Some co-founders find common ground over a love of computers or a passion for personal finance. SmileDirectClub co-founders Alex Fenkell and Jordan Katzman bonded over braces. The two met at a summer camp at the age of 13, as both were going through the awkward experience of wearing braces to straighten their teeth.
The pair stayed friends after that summer and eventually became serial partners in business together, launching a car-detailing business and later developing a Want button companies could add to their websites that let consumers create a single shopping list pulled from multiple websites. In 2012, when looking for a new venture to start, they decided to return to the experience that brought them together in the first place. Two years later, they officially launched SmileDirectClub (formerly known as SmileCareClub), a company that's taking a direct-to-consumer approach to orthodontics.
"We were sort of reflecting back on that pain point of our youth, and we figured there just had to be a better way to go about this," says Fenkell.
Their goal for SmileDirectClub is an ambitious one: Fenkell says that the pair want to do for the orthodontics industry what Crest Whitestrips did for the teeth-whitening industry.
"Back in the day, if you were going to get your teeth whitened, you would go into a dentist's office and pay $800," says Fenkell. "In 2002, Crest Whitestrips comes out with a sub-$50 product that's sold everywhere, and that can you can do at home quickly. Fifteen years later, teeth whitening is now a $10 billion industry."
Fenkell and Katzman felt that the biggest opportunity for SmileDirectClub lay in addressing two of the main pain points associated with getting braces: the cost (which can range from $3,000 to $7,000, according to Fenkell) and the time spent going back and forth to the orthodontist's office. Thus, the pair came up with a subscription-based model: SmileDirectClub ships a different pair of aligners to a customer each month to gradually shift his or her teeth to the correct place, which cuts out multiple in-person checkups from an orthodontist.
Here's how the system works: Customers fill out an online questionnaire, and then receive an at-home kit to take an impression of their teeth to send back to SmileDirectClub. From there, a dental provider associated with SmileDirectClub creates a treatment plan (the company says that the average treatment length is six to 10 months). The impression kit costs $95, and customers can pay the remaining cost either upfront ($1,700) or commit to a $250 down payment and $99 per month. SmileDirectClub does turn away some customers who have "severe" misalignment issues, and it works with customers who have implants, or recently removed wisdom teeth on a "case-by-case" basis. For those with cavities, they'll need to address them before seeking SmileDirectClub treatment. If SmileDirectClub does turn someone away, the company will reimburse the patient for the cost of the impression kit.
Fenkell and Katzman knew that the biggest challenge would be in getting dentists and orthodontists on board. To operate, SmileDirectClub needed to sign on a licensed dental provider in each state to oversee treatment. The pair also realized they needed more industry and management expertise, so three months after launching, they brought on Doug Hudson, the founder of SimplexHealthcare, which has since been acquired, to be SmileDirectClub's CEO.
"You have to develop a sense of trust to bring more people into it--you can't do everything at once, which was a struggle for us at our last business," Fenkell says.
While the co-founders say they are still involved in most aspects of the business, Katzman now works mostly with the company's IT department and Fenkell handles SmileDirectClub's marketing efforts. It took a year's worth of flying around the country, but SmileDirectClub now has a network of more than 200 orthodontists and dentists who oversee treatment.
Nonetheless, SmileDirectClub still hasn't won over everyone in the community. The American Association of Orthodontics recommends that any treatment plan assigned to assist in the movement of teeth, no matter how slightly, be done with the in-person supervision of an orthodontist, according to its president, Wayne McCamish. When asked to address the AAO's position, Fenkell pointed to the company's networks of providers who have approved of SmileDirectClub's treatment plan. Fenkell also said that SmileDirectClub deals only with "mild to moderate" teeth correction, recommending that customers with severe of cases see orthodontists.
"It's really about opening up the market share, rather than taking away business from orthodontists," Fenkell says. Even so, within the past year, SmileDirectClub's model has inched closer and closer to resembling that of traditional orthodontists. The company has opened up 12 "SmileShops" across the country, where customers can walk in and get a free 3-D scan taken of their teeth, instead of receiving the at-home impression kit, and Fenkell says the company has plans to launch 20 to 30 more in 2017.
Perhaps the biggest sign that SmileDirectClub is on to something came in July 2016, when Align Technology--the company behind Invisalign, a SmileDirectClub competitor--acquired a 17 percent stake in the company for $46.7 million. As part of the deal, Align became the exclusive supplier of SmileDirectClub's aligners. SmileDirectClub says that it's now valued at $275 million. (The company declined to disclose revenue.)
"Whenever you disrupt something, there's going to be some friction. It just takes some time to muscle through the first year of the business, to show the results, and we believe we've done that," Fenkell says.
Corrections and amplifications: An earlier version of this story misstated which customers SmileDirectClub is able to work with. Patients who have cavities must have them treated before seeking out SmileDirectClub treatment.