Why I invested in Wally Health and Tyler Burnett
My path to Chief O' Teeth and The Modern Dental Care Revolution
It was June 2022 when I caught up with Alex Chang at Underdog Labs. I reached out to Alex because I view him as a high-signal pre-seed investor who knows how to pick'em. Alex was running through his portco's and briefly mentioned a four-walled business with a subscription element. It sounded weird; why would a software investor put money into a four-walled dental startup? The company was Wally Health. I called my cousin, a dentist, and she promptly told me that she had never heard of Wally. I asked Alex for an intro to Tyler Burnett, CEO at Wally, and took some time to gather my thoughts.
Nothing was adding up. My cousin, a dentist, had never heard of this business. A software investor did a four-walled dental deal, and the market was at its absolute bottom for rounds getting done. Yet the branding on Wally's website was slick, the copy snappy, and the founder, a Canadian, married to a dentist with his company based in New York. Talk about looking for an outlier. Wally and Tyler were about as far out there as it gets.
Before my call with Tyler, I decided I should get competent on health tech benchmarks; I did some quick googling, found an investor I respected, Sofia Guerra, at BVP, and paged through her writing on best-in-class metrics for health tech companies. A few hours later, I went to my parent's house in Maryland to play with their cavaliers, pick up a houseplant (still alive at the time of writing, thank you very much), and take my call with Tyler. Tyler and I only spoke for roughly 30 minutes, but we covered quite a bit of ground. Tyler's pitch hit me straight on, right in the thesis, if you will. You see, I'm obsessed with standardization, optimization, and democratization of services and technologies; it's my go-to thesis for all things non-ML.
After I emerged out of the depths of the Zoom waiting room, Tyler made a few opening jokes about being married to a dentist, I laughed, and then we chatted about product & metrics. Over the next 30 minutes, I realized that Wally intentionally left low-margin money on the table; every minute a patient was in the chair getting work done had to be used efficiently. Traditionally, dental practices are full-service; while this can be convenient, many dentists spend their time doing low-margin and time-consuming procedures. Tyler pitched a radical shift in how he wanted to approach the market; he only wanted to do high-margin activities, had no intention of selling people expensive and complicated procedures they might not need, and wanted to optimize every minute in the chair by implementing drill-less fillings, a gel for cleaning instead of a scraper, and have patients do the whitening at home via a kit. By bringing in these optimizations, Tyler was able to bring the costs down, margins up, and keep the price point low enough that patients could skip having to use their insurance, a known friction point in dentistry. These optimizations allow for high-margin scaling, a classically insurmountable hurdle to expansion in existing provider-owned practices. Wally's optimization-focused primary dental care is quite interesting because it's a modernization of a traditionally fragmented and analog industry, a model that has seen minimal disruption since its inception.
Knowing I could not just go straight vibes on a four-walled business in this market, I needed more confidence. I pulled up Sofia's health tech benchmarks; while Wally was not exactly health tech, its operations were close. I looked at Wally's numbers and compared the metrics provided by BVP; I then informed Tyler that he was in the top decile in most of their categories. Tyler smiled. I ran through a red flag checklist in about 10 minutes and signed the SAFE.
Over the last year and change, Bling Capital led the seed round, Wally opened more locations across NYC, revenue has gone through the roof, and I was promoted to Chief O' Teeth, where I will be dressing up as a pair of teeth and roaming New York as part of a marketing campaign. Things are going well at Wally, things are going well with Tyler, and I, for one, am thrilled to be roaming New York as a pair of teeth come mid-April.