Chris Villanueva, DMD, is the founder and CEO of MB2 Dental, a dental partnership organization that added more than 120 practices to its network and reached the 500-practice milestone in 2022.
He recently spoke with Becker's about what sets MB2 Dental apart from other DSOs and DPOs, effective strategies for expanding and the company's goals for the future.
Editor's note: Responses were lightly edited for clarity and length.
Question: What strategies have been useful and effective in expanding the company to more than 500 affiliated practices?
Dr. Chris Villanueva: Unlike other groups, I feel a disproportionate amount of the practices that join us come from our doctor partners. At the last count about 40 or 50 percent of those came from internal referrals, which is a big deal; another 20 to 30 percent come from word of mouth or traditional media; and only 20 or 30 percent come from brokers or through an auction process, which I think other groups rely more heavily on. The way we have gotten to this point is really through our doctor network.
Q: Do you think that the MB2 doctor network is what sets you apart from other DSOs and DPOs?
CV: What sets us apart more than anything is our tenure and our track record. I think a lot of these groups that come out of COVID primarily, they talk about culture, which is somewhat subjective, but something that is more objective is our tenure and our track record in this space. I've been doing this 15 years and we've been here through a lot of cycles. We happen to be in a cycle where there are a lot of consolidators out there, and that will die down when many of them won't make it to their first event. I feel like doctors are sophisticated enough to see that from all those DSOs and DPOs, we are really the only ones that have been here that long. With that experience and size comes a lot of lessons learned but also a lot of leverage when it comes to negotiating pricing. That is something new groups can't compete on.
Q: When it comes to growth within the company, what do you think are some of the best or most impactful decisions that have been made in the past few years?
CV: We're always thinking about where the profession is at any given time. I think one of the biggest things that we've done recently was developing our own app that a lot of doctors download and can see what we have to offer and what our vision is at their leisure, and I don't think any other group has that. We developed that last year and I think it has been very helpful in streamlining the process for us. Last year we looked at more than 2,500 submissions for review and we partnered with about 100 of them. Being efficient in determining whether or not we would be good partners is the key to scaling a business of our size.
Q: When you are going through those reviews, are there certain qualities that you are looking for in a practice or dentist when deciding to partner with them?
CV: Motivation is the single most important factor. If doctors are looking to retire, we probably aren't the right solution for them. Our model is very much a partnership model where we are just another touchpoint for the practice. We really want the practice to continue to operate as it did prior to our partnership. We can create efficiencies, we can create negotiating power and some education and value for the practice, so we really want engaged owners that want to continue to practice and manage their private practice. That is probably why the average age of our owners is mid-40s and the average age of the entire doctor population is probably late-30s, giving us a relatively young group of providers compared to other groups out there.
Q: Looking toward 2023 and beyond, do you have any specific plans or goals to continue growing and expanding the company?
CV: Absolutely. We've already slated almost half of what we've added last year in this quarter alone. Our focus is really on creating density in markets where providers are able to refer patients to trusted specialists within the network. We are probably the only group of size that has a significant network of specialists and general practitioners. About one-third of our practices are specialty practices, whereas other groups out there focus primarily on general practices or primarily on a specific specialty, we actually have both in our network. Our focus in the next couple of years is to build those relationships out.
Q: Do you anticipate challenges or obstacles when it comes to expansion and continuing to grow?
CV: The biggest challenge is probably going to be continuing to educate doctors on the difference between our model and track record versus that of all these other groups that are being created in the last couple of years. If you don't follow the history of dental consolidators, it is easy to assume that one group is as efficient and as stable as another. We spend a lot of time thinking through how we can continue to educate providers on the difference of our value proposition compared to that of other startups. That is probably where we spend a disproportionate amount of time today compared to three to four years ago.