The Group Dentistry Now Show: The Voice of the DSO Industry – Episode 16

In this episode, Darin Acopan, EVP & Partner at DEO, discusses the DSO mastermind community where small & emerging dental groups can come together to learn from experts and each other to scale/grow their organization — essentially getting an MBA in the DSO space. If you want to understand what DEO members experience, this podcast is right for you!

Join the DEO on June 4-6 in sunny Phoenix, AZ! Register now for The DEO Summer Summit: Keys To Growing and Operating a Successful Dental Group. Save an extra $100 with the code GDNSUMMER.

Our podcast series brings you dental support and emerging dental group practice analysis, conversation, trends, news and events. Listen to leaders in the DSO and emerging dental group space talk about their challenges, successes, and the future of group dentistry.

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FULL TRANSCRIPT

Bill Neumann:

And I’d like to welcome everybody to the Group Dentistry Now show. I am Bill Neumann and we always have great guests on the show. I feel very honored to have our next guest who I consider a friend that I’ve known for quite a long time in the dental space. His name is Darin Acopan and I think most of our audience could know him as the connector in the dental industry, in the DSO space for sure. Darin is great at putting people together, so Darin is a partner and the executive vice president of sales in the dentist entrepreneur organization. You may know it as the DEO. Darin has been working in the DSO space for the past six years. During this time, Darin has interviewed hundreds of emerging dental group practice owners, which has allowed him to gain key insights in terms of what emerging owners pain points are, along with what solutions work best to scale group practices. So Darin, welcome to the Group Dentistry Now Show.

Darin Acopan:

Bill, thanks so much to you and Kim for really putting great content out into the DSO space. I’ve been a long time subscriber of everything that you put out, both on social and in hard print. So thank you so much for now expanding to podcasts and having us on.

Bill Neumann:

Yeah, thanks Darin. And right you, this is before your time at DEO we’ve known each other.

Darin Acopan:

Yes, about six years I think at the one of the CDA events was the first time we met face to face.

Bill Neumann:

Yeah, that’s correct. Yeah. Well, and the industry has really progressed since then, so we might touch on that a little bit. There’s been quite a bit of change in those six years.

Darin Acopan:

There sure has.

Bill Neumann:

So Darin, tell the audience a little bit about who the DEO is, maybe a little bit of history and where things started and then I think a lot of people might know the DEO from the summer and fall summits that you have, but DEO’s quite a bit more than just those two events. So I’ll let you take it away.

Darin Acopan:

Great, great. Thank you so much. Really, a lot of people in the industry think the DEO has popped up overnight and a handful of veterans in the space know the backstory, which is our group has actually been around for close to three decades now. And it was founded by a periodontist named Dr. Marc Cooper. And so Dr. Cooper used to practice chairside and then had an epiphany at about midway through his career, which caused him to sell his practice and then become an executive consultant for dental owners as well as medical groups. And so in consulting for medical, he actually gained some key insights into the consolidation that occurred in that industry and he would openly share that with his dental coaching clients and whenever he had a speaking engagement and really the name of the company back then was The Mastery Company.

Darin Acopan:

And so about three or four years ago, he was getting a little burnt out. Dr. Cooper is in his 70s nowadays and so one of the first pivots that he created was reaching out to my business partner and the CEO of the DEO Jake Puhl, who you already know. And so Jake knew Dr. Cooper because he had cofounded one of the first digital marketing companies in dental called Firegang, which it’s still in business today, but Jake no longer has an equity stake. And so when they were getting Firegang launched, Jake and his business partner wrote a book on marketing and Dr. Cooper helped promote it, so that’s the connection there. And so when Dr. Cooper reached out to Jake at The Mastery Company and saying, “Hey, I’d love to potentially partner up with you,” Jake said, “Absolutely,” and so he left Firegang, had his partner buy him out and then he came into The Mastery Company at that time.

Darin Acopan:

I came onboard maybe six or seven months after Jake did, but during that time where it was just Jake and Dr. Cooper, they kept looking at different opportunities to scale the business and the one thing that Jake and Dr. Cooper kept coming back to is this thing that Dr. Cooper created within The Mastery Company called the DEO. And so at the time there were only about 10 or 12 coaching clients of Dr. Cooper’s in the DEO and when Jake queried Dr. Cooper about how it came to be, he said, “The reality is there are a lot of great dental consultants out there, but typically when you get to about two to three locations as a practice owner, those consultants don’t have a lot of experience in that arena because most of their clients are one location owners.”

Darin Acopan:

On the opposite end of the spectrum, you have very large groups, great organizations like the ADSO for advocacy and some other groups. Usually it’s by invite only and at the time back then the ADSO required a minimum threshold of, I believe, 30 million in revenue as a group to have participation in their network. Now it’s definitely lowered but back then that was the case. And so Dr. Cooper created the DEO for his coaching clients that had multiple locations in order for them to not feel like they were on their own island and so that they would get the benefits of networking effects for those that were at their level or those that have been there and done that.

Darin Acopan:

And so Jake thought that was brilliant. And what happened is when I came on board, we decided to go all in and pivot the business away from a consultancy, which was largely what The Mastery Company was to the DEO, which is a mastermind community in which, yes, there’s content that’s shared, but largely what you learn comes from other practice owners that are at your level or beyond. And so now the group has scaled from the original 10 to 12 members to a group of 180 members. And on average, each of those 180 members has typically five to 10 locations doing roughly between six and 10 million in revenues. So we have some that are not as large, some that are a little bit larger, but that’s our average DEO member and it’s just a membership based community where it’s kind of like getting your MBA in the DSO space.

Bill Neumann:

Really, really cool. I mean, you guys have grown substantially and certainly have created a wonderful community and I appreciate being part of the summits that you have, the open events that the public can attend, people in our part of the DEO mastermind group. Let’s talk a little bit about the events and then I’ve got some specific questions as far as what your members are experiencing, when you talk to them, when you meet with them, what kind of feedback you get and maybe I think that would be some really good insight for our podcast listeners, what you see going on from your members, what you hear, what they talk about. So event-wise, again, like I say, not everybody, but a lot of people know about the summer summit, which is open to the public. And then of course the fall summit, which used to be the quieter meeting, but now that’s almost as busy as the summer summit is. So we have those two events. We’ll talk a little bit about those at the end of the podcast. What are the other events that you, that you have? And I guess those are more for your DEO members.

Darin Acopan:

Correct. So the two large summits typically draw between 650 and 800 attendees all in, and again to your point, Bill, we have one in June that’s known as a summer summit and in fall, during the month of November, we have our fall summit, which used to be a lot smaller and now it’s pretty much the same size as the summer summit. And so last year we were in Orlando for the fall summit. This year we’ll be in Brooklyn and the summer summit is typically always in Phoenix. Behind the scenes, to answer your question, we do for private member events for DEO members only, but largely for the general community, for the majority of that are not DEO members, they’re always welcome to come and learn great content and get the benefits of networking effects at those two larger events.

Bill Neumann:

Okay. Very good. And we’ll touch more on the summer summit and the fall summit towards the end of this podcast. So I had a question since you have come from outside the dental industry. You were with a dental company just prior to DEO, but before that you were involved in finance and some other industries, what do you see is the couple of differences about growing a business in dentistry versus some other markets?

Darin Acopan:

Great question, Bill. So I’m going to give one of our DEO senior faculty members, Emmet Scott, the benefit of this. He always says, and I believe this, the differences in dental, we’re in the process of a consolidating industry, right? An industry that’s currently actively being consolidated versus other industries like medical, which have already consolidated. So that being the case, there really is no blueprint for scale and the reality is the margins look really good in a dental practice, but unbeknownst to people that have one or two locations, they don’t realize that in order to scale, you are going to go through some growing pains and there is no silver bullet to mitigate the risk on those growing pains because you can do anything but you just can’t do everything.

Darin Acopan:

So when you have limited time and resources, where’s low hanging fruit? What can you actually pull the trigger on to move the needle? These are all things that are really gray area, which is why we created our organization so that we could mine the data from other successful group practice owners on what works and what doesn’t. So I think that’s the big difference is this, I think, we’ll all look back four to five years from now saying right now this was the golden era of consolidation within the dental space and we should have done more. And so I don’t want to be on the wrong side of history, which is why a lot of our members are trying to scale, but they’re trying to build the right foundations in order to scale a true platform rather than just gobbling up locations and then taping them together because we’ve seen both situations and one doesn’t play out so well.

Bill Neumann:

Yeah. And I think we’ve seen some of that in 2019, some of those a duct taped DSOs fail or be sold off at relatively low multiples. Yep. And yeah, that’s a great point about the industry consolidating and if even look at it from an industry partner standpoint, I think industry partners are going to have to be really keen on what the DSOs and the emerging groups are telling them they need because to that point, some products and services that are needed by growing groups don’t even exist yet because this consolidation is still occurring. So I think there’s opportunity, but that’s also one of the struggles the DSOs have, they need platforms and they need data and they need products and services that may not work at scale. So they’re good for a solo practitioner, but not so good when you have 10 or 15 locations.

Darin Acopan:

Absolutely agree with you.

Bill Neumann:

Good stuff. So let’s talk a little bit about more focused on what you’re experiencing with your emerging group, your DEO members, and maybe some of the larger DSOs and this really ties into the theme of the summer summit, which is keys to growing and operating a successful dental group, so about scale and growth. When you look at paths for emerging groups or DSOs to add practices to grow, you always, there’s really two options, right? There’s acquisition versus de novos. Can you give a little bit of insight? You have some that strictly go acquisition, some that go strictly de novo and then some hybrids out there.,So let’s talk a little bit about that.

Darin Acopan:

Perfect. So funny enough, this was the theme of our November, 2019 fall summit, right? It was de novos versus acquisitions. And so the reality is that you won’t know which path is truly best for you until you do two things. And the first thing is you have to talk to others that had been there and done that. Some specialties like pedo are more de novo centric, but the reality is if I want to get from point A to point B, the smart and prudent thing to do is talk to others that have already gotten to the point B and what were some of the obstacles that they encountered? That will then formulate an algorithm so to speak, where I can make a better decision based on the information I gather. But number two, you have to see for yourself. Heartland is largely an acquisition based model and PDS is largely a de novo based model and both are very successful.

Darin Acopan:

You usually tend to go in the direction that best suits your platform. The reality is, it’s very difficult because most people don’t begin with the end in mind. They start with one, then they kind of haphazardly scale up if they don’t have direction or guidance from others that have been there and done that. So that’s what I would say first is what specialty are you in? If your specialty skews more towards the de novo model, you might want to talk to others that have been there and done that. If you’re agnostic, I think you should try one of each and then document what the process was like. And then from there you can make a decision on should location number three be an acquisition or de novo. Sometimes you acquire a couple of locations before you do your first de novo or vice versa.

Darin Acopan:

But the reality is you’re going to have very different processes for either situation. And in some cases an acquisition can kind of be like a de novo, right? Because there have been stories that you and I have heard, Bill, where owners have to completely clean house, so to speak and upgrade the facilities, so in a sense, that’s kind of like a de novo. It just really depends on what you’re trying to build and, and what you feel more comfortable with. I just don’t know that you can do that without actively talking to people that have been there and done that and then doing it yourself to see what fits best.

Bill Neumann:

Yeah, that’s great advice. As far as what you… What are you seeing? So I’ve heard some things about there seems to be a bit of a feeding frenzy for acquisitions. You have more DSOs that are in the market. There are more that are doing acquisitions, so they tend to, and sometimes in specific markets, so they tend to drive prices up. And in that case, do you see… Well, why don’t you give us some ideas of trends? Do you see like in certain markets where there’s more de novo activity versus acquisition activity because there’s more competition? What are you seeing and what are your members doing about this?

Darin Acopan:

Great question. It’s, no doubt that the majority of our DEO members are growing through acquisitions versus de novos. It’s typically easier to secure debt financing with that approach. At a certain point though you, you are going to have to create systems and a true platform to grow same-store sales rather than purchasing locations to improve your EBITDA. I think that’s what you and I were referring to where you had those taped up groups that felt like, well, one plus one should equal three. Well, not in all cases if you don’t have systems and scalability. So the reality is yes, acquisitions are still the low hanging fruit from what we see in the DEO, but the reality is at a certain point, you’re not going to be able to compete with the premiums that some of the larger groups are paying out and therefore is the de novo model going to be something that we see an increase in popularity? Potentially. I think the reality though is if you can’t get your same-store sales up, what business do you have in scaling further, whether it’s acquisition or de novo?

Bill Neumann:

Great point. I mean they’re called DSOs for a reason, right? So What does that S? What’s the support that you’re building, the systems that you’re building behind the practices? How are you helping grow those same-store sales? Yeah, it’s really super interesting when you talk to some larger groups out there that are using four and five different practice management softwares, where the locations are not in sync, they’re not in tune. You talk about culture, which you have a culture of people, but then you also have that culture, that connectivity of the practices, right? And I think when you’re, when you’re not working on the same systems, I don’t know how you could have the same culture.

Darin Acopan:

That’s absolutely correct. I think if you could just take the time to really map out what are your internal processes and what do you want that ultimate patient experience to look and feel like, and then document that and turn that into some type of learning management system where, as you onboard new clinical and nonclinical team members, they get a vision for what they’re actually doing, rather than they’re just punching the clock at a nine-to-five job. And I think that’s a large issue as far as why we’re running into attrition issues in dental, is because those groups that have really figured out the culture piece to your point have that documented. People understand what they’re doing and what their role is, how that impacts the overall enterprise versus some others that, hey, they’re just going in for nine-to-five and if someone them one or $2 an hour more, they’re going to jump ship.

Bill Neumann:

And I’m guessing that this is what DEO is helping teach these emerging groups as they go from one location to 10 or 10 to 30. Do you talk about leadership? Do you talk about the support or the systems that should be put in place? Do you talk about de novo versus acquisitions or affiliations?

Darin Acopan:

That’s absolutely right. We do a fundamental approach and belief of ours is that people jump too quickly to working on the business before they work on getting the right team in place and before they work on themselves. So if you’re the owner founder, you by default, whether you want it to be or not, are going to have to be a different person than who you are today because you’re currently perfectly designed to get whatever results you’re getting. So if you don’t change yourself and improve yourself, how can you then recruit a great leadership team to help you out through delegating responsibilities and tasks in order to then grow the business?

Darin Acopan:

I think people miss step one and two and they jumped straight to growing the business. And Jake and I and those in the DEO see it all the time. The really great organizations have a fantastic leader that’s constantly learning, there is no finish line and then creates a culture where it attracts the top leaders and the leadership team then executes on that vivid vision that is agreed upon and the business in turn improves, but it has to go in that order, work on yourself, work on your team, then work on the business. And quite frankly, that’s just something that you don’t learn in most dental schools.

Bill Neumann:

And well, yeah, right. I think you’re right on there and it’s a shame that the business side of dentistry isn’t taught at dental schools and I continue, and I guess that’s why there’s so many practice management or practice consultants out there, but to your point, most of them are focused on solo and so as you scale, there’s a whole different, there’s that different skillset that you have. I think it can be very clinically focused and succeed with one location, or at least you used to be able to, and not necessarily have the business acumen. I think those days are slowly fading. Maybe they’re quickly fading and the ability to scale, to partner up to work in a practice setting, it’s great that you guys are doing that and you’re one of the few out there, if not the only, that really are focused on emerging groups.

Darin Acopan:

Totally agree with you on that.

Bill Neumann:

So let’s talk a little bit, sorry, one last question regarding acquisition versus de novo. What advice would you have for some of the younger DSOs, emerging groups in our audience when they plan the path? Do I go acquisition? Do I go de nova? You touched on it a little bit. Maybe you try an acquisition first, then you go de novo, find out what, where you’re best suited, where your skillsets lie and then focus that way. What else do you have for them?

Darin Acopan:

You know, Bill, when you asked me that question, what came to mind as a book I just finished reading called Black Box Thinking, and I’m going to quote something directly from that book and the desire for perfection, which dentists are by nature, right? Because you learn beginning, middle and end, and you do mini, micro procedures every single day. And so there’s this desire for perfection, but the desire for perfection rests on two fallacies, and the first one is the miscalculation that you can create an optimal solution sitting in your bedroom or your ivory tower rather than going into the real world and testing whatever assumptions you have, so that’s first. And the second is having the fear of failure. I don’t know anyone in the DSO space that has achieved success that hasn’t made a lot of mistakes during the process. So those are the two things I would highly, highly recommend is at a certain point in time, you can go to all of these DSO conferences, but you’re going to have the rubber meet the road and testing things out.

Darin Acopan:

And then the second is you’ve got to get over your fear of failure. Everyone fails forward and at a certain point, that’s the reason why you have to build yourself and a great team because it’s too difficult, in my opinion, for anyone, no one does it alone. Anyone of the true DSO leaders in our industry is always improving themselves and has a fantastic team that quite frankly, if the CEO stepped down could step into his or her place. So that would be my recommendation is start. It’s never too early to start figuring out, okay, what am I ultimately going to go out and test? What is my hypothesis that I’m willing to test and that I’m not going to be afraid to fail? Because chances are you’ll fail quite a bit when you’re first getting started. That’s what I would recommend.

Bill Neumann:

Absolutely. So for the audience, again, what was the title of that book?

Darin Acopan:

It’s called Black Box Thinking.

Bill Neumann:

Okay, Black Box Thinking.

Darin Acopan:

Yes.

Bill Neumann:

Very, very good. And we’ll put up a link to it on our website when this audio podcast goes out, but I’m sure you can find it on Amazon.

Darin Acopan: Yes.

Bill Neumann:

Very good. So let’s sum things up. Let’s talk a little bit, we’ve got probably three or four minutes left, let’s talk about the summer summit. That is going to be in Phoenix, Arizona at the JW Marriott. I’ve been there a couple of times. It’s just a great venue. If you’d like to play golf, there’s some great golfing there. If you don’t like to play golf and you want to go to the pool, there’s some great, the pool is pretty cool that they have there and just what a wonderful venue. And of course there’s going to be some great DSO emerging group, dental group practice content. It’s June 4th through the 6th and it’s keys to growing and operating a successful dental group. So do you have any predictions or any information you’d like to talk about specific to that summer summit?

Darin Acopan:

Well, a couple of things. Our last couple of summits have sold out and when we say sold out, it’s not a sales tactic. There literally is shoulder to shoulder room only. And so the tickets are as cheap as they’re ever going to be today. And in fact, I’m going to provide your audience bill with a promo code that knocks $100 off the current price. So if you just entered GDN podcast in the field where it asks for a promo code and we’ll have these in the show notes as well. Again, that’s GDN podcast. You’ll get $100 off on top of the current pricing. To your point, it’s a great, the JW Desert Ridge in Phoenix is a great facility, whether you golf or not. It’s very kid friendly and we try to do this event around the summertime so that if you want to make a two for one and bring your family out and have a vacation a couple of days after the summit’s over, that’s what we design it to be that way.

Bill Neumann:

I brought my son last year.

Darin Acopan:

Exactly. And so the reality is I would just encourage people to go to the DEO website and take a look at the list of speakers. They really are the who’s who within the DSO community, and again, it’s great content, but also the great networking effects. Typically, the last time I looked at our same event a year ago, there were about 220 unique DSOs at this event. Probably more DSOs than you’ll ever encounter at another typical conference.

Darin Acopan:

So that’s part of the benefit is rubbing elbows and communicating and then talking to people. You get the most benefit, quite frankly, at the networking reception sometimes, and after hours at the bar. When you’re really trying to troubleshoot a couple of problems, there’s probably 10 or 12 people with the answers to what you’re going through and so the content’s great, but the other benefit is having the networking effects of other owners that have been there and done that and so just highly encourage you all, especially we love to see first time attendees come out and just have their minds blown because they really don’t know that this world exists within the dental community. It’s just, Bill, you and I have been in the DSO community for quite some time, but for those that’s their first time experience, it is nothing like they’ve ever experienced in their lives.

Bill Neumann:

Totally agree with that. You have people that haven’t experienced one of your events and the attendees and it’s not just the DSOs, it’s also the industry partners, people there that are really matched up nicely with whether it’s technology or services, they understand the emerging group and the DSO space and they’ve customized products and services. We talked about that when we talked a little bit about what Emmet says about a consolidating industry, but it’s like the IPs there get it and they’re working already with DSO’s group. So it’s a really, it’s a great mix of people. So that, again, it’s a great event and we have an emerging groups to watch list that just came out and we’re going to be giving away some awards there. So GDN’s is excited to be there. Very, very happy to be working with DEO. So that’s the summer and let’s hope everybody’s going to make the summer event. And then there’s also the fall summit. I know that’s where we’re getting out a little bit in time, but that’s November 5th through the 7th in Brooklyn, New York. And is that a Marriott property as well?

Darin Acopan:

That is the Brooklyn Marriott, just near the bridge, and so we’ve been asked by many, many people in the DSO space, please do a DSO conference in New York, so now we’re delivering and we hope to see you all there. The tickets for that event will probably be sold, opened up right around June during the summer summit. Normally there’s a super early bird pricing, so I would just mark that on your calendars and intend to come out. We try to do one event, our fall event somewhat on the East Coast to just really, really help out those, there’s just a lack of DSO conferences nowadays on the East Coast, so we’re trying to be one of the few organizations that produces an event there for all of you on that side of the US.

Bill Neumann:

Wonderful. So listen, Darin, I really appreciate you being on the podcast and I am excited to see you. I’ll probably see you before I see you in Phoenix, Arizona.

Darin Acopan:

I think we’ll be in Maryland, or we’ll be in Maryland at the ADSO and that’s another great conference for folks to attend as well.

Bill Neumann:

Okay, oh, yes, that’s great. Yeah, the ADSO in March. Yeah, they have their event right outside of Washington DC. We’ll see you there and probably a lot of the audience. But again, thanks for the insight. I think a lot of people, especially the emerging groups that are listeners of our podcast and readers of Group Dentistry Now are going to get a lot out of this. So thanks again, Darin Acopan, EVP and partner of the DEO, the Dentist Entrepreneur Organization.

Darin Acopan:

Thank you so much, Bill. You have a great day.