Who Cares About Dental Saturation with Trey Tippit

The following transcription was from the Bulletproof Youtube channel. Here is the https://www.youtube.com/watch?v=XuOQVOvZdwo

Peter Boulden
0:00:00
All right, everybody, welcome back to another episode of the Bulletproof Dental Practice Podcast. I'm your host, Dr. Peter Bouldin, and I have on a guest today, one of the OGs of the Bulletproof ecosystem. Someone who's been, have you been in the mastermind two years in a row?

Trey Tippit
0:00:25
No, one year, but I joined back.

Peter Boulden
0:00:28
Well, Dr. Trey Tippett, if you don't know of Trey, I feel bad for you, I'm kidding. But if you don't know of Trey, he's a practicing dentist with lots of stuff cooking in Texas. Trey, what area of Texas mainly are you focused in? I know you do a lot of rural areas as well, but what would be your main scope of where you reside, if you will?

Trey Tippit
0:00:53
So we are pretty focused on the west side of Houston with any of our city practices, and then we are rural with half of our practices, and that's between Houston and Austin.

Peter Boulden
0:01:04
How many are in your ecosystem as of right now?

Trey Tippit
0:01:07
There are six in the ecosystem as of right now.

Peter Boulden
0:01:09
Six, got it.

Peter Boulden
0:01:10
So give a quick, if you wouldn't mind, just again, I was kind of being funny with, if you don't know of Trey, like you should, kind of thing is where I was going with that. But give a quick background, because where I feel like I know you really well, obviously there's people in the listenership who don't know of you. And I've been really impressed by just getting to know you, your ground game, the way you function and operate. And we're gonna get into a topic today that you said on one of our mastermind calls that I thought was fascinating, and I shared kind of the same sentiment. We won't go there yet. But give kind of, if you wouldn't mind, a quick background of how you're here, right? How you are where you are right now.

Trey Tippit
0:01:49
Sure, you bet. So my dad was a dentist. My mom was a dental hygienist. And I was not smart enough to run the other way. And I got out of dental school in 2008. I bought my dad's practice from him in 2011. And we looked at, we were basically bursting at the seams within a couple of years. And as you started to look at the names of dropping insurances, there were too many stories that we heard, that I knew or had heard about people and names on the list of that first list we looked at. So from that standpoint, we moved forward with the idea that our goal is to treat more people. So we ran zip codes, opened a second office within the second zip code in terms of most concentration out of our immediate area, and then ended up liking it and feeling like we were pretty good at it, so we just kept doing it. And every practice has more or less been a leapfrog of the previous ones, whether it be moving patients to one area or looking at a geographic map, knowing that that's the next logical area that we will draw from our existing draw area, or existing base, rather. The plan was always expansion, or did it kind of happen that way just because you started bursting at the seams? Bursting at the seams. Where I am now, I had no idea this was where I would be. So I don't practice dentistry anymore. I train, I manage, I look for growth, lot of cheerleading.

Peter Boulden
0:03:17
And what I love about the practice is, and I'll just kind of, I'll speak where you're not probably gonna brag on yourself, is that you have run a giant organization, but it's not been predicated on home runs, versus a lot of practices will aim for the fences and be like, I'm gonna do all on Xs, and I'm gonna do only veneers, and I'm gonna do only implants, right? You have built a practice and a culture that says, let's get a tremendous amount of base hits because we will probably win more games than someone who's going to get up and maybe not have a good game. Trying to draw a baseball metaphor there, you see what I was doing?

Trey Tippit
0:03:50
That's all you got.

Peter Boulden
0:03:51
But you are cool with the quote unquote non-sexy dentistry. Let's do about a quadrant dentistry, let's do the crown, let's do the very functional dentistry and be the best at that and then bring that to the masses if you will.

Trey Tippit
0:04:05
You got it. You nailed it. That's exactly what the mindset is. Let's do bread and butter needs-based dentistry and let's do it at scale. Let's treat as many people as we can. You have some docs that develop interests and they pursue those interests and implement that into their practice and their teams, but for the most part,

Peter Boulden
0:04:26
it will make people go through it. Yeah, I'm not saying that you don't do it. It's just not a core feature of the, yeah, there you go. Correct. Okay, so now we'll jump into kind of the meat, is why the genesis of why I wanted to have this podcast and talk to you is because we were, I'll give some context to the audience. I was actually sharing with the mastermind, a practice I'm looking at from an acquisition standpoint, looking at, hey, what do y'all think about this? What are you seeing? And kind of just going, using actually the Bulletproof Mastermind as almost my own mastermind because there's some really Successful intelligent dentist in there and I want to you know, I always say the answer is in the room So we are kind of going through that and right and and the topic of saturation came up So one of the people in our group said well, what's the saturation of this practice? Meaning, you know the saturation of dentist and that seems to be a huge metric when you look at demographic research, like when you get it specifically for dentists, you get reports run, whether it's demographics or others, is that that is a big metric. It's like, well, how many other dentists are in the area? And Trey's comment was like, who gives a shit? Pardon my French. And he was like, it doesn't really matter. And you had some kind of good thoughts behind that. And so I'm gonna shut up and let you kind of expound on why it really doesn't matter, right? If anything, it's almost confirmation for you. So why don't you go from there? I think I've given enough ground game on that, but why don't you expand on your theory there?

Trey Tippit
0:05:51
So when you go and look to buy a practice, that's one of the big metrics. And it's one of the metrics that brokers or real estate guys, anybody that's pitching you that deal, they're gonna give you the dentist to population ratio. And I had a doc in dental school tell me this, and it was about Austin, in Austin, Texas. He, you always hear to this day, it's Austin's saturated, don't go there. But the town has boomed forever, in which case that just, it always just felt like, that doesn't make any sense. And one of the things I've asked about him, he had practiced there forever, and he said, there's always room for a good dentist. And when you really looked at it, now doing what I do and looking at data and looking back over trends and data we've collected in our own practices, you start to realize, looking at new patients, all of your patients, not all,

Peter Boulden
0:06:45
but the majority of your patients come from other dentists. What do you mean? Do you mean because they're unhappy?

Trey Tippit
0:06:54
One reason. It's really three reasons out of that that lead to someone leaving. It's their dentist dies, their dentist retires, or they move.

Peter Boulden
0:07:04
Or they move. It's a geographic… So meaning they are new to the area.

Trey Tippit
0:07:12
Correct. That is what you usually see. Now, there is the guy that shows up and says, hey, I haven't been to the dentist in 20 years. That happens. But it's the anomaly. It's the Miss Prebys principle. It's 80-20. That is not 80. So the chances are that you go into that spot and you're looking for people that say, I've never been to the dentist. I woke up this morning, I decided I need to go for whatever reason, and I decided to come to you, are few and far between, which is more likely and kind of the, that's kind of the end game of focusing too much on, or focusing on the metric of dentist to population ratio. Yeah, there's enough patients to go around, but in the scheme of things, everybody's coming as a second opinion or for one of those other three reasons. So you want to put yourself in the middle of where all the action is basically.

Peter Boulden
0:08:08
So an interesting, another thing I always talk about too, and this is gonna piggyback on what you just said, is that what the demographic studies do not do is they don't quantify the quote unquote real players in the town. Meaning they just say, do you have a dental license, and here's the population, and here's the math associated with that. I contend that really there's only about 5% of dentists in the nation that are really playing the game. And what I mean by that is, you know, they've got an office that looks sharp, they're marketing, they've got a team that they're building and training, they're constantly on the move, right? They're looking for this year to be better than next year. And many dentists are good or they're doing good or doing well by default. The fact that they are dentists and there's a scarcity of us meaning that there's only a certain amount of dentists. So what I don't like about dentographics reports or demographic reports, I shouldn't pick on them specifically, I'm just I'm not picking on them specifically, I'm just saying all the reports in general, is that it doesn't it doesn't give qualifications to the people. Meaning that let's say we were looking at two separate cities, right? so situation a is is there's 20 dentists in this area for a population of a hundred thousand people 20 dentists, right? So that would give you a ratio of 5,000 to 1 which would be a good ratio Right, but if some of the if these are all monster practices, right? If these 20 are all monster practices like Craig's practice per se right and these people are all just killing it with social media and they have amazing websites and amazing this. Like that's probably them would threaten me more so even though that ratio at the get looked pretty good, like, oh, 5,000. All right, that's good. That's doable. But I would be more threatened threatened by the fact that I had looked into and dug my next level of due diligence would have been, what are these practices really look like? And holy shit, there's 20 Greg Spodak practices in this town maybe this is looking a little more anemic than I thought versus situation B which may say okay there's only 40 for these 20 dentists there's only 40,000 people in this town which would give you a ratio of 2,000 to 1 okay but you'd look at and say oh that's kind of on the border but if you start digging into and looking at all their Google reviews and their ratings and their website and their practice locations and the way they look and all these things, you may say to yourself, well really only the practice that I intend to do there or the vision of the practice I tend to acquire and change to, it's probably going to be the top, you know, two or three practices in that town. So it's not a level, my point is that the number, I think this is where you go Trey, is that the number doesn't really tell you a whole lot of information. I think it's a good starting point. It's something that can either get your attention one way or the other, meaning, ooh, this is really awesome, or ooh, this is really bad. But I think there's always a level two where you dig in and say, well, who's playing the game? Right? Or is it just doctors who maybe work at the school three days a week and they have their license and therefore the demographics has included them in this population study, but they're really not playing. You know, I'm trying to say like a certain dentist who were just not playing the game.

Trey Tippit
0:11:21
All things are business is basically the gist of that is, you know, one does not equal one.

Peter Boulden
0:11:27
Yes, thank you. I guess I could have said it that easier. I just want to go into scenarios.

Trey Tippit
0:11:31
Troy. So, yeah, I like I like your you painted a pretty picture.

Peter Boulden
0:11:35
Thank you.

Trey Tippit
0:11:36
Yeah, that's a very good point. And then you have to dig down to the next level to get the full story on the numbers. The numbers are just that. You've got to have the meaning behind the numbers to really tell that story. And you're exactly right. You don't want to go into a relatively, let's say a town of 100,000 with a bunch of Craig's Kodak practices. They're drawing a huge base out of that and that's what we're trying to compete with.

Peter Boulden
0:12:03
They are taking a disproportionate amount of people out of that, right? And so if you have a ton of them, the 5,000 to 1 ratio, it doesn't look so sexy anymore. And as a matter of fact, it would be really hard to compete against that because of just the consensus. When you get to that critical mass, it gets harder to compete against. So I like where you flipped that on your head. In our mastermind discussion, I thought it was just because it was kind of a contrarian thought. Whereas most dentists, most people I talk to are just, they look at that metric and then they just take what's given to them. And you said, no, no, no, no, no, no. That's only part of the picture and I'm going to flip that on its head. And if anything, I think it gives, if there's saturation, meaning success has left clues, it says it's a good market to go into, right? I know you're tracking where I'm going but you're saying like – as a matter of fact, there's a story. I remember I went out and did a Hornbrook group. Let's call this circa 2005. I was out in San Francisco before it was a hellhole and I should probably bleep that out maybe. We all know where it is. I don't want to offend my San Francisco friends. But anyway, there was this building, Trey, and it had in this high-rise building, I shit you not, I wish I could remember the name of this building, there were over 200 dentists in this one building. And I remember thinking to myself, how is this even possible? You would think that at level, the 100 dentists would be like, oh, there's too many here. But like, honestly, it was almost like a feeding frenzy of like this was the dental building. There were like maybe not 200 in that building, but on that block, it was a disproportionate amount of dentists in this building. So obviously it's worked because people wouldn't just be jump throwing themselves off of a business cliff, if you will, and be like, oh, well, this practice went bankrupt. Let me try. And this practice went bankrupt. Let me try. It's it it was working in that ecosystem, in that town, in that concentration. So you're going out the same way. Don't let concentration scare you because obviously it's worked in the past.

Trey Tippit
0:14:11
Correct. If you take a step back and look at the bigger theme of what we're talking about, what you're getting at is dentists don't compete with other dentists. That's just one way of showing that you're not really competing with other dentists. So you're competing with discretionary spending of dollars. And you get into, I'll give you an example of us. In our first practice was a big practice, wealthy neighborhood, middle of Houston. It's, we never had employment, or contracts. We had a one-page employment agreement, no non-compete. I'd have attorneys tell me, you need a non-compete because we had multiple locations. And I thought back, it's no we don't. People aren't leaving, I'm not competing with them, they're gonna be able to move next door and set up, they won't hurt anything at all. And I have non-competes now, but I still believe that. I still believe that.

Peter Boulden
0:15:08
You have non-competes now because you got hurt in that process or you just, you yielded to the to the advice of the attorneys?

Trey Tippit
0:15:15
And because I didn't care to argue that point.

Peter Boulden
0:15:17
I agree. I mean, I think there's something I think once you get to a size, you can say and it's not an arrogance and like, I'm so confident you can't move across the street for me and you won't hurt me. But I think you get to a point where it's like, OK, well, like my come up was pretty hard, meaning, you know, I had 20 year come up of me building this. But if you think you can do better than that in a few short years and put a dent in the practice, like that's fine, go ahead and do that. Shame on me, not shame on you, right? And as we all know, non-competes are very hard to enforce. So I think they're just a warm fuzzy for us to feel good that no one's gonna take away our stuff. But I agree with you. I think that, look, I haven't been placed to because everyone's like, dude, you're insane not to. Why would you not do that? Because no one's gonna fight you on it. But I totally agree with the sentiment there. It's an abundant world. I think where you were going was, it's a very abundant world. There's plenty to go around. If you've got the chops to do well, you're gonna do well. If you don't, that meritocracy falls off on you, not me.

Trey Tippit
0:16:16
That's spot on. So I'll also throw the flip side to that too, though. Yes, and our second practice is on a corner, very big, well-developed corner in a suburb, seven dentists when I went in there on that corner within that whole ecosystem of development. And you never think twice about that. That was a positive thing because you absorb all the people that are walking out of any of those practices, not to mention in that given area, the dry area. But if you go the extreme other side to it, I will say, now, if someone, you've seen rural as well, but there are a lot of places where there are no dentists. Those demographics you listen to, that is a good place to be.

Peter Boulden
0:16:57
So I love this because I feel like you and I have the chops to talk about rural stuff, right? Because we both have gone into those markets, we like them, you know. There's another guy that Craig always talks about, he's Steven Birch, who kind of says the same thing. You know, Craig always mentions him on the pod. But, you know, the rural streets are where it's at, so to speak, and so tell me, tell me, unpack what you were just saying about, like, the absence of someone being there. What would you look at? What would you say, holy shit, this is where I want to go.

Trey Tippit
0:17:33
So, I look for, and when I specifically started down that path, I was looking for within an hour of Houston, one, because I want to get there, and two, because you still have people escaping the big city, urban flight into these markets where some of them still live there and work in Houston. And then we progress farther beyond that. But a town of, say, 4,000, you can very easily have, and one of our practices does, it has a town of 4,000 with an active patient base of 4,200. So you end up with, because the small area is 20.

Peter Boulden
0:18:10
The halo effect, yeah, yeah.

Trey Tippit
0:18:11
It's a huge halo and there's nobody, or there are very few people around, you can't service the area. The needs greatly outpace the ability of any of the dentists nearby to actually do the work. So it provides you with an enormous head start and an advantage in that regard to building a practice. And suited my world very well of trying to treat more people because some of these people, it's just a demand.

Peter Boulden
0:18:40
So how many of yours have been startups and how many have been acquisitions? Obviously the first practice, let's call it your fathers that you then took over, that was obviously, we won't count that one, but what has been your tactical expansion approach? Has it been through acquisitions or de novos? It's been through both. Our second practice, second and third actually, were startups. So, went into one was an existing space, second gen space that we just moved into. Another one was rural and it was an ophthalmologist office that we went in and just bought the building. We didn't buy it, but we converted those ops into dental ops and then bought that later and then did a little bit more revamp to the building. Those two were startups, great options. I really enjoyed those and we're going to try to do another one. That ends up, in my world, I enjoy that. If you can suffer through the beginning and market your way past

Trey Tippit
0:19:38
the initial heartache, but the rest have been more.

Peter Boulden
0:19:43
I like what you said there, and I think that's a good thing to unpack. I want to pause here. You're saying you like that, and you said if you can live through the pain. And so a lot of people listening may be wondering, what is he talking about, right? And so are you saying that there's more upside with a startup and it's more inexpensive potentially, right, from a cost perspective, but you got to have staying power to be able to watch it on its come up, so to speak. Correct. Versus plunking down, I want to buy a million dollar practice for 700,000, let's just call it, and then buying that cash flow, right?

Trey Tippit
0:20:18
Positive or negative to both, but I get to design what I want, put in what I want, I can control the debt and when I go in there, the growth of the revenue can grow at a pretty astounding rate on the front end and then you can dwarf the debt to where your revenue to debt ratio becomes very positive and in your favor. But you start with zero. So the day when you hit that go button, you have no patients or not, and you gotta meet all the demands of the overhead. So you gotta suffer through that, whether it be through lines of credit or as you get bigger, other practices can pitch in. There's all sorts of things you can do.

Peter Boulden
0:21:06
How much of your decision from your expansions has been predicated on information, or because you've been a Texas native and your family's been a Texas native, like there's, I guess what I'm trying to say is there is Intel and there is intuition.

Trey Tippit
0:21:20
Yeah, that's a great question. And I would say, frankly, the vast majority of where I go is off of intuition.

Peter Boulden
0:21:27
Okay.

Trey Tippit
0:21:28
And it's backed up by Intel.

Peter Boulden
0:21:30
So, all right, so let me push on you for a second then, because I like this. If, the way we started this podcast was, who cares about saturation? So if you're basing all of it on, mostly on intuition like you're saying, is it a conformational bias that numbers don't matter because you were romantically already there and you wanted the numbers to say like, who cares about the competition? No matter which way or the other, because I've committed to going there in my heart and head.

Trey Tippit
0:21:53
Sure, to some extent that's true. However, the results don't lie. So in the end, you build a practice, then you've proven that that is in fact what I would say that is one piece of so many pieces of the puzzle. But you build a thriving practice in that area with all those things.

Peter Boulden
0:22:12
It is confirmation of that's not necessarily part of the confirmation bias. I was being hard. Obviously, I don't think you can fully be dogmatic one way or the other. I mean, I would just be idiotic. You don't want to just open practices based on data and you also don't want to be just leading with where you should open based on your heart. But I also think that you being generationally there, you know, the tippets being there generationally, I think that's an advantage that let's say private equity or someone moving into town doesn't have, right? They don't have the countless decades being there to say like, this is a good area, this is growing, this is not growing, this is right, just like I've been in Atlanta my whole life. So there were some areas I opened that on paper were like, yeah, it's probably pretty saturated. I wouldn't open that Buckhead's location in 2009 because it's pretty saturated. But like, you know, like you said, the story, the story proves proves you either correct or I should say or timeline proves you either correct or incorrect. So, yeah, time will tell. Time will tell. It's a better way of saying it. Yeah. So the reason I was asking that question is I think that many people are looking for, many people listening to this are wanting to expand and they're looking for the exact methodology of that. And I think that's a hard way to say like, here's the steps and here's how you do it. Yes, you want to quantify things with data, but a lot of times your intuition will lead you into knowing like what's your deep gut say? And then can you confirm that with some of the data, but don't be dissuaded by some of that data that would turn most people off, which is how we started this, is don't look at just maybe the saturation of dentists, because I think that's where most, honestly, Trey, I think that's where most dentists go to immediately. They go to the average household income of the subject property that they want to do, how rich is the surrounding area, can the town support the dentistry that I want to do, and then B, how many folks are already there, how many people beat me to the punch? And that's why I wanted to do a whole pod on this because I think that that's, because it's so one or two in the decision tree for dentists to decide where they're going. I think it's so important that I like it when I hear this contrarian thought of like, keep unpacking if you really wanna be there.

Trey Tippit
0:24:22
Oh yeah, yeah, well, and you gotta remember that all the data's just an outline. You have to be able to bob and weave in and out of the outline for all those reasons. And I mean, our, the location that we have about an hour outside of Houston, one of them, the demographics would be terrible. You have a small town, 4,000, and there's, I mean, all of us are listed on it. So if you ran, depending on how you run your demographics, you may have, you know, 200 to one in that town. But you don't realize it's only one practice.

Peter Boulden
0:24:52
I see.

Trey Tippit
0:24:53
So there's all sorts of ways that the demographics and the data gets skewed, so you gotta go use intuition and just figure it out and start to put a little bit of, basically you tell a story behind the data. You're trying to uncover what that story is between those numbers, behind those numbers.

Peter Boulden
0:25:12
Yeah, and look, anyone listening to this, I would impress upon you too that I think this is a big takeaway. I know Trey and I agree on this, is look at the competition based on who you think you will be in the future, right? If you think you're going to be like an office like we keep using the Craig Spodek example, if that's the model you want to build, how many are there just like that already? Because that's your true competition, right? And you hate to think that other dentists are your competition because we want to be like kumbaya and all hold hands together, but at the end of the day, we are running independent businesses of each other. And as much as we want to help each other out, which I'm sure we do, and I'm glad we do. I mean, there are times when you do want that collaborative experience, but at the end of the day, there's only so many people that you can serve, meaning in a town, so it does become competition to it, in a sense. So looking at your true competition, right, not just the numbers of people who are holding a dental license.

Trey Tippit
0:26:10
Yeah, that's a very good point. That's a very good point. Okay, buddy, anything else to add?

Peter Boulden
0:26:15
I like to kind of, I want to keep this, I'm envisioning this as a YouTube thumbnail and it's going to have your face and just it's saying like, who cares about saturation? So I don't wanna keep going into different topics here. So I wanna wrap it. Unless you've got anything just sensational to add,

Peter Boulden
0:26:37
I would love that.

Trey Tippit
0:26:38
No, that's left for another one. That's left for another one. This is a good way to do it.

Peter Boulden
0:26:43
Thank you for spending the afternoon here, buddy. I gave you the shortest heads up in history and I appreciate you doing that. But that's what's having, hey, when you have ultimate freedom like you, you've worked yourself into having, doing what you want, when you want, with who you want. Careful what's next for you. Be careful. Be careful.

Peter Boulden
0:27:02
All right, everybody, we'll see you next time.

Transcribed with Cockatoo