Interview with Michael Wendt, CEO of bestsmile
The success story of bestsmile is impressive. Since its founding in 2018, the dental start-up has established itself as the market leader in Switzerland for aligners, invisible dental splints, and is now attracting attention with another product innovation made in its own, just extended production site in Winterthur/Switzerland: veneers. In 2019, Sparrow Ventures first invested in bestsmile, in March this year it was taken over completely. What the takeover has changed, why education and work experience are not the most important things in recruiting new employees, what mistakes you should avoid as a start-up when looking for investors and where the journey of bestsmile should go in the future: We met Michael Wendt, CEO of bestsmile and talked with him about these and many other topics. Plus: He shared quite interesting insights of his own history of building start-ups.
Michael, can you introduce yourself briefly? What is your background?
I’m Michael. I’m 34 years old, born in Germany and the CEO of bestsmile. My university introduced me to the start-up world. I studied Business at WHU. I liked the concept based on the American college model. Students live together on the campus and spend a large part of their private life together. What happens outside lecture theatres is at least as important as what happens inside. Students take on plenty of responsibility and a lot of trust is placed in them. They organise conferences and events and need to find the requisite budgets. Through that, I was able to learn a great deal, develop personally and become more self-confident.
When I started my studies, in 2008, there were few start-ups among the alumni. Today, the university is well-known among entrepreneurs. Many former students have launched famous start-ups, including Zalando. Oliver Samwer, Germany’s start-up “godfather”, gave the first lecture I attended.
You created your first start-up at the tender age of 22, am I right?
Yes. That was while I was still at university. I ran my software company from my student digs for a year before we moved to Berlin in 2011. Berlin was interesting because there were enough student workers who had heard of SEO, and it wasn’t expensive. That created the perfect environment for a start-up. There were also many like-minded people.
I built up my company and brought investors on board. I sold the company in 2013 and started my second company that same year, this time with bigger ambitions and a larger team. We then sold this start-up in 2019 and I decided to move to Switzerland.
That’s how you ended up at bestsmile in 2019. How did that come about?
I had actually decided not to found any more start-ups, to join the industrial sector and had had job interviews at companies like Porsche, amongst others. Soon, though, I realised that these major corporations are too fragmented and work too slowly for my liking.
Within Switzerland, I knew some of the founders of bestsmile because they were also active in Berlin. One of them — Philip — asked me if I’d like to do something together and presented bestsmile to me. I immediately decided to start there, initially as Head of Retail.
What exactly prompted you to start at bestsmile?
For me, everything was new: the industry, the environment, even the business model. The latter impressed me particularly.
bestsmile makes a real, physical product, while also having its own treatment centres. [Note: 36 locations in Switzerland] It’s very much centred on the “human touch”. You can’t digitise a dentist, but digitisation can help optimise the product.
Up to that point, I had only been involved with software products. I hadn’t built up a physical location before. I only had furnished offices! (laughs)
Do you still remember what it was like at the beginning? bestsmile was founded in 2018. At the time, it was a year old and in full development.
I definitely remember it! We had a very ambitious timetable for expanding the company. bestsmile had already proved that its business model worked and that there was a market for its products.
Sparrow Ventures had also just come on board as an investor. [Note: late 2019] The plan was to add another twenty locations to the existing ten in 2020 and build up the company’s own production operations for making the aligners. It was clear that it now needed middle managers, that it had to optimise the procedures and introduce standardised procedures, especially the software.
The mood was great because we were constantly celebrating successes and wanted to keep going at an ever-faster rate. That was motivational for everyone, and the positive energy was infectious!
As you already mentioned, you created start-ups yourself and are familiar with the entrepreneurial world. What do you think bestsmile does better?The key to success was that the founding team dared to do everything in-house.
Up to then, I knew that the mantra of the start-up world was that you did as little as possible yourself and outsourced a lot, just as the countless scouting platforms do by interconnecting the various platforms and companies with one another. The buzzword is “platform business”. The competitors who have similar offers to bestsmile also work that way, mediating between customers and dentists.
bestsmile dared to open up its own dental clinics, hire dentists on fixed contracts and set up its own production plant to make aligners — and now also veneers. This enables us to offer a completely different customer experience and provide higher quality. Thanks to these unique selling points, customer satisfaction is higher and we have a bigger share of the pie.
bestsmile is now the market leader for aligners in Switzerland and employs 330 people. We’ve now also added veneers to the portfolio. What achievements are you proud of?
That’s easy to answer! When I started, in late 2019, we needed middle managers because we had already become too big, and senior management could no longer communicate directly with staff at the various locations.
We therefore trained regional leaders from within our own ranks, prepared them for their new position through coaching and training, placed our faith in them and gave them responsibilities. Today, they are our leadership. I’m very proud of that!
The second thing is that we now have another product: veneers. This is the Champions’ League of dentistry. We’ve been able to both expand our production accordingly and find suitable experts. We’ve also given our dentists appropriate training.
In general, what motivates you in your everyday working life?
I’ve had an interesting personal epiphany: I have more fun working at bestsmile than I had at the companies that I founded myself.
Why is that?
The biggest factor is the culture that bestsmile developed. The members of the team are stress-resistant and can achieve much more than can be expected of them. At the same time, they get a lot of feedback from management, so they will also be able to do a lot in the future. That’s a very balanced situation. People want to do things. You can feel it.
The second aspect is the success. At every location we open, we get confirmation that it works. That drives us. And the third aspect is that we can celebrate! Not just the company’s anniversaries, but our performance and the goals we have reached. That’s really wonderful!
Positives aside, I presume that there were also setbacks. What was a low point for you personally?
The biggest setback was the lockdown in March 2020, which forced us to close our surgeries from one day to the next. As nice as a large network of 36 locations across Switzerland may be, it’s also correspondingly inflexible.
We had to issue directives to staff at our shops at short notice, including on how electronics should be locked and plants cared for. We also had no idea how we were supposed to serve our patients. That was the most anxious time because nobody knew how long it would last.
What effect did this situation have on you? What did you learn from it?
Up until then, I had this romantic idea about physical locations. The lockdown clearly showed me that the structure is rigid if a problem arises.
We aren’t flexible enough to quickly power up or wind down certain areas.
That’s what our responsibility — towards staff and patients alike — made clear to me. That’s why we must always be able to carry our own weight.
What other experiences are you grateful to have had?
What impressed me most was that if you have the right people, you can tackle tasks which they weren’t trained for. We’ve developed a lot of people internally and guided them to positions that match neither their training nor their professional experience.
Young people can be given a lot of responsibility. For instance, the head of all our dental assistants is only 24 years old. I would say that putting together the right people is more important than skills. I’m extremely proud of this culture.
Given the experience you have gained and what you now know, what would you do differently with hindsight?
I wouldn’t change anything about my own development and that of the company. But at the start, we would have been grateful for some of the insight that we gained from our operational business over the years. For instance, we would have had fewer than six locations in Zurich, but larger ones.
In 2019, you found an investor in Sparrow Ventures. What are your tips for start-ups looking for investors?
There are strategic investors and financial investors. Sparrow Ventures is a strategic investor that can follow its own roadmap through its participation in bestsmile. Our business model suits the corporate strategy of Migros, which has set itself the goal of expanding its involvement in the healthcare industry.
A financial investor mainly wants its investment to increase revenue. It’s about proving that your own business model is healthy and scalable. Then it’s basically irrelevant what you do. You’ll find a donor.
My tip: Think about what kind of investor you want to bring on board and use your pitch to highlight the benefits for the investor in an appropriate way! Many people make the “mistake” of focusing too much on themselves.
What did the investment by Sparrow Ventures change for bestsmile?
Many things didn’t change. That was the wish on both sides. There was a clearly defined roadmap that included the goal of the investment, namely a possible takeover. That’s what we worked towards.
There was also support for bestsmile on certain issues, but we were never bothered by the group’s weight. Investment by a company the size of the Migros Group could give the impression that HR and financial capacities would be bound internally, even though you don’t have many of those as a start-up. That wasn’t the case. It was mainly positive.
Sparrow Ventures took over bestsmile in March 2022. bestsmile is now a part of the Migros Group. What has happened since then?
Attention from the press led to a veritable flood of enquiries about our consultation appointments! (laughs)
Migros enjoys enormous trust among the population. The takeover is like a seal of approval, and this benefited our trustworthiness tremendously. Belonging to Migros helps us with suppliers, banks, and other partners. The doubts that some customers initially had about the young start-up have also disappeared because people no longer need fear that bestsmile may soon cease to exist.
Are there any other palpable changes?
We’ve also noticed the advantage on the labour market. For example, we have significantly more responses to job ads.
What does the takeover mean for you personally? After all, it made you the CEO and you’ve quit your job as CRO.
The change of role has brought new agendas with it. Before I took over as CEO, all my efforts as CRO (Chief Retail Officer) were focused on the shops and the medical staff at the surgeries. Today, I’m responsible for the entire company, have much more contact with all my colleagues as well as insight into a wide variety of projects. That’s a lot of fun.
Having said that, I slightly miss the fact that I spend less time with staff and customers at the surgeries.
What are the advantages and disadvantages of being a part of such a large corporation?
There are mainly advantages! Especially our public image and the trust of customers, staff as well as suppliers and other partners, which has also increased.
Immediately after the takeover, I had a lot of work! (laughs) A company sale is labour-intensive right up to the last minute. Now it no longer creates any major difficulties for our operational business.
Disadvantages? (thinks) Of course there are things that we must implement in order to integrate ourselves into the group. Things that are more onerous. This relates almost exclusively to financial reporting. Our colleagues in the finance department undoubtedly feel this the most. The rest aren’t affected.
What will happen next for bestsmile? What plans do you have?
We’ve successfully positioned ourselves as the market leader for aligners. Many people know that bestsmile stands for aligners. Now we’re in the process of establishing veneers, which are even less well known in Switzerland.
Another goal is to expand our target group by offering solutions for older as well as younger customers.
Looking back at everything that happened in 2022, what was the highlight for you, and what do you wish for in 2023?
We reached two milestones in the autumn of 2022. Firstly, we treated our 30,000th patient. Secondly, we inaugurated a new building for our production in Winterthur, thus setting a course for further growth. Our production area has doubled to more than 1,000 m2. We’ve also upgraded in terms of automation and infrastructure. The centrepiece is a production robot developed in collaboration with the Rapperswil University of Applied Sciences, with which we can manufacture 10,000 high-quality tailor-made aligners per week fully automatically. It’s the first of its kind in Europe.