E30: A Conversation with Alex Frommeyer, CEO Beam Dental

This is a podcast on Dental Insurance…but before you dismiss dental as just a small subset of insurance or employee benefits, you may want to listen in to this episode. Beam Dental is the first digital native dental insurer. They use data to underwrite risk in the same other insurers underwrite their exposures, which is a departure from the slot-rating that most benefit companies employ. The Beam Brush, is a connected toothbrush that informs beneficiaries with info on their dental wellness and qualifies them for insurance discounts, aligning everyone’s interests.

Perhaps more importantly, Beam’s business model is evidence that a wellness-based alignment works. And perhaps this is a model we can use to align health insurance and wellness? It’s hard to not get excited about how Alex Frommeyer and Beam are working this problem!

Watch here:

Beam’s History:
2012- Ohio-based dental insurance company delivering advanced group dental benefits centered on a smart toothbrush and vision insurance was founded. Beam Brush, which received FDA 510(k) clearance in July 2012 is introduced and has an embedded accelerometer that tracks a user’s brushing schedule. The sensor can measure how long a user brushes and how often.

2013- In October, Beam announces a second product, called the Beam Brush Bug, which is a small adhesive accelerometer they can attach to any toothbrush or flossing device.

2014- Beam raises $5 million in a round led by Drive Capital for its manual smartphone-connected toothbrush. This brings the company’s total announced funding to date to $5.5 million.

2015- Beam dental now offers a dental insurance plan based on its connected toothbrush. The toothbrush provides data that theoretically will help lower the overall cost of insuring customers.

2016- Beam partners with Stride Health, together, Beam and Stride aim to improve access to affordable dental insurance for the self-employed—and specifically, for independent contractors. Beam has launched SmartPremiums, its dental insurance plan, in California. Beam also partners with Flock to bring their wellness/dental product to brokers. Full-stack insurance company Beam Dental is currently available in California and Texas.

2017- Beam Dental partners with VSP® Vision Care.

2018- Beam Dental files form D with securities exchange commission.  It also raises $22.5M Series C Led by Kleiner Perkins. It also partners with Insurance Alliance. Expands to 9 more states.

2019- The company raises $55M.  It also partners with Ease to make it easier to offer dental plans.

2020-Beam partners with Employee Navigator to simplify benefits management. It also partners with Rippling, to simplify benefits shopping & management.

Connect:
Alex Frommeyer (LinkedIn)
Beam Dental (Homepage)

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Transcript

Nick
And we're live, we're back with the Coverager Podcast. I'm excited to have this particular conversation because I'm going to be treading water in an area that I'm not exactly familiar with, which is, which is always good. I'm going to be out of my comfort zone and be asking a lot of very basic questions but hoping to get a ton of insight and we're going to be looking at the dental insurance market. It's funny because I thought I had I thought I had all the answers and then you find out you actually, I actually don't know very much. So my guest this week is Alex Frommeyer, how are you?.

Alex F
I'm very good. How are you doing?

Nick
I'm great. I'm not going to call you Fro yet. I'm going to reserve that for the end. So give the, allow the audience and myself time to like feel as though we're, we're good friends, but at the end getting to know I call you Fro you have to call me Lamps...

Alex F
That's right, we did kind of decide that, you know, that would be indicative of a true bond. We hope to make over these minutes.

Nick
So let's make that bond. You know, I'm excited to to have this discussion because like I said, I thought this was something I had my finger on the pulse, but I ended up finding out that No, not at all. So I always start all of these podcasts off by giving an elevator allowing the guests to have an elevator pitch. So Alex floor is yours. Who are you? What do you do? And what is Beam Dental?

Alex F
Yeah, well, thanks again for having me on. Beam Dental is a next generation provider of dental insurance for small and medium sized businesses and we're doing that in over 40 states around country today. And so we fit a model that focuses in on kind of three key differentiators that we like to talk about. 1. is easy, 2. is smart, and 3. is prevention. So let's climb inside each of those. So easy for us is a more simple, streamlined, easier to understand, easier to use product experience from soup to nuts. So when Beam presents itself to a customer, we are looking, you know, first and foremost to make the actual transaction of quoting and enrollment and implementation as slick and as user friendly as possible. And that's using a mix of digital tools and products and services to make that process as beautiful and as user friendly as humanly possible. And that's a mix of automation and just kind of our whole digital stack. Then you start to think about the kind of icky back office components of any insurance product, not just dental. And here, you know, I think you also see our interest in really beautifying that process, whether it's claims processing or customer service. There's still a human in the loop in many or most of those processes, but we're using software to help make it more scalable and higher leverage. So that the experience is frankly better for the member for the client for the broker and for ourselves as well. And then probably the third piece of the puzzle is being able to represent our data in many different forms, but from a common high quality set of data feedback sources, so we want to be able to show plan information on mobile and the web and multiple formats at multiple different parts of the customer journey in a way that's going to be highly consistent and high quality so there's just less room for human error in the misreading of data and the misinterpretation of it as a result, so that's that's how we think about easy inside the business. Smart is how we've approached our underwriting or pricing as a business. And so in dental insurance, it's a little different than I think some of the other insurance lines that you cover commonly, in that there are actually many, many different permutations of the product itself. So, in dental insurance, you can pull lots of knobs and levers with multiple different classes of coinsurance, and manipulations of in and out of network, reimbursement levels and deductibles, annual maximums, there's all kinds of different things you can do to design Dental Plans. And that combined with a relatively thin amount of underwriting data, sets the stage for someone to come in and really elevate the approach from an underwriting perspective toward one that uses machine learning and predictive analytics to try to anticipate actual underlying risk factors, as opposed to what the legacy carriers in the dental industry tend to do today, which is price in accordance with pooled rates or shelf rates or rack rates, however you want to think of it. But that's the prevailing wisdom in the market today. If you ask a dental actuary, in a room of 100 people who's going to need a root canal in the next year, they're not going to be able to tell you the answer, but they know exactly how many root canals they're going to be in that room. And we try to do a much more targeted, personalized and tailored approach to pricing, plan designs and coverage levels that actually makes sense to what is most likely to be needed from a consumption perspective. And then quickly, I'll touch on prevention. This is probably the fun one for us. It's what we're most known for in in the markets that we operate in. We include the Beam Brush, which is a connected electric toothbrush, as well as toothpaste, floss and replacement heads for the brush with all of our members, and it's included in the dental insurance benefit itself. So totally voluntary program. So some people have their own favorite toothbrush, and that's fine. They don't have to take ours, but it's included in the premium that you're paying. So it costs you nothing extra to have access to the program. And that kind of wellness program is the way we think about it. A dental wellness program is attached to the policy, and it works together with the insurance. So we administer at renewal, a premium discounting program, based on the usage of the brush in daily dental hygiene. So the easiest way to think about it is if you're taking great care of your teeth every day, two minutes twice a day, like your dentist always tells you to, you're going to receive premium discounts as a result of that engagement. And we actually are building out we think of this as like an entire platform or an ecosystem for more rewards and ways to kind of individually, drive that engagement and then maintain high levels of engagement with our user base over time. Because guess what, consistent preventative care is provably going to drive low claims consumption and higher retention over time. And that's exactly what we want. We want delighted members who are getting more for their money. They're receiving credit for displaying low risk behaviors, like brushing their teeth every day. And as well as we want to see that they don't need the same number of fillings and root canals as the average. And guess what, I don't think our members want to get lots of root canals either. So our incentives are aligned there. That's basically how we think about the theme and the value proposition to the market.

Nick
So there's a lot to unpack there. So I I've been under the understanding from a underwriting standpoint, that I always thought of dental insurance as like a breakeven product, like to me dental insurance, dental insurance was always like, it's cash flow smoothing, right? Like you're, you know, if you have the wherewithal you really don't need dental insurance because you're going to be spending about the same for the insurance or for that. And so I never understood there was actually an underwriting component to it because for me it was a checkbox. So can you talk about that part of it? So is there the ability to segment the market in a way where you can locate you can find a population of varying degrees of risk and know ahead of time, you know, this segment should be paying more like they're much more likely to have the root canals and all of that stuff. Dig in a little bit more on the underwriting and talk about how you guys and your actuaries and your underwriters sort of think about risk selection and then market segmentation.

Alex F
It's a great point that you made because it is partially true along two different parameters that I'll quickly point out. The first is that many other carriers that offer dental insurance product are using it for cash flow smoothing or in the context of a bundled product. And so it is presented in this kind of commoditized way, meaning that if you're a major health insurance company, and all of them have a dental product Anthem, Cigna, United Healthcare, Humana, they all have a dental product that they bundle their health plans with. And so the way they're going to present it to you and the way your broker is going to present it to you is hey do you want dental, they'll bundle it for you know, that 5% off

Nick
exactly, it's a check box

Alex F
But it's like, do I need to know anything? And the answer is like No, it's just dental insurance, right? So you added and you take a little discount and move on. Right? And so it's considered a check the box benefit, which we think is totally unfair, and I'll tell you why in a second, but in that context, the way it is presented to the market is like it's not differentiated at all, and it's just a cash flow benefit style product. And then I think the other way you're correct is that part of dental insurance is a benefit that is not underwritten against a risk profile per se. And that is all of the claims codes that comprise preventative care. And so the typical dental insurance policy covers preventative and diagnostic codes at 100% coverage. And those while they do have like a consumption rate, like I can tell you how often people get two cleanings a year at the dentist versus one versus zero. And so there's a little bit of a underwriting process to try to make the determination on what that will look like for any given group of people or any given singular person. It's not really you're not really underwriting risk. You're just underwriting like a behavior, right? And it doesn't make a massive difference to the underlying success of your underwriting to make that determination or suss out whether or not cleanings and x rays are going to be consumed, and at what rate, though, that does exist a little bit, but I think that's, you know, kind of like directionally not really what I would call insurance insurance should be protecting against something that's not a every six month occurrence like a cleaning is it should be protecting you against something that feels more like catastrophic risk. And so the equivalent of that is you need a full mouth. You know, you need multiple implants along one of your arches or something. And now you're getting 10 to $15,000 worth of work done right across multiple different appointments. And it's like a whole like medical ordeal almost. So in that context, there absolutely is underwriting and there is a way to understand and model risk the same as you would see from any other style of insurance product. And that is a little bit out of sight out of mind for the typical customer because most people are just consuming those preventative codes when they go to the dentist. So when they picture, their last dental appointment, it was most likely a routine cleaning. And so they're like eh I get it, it's a benefit. I'm paying, you know, some number of dollars a month. And you know, I get to go get these cleanings every once in a while. But with the way we think about at Beam is a total ground up rebuild of the risk portions of the actuarial modeling to triangulate a new technology, in this case, machine learning or predictive analytics and rebuilding the models to understand at a much more granular level, what's actually going on inside the group dental benefits marketplace. So as we talked about earlier, typical legacy carrier is going to offer a rack rate, generic plan Design Dental product that they know is profitable on a portfolio basis or on an aggregated risk basis. But it's going to be offered with some sort of discount applied. And then you attach it to your your life & vision ancillary bundle, or you attach it to your your health care bundle. And that's pretty much the game. And then Delta Dental is kind of the lone dental specialist out there, at scale at least. And Delta Dental is a nonprofit. And so they kind of price their products, in accordance with a slightly different set of unit economics as a result of how their business is built and having the largest network of dentists in the country and factors

Nick
Still sort of like rack pricing, though, like still sort of...

Alex F
Still the same underwriting approach.

Nick
Yeah, like one size fits all type of bucket.

Alex F
Yeah, and that's especially true the smaller you get in terms of group sizes. Once you've got hundreds and hundreds of employees, you're gonna get an underwriter a personal underwriter assigned to a case. And so you get like personal attention. And basically Beam's innovation is we have replicated the feeling of getting your personal underwriter attached to your case, and brought it down into the small group segments, down to 2/3/4 people, even these tiny micro companies get basically that level of tailored pricing or personalized pricing. And what we're basically doing is we're using our own claims experience data to feed predictions with various level of confidence intervals, what might happen in the future for groups that we're underwriting now that look like groups that we've underwritten in the past, or individuals that we're underwriting now that look like individuals that we might have underwritten in the past. So for example, just like an easy way to think about this is your average 80 year old, all other things being equal and your average 18 year old, are going to operate at fundamentally different assumptions for claims filed in any given contract period. And the reason why is simple 18 year olds have all their adult teeth and they're relatively new to their body. And 80 year olds have been living with those teeth for decades and decades. And, you know, life expectancy is at this point outgrowing what teeth probably evolved to be able to sustain. And so people are doing a lot of very intensive dental work in the final third of their lives because of their teeth just failing on them, right. And so because of that, you're getting very expensive work done like crowns and bridges and implants, at higher rates than you will see typically on an 18 year old or 28 year old. And so we can use simple factors like age and the underwriting process to better predict the actual underlying likelihood of a crown, for example, in a contract period, and then unlike our competitors, we can actually affect your rate if you have a company that happens to be full of 18 year olds, versus a company that's full of 80 year olds and we'll actually send different prices out into the market. Even if all the other underwriting factors look identical to each other, and so that's really the power of our system is the more data we're feeding and more claims experience we're underwriting, we're also getting smarter and smarter models over time. And so even insights as simple as what I just described, that's very much a barbell construct. But there's lots of little slices of nuance in the underwriting factors that our machine is constantly refining over time. And it's allowing us to grow incredibly rapidly as a business while also actually pulling our loss ratio down over time. And typically, you see either loss ratios and premium volumes grow up together or go down together. And that's been a kind of like secret sauce in that context.

Nick
Okay. So you explained the underwriting. I get it, I understand it. So now I'm bringing it forward to the customer facing side and thinking well, okay, that's great. You're going to be attractive to some and maybe unattractive to others. How do you get in front of business? How do you compete in a crowded marketplace that is benefits where someone can just check a box off and say, I don't want to deal with this hassle? How do you how what's the what's the, how do you position yourself in that kind of noisy, messy environment?

Alex F
Yeah, it's a great question, because this is also the exact question that every broker asks us when we first introduce ourselves to them. And it's usually some version of this conversation, which is, I have actually more dental carriers than I need, and want, frankly, that I'm already quoting with, so why would I add yet another one? Right. And it's a great question. And and they're totally right, that, you know, it's easy to, you know, collect a half dozen or even a dozen dental carriers that are operating in any given market around the country. And nobody needs another check the box carrier, right and for these lines, and Beam's answer to that, and I think what's really resonated with our broker audience where we do all we work exclusively through brokers and digital brokers. And I'll make that distinction in a second was really resonated with them. And then our end clients, the small and medium sized business itself is a combination of our lone status as the digital first carrier in the dental space. And the user experience that comes with those investments. And then I think our real distinct factor is the Beam Brush and all of the kind of physical goods that represent the product. It's, it's a really compelling brand building exercise for not just us with our brand, actually on the products and the products being used every day, right and sitting on your sink in a very visible place. But it actually helps the brokers as well because they're constantly looking for ways to differentiate themselves and position themselves as kind of modern and hip to the latest trends in the employment benefits space. And they need ways to open up doors for them to win more clients and continue to grow their brokerages. So we've actually found a very common alignment with their mindset, which is often, you know, growth and differentiation. And that's what Beam is doing. We're growing and we want to differentiate as well. And so that kind of common purpose has allowed us to really tell our story to brokers effectively, because they can turn around and align it with their goals with their clients. And that helps open up the doors. And at the end of the day, small/medium sized businesses love being able to offer something that they can point to really easily as different to their employees and dependence when it comes to the benefits equation, because the employees probably don't know that a competitive bidding process was being run in the background. So it's hard for the employer to say well, your I picked your healthcare insurance provider over the other one because they saved us $20,000 this year, right, that doesn't really resonate, because people don't know what the alternative was. But they can say, well, we picked beam because look at these, you know, everybody has these electric toothbrushes now and everybody is getting toothpaste and replacement heads sent to them every six months. And it's just like a really cool benefit we wanted to offer to all of you because we love working with you so much, right? So it totally allows the employers to, you know, build their benefits and their their kind of cultural, the cultural aspect of it around this unique offering. And that resonates a ton. When we think about brokers, we think of it as in kind of an 80/20 in our business. Most of our volume is driven by traditional brokers and these are anything any brokerages from the kind of mom and pops that operate in one market, all the way up to the kind of top 10/top 5 brokerage houses that that are kind of the the big names in the space, whether it's USI or Hub International are now Acrisure, One Digital and so we partner with those folks around the regional offices and at the national level to gain distribution. And then a segment of our business is also focused on what we call digital brokers, which are some of the emerging marketplaces for group benefits buying. And I think, you know, two of our partners that have been incredibly successful in this space are Gusto and Rippling. Who are both great examples of alignment with Beam in terms of being digitally native businesses that are trying to make insurance among other things simpler and easier for very busy overwhelmed small businesses.

Nick
Do you think you'll have an advantage in these digital marketplaces because you're digital? Like, will it be more difficult for your competitors to be able to sort of slide into that space?

Alex F
We've certainly seen that we were, for example, Gustos first dental partner and they have you know, in order to cover the full kind of geographical map, they have other partners now, but we met them back when they were a company called Zenpayroll. And all they did was payroll at the time and they were trying to expand into the benefits space. So we helped kind of stand up the dental as part of their benefits practice. And so they've been a tight partner of ours for years. In fact, their chief marketing officer's, one of our independent board members at Beam, so we have a, you know, really phenomenal relationship with the business. And Rippling is much the same story where, you know, they could work with lots of different carriers, but they want to work with the ones that are going to be the easiest to work with. And those are going to be the digital first players. And we hope that means over time, if we do our job, right, that they don't have a reason to go add tons and tons more carriers but instead focus in on, hopefully what's working well for an aligned customer. And you know, those aren't the only digital brokerage partners we have. We are continuing to scour the market for what amounts to a lot of activity in the Insurtech space or in the Employee Benefits space as it's becoming increasingly digital, just generally speaking. And we think that's a really exciting macro trend that's going to deliver a ton of value to companies like Beam who are already doing There, but also to just the broader customer marketplace who are used to buying things digitally and user experience being an obvious benefit instead of a detractor. And insurance, of course, is one of those, like, plagued by low NPS scores industries classically. So we think there's just a ton of opportunity there.

Nick
Yeah. And it's likely a lot of the startups are in the digital space themselves, right. So there's a there's sort of a marriage. Probably similar to how I think there's a you know, almost like an affinity relationship with Lemonade, the renter's insurance. You know, a lot of the folks that they focus on but are customers are they're younger professionals that live in urban areas that are very digitally savvy, and just feel more comfortable transacting business in that particular way.

Alex F
So it's self reinforcing. Right? You know, it's they're almost kind of selecting their preferred customer and vice versa. And you know, in the group market, you can't do that quite as easily because you know, there are people that would prefer to transact digitally and people that wouldn't that might both work at the same company. And so you know, you can see some of those segmentation certainly we see a ton of success with smaller, newer companies in white collar and tech or digital industries. That's our key customer and that aligns exactly with what Lemonade also experiences I think. But then you have customers, you also have customers that are like manufacturing businesses as well. And so there's it takes all types.

Nick
It seems like there would be an affinity with startup founders. And Beam Dental like it's just like, Oh, those, those are our people...

Alex F
Exactly. And so yeah, if you'd like start cutting our customer segments for our biggest market is the Bay Area. And our most common customer is under 50 employees and our most common SIC codes are, you know IT and technology SIC codes? And so, you know, it gets obvious real quick.

Nick
Yeah, yeah. So let's get to the third leg of the stool, the, you know, the, the Beam Brush and those kinds of things and sort of trying to tie in what I would call risk management. You know, and I think it's a it's a missing component of the value proposition that insurance companies I think, should have and should be pushing. You know, it's, it's one thing to send an email to your homeowners customer and say, hey, it's that time of the year, climb up on the roof and take the leaves off, you know, out of your gutter to prevent water damage, and it's another to build technology that does that for them. Right. And so in your space you're doing, you've provided a technological tool that they can then tie back to, hey, if I do this, I'll be healthier. Right and But I'll also be able to reduce my premiums. They reduce my rates on that. And so talk about that, talk about the technology that went into that. And if you can, like, where could that go?

Alex F
It's really interesting that the my co founders and I were all engineers by training, we don't come from the dental world. We don't come from insurance and we don't come from employee benefits. So this is we were outsiders kind of crashing the party, in, in insurance and in dental insurance. Certainly.

Nick
Welcome!!!

Alex F
Yeah, thank you. Thanks for having us. We've learned a lot and a lot more to learn. We started the business around the toothbrush and we were the kind of first to bring the toothbrush online, which is now a whole segment of the oral care industry. And you know, Oral B and Sonicare and all the major players now I have connected toothbrushes as part of their kind of lineup of of available brushes. And that kind of speaks to my co founders and I in our original interest in vision, which is still very much a part of the DNA of the business today, which is really around health equity or access, we really think of the vision of our company to be revolutionising dental care and coverage in the context of increasing accessibility. And in our view, one way to do that, which is a very old idea, from our perspective, but still brand new to the insurance world and brand new to a degree in healthcare is how can we be using technology to better kind of understand our customer, whether that's to help give them a better rate on their insurance coverage, or to better predict what diseases they might suffer from and, and so we kind of consider that whole part of the business which we think of as like a dental wellness platform as our kind of Ode to our original interests around the health care side of the dental industry, even though we're more in the kind of financial services side of the industry today in the context of the insurance business, which is which is the core product and is the core business today. The brush allows us to connect some disparate concepts. One is that people should get credit for exercising good preventative care. And in healthcare, this exists a little bit now there are some step tracker programs that have been really successful with like Fitbit and Apple Watch and others for some of the major health insurance players. There are wellness programs that you can that are, you know, kind of well gamified and help you achieve different levels of wellness and engagement in you know, better dieting and you know, working on staying active and fit. And those are all I think really valuable, though I think everybody would agree are relatively nascent. There's just so much more to be done there. And you really have to think about it as a long term investment because walking around the block a few times today isn't going to pay off for hypertension, you're not going to get for like 20 more years. So you have to really think about these as very long term investments for a societal benefit. And so I think what Beam's always seeing is the simple healthful action that we all take every day to some degree, which is brushing your teeth, A), you should get credit for it. So we can at least kind of sync you up to some sort of habit forming or habit reinforcement, right. And then we always saw the opportunity in the context of an insurance product coupled with that, which is like the financial feedback loop. So I kind of envision, you know, you're brushing your teeth every day, you're, I'm thinking of it as like a little piggy bank, you're kind of like putting some money back into your pocket because you're not going to need a root canal, right? That's going to cost you 5 or 700 bucks out of pocket sometime in the future, right Fingers crossed. And, and in that context, if we can draw that just direct line which is a very simple line between this little thing you do everyday called brushing your teeth and a little bit of, of, you know money dropping into the piggy bank. Bank. How can we create the feedback loops, the rewards infrastructure and frankly, build new products and services on top of that basic idea, that reinforces the idea that you should get credit for brushing your teeth, you should get better insurance for brushing your teeth, your insurance should improve itself over time. It's kind of the way Tesla's built their whole thing is a piece of hardware. It's the toothbrush, and car analogy. It's really a piece of software connected to the internet. And it's self improving all the time. There's new updates, new features dropping in, and every time a new feature comes in your car becomes more valuable. And it can do things that it didn't do before. And we kind of view the idea of dental wellness program to be similar because we want to drive long term relationships with our customers. We want it to pay off in the form of you know, not having to suffer through that you know, proverbial root canal. We want it to pay off in the form of a kind of like happier, healthier person, and ultimately putting products and services into the market that can get to customer segments which are unloved today, and to ultimately get to more people. Until recently, there were 100 million Americans that don't have dental insurance. So you've got a huge piece of the market that's missing. And it's still 75 million or something today. And we cannot rely on public programs, which is the reason why it's not 100 million anymore is the expansion of Medicaid and to a lesser extent Medicare over time. We cannot rely on public programs to get that number all the way to zero. We think there's a way to get a compelling private market market offering into the customers that want coverage. They just don't see a compelling reason to get what's out in the market today. And to us, that's just a product problem.

Nick
Yeah. I'm immensely intrigued with the concept of a minimum viable product and the lack of such insurance. And as you're, as you're walking through your business model, I can't help but think and kind of kind of set my questions this way that beam dental is provide you are even though you're you're already a viable business, but your entire business model is almost an MVP to how we could potentially transport this exact same model upwards to other areas of health insurance, like you talked about the Fitbit thing and I see that the you know, the health insurance companies are going to just really struggle trying to execute on this. It really requires a company more attuned to how you're thinking of, of this, and so it's In your long term plans to, you know, perhaps change the name from being dental to being Corp. And, and have and use this framework to potentially deliver the same sort of technological promise to health where you, you can start to get the promise of the technology and all of the predictive analytics and the power of that to a consumer base that's very interested in that and actually would would, would very well receive a message of, hey, I want to work with you. Right, which is opposite of insurance, right? Like, nobody really wants to work with us. But yeah, I want to work with you. But we're in a partnership. If I do the right things. You'll credit me the right way. And we'll work on this together. And when if a catastrophe does come, I'll be taken care of. Have you thought about it in that sort of prism?

Alex F
Yeah, I think about it all the time. And at the end of the day, the you know, from my perspective, the opportunity is so clear along exactly what you said, which is to take our basic model and extend it into new corners of the healthcare market. And, you know, I think we see, we see that opportunity clears day and I also think you're right, that the customer would be highly receptive to partnering with someone that can invest in them and that they can invest in. And that's part of this kind of cold war standoff in the healthcare market is, first it's tied to your employment. And so part of the trouble with making a long term investment is if our company leaves Cigna next year, I'm starting over in my wellness journey with whoever we flipped to next year you hc and now and two years later, we might switch again. And somebody has got to figure out how to stop this steady, fast March upward of healthcare cost, year on year growth. It's insane. And, you know, it's not going to be one company that solves this thing. These are this is a multi trillion dollar problem literally. And it's not gonna happen overnight either. But we see tons of opportunities to take this highly integrated, you know, kind of digitized wellness model and pair it more deeply into the risk modeling, and then pair that more deeply into AI, machine learning, predictive analytics, however, you want to think about it at whatever level to actually be able to credit people to your, to your phrase, let's credit people for not just one action, like brushing your teeth, but actually for lots of different actions. And instead of thinking it, thinking of it as a relatively adjacent wellness gamification program, let's really integrate it into the center. To run the business, yeah, imagine a dental or a health insurance company that wasn't doing wellness as a piece of its business.

Nick
But if it was the business,

Alex F
yeah, the core of the company was driving those kind of healthful actions.

Nick
I can't help but just get excited about that. Because, you know, I'm flashing my Apple Watch. And it's been, you know, over the past several weeks, it's a game with me and my watch, right? I'm trying to, you know, beat my best.

Alex F
Close your rings

Nick
I'm doing my own gamification of this, right. And walking as you as you walk me through your particular model business model, it just strikes me that it's like, I would never consider myself to have a relationship. I love the Cold War standoff thing because that is I think how most people feel with their health insurance companies. So I do think there is a market for more community based approach in health, dental, vision, the wrap up the whole group there, where you could use these behavioral economic type of features, I want that, right, like, give me a reason to want to exercise more! Give me a reason to want to eat better! And one way to do that is I'm a highly competitive person. Like, I would definitively as someone who would probably not qualify today, because of bad decisions I've made because I'm a startup founder. So I have three years of anxiety that's been

Alex F
there you go

Nick
that's built up in you know, sweets and other things. I would I would look at that as a challenge and say, Yeah, fine. charge me the rate you think I probably deserve today, but give me the incentive to drive that rate down. I will do those things. I will and I think society has changed. And there is there is a subculture...I don't know how big that subculture is 10s of millions, I don't know if it's hundreds of millions, but let's say at least 10s of millions of people who are these, you know, more outdoors, athletic,

Alex F
Active lifestyle

Nick
yeah, active lifestyle, like that is a thing now and kind of combine it all together. So you're not just an insurance company. That's, that's sort of where I'm getting at. And I think there's an opportunity and you Beam Dental almost seems like the minimum viable product to prove out, hey, we did it in dental. And now now there's an opportunity to kind of expand the sphere to other areas of wellness. And I just think the society desperately needs that.

Alex F
That would you...totally agree with everything you're saying. And what's cool is that I can build a multibillion dollar business that still fits kind of the MVP notion. And then actually enter even larger markets over time if we so choose to be able to attack, you know, even bigger and maybe even more important problems. But, you know, this also reminds me not to use an another reference to Tesla. But I remember Elon early on in the Tesla days talking about how he knew that electric cars would work because there was like a funeral given for some electric car that like GM produced or something when they discontinued the line. And he saw there is like an in an kind of an installed base of really passionate people about the topic of EVs that could be built upon over time. And similar to that when we were first starting Beam, around the toothbrushes and the hardware. There was a movement that we became a part a pretty big part of that community, called the quantified self movement. And it was right at the beginning. This is just like circa 2010 plus or minus a few years, it was right at the beginning of some Internet of Things, products that were coming to market around healthcare applications, connected scales, wearables and fitness trackers. We kind of represented the dental piece of that puzzle. There were some connected blood pressure cuffs.

Nick
I'm looking this up as we speak.

Alex F
Yeah. connected, connected thermometers heard of this, okay. Yeah, it's, it's called the Quantified Self Movement. And there was a whole group of basically data junkies out there that were using all these different products to like map their health, on spreadsheets and inside tools, because they viewed the idea of like owning their own health data and quantifying what's going on with their heart rate and their sleep, quality and their dental care and all these different factors as a piece of a larger puzzle, so they could start the process of like personally hacking their own health and improving it and I thought it was is always super interesting it was very much a technology thing to this wasn't like let's get together and like do and diet you know and compete on like you know weight loss program or something with based on like what you know eating salads or something like that it was explicitly about, like what technologies can I use and where and put on and data streams that I can, like put together to be able to better understand my body, frankly. And I've always thought that that was the canary in the coal mine for models like beam. And part of the reason why I thought we would be successful, but also lots of other applications in across healthcare and the fact that you know, we're basically 10 years removed from the beginning of the quantified self movement. And all we really have to show for that scale are Apple watches that are mostly accelerometers tracking steps, is like kind of disappointing because there's a lot more gas in that tank and there's just not a ton of you know, beautifully Designed commercially available products that are speaking to that, that movement, but I believe it's there. And I'm you know, still, of course convinced. And we see this every day in the growth of the business that dental can play a huge role there because everybody already uses a toothbrush. Everybody already owns toothbrush, everybody is already familiar with, how it works and what it does and why. So it requires very little education relative to some of the other data collecting products out there. Just like most people don't understand what their blood pressure reading is. So getting a lot of people to use a conductive blood pressure cuff. It's a little bit trickier than getting everybody to use a connected toothbrush and use that data stream in a valuable way.

Nick
Yeah, yeah. Reminds me of the Peter Thiel quote. We were promised self driving cars or flying cars, but instead we got 140 character limits.

Alex F
Yeah. It's that is one of those things. I'm not usually in that camp, but one of the places where I think Just healthcare needs to see itself through to the other side is, is around personal health data, it's around people moving with their data and not having to be tied to a specific carrier or tied to their place of employment to receive health care and and we think dental should play an outsized role in that conversion as well.

Nick
Yeah. And it provides the model the model framework right to me that I think that's the most exciting not not not to diminish what Beam Dental has done in the actual dental space. I think it's fantastic and it's so appreciative of you giving me this 101 in dental insurance, but it just seems like the natural step like you've proven out a particular hypothesis that I think makes it makes it much more likely that there's there is an opportunity in the bigger health and wellness space, all of health insurance and yeah, it's it's a it's a A much more political type of thing. But to me, that's the exciting part of I think my conversation with you now is that this will work. Right, like we got we got proof points that this this is beyond just an experiment. This is successful one. And I think I think hopefully the the listening audience got that as well is that then dental insurance isn't just cash, cash flow smoothing, there's actually it is insurance. But the way to sort of abstract the different elements of it Beam Dental, I think is, you know, quite the use case to do that.

Alex F
Well, it's much appreciated. And you know, if we wake up a few years from now, and people have taken this model and expanded upon it for other to attack other parts of the healthcare market, we would be ecstatic and maybe even playing a role in it ourselves in the future, so that'd be great. Everybody would benefit.

Nick
We've got come full circle. So I think we can take out our champagne glasses and I can say "Fro"! Thank you so much. I think we've we've connected here on a on a more than superficial level and I think we're I, I hope that you'll, you know, keep us up to date on on those kind of fronts and this is this is really exciting to watch. So Fro Thank you so much.

Alex F
Well, to reciprocate Lamps you've done a phenomenal job now convincing me to spend the next 17 hours reading incessantly about healthcare applications so I can begin the process of reacclimating to what is an incredible opportunity that I hadn't thought about in a while but now I'm gears are turning and you've got the gears turning!

Nick
You can you're going to get the email from me at like three o'clock. Okay, I just had this idea you should you should really apply this. But this was fantastic. Thank you so much. I really I think the audience as well, I appreciate the 101 on dental and and really a vision of the future. So this was fantastic. Thank you so much.

Alex F
Thanks a lot, man. We'll talk soon Okay.

Transcribed by https://otter.ai