Entrepreneur Drives a Revolution in Dentistry

Open wide and visualize dentistry without drills, needles, and scalpels.  “We’re past the initial resistance and we’ll be fully through the market inertia in a year from now,” noted Mike Cataldo, founder and CEO of Convergent Dental. The young company has developed and markets the first FDA-approved CO2 laser system (i.e.., Solea) for dentistry on both hard and soft tissue.  “We built the prototype, which proved we could vaporize tooth structure with lasers,” observed Cataldo, who shared entrepreneurial insights via Skype in Charlie Jonson’s New Ventures class in late October. “FDA approval was relatively easy; pretty straightforward . . . but the market still doesn’t believe it,” he confessed.  

It’s always tough to break into a market with a game-changing technology, Cataldo told the students.  To that end, training and supporting “the early adopters” [i.e., dentists] is critical. “They become a reference base for others; they help convince the mainstream,” he emphasized. In its third year on the market, Convergent has 500 customers. “You build the product and attract the customers; the rest is leadership—who to hire in sales, technical help, and other areas. That’s how you break through the market inertia,” he said.

The Solea system, Cataldo continued, yields recurring supplementary sales from its customers. That includes an ongoing stream of revenue from maintenance, software and hardware updates and improvements, and replacement of hardware components that wear out. That contributes to the young firm’s cash flow, which Cataldo considers critical. The dentists, he added, also prosper from the win-win  financial arrangement. Solea allows them to perform roughly four additional procedures each day. “They become cash positive on their initial investment after one month,” he observed. “And they get their entire investment back in six months.

I don’t care who you’re selling to; honesty remains the best policy.“To date, we’ve raised $45M—$9.5M from a venture fund [Boston-based Long River Ventures] and the rest from individuals [including high-profile investors Peter Lynch and Gordon Gund],” Cataldo explained. “We keep our investors plugged in. We do what we say we’re going to do.”  That transparency was evident in Convergent’s proactive, relationship with the FDA, which yielded Solea’s swift approval. “We sent a message to them, that we have nothing to hide,” he told the students. “I don’t care who you’re selling to; honesty remains the best policy.”

Reviewing Convergent’s revenues and its five-year revenue projections, Cataldo cited 25% current annual growth; “we’re up 150% in cash on hand to cover expenses,” he said. In its exit plan, Convergent, he noted, will consider all offers, but Cataldo expects an IPO in 2019.

Transparency and honesty topped the list in Cataldo’s career advice to the students/future entrepreneurs. He also held communication skills at a premium, warning, “If you can’t communicate ideas, you’re done.” And, he exhorted, “Do your homework and know your business. There is no substitute for knowing its business, clinical, and technical demands.”