Recently, a good friend of mine sent me a link to YouTube and suggested that I watch the video because I would find it interesting. After 20 minutes I was speechless at what I learned and how much I didn’t know. I quickly became fascinated with the presenter in the video and his breadth of knowledge in a field that, when looked at in a micro arena, can impact how well our practices will survive and flourish in the years ahead. After over an hour of watching different presentations by the same individual, it became apparent to me that in order to maintain my competitive edge in a vastly different profession from 1984, (when I was graduating from dental school), I was going to have to focus on one word, Defensibility.
Scott Galloway is a professor of Marketing and Brand Strategy at NYU University Stern School of Business. Listening to him speak was nothing short of impressive because he delivers his topic with confidence, authority, and knowledge based on indisputable facts. Mr. Galloway’s message is about the new world of business, where it is going, and who controls it. It is no secret that I have always had an entrepreneurial slant and anyone who has read my editorials/viewpoints over the years can attest to my outlook. What I found so amazing about his presentations was, what he refers to as the “Gang of Four” or the “Four Horseman”, how strong they truly are. In addition, I kept looking to see if there were any tidbits I could extract that would help me continue to move my practice forward.
For some readers this information may not be new, but for someone who was born in 1956 to have the new world of business spelled out to me in dollars that were in short mind boggling was numbing. This ‘Gang of Four’ is made up of Google, Apple, Facebook, and Amazon. In 2015, while the rest of the world’s stock markets slid into bear territory, these four companies increased their combined market capitalization to 1.728 trillion dollars. To give meaning to this figure Canada’s GDP is 1.785 trillion. According to Mr. Galloway, Google dwarfs any competitor; Amazon controls 43% of all e-commerce, and Apple added $51 billion dollars in revenue in 2015. Moreover, he explained that there are 1.1 billion Catholics in the world, yet 3.4 billion people have a “meaningful relationship with Facebook”.
His research is both compelling and scary, because traditional industries and institutions are rapidly shrinking to the point of implosion. One such industry that is quickly declining and will not recover is traditional advertising. He declares that, “the house that advertising built has imploded and is no match for Facebook and Google”. In addition, Facebook and Google now consume 50% of the global mobile advertising market and that advertising is a tax only the poor pay. He goes on to explain that most of us are willing to pay additional for alternative ways to get our entertainment i.e. Netflix, Crave, just to avoid advertising.
As his presentation progresses, he begins to talk about an additional disruptive industry, which he defines as delivering a product or service at reduced cost, that over time may become “the fifth horseman” This company is Uber. Though I personally have no need for it, I cannot deny the brilliance of the business model and the possibilities that it will embrace the different delivery systems including driverless cars. It currently has a work force of 162,000 without the creation of a vast infrastructure that so many industries its size needed to create over decades. View it anyway you want but taxis are becoming Zombies-the driving dead.
So what are the implications for dentistry and how can we benefit from them? Some changes will be obvious and others less so. One such trend may be sundries-which comprise an important part of our practice performance and for most of us 6% of our overhead budget. At last year’s 2015 Chicago Mid Winter Dental Meeting the talk on the exhibit floor was the rumour that Amazon, with their vast network of distribution centres and expertise on rapid delivery to consumers, is considering moving into the multi billion-dollar business of dental consumables using their unique ability to deliver name brand products with a 30% savings. If this comes to reality, then it is another example of disruptive commerce, which in turn will result in a significant shift in how we currently utilise the current supply chain in dentistry.
The examples and the vision of the business models that have been illustrated make perfect sense and though as solo practioners we are not going to create world-class companies I believe that delivering a superior product with superior service will insure defensibility in a rapidly changing industry. Since it is well known that high quality and service cannot co-exist with low price, you must decide which two out of three principles you will use as your practice platform. For me, following Starbuck’s philosophy to maintain staff engagement and loyalty will help me continue to deliver high quality dentistry with exceptional service. OH
