doing a worse job than someone with 20 years experience and that we think is a solvable problem partially with this technology we are working with a handful of leading universities on creating a set of learning tools so that within the student environment they're able to leverage our technology to sort of test the efficacy of their reading of radiographs and do that at their own pace and we hope to be producing dentists that on day one are are just more capable and more experienced.
Howard: So how long before the computer just reads it and just tells you the answer?
Ophir: So that that happens now but this is intended to there's two things to say about that one is that there's still a level of probability associated with all forms of computer vision day I just there's a level of probability with having a human to read something so we ultimately want to defer to the dentist after giving them the result so they make sort of the final decision and also you need to make decisions about treatment planning and how to go about actually solving the problems in issues that are identified. So it's not that the machine can't read the radiograph better than a human today in many cases we're very much already there but ultimately this is just one piece of the puzzle right the the patient still needs to be communicated to and treated and that is obviously the dentist the dentist job. The dentist's job in our view is to be able to explain to be compassionate and to obviously treat a set of ecology. One thing that we're really excited about is we're working to standardize treatment plans across the board so what you currently will find is for a given set of pathologies if in dentists will just want to treat all the stuff in different ways and ultimately there's a there is an optimal way to treat a set of pathologies and issues and there might be some things that are cosmetic and some things that are disease oriented and you need to sort of prioritize these things and make those choices available to a patient and I think that this technology will help do that at scale and that's ultimately better for everyone involved as well.
Howard: You know you've lived obvious I mean you went to Carnegie Mellon you want to did you actually go to Pennsylvania because I know they got a young school out there in LA?
Ophir: When I went to school I dont think they had the school out there but I was in Pittsburgh, yes.
Howard: So you went to Pittsburgh so did you did you come back as Steelers fan or did you stay with your radar what are you in Los Angels your teams are coming and going.
Ophir: I'm still a Steelers fan actually they kind of won me over because we had lost the Raiders for some period when they went up to Oakland I'm a fan you know like you can't help but get very much into sports when you're in Pittsburgh this is very much a sports town so I like the Penguins I like the Steelers I like the Pirates still I would say Lakers and Dodgers fan first.
Howard: A Lakers and Dodgers fan first
Howard: and when you went to Carnegie Mellon were you more of an Andrew Carnegie fan of the scottish-american or more of an Andrew Mellon fan banking businessman?
Ophir: I was more of her Herbert Simon Alan Newell fan which they're two really renowned professors that had that that were professors at CMU and these are two of the fathers of modern day artificial intelligence. So back in 1956 there was a meeting of the minds of some of the top computer science and mathematicians in the country at Dartmouth, Allen and herb were were to those I think it was six in total.
Howard: Herbert Simon and Allen who
Ophir: Newell and that's actually where the term artificial intelligence was coined way back in the late 50s and really the first neural network that was designed was in the very early 1960s so people tend to think of this stuff as being fairly recent but really the mathematical underpinnings and the theory behind what's driving all of the revolution that we're seeing an AI today was invented back in the 60s we just didn't have the computing power to run these algorithms at scale and it was with the advent of GPUs because of gaming which happened to be serendipitous suddenly we were able to afford these perform these vast quantities of calculations quickly enough that you can train up systems and run them in production environments. So Carnegie Mellon is as a very intimate role in what has become modern AI and you know there's been various false starts with AI since the 60s there was a lot of excitement at that point there was a lot of excitement again in the 80s primarily on the part of Japan and that led to what effective effectively became what's known as the second AI winter and now we're in what people are referring to AI spring and things really are different this time because we're solving hard problems every single day across every single industry using this technology and we have the computing speed and we have the big data resources available such that even if this technology were to stop being developed today we still have to already have a powerful tool in sort of the tool chest to solve a specific type of problem.
Howard: So I got my first CERAC machine hmm I graduated in seven embody 89 just because just you know young dumb kid love technology was a toy it was a boy in his toy but I remember whenever I would go back to Austria or Germany and I'd you talked to the Sirona people about all your issues they don't we say well well there's a million things we'd want to do but they we have to cut it back because there was no processing Intel's micro so the whole problem with all that technology was waiting for Intel's micro processors to use that when you say GPU does that include a Intel Inside?
Ophir: Yeah Intel has a whole line yeah absolutely and video is a big player in the space as well so effectively what you're doing when you're training a neural network is you're doing hundreds of millions or many more very relatively simple calculations but massive massive quantities CPUs are not really tuned for that they're tuned more so for multi tasking GPUs were developed so much because the gaming industry is such a force in the market and produces so much revenue that there's a lot of competition and incentives on the part of chip makers to be able to render very complex 3d environments very quickly and it turns out that that same processing which is basically doing lots of simple calculations could be applied to what we need for a neural network to function and that's what's effectively made neural networks you know feasible to use.
Howard: So you're saying then that there actually was a purpose for these people that play Fortnite?
Ophir: That's right
Howard: There was a reason
Ophir: Identifying two ligaments
Howard: I never knew anyone found a purpose for these Fortnite players but you just but the one thing I'm excited about the most is the fact that you know I've been in this space a long time and when you say artificial intelligence I you know I said natural intelligence literally none of these dentists know their numbers and that was okay when everybody was like a cottage industry and your mom dad it ran it at office and all that stuff like that but now you have these highly debt leveraged DSOs that have borrowed a tone of money and some of them are it's public record that their debt is rated as junk you know and in the next financial contraction every financial contraction Oh is you know thins are heard and I think a lot of over leveraged DSOs and a lot of people whenever he's ADSL they always think of someone that owns a hundred to a thousand offices most DSO are in the three to ten office deal and I know still shocked that when he'll I podcast at a hundred of them they never know their numbers I mean the end then you go in their office and you don't know the numbers and so you have all these employees working in these highly leveraged offices and no one even really knows their break-even point. The hygienist so I know you have a second opinion I know you have the smart margin for crown and bridge well we also let that practice and practice intelligent which is why which is why I've been stalking you for so long.
Ophir: I think that might be the most impactful product offering that we that we have on the docket and the reason for is exactly because of the things that you're talking about ultimately if you don't know your numbers if you're not sort of on top of the the types of tasks that are repetitive but very important in improving those consistently over time then you're sort of behind the balls what we were able to do with practice intelligence is we're able to look at entire patient populations cut up in any which way by geography or age or gender or whatever makes sense and we're able to list for example what are the open pathologies that exist we're able to look back in time and understand sort of in a perennial fashion the the level of degradation with something like Belle Moss were able to under and whether or not historical treatments have been effective were able to understand performance that the practice and her level were able to look at all the intraoral scans that have ever been taken into practice and identify who's not doing good job prepping teeth and who's not taking high quality scans and that's really problematic especially when you're looking so we see millions and millions of in intraoreal scans and you'd be shocked I would probably put the number at 75% or 80% of poor quality scans either the screen call the scan quality is lower the preps quality is low and that inevitably by definition leads to very low quality restoration so we have to jam a bunch of cement and make it work because nobody wants to get the patient back in the chair and this is an entirely solveable problem it says Mooney to be afraid of or ashamed of we can get better at this by just shining light on it and improving and this is entirely within reach.
Howard: but is any of that gonna be financial I mean everything you're talking about seems like Basil's inter all pictures x-rays perhaps things like that but any of that hook up to QuickBooks Pro or accounting?
Ophir: Well one thing that's interesting I mean you could almost think of the current capability is as a lead gen tool both historical and ongoing in a real-time basis so if you give me any set of x-rays whether they be 10 or 10 million I could look at those sets of x-rays and tell you what every single untreated pathology and issue is open margins bone loss different forms of caries and suddenly that in itself I think would have an impact because what we sort of envision doing is notifying practitioners on an ongoing basis about what they're missing and what's untreated within their patient population I don't think that that's well tracked or well understood and often times things go totally unnoticed we're not necessarily tying directly back into accounting software but we are ultimately giving practitioners better tools to identify untreated issues so that they can reach out to patients and do so being sort of backed by a technology that I think they could stand beyond that patients could also get behind so that they can treat them more completely and more effectively so that's one thing if you're talking about s DSO whether it's 10 or 100 practices you still do want to understand the performance of your practitioners so that you can deploy the appropriate training that will lead to I think lower patient attrition ultimately and it'll lead to better dentist so therefore better reputation and that ultimately leads to you know longer term financial success as well.
Howard: I mean I mean some of these DSO is I mean they I was talking to and again when I'm talking about a DSO it's you know some guy in sure 60,000 and he had one practice but he decided that if he had a north-south-east-west practice he can be scale one level of management and what that means is go back to the e-myth I mean and your office manager is not an office manager I mean I've been in your office a million times she's answering the phone she's checking in patients there's nothing office managerial about her work franchise work because they have a separate location where they're not making hamburgers fries and cokes and they're just working on the business and so these DSOs getting things like that they first find out there's something wrong with her doctor because they got served a lawsuit so then they start focusing on and they start digging up and the first thing they find out is that this office has for dental assistants and none of them would let that does work on them or any of their patients so quality control if you got nothing to lose there's no big deal but as these DSOs get bigger and bigger they have more assets that are threatened.
Ophir: Yeah and with the smaller DSO you typically have a practicing dentist who has to run their own you know home office and then they have four additional locations they don't have the time to do it well or effectively and we think technology can be deployed so that there is sort of this layer of security that sitting there and notifying them of any potential or recurring issues right and I think that that is important and helpful because right now how do you get insight into anything if you if you're talking to a DSO you call you know Dan at the front desk and you say hey how many patients do you think have you know bone loss and they'll give you some some guesstimate I mean there's no structured data therefore nothing is queryable therefore a lot of things are just not knowable in a way where you've been systematically deployed better processes and better solutions that's fundamental to every category of dentistry and once we're able to deploy that in a way where it's really user friendly really easy to interface with if I don't have this buddy, I got to thinking about it remember that that paperclip in Microsoft Office that everyone hated I couldn't see because the version of that that is actually great and helpful where it's kind of like you have this this this pal they're looking over your shoulder giving you insight and helping you better manage your business.
Howard: Yeah I think a lot of people when they got so upset about that paperclip it's because deep down inside they just hated Microsoft I mean I lived yeah I couldn't believe it because it's so unfair because like like my dental offices I just had to celebrate my 32 year anniversary right last Saturday and you know they the the city engineers they built 48th Street and Ray which someone's died at like every month since I've been there Halla white dental office killed one person three months in a row they closed me down but when Arizona Department of Transportation decides are gonna build an eight Lane intersection in this little you know I mean it just it's just and so many of the Microsoft I mean you know they would just intentionally no that they released all their software filled with bugs yeah and you're like I'm a dentist trying to do a root canal and I just didn't I just gave Bill Gates all this money I bought this software and every single IT guy that comes out here just says well never buy the first release it's all full of bugs you know blah blah like well why would you just release a bunch of crap when you when you know I'm a dentist and I know you're selling crap why don't you know you're selling crap but back to back to this AI do you think that dentistry you know it's getting exposed to the word telemedicine you're a telemedicine play I mean this is technology computer scanners tellemedicine and but I knew to some SD and smiles direct Club just went public last month yeah and they're at telladentistry play is that word getting is it gonna be an emotionally bad word I mean is it gonna be a trigger word where if you walk into the don't compensate telladentistry you know happens someone's gonna have angina and people are somewhat threatened by that term?
Ophir: Actually I don't think about us necessarily as being tell a dentistry because we still are servicing practitioners that are in a live environment with patients for the most part I think the oppai peel markets generally recently have been troubling and the other beating peloton two small direct club obviously looper and lift and no it's interesting to note there is while they have had very disappointing IPOs I think smile directors it attacked the value that the IPO that today they're still far more valuable than they were in the private markets just as sort of a local data point but I do think that new is always threatening and we're going to be seeing a lot of a new I mean we've been getting contacted by a lot of entities in the u.s. that are opening up these dental bars so kind of salon like environments where you can walk in and get teeth cleaning and get some hygiene done you get some x-rays taken it's a really nice experience you don't have to have an appointment it's not the medical environment I think that could potentially be very disruptive to the industry and you see some big box stores focusing on opening up dumb dental clinics amazing we're in the age of disruption and that's going to continue to happen it's going to happen because consumer expectations are changing it's going happen because the rate of technological train change is dramatic. So the reason it's hard to predict the future and the reason it feels like things are changing so rapidly is because a lot of the technologies that are underpinning a lot of these developments are exponential in terms of their growth. So if you look at wireless speeds or or obviously micro processing speeds or pixel resolutions or all these different things these are these are technological movements that are growing exponentially and once an exponential curve infelcts and you get that doubling on very large numbersthen things start to change in very very rapidly and things that were not possible in the very recent history suddenly become possible and that's the world that we live in I think the dental category is seeing it but every other category seeing it and business is ultimately inherently competitive it's a warlike place at the end of the day and I think that the practitioners that focus on servicing patients and that take advantage of technologies that will be able to serve them and their needs are going to ultimately continue to be successful but yeah I mean there's a lot of things out there that represent some level of existential threat and I think that if I was a practitioner I'd be a little nervous as well because there's very disruptive technologies in the case of smile direct you had an aligner market that was very well defined and now it's less well defined for a variety of uses a lot more players in it and that's threatening and problematic if thats your core business.
Howard: When you look at in the horizon from where you said um what who do you think here are the major disruptors today?
Ophir: Well it's a good question we know that it's you know what I've been struck by in this category is that there's a handful of large companies that are in control of a lot of important components of the value chain these companies
Howard: In dentistry?
Ophir: In dentistry
Ophir: Pretty well capitalized and in interfacing with them and talking about partnership opportunities and other opportunities they're very smart they're very aggressive they're very competitive in some cases they're very acquisitive so I've actually been impressed by just the level of business sort of savvy that I've seen in the category. You have a lot of the large players like danaher's Kayaba which is now in vista which i think is a very capable group obviously you have Schine which is ability and very well run operation you have Glidewell which is forward-thinking technologically DENTSPLY that's doing some impressive things you have these large very entrenched players that I think are going to continue to be forces to be reckoned with but you also have entirely new models that stand to potentially disruptive things we're talking about these dental bars we know that sort of Walmart is out there and could be very disruptive and there's a whole slew of startups that are working on new technologies whether they be new forms of materials from a chemistry perspective or things like AI that stand to really transform things. I do believe and obviously I'm biased but I do strongly believe that the things that we are doing are going to be are going to impact the industry more than the industry isn't impacted in the very very long time because we're able to add such a significant amount of efficiency into into these business processes whether it be you know insurance claims or margin marking or or practice intelligence that I think it's going to be a real game changer but I also think that the industry will be better for it.
Howard: You've mentioned dental bars twice what's getting your minds here who are you thinking of, your thinking someone specifically?
Ophir: There's a company called Tend for example
Ophir: Tend I think their websites hello tend I think that's one of this mountain the guy who was CEO small direct club for a minute was is a CEO of this company they've raised money from one medical who obviously has a certain model that they're looking to potentially replicate and they're a very capable group and I think it makes sense so if you suddenly have cleanings happening in more salon like environments and teeth whitening then that is taking away a very important mechanism to get a patient into the dental office and then to do work there so I'm not being disruptive...
Howard: You said the guy was from smile...
Ophir: I think it was a CCO smile direct on a guy named Doug Hudson is that showing up for you
Howard: From Smiles Direct Club?
Howard: So is any, when you look at major disruptors do you think any DSO has got a higher interest in attraction to AI than others?
Ophir: I think there's a lot of talk I think if you ask large DSO you know take your pick of the bunch whether they're working on a or they're gonna say yes and we're working on it and we have resources dedicated to it we haven't seen a lot of activity directly coming out of the DSOs as relates to that technology do I think they're disruptive powerful and meaningful force it's hard to look at the numbers and the trend lines and deny that they are I mean they're largely overtaking dentistry in the United States and it's a massive increasingly a massive component of the market and the growth rate is it was large and you have these PE firms that have glommed on to this in a way that is clearly exciting enough to them to give you to invest heavily so I think that DSOs or better or worse very much a part of the fabric of what dentistry looks like today is going to look like into the future.
Ophir: What do you think?
Howard: Well I always have to ask people how old were you in 1980?
Ophir: Negative 2
Howard: Okay so that was I was born in 62 so that was my rock bottom experience I mean interest rates for 21% double-digit unemployment inflation everyone knew who the Federal Reserve Chairman was Paul Volcker because he lived under an armed security guard so right now it's kind of hysterical because it's laughing cuz people are complaining about the Fed well he's not being carried around by military people and armed cars but anyway it was really bad and we all lived through it and then I graduated May 1187 and it's... what's that?
Ophir: May what?
Howard: May 11 1987
Ophir: Oh I was May third 82.
Howard: When you were born?
Howard: Okay and and then there was Black Monday and then you know then the y2k fall and then there was Lehman's day and I just so I so it seems to me that everyone always thinks linearly like if this DSO went from one location to a hundred and then the same a lot of time what's a 200 to 300 they just think they can literally add it all up and tell you where they're gonna be it doesn't work that way what goes up comes down they're highly leveraged there either and in the down contraction the that's how evolution works you they want the business models that aren't working need cleaned up and it's a good thing because then those workers can all be deployed to a better so I'm really interested in the next business who will serve what business models will survive the next contraction and that's gonna be a very interesting.
Ophir: I think thats very interesting and it's very very much an open question and the extent to how healthy or unhealthy these businesses are is something that I think once we have a financial contraction that's going to come to light very quickly and I think some DSO's are better or better run than others and that's that's the reality too.
Howard: Right that'll always be I mean there's just better operators and a lot of times out I mean in my lifetime there's only been a handful of companies that just blew up you know thirty thousand percent or more and one of them was a Walmart I've still never met anyone who knows who the CEO of Walmart is because Hollywood he's got you thinking about he's some hot sexy guy with good hair like you driving a Ferrari or something with all the chicks and no man he was just a boring old guy with his head down and he was an operator he was a numbers guy you know. Walmart was was an amazing deal so I'm guys I'm just trying to think any other who or almost at an hour any other technological disruptors that got your attention or respect?
Ophir: You know we haven't seen it's not because I don't think it's coming but we haven't seen a huge amount of direct competition there are certainly some players out there who are dabbling not particularly well capitalized yet but I think there's ahuge amount of opportunity here so first off even from a radio graphical perspective there's the CBCT I believe a company out of Israel is working on that as well there's there's pan out and Safin and just imaging problems that are very straightforward there's all types of automation that could happen on the dental laboratory side and there's all types of processes that could be optimized throughout the entire value chain. So you know I think it's I think we're sort of at a point right before where there's gonna be a major inflection and this technology will start to have a real impact and there'll be an influx of additional players but I don't know I mean I haven't seen a huge amount of startups that but I think our are quite there yet but I think they're on their way.
Howard: and do you think they'll be more in technology supplies or the actual delivering of the dental care?
Ophir: The supply game is going to continue to be sort of Amazon and Schine kind of going at it.
Howard: but when do you think that happens I mean Greater New York meeting three years in a row there's Amazon and the boys in that behind the booth are dressed like men and black and they're just they're like 3 this will be year four but I don't is that is there you know I I don't know of really anybody any major company.
Ophir: I think yeah I think Amazon is hugely capable obviously but also just distracted I think they have a lot of opportunities that they're going after and it and I think they were kind of they go in and out of being focused on on the dental category but have a plan but they're exactly and it's hard to argue that they're not going to to be a meaningful player in that space simply because they have such a uniquely powerful infrastructure for delivery and that ultimately is a massive asset that's almost impossible to replicate so there's that. I do think sort of one thing that we're going to see that we'd like to be involved in as well are these connections between systemic health and oral health and I think there's a lot of opportunity there that would be hugely insightful and helpful to patients if we were able to make those connections although it requires you know sort of creating a bridge between electronic health records and dental records and once you can do that at enough scale then you have the data it'll be fairly easy to spot the correlations and I think that there's a lot of correlations to be had there I think China uniquely in this particular space because of the particular form of government is going to get there potentially ahead of a lot of other players just because they have access to data on a massive population of people over a long period of time and it's more easily access and more easily mind.
Howard: All right as there any other things that you wanted to talk about today?
Howard: My god I just so fun to listen to your mind mean I am you this way you know I've done a gazillion million trillion fillings and it's fun to come out of an operatory and listen you guys talk about all things technology there is I'm sure there's if people are watching this on iTunes they probably don't know but if anybody is watching this on YouTube probably the most pressing question is who has better hair you or Stanley.
Ophir: I was going to say you
Howard: It sounds like to join your company you had to have a dad that's a dentist and good hair so when did you and Stanley meet was it high school, college?
Ophir: No I was a patient at his office so I literally went there one day a few years ago and Dr. Helm who's one of his partners is my dentist and I said to them like guys I've been thinking a lot about applying this technology to health care I think you would I really want to explore particularly in the dental category are you interested in this could you share some data with me so that we can sort of test some things out and Dr. Stanley kind of overheard the conversation and he came up to me afterwards and we got to talking and he was very very interested and engaging on this topic and very helpful and helping us get some initial data sets and it was all very serendipitous honestly he's been a tremendous asset he's obviously a very capable practitioner he's got those good looks which is always nice and you know giving what we do we need a practitioner in-house day-to-day to guide the things that we're doing to make sure that we're on the right track and then he's been he's been a great asset but it was all very serendipitous the way that it came together and the time he worked out where he was willing to devote more time to Pearl I was eventually willing to leave this most larger other company that I started to pursue this exclusively so we'll see where it goes but we're having a lot of fun we're really excited about just helping shed light on various elements of the market, we love dentists at the end of the day obviously our fathers are dentists we do feel that we're operating not on the service of any particular constituent we kind of want to remain independent in that regard and just be providers of truth but we do think that this is an industry that that you know could be it could gain more in the way of popular and public support and it deserves to to gain more and that'll make for a bigger opportunity overall and I think we could also be helpful in sort of in that effort so yeah we're having a blast.
Howard: Well it was an honor to have you on come on I just want to finish the show with on you went to CMU Carnegie Mellon University one of the greatest universities ever and I'm a big Andrew Carnegie fan...
Ophir: Sorry I never answered that question I'm more of a Carnegie.
Howard: and so many people get so upset would not people sit there and and say something didn't like about him I'm like well what the hell was your great-great-grandfather doing back then you know you can moonshine out of his bathtub and your upset. So your great-grandfather isn't even on the map so it's easy to be a critic but it's amazing I love this course it's like the more I get older I pay less attention to what men say I just watch what they do they all know actions speak louder then words, you cannot push anyone up a ladder unless he's willing to climb it himself I mean these guys they do just there were simple people with a work think that wouldn't stop yet they were all so fearless and they just would walk into the unknown and do this stuff but it was an honor and a privilege to have you tell your dad that he did a great job raising you gonna give credit to your dad or your mom on that one?
Ophir: You know I always like to say my thing my dad was actually a fantastic dentist especially on the cosmetic stuff he's super artistic and capable but I think if my mom wasn't running that office and might have ended up on the streets so I give them both credit.
Howard: All right well hey thank you so much for coming on the show and talking all things dental AI.
Ophir: Yeah thanks for having me and also keep up the great work you're helping us all in the industry learn more every day