Building a Brand of Brands

John Wheeler

I believe deeply in ads. Like, that's one way that we built Aesthetic Center. But we also built Aesthetic Center, you know, joining the local country club and sponsoring the football team and sponsoring the little league team, rubbing shoulders with people and joining the chamber of commerce. And those are things that are a lot harder to do via a de novo strategy versus our acquisition model of just finding people that are linchpins in their community.

Erica Crawford

We have John Wheeler with us today from Alpha Aesthetics. You are the CEO and founder of Alpha Aesthetics, and you have 18 brands in 36 locations. Is that correct?

John Wheeler

As of the time of this recording, yes, that is correct.

Erica Crawford

So, more is on the way then.

John Wheeler

More is always on the way.

Erica Crawford

I love that. I love that.

John Wheeler

That's what I'm paid to do. [laughter] Can't just stagnate. Got to grow.

Erica Crawford

You always got to grow. I'm always about that growth. That's a growth stack.

John Wheeler

It's a growth stack attack. [laughter] Is that the slogan for Influx, growth stack attack?

Erica Crawford

Off the record, we made a whole song about it. I will play it for you afterwards. It's called Growth Stack Attack. It is 100% off the record, not official, internal only, but it is great.

John Wheeler

I feel like it needs to be in like the vibe of the Beastie Boys.

Erica Crawford

It's very much in the vibe of the Beastie Boys. [laughter]

John Wheeler

That's awesome. Yeah, it speaks to our, uh, our demographic.

Erica Crawford

Yeah, [laughter] that's awesome. Um, yeah, I had a few questions. You know, we work with a lot of, you know, multilocation or large, you know, large brands like yourself, right? And there is something really unique that I've always seen that Alpha does, and I want to talk to you about it and what your thought process was behind it, which is that every brand is unique. You have not put them under one umbrella. You've allowed them all to kind of shine in its own way, and I am curious to know what your strategy has been around that. Is that ever going to change, and just your whole thought process on an acquisition and allowing them to kind of

John Wheeler

Yeah.

Erica Crawford

shine?

John Wheeler

What dentist do you go to?

Erica Crawford

I go to a dentist near my house.

John Wheeler

Is it like very obviously private equity owned?

Erica Crawford

Kind of. Yeah. Oh, really? Yeah. But in all fairness, like, we don't have like the best dental genetics in my family, and I need to have a dentist that could do everything. So it's one of those like big ones where like every endo's there, the periodontist is there. It's one of those ones where there's like everything, a one-stop shop, but it is a fancy dentist. But, um

John Wheeler

Yeah.

Erica Crawford

Yeah. I know that's probably not the answer you're looking for, but if I was just a normal person, I would have gone to like a mom and pop shop. Um, and ironically enough, my daughter goes to definitely not a privately owned, really sweet dentist down the street just for her like cleanings, because she's, you know, a child and not mine, because I had a feel she doesn't need that.

John Wheeler

Yeah. Yeah. I think, um, I just have this thesis that most of the time when I ask that question, it's like, you know, those like just really sterile, like obviously private equity platform dental offices that just look just super vanilla — like, I don't know many people that go to those. Um, most of the people that I know are like, I want to go to like a local dentist, like I just trust them more. Um, and I kind of feel like it's the same in aesthetics, where it's like there is just this like trust of like this homegrown brand — that it's going to be like less vanilla with how they inject, less like the Big Mac needs to taste the same in Alaska as it does in Florida. Um, less homogeneous, just more like, what do you actually need? Um, and I'm going to give that to you, rather than like, I'm only able to inject in this way with this product using this technique. So, we really do believe in the power of the local brand versus the power of like this kind of like dumbed down nationwide brand. Um, so that's a part of our thesis.

Um, I also just think people believe more in, like, the, you know, the local band that played a bunch of shows locally and then made it big, versus like the industry plant, like the Sabrina Carpenter or the, you know, whatever. Uh, where it's just like, wait, how many like local shows did you play? Like, people like the story of like, dude, I was going to this med spa when they had one injector at one location. Now they have four locations and they've like kind of made it, and I'm like rooting for them. I think there's just power around that. So we do have like a more of like a hyper local regional strategy, where it's like, how can we as a brand of brands have this portfolio or this basket of the most badass brands in aesthetics, um, that like we've also helped create?

So it's not necessarily like, hey, this nationwide brand like crashed and burned and now we're like swooping them up. It's more like, we've partnered with these really great providers that have built something really special at the local level. We have these amazing, uh — like an amazing design and marketing team. Now, how can we stand behind them and keep their name, keep what made the brand distinct, but also like give them a truly world-class logo and website? Right. And that's just something that Kevin, our VP of brand strategy, and myself have talked about since day one, is like, if we're going to be a brand of brands, how do we create like literally this basket that we're just so freaking proud of? That maybe they didn't come in with that, but like we want, like ideally at end state, every single brand that we have to be able to stand toe-to-toe with these national brands from like an aesthetic or a vibe or just like a distinctive, like, that's cool type standpoint.

Erica Crawford

I love that. I have to ask — you know, your marketing team is easily the best marketing team of all the sort of PE or investment or, like, you know, large rollups I've seen out there. Mitch, Kevin, Andrea — I mean, you have an incredible team. I have to ask, how did you find these people? Just how did you find them? How did you build that culture? It's insane.

John Wheeler

Yeah. Yeah. I mean, they all started with — well, not now maybe, but the people you just mentioned except for Andrea, um, they all started with me at Aesthetic Center. So, um, they all know how to grow a med spa, because we did that. Like, Mitchell and I started together in 2019 — um, I think 2019. No, actually we started in 2017, and grew Aesthetic Center together from basically almost, you know, very small revenue, um, to 15 million in revenue. And so, like, he directly played a part in that, and I think that is a distinct advantage — is just knowing what it takes to grow med spas, because he's actually done it.

Erica Crawford

That's amazing.

John Wheeler

Same with Kevin. Kevin and I started working together in 2020, and, uh, you know, during COVID, and, um, again at Aesthetic Center, and he was a part of that journey. And, you know, a lot of the folks that now are part of that Alpha marketing team, we just been together forever.

Erica Crawford

That's the way. I mean, that's, uh — it's not too dissimilar to us at Influx, right? We've all been together for quite some time. Um, I do have to ask, and I'm a little biased on this, so it's okay if you don't agree with me. But I think that when it comes to marketing aesthetics, it is such a unique niche. It takes knowledge of the legalities of it, even the Google, Meta policies, the dos and the don'ts, but also like what an aesthetics patient is, what a wellness patient is, what they're looking for — that bringing in somebody who is not familiar with how to market an aesthetics practice, they really struggle. And I find that when they come from other areas like fitness or jewelry or makeup or whatever it is, they go, "Well, it's a luxury," but it's like, "It's not the same luxury as aesthetics." And I feel like they struggle in our field until they've learned a bit.

John Wheeler

I think that's a part of it. Um, I think the other part is, like, Mitchell and Kevin and I, like I said, like we started at almost zero together. And like the three of us — what's really weird to us, and we still don't — like, we're still trying to wrap our head around this idea of, like, you know, now we're at way over a hundred million in revenue. Like, the people that we bring in a lot of times, or like that we interview, it's like they don't want to do the work, and like the three of us just don't know anything different. It's like, we're just like very, very, very tactical. Um, and we're not afraid to roll up our sleeves and just figure it out, where I think a lot of people that have, like, been in like corporate marketing for a long time, they love to like bark orders and, like, you know, sit in this ivory tower. But we're just like, no, let's just be about it. Let's do the work.

And that's not just marketing, because I'm not that involved in marketing. Um, I can't take credit — like, that's Andrea and Jeff and the team that lead that. Um, but that for me spills over into the whole company of, like, I just want to do the work. And I've had executives on the team before where it's like they like to just sit on calls and pontificate. I'm like, dude, do some work, bro. Come on.

Erica Crawford

I mean, you're physically — you're here. You're here at AmSpa. You're putting in the work. You're like, you know what I mean? You're rubbing shoulders. You're talking to people. You're running your team here. I've watched you put in the work. You do the shows. You do the talks. I've seen CEOs of frankly much smaller companies than yours not here, right? So that really tells me everything I need to know.

Um, okay. Next subject. With AI, has that helped you in any way? You have a pretty robust marketing team. You have a great one. Um, have you been able to — not just on the marketing side, but like on the organizational side, on the management side — been able to optimize anything, kind of make it quicker for you? Like, what do you use AI in?

John Wheeler

Yeah. Um, so we've had ChatGPT for a long time as an organization, and I think ChatGPT is a really nice thought partner. Um, I don't think it's very strong with analysis of financials. Um, that's where I think Claude is really strong. And so, just like everybody, you know, the last month or so, we've really been putting in a lot of time testing out Claude, um, specifically Claude Cowork. Um, unfortunately, not finding that it's HIPAA compliant. So, we're using it more like — we have a spreadsheet with a bunch of data, no patient information, uh, I want to make that clear.

But yeah, that to me has been the ultimate unlock, and I would encourage anybody to play around with that — is like taking a financial package, or even just like a topline flash report of revenue, whatever you have in Excel. Um, you can go, and in the Cowork portion of Claude — you know, paid, but 25 to 100 bucks a month, kind of, to start with, uh, well worth it — go hit the plus sign next to plugins. Uh, then go to data, and then add the plug-in, data, and then, uh, load in your spreadsheet, and then tell it in that data module to just create data viz, um, or just dashboard. Like, you know, you can use "or analyze" — you can use some of those skills in that plug-in module, um, and just see what it spits out. And then you can kind of make it more and more and more customized.

But, um, that's one way that we've been able to just really — like a quick and dirty dashboard of how are we doing this month, how are we doing this quarter. Not that we didn't have those, but in Power BI, which is what we've been using before, it just takes a lot more time to build a dashboard. And this is just like the most insane data viz tool I've ever used for just a super quick and dirty, like, let's get a really in-depth look. And it can even add slicers by provider, by location. We've even made it where we can toggle, like, forward looking — like, if we pull this lever, what's that impact going to be on revenue, on profitability? And then we can really get prescriptive instead of just descriptive about how we're going to run our business operationally, based on like really, really hard data with these toggles, which is legitimately crazy.

Erica Crawford

That's amazing. And you also — I feel like, correct me if I'm wrong, but Alpha was also really early on using AI and chats, right? Did you use it some part of your sales as well, to kind of help with the turnaround times and all that?

John Wheeler

Um, yeah. I always try to be tip of the spear on AI, and I think that's where we're going to win, is just our ability to leverage AI. Um, so any company that I'm running needs to be really the standard bearer of AI adoption and use. Um, so yeah, I mean, we've always been using ChatGPT really since it came out. But again, like, I think that chat — we were talking about this earlier — I think ChatGPT is a lot better at being a thought partner.

And even like stupid stuff — like, I was trying to figure out how to export my clinical lab data from my Function Health app. I asked Claude how to do it. It's like, what's Function Health? I asked ChatGPT how to do it, and it's like, boom, here's the — here's the three steps to do it, or the five, however many steps it was. So I think that chat has like a lot more context for the world. I think Claude is just way, way, way better at analyzing data. I also think it's a lot better at, obviously, coding, at, um, connecting multiple sources. And like, anything transactional, or like doing work, that would be Claude. Anything thinking, um, that would be ChatGPT right now, as of this recording. That all might change next week.

Erica Crawford

It could, but I agree. I use chat — ChatGPT is my friend, right? I ask it questions, quick things, trying to cook a meal — I use ChatGPT for that. To, "What do you think about this email?" I wish I didn't use it for so much, but I do. I use it for a lot of things. But when it comes to analyzing information, Claude is far superior, in my opinion. So, it's a little bit of a different — but you're right, it could change next week. I mean, this wasn't true a couple months ago, right? So, that's the wild part about AI.

John Wheeler

Yeah. I would encourage anybody, like, in Cowork — first of all, enable it. Um, pay for it.

Erica Crawford

Yes, always.

John Wheeler

And then play with those plugins specifically. So, there's a legal one that I really like. Um, that's helped us a ton. There's a finance one that I really like. There's also a brand one that I think is cool. Um, marketing operations, around like finding op — that plugin specifically is really good at finding operational inefficiencies and efficiencies.

We also have used it in our M&A process, um, of like, download — like, we load in via Excel this like master file on like everything we know financially and operationally about the practice. And, you know, obviously, like, we're adept at doing that ourselves, and we still do it. But like, we've also been impressed that, like, it can find things that maybe we didn't, and it can also, like, be a thought partner on how can we solve these problems via deal structure, um, in a way that, like, maybe we wouldn't have, like, been so quick to, like, come to that conclusion. So it's amazing. It's absolutely amazing.

Erica Crawford

That's incredible. So when — okay, tell me, when was your first acquisition, by the way? So I'm all over the place, but I have all these questions.

John Wheeler

Well, I founded Alpha with Aesthetic Center, and that was March 20th of 2023.

Erica Crawford

2023. So with Aesthetic Center. But what — okay, what was your second acquisition, I guess I would say?

John Wheeler

Uh, hold on — Timeless Beauty. That would have been like June 1st of 2023.

Erica Crawford

That's wild. So, like, in less than three years, we're talking about 18 brands.

John Wheeler

Mhm. Yeah. Yeah. 18 acquisitions, 36 locations.

Erica Crawford

Do you have any suggestions for anybody else trying to — I think, for the sake of my audience, who wants to be acquired?

John Wheeler

Uh, yeah. I mean, it's — look, it's about building a great business. Like, I think that was something I didn't understand when I was going through that process, is like, somebody's going to want to acquire me because I have great ideas, or like, I'm running high on vibes. It's like, yeah, those things matter — like, the qualitative things matter. But so does, like, have you built a fundamentally sound business, with a team that loves being a part of what you've built, um, with a great culture, and with great margins, and a diversified mix of providers, with patients that, you know, really, really want to stay, and the retention rate of both patients and providers is super high, and team in general. Like, that's what we're really looking for. Um, in addition to just some of those other metrics. And again, like, it all matters. It all flows into the story of how premium is this business, because at the end of the day, it's like, the people matter greatly.

Erica Crawford

Yes.

John Wheeler

And it's also like the acquisition of a business, and so how healthy is that business? Um, and that's what we look at.

Erica Crawford

I love that. And I know you do both plastic surgeons and med spas, or —

John Wheeler

Not a lot of plastics. It's almost all med spas.

Erica Crawford

Almost all med spas. Okay, that's helpful to know. I think some of them just have like a facial plastic in them or something like that.

John Wheeler

Yeah, we have two, uh, practices that have facial plastic surgery.

Erica Crawford

Okay, so they're — but they are heavy non-surgical.

John Wheeler

Of our 18 brands, two brands.

Erica Crawford

Okay, that's helpful. That's helpful to know. So — so what, pretty much all non-surgical? Okay, basically all non-surgical, because even with the facial plastics, they're doing a lot non-surgical.

John Wheeler

Yeah.

Erica Crawford

Okay, perfect. Is there anything else? Um, you tell me if I'm wrong, because this is your area. Um, I have noticed that some med spas try to kind of solely expand off of ads. And while I'm a huge fan of ads, I think a huge part of that acquisition is kind of what you said — is to build the community. It's the patient retention, which means SEO, social media, word of mouth, referrals, public relations. Almost — those are almost more important when it comes to —

John Wheeler

Being at the point of acquisition. That's why I'm so bullish on an M&A strategy versus a de novo strategy. I'm not saying de novo is not doable. It is exponentially harder, though. What we're acquiring is businesses that are led by these founders that have deep roots in their community, and it's like, their kids go to the schools, and their parents maybe even raised them in that town, and everybody knows that med spa. And again, that's where I started with you, right? Is like this idea of these dental practices, where it's like, one dental practice is very clearly this like PE shell vanilla thing. The other one is like this dentist that goes to church there, and all of his kids go there, is on the board of the, you know, nonprofit there. It's like —

Erica Crawford

Those are just two different things.

John Wheeler

Yes. And so I believe deeply in ads. Like, that's one way that we built Aesthetic Center. But we also built Aesthetic Center, you know, joining the local country club and sponsoring the football team and sponsoring the little league team, and living in the town — like, I'd live in El Dorado Hills — and rubbing shoulders with people and joining the chamber of commerce. And those are things that are a lot harder to do via a de novo strategy versus, um, our acquisition model of just finding people that are linchpins in their community.

Erica Crawford

I agree. You know, it's funny, because I always tell people — I always talk about marketing channels, and so many people will go, like, "I have four marketing channels." "You're — what are your four?" "I have Instagram, I have SEO, I have ads, and I have referrals." I'm like, you got to have like 20. I need to hear that you're hanging out at your local golf club. I need to hear that you're in your local, you know, wine and country. I need to hear that you're, you know, doing four different types of social media, that you have a — you know, you're working with a, let's say, a traditional, uh, reconstructive plastic surgeon, and they're giving you referrals and you're sending them referrals, and whatever the way it is. There should be — your presence should be everywhere, so that you're established in the community.

John Wheeler

Yeah.

Erica Crawford

So, I couldn't agree more. Also, I will say, I'll give this, uh, example — personal example, because it really fits into what you said about, like, the dentist and the personal touch. When I was having Ken, I was really particular about my OB, right? And I kind of consider myself the ideal aesthetics patient, right? Like, I like — an aesthetics patient who is paying for Botox, lasers, whatever — they're technically in the middle class or upper middle class, or they're in that range. It's just, you know, it's not cheap, right, to get the services that we have. It's not crazy expensive either, but that is where they are, typically speaking, right? 35, right? Mom — like, I am, you know, for most practices, I fit in that category.

So, when I was looking for an OB, all I cared about is not having to go to a hospital for my check-ins. Obviously, I knew I'd have to give birth in one, but not going to a hospital, not going to a medical group. But I wanted to go to a place that was a single provider — two providers at the most, but like, two — when I say providers, two doctors there, right? There's nurses and things like that, but two doctors, OB, where the OB did all my own ultrasounds, so I didn't have to go to an ultrasound tech, and then we wait, and then, you know — and get that personalized experience.

And my OB's office was packed at all times. And it was funny, because she was the only one in my neighborhood that was like that. And it's funny how busy she was and successful she was, even though it was, you know, a PPO insurance situation — there's a lot of cash pay. But that type of brand appeals to a lot of people. So, it's kind of ran the mark of what you're doing with your brands, is it's like that personalization, that care, that community. It's unbelievable how much people want that. And the odd part is that in places like LA, where I live, there are more options like that, but in a lot of cities, there's not, which is the irony of the whole thing.

John Wheeler

And that OB might have been private equity backed. Like, I wouldn't even know. So, yeah. And that's, I think, the beauty of, again, our model, is like, there's so much value that we add for our partners in joining this network of world-class practitioners and managers and leaders, um, but also engendering trust with the local patient of, like, hey, this is still me. This is still like this local thing that you know and love.

Erica Crawford

Yep.

John Wheeler

Um, so yeah, I think it's like Miley Cyrus, you know. It's the best of both worlds.

Erica Crawford

Best of both. I [laughter] love that. Well, thank you so much for coming on the pod today. I appreciate everything that you've had to share with us. Any final words of wisdom?

John Wheeler

Uh, no. No, it's just been a [music] pleasure. So, thanks for having me.

Erica Crawford

Thanks for being here.