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Subscription-Based Aesthetic Technology | The Venus Concept Model

Subscription-Based Aesthetic Technology  Park City

Subscription-Based Aesthetic Technology | The Venus Concept Model

Ep. 33 - Dom Serafino & Chad Zaring of Venus Concept

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Aug, 2021

Available everywhere you podcast

In this episode, Dr. Grant Steven chats with Dom Serafino (Founder & CEO) and Chad Zaring (COO) of Venus Concept about the company's innovative model for aesthetic medical device sales, the story behind the company's beginnings, and how Venus is working to better align incentives between manufacturer and physician.
The trio also shares their views on the current state of the medical aesthetic technology landscape and what they see coming in the future for the industry.


Full Transcript

Subscription-Based Aesthetic Technology  Park City

Dr. Grant Stevens

Hello everyone and welcome back to the technology of beauty. Where I have the opportunity to interview the movers and shakers of the beauty business and today is no exception. Today we're gonna get to know a little about Venus, the company that Dom started 11 years ago yesterday, and both Dom and Chad will be talking to us here.

I'd like to welcome both of you guys. Dom is the CEO and founder. Chad is the chief commercial officer. Is that right? And we are so fortunate to have both of them on a Zoom call today. And let's get started with you. Dom. Where are you from?

Subscription-Based Aesthetic Technology  Park City

Dom Serafino

Yeah, that's great. Thanks Grant. And we've been looking forward to being on this. Unfortunately, travel restrictions forced us to do this over Zoom, living in Toronto and Canada we finally got the clearances that we can travel without restrictions if you have your double dose. So I've got my double dose and I'll be able to get back on the road and spend time, with guys like yourself.

But, it's a pleasure to be on your show. We've been in the industry a long time. We've known each other an awful long time as well. Yes, we. But it's funny when we look back and see the evolution of the industry from, essentially the mid nineties when I was a distributor in Canada and we represented pretty much all of the technologies that were available at the time.

And we also owned a plastic surgery clinic with a plastic surgeon partner. So it gave us a little bit of a, a very real life experience to understand, what happens at the clinic level. And I think we, we gained a real appreciation for the challenges that docs have. Every day, not only with technologies, but just running a business and that we we appreciate that and I think that's part and parcel to how, quite frankly, as Venus became Venus Concept as a company and the programs and the way we've positioned ourselves as a company in general.

Subscription-Based Aesthetic Technology  Park City

Dr. Grant Stevens

And where did you go to school?

Subscription-Based Aesthetic Technology  Park City

Dom Serafino

I went to school in Toronto business school here in Toronto, focused on marketing. Interestingly enough on the device side, I started in the cardiology cardiovascular care area in the mid eighties and with a company called Marette Electronics out of Milwaukee.

And you start to learn. The importance of technology and how the role it plays in medicine and it just evolved into aesthetics when aesthetics really on the device side was, really in its infancy in 92, 93. And it was fun to watch it grow and continue to grow, which makes it so exciting.

I call it my my beauty drug. You just can't get away from it because it's always something happening and always something exciting to talk about. And if you've got a really great team that, are very open-minded about where to take technologies and work with docs that can, really make it work.

That's the excitement here for us. And we think we're still at the, I'll call it the teenage stage of the industry. Where there's still lots of room for growth and lots of room for improvements, but we're excited to be part of it, for sure.

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Dr. Grant Stevens

Yes, indeed. And how about you, Chad? Where are you from?

Subscription-Based Aesthetic Technology  Park City

Chad Zaring

Yeah, thanks. Again, it's an honor to be on the show Grant. So I grew up in Pennsylvania, live in Nashville, Tennessee. Now Franklin, it's been pretty open for a while. I will tell you, Nashville and Florida have led the way. I married two daughters moved to Nashville from Florida about seven years ago.

Domino's Path converged. So I spent about 17 years in surgical robotics. I was with a few companies, intuitive Surgical which soft tissue surgery, urology, gynecology. It's become the standard of care. I was there when you really couldn't give a robot away. And now most surgeries are done minimally invasively.

And then I spent some time at an Israeli company, robotic Spine Surgery, that was acquired by Medtronic. And then maybe a year and a half ago I met Dom. He was on the board of one of the companies I was with. And when he talked about bringing the artist robot, which I'm sure we'll talk about for hair restoration into the Venus portfolio.

And basically he wanted to define the next decade of devices for cosmetic and aesthetic surgery by incorporating robotics. AI Advanced Vision. I said, sign me up. And then Covid hit about two weeks later. It's great timing. It was a, yeah, it was a great timing, but it was a great experience to go through and got the wheels back on the bus and really optimistic about the future.

Subscription-Based Aesthetic Technology  Park City

Dr. Grant Stevens

That's fantastic. And I guess welcome is in order. Absolutely into the business, into the marketplace.

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Dom Serafino

We threw him into the fire.

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Dr. Grant Stevens

No, I'm kidding, for sure. Drinking from the firehose for sure. So Dom. Tell me, when did you first get into the aesthetics arena? Was it with the 94, was CO2 lasers, that sort of thing?

Subscription-Based Aesthetic Technology  Park City

Dom Serafino

Yeah, it was co2. We then, a, that evolved as, into Erbium and so on. And as CO2 was this really hot category. Everybody was going crazy, finding ways to use it. And then, you learn a year later with delayed Hypopigmentation. We were able to make faces look like a woman that was 60, looked 40, but her neck looked 70, and it was all of the challenges that went along with that.

And then IPL came along as and with ESC back in the day. And and the thing was interesting because, we worked with Ken Dela and we worked with Palomar. That was just getting started at that point, and that's when hair removal came onto the scene. And really, that was the first I, I'll call it commercially viable mass appeal.

Technology. That was the good news. The bad news is in the clinic when we were using things like the epi laser that as you remember, was very large and good lifting in Canada where you need a building heated, you could certainly build it with the BTUs that heated, excuse me, with the BTUs that you put out.

But it was a spot size that, you, you did hair removal with a seven millimeter spot size one pulse every three seconds. And I remember our first patient that we actually signed up at the clinic wanted all of her legs. And we had to charge her $25,000 to do a treatment on her legs.

Unbelievable. It took 24 hours to do. So you can imagine sitting three or eight hours a day for three days in a row to do this lady's legs in a clinic. And that, that made it quite challenging. So clearly technology has evolved since then, but, we, we've had the privilege, quite frankly, of really understanding how most of the companies in the space, even today, operate and you know where their strengths are and where their weaknesses are.

And hopefully we're able to leverage that into the models and the things that we do with our technology.

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Dr. Grant Stevens

I don't think everybody knows about the Venus model. Could you share with us one of you the Venus model?

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Dom Serafino

Yeah I think it's important to recognize, Venus became an idea.

I started to look at, where we could manufacture. I had a partner in Israel, which is, as we all know, a hotbed for technology development and so on, and aesthetics, and it was in 2009, 2010, and we were just, Coming out of the massive recession, in, in oh eight and oh nine, and, the device business was completely decimated.

Nobody was getting really any kind of traction. Banks weren't lending money and so on. But what was interesting during that time is that clinic traffic actually was pretty stable. And in some cases actually increased. So it gave me hope that if we could put together the right business model we could continue to expand this market.

And actually I'll set it, restart it again. And basically how the model worked is we avoided the doctors having to go. To third party lenders and so on, and we became a subscription model with our technologies so that a doctor didn't have to worry about credit ratings per se. We held the paper, didn't have to worry about tying up their personal credit that was available if they wanted to do something personally, et cetera.

And even if they'd overextended themselves in their clinics, they could bring in the latest, greatest technologies from us. Under this model. And what that did is it actually forced us as an organization to have a much higher bar, to achieve, because the paper was with us. So it wasn't like, we could sell something that didn't function.

Didn't work and so on and that, because we would be on the hook and you'd be left with two scenarios, the doc. Could either stop paying and you could either sue them, which is usually not good for your creation of brand, or you take the machine back, which is also not good. And I remember you were one of the first customers really with the Venus freeze.

Really early on. And so what we really focused on as a mantra for the company, was we weren't gonna reinvent the wheel with some new energy source or wavelength, or pulse duration, per se. We wanted to take a look at technologies that had already been really well. Over the last 20 years and modified a little bit.

I'm gonna call him a quasi iMentor, Dr. Gary Lass, which I'm sure oh yeah, I remember. I remember being in Yeah, exactly right. So we went to Cheesecake Factory at in Marina Delray for lunch one day. And he sat down and he goes all you laser guys are, And I said thanks.

Thanks. Thanks Gary. Am I paying for lunch? Are you right? But I took it very seriously cuz I said, tell me more. And so he said, he goes, you guys don't understand how doctors are wired. Everybody comes into our clinics and are always preaching about, and he goes, I'd like to use a baseball analogy.

My technology is like I hit home runs. He goes, that's not what doctors are looking for. They're not looking for the home run. They're not wired that way. They don't think that way. They wanna look at technology as like hitting singles, make it a little safer, make it a little faster, make it a little bit more comfortable.

Maybe a broader audience of patients that can be treated and, keep moving the ball along or the, Along the bases with each of the singles, because whenever you're swinging for the fences, you may hit a home run, but nine times outta 10 years you're withing. And I took that very seriously, and I think that we built our entire model and our expectation based on that sort of premise, because technologies have continued to evolve and the customers, the 14,000 systems we've shipped globally,

One of the things that's the common denominator has always been that, you guys are under promising and over-delivering because we don't want to set a bar that is so ridiculously, unattainable that it disappoints. And that's doesn't mean everybody's perfect in the technology.

By no means is that the case, but because we have a direct relationship through our unique subscription model with the customer, it does force us. To pay more attention, quite frankly, post sale than most other companies because they move on to their next sort of sale.

Subscription-Based Aesthetic Technology  Park City

Dr. Grant Stevens

Chad, how does that subscription model work for the actual for the physician who puts one of the technologies in their office?

Subscription-Based Aesthetic Technology  Park City

Chad Zaring

Yeah, sure. It's a great question. So we take I mean we, we try to emphasize, as Dom said, we want this to be a repeat relationship. So we really the, we try to make lower the financial burden upfront. So we take a nominal fee upfront to cover a license fee to license the technology, and then it's just pay as you go for 36 months.

It's a monthly payment. But what we really try to do is, I'll give you an example with Bliss, our bliss, our fat reduction device that also has the RF body contouring and skin typing is, we've added, we just, you may have seen, we signed a global ambassadorship with Venus Williams recently, so there's a lot of press and publicity about that, especially around the Wimbledon time, of course.

We do, we've developed Bliss Academy. For a lot of these clinics, of course non-invasive fat reduction is getting a lot of legs globally. And new clinics are getting into it, but they don't, it's not build it. They'll come they need some coaching. And how do you talk about it with your patients? How do you close 'em? So we develop Bliss University and then we've we have a pretty strong practice enhancement team. So they really latch themselves onto these customers for the first year or longer. So we, so basically we lower the financial.

We take a nominal fee up upfront, it's 36 payments. But we, what we try to do is emphasize the roi. How do we increase clinic traffic? How do we provide great outcomes to the patient? How do we create this domino effect so that the next patient can influence the next patient? And then we, of course, we provide a three year warranty, so we just don't want the customer to really worry about anything.

But maximizing revenue and offsetting this monthly fee that they have to pay.

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Dom Serafino

Yeah, and I think that there's one other element to that, cost certainty is really important for physicians who are, bringing technologies into their clinics so that they can understand the competitive landscape and price their procedures accordingly.

And the second part to that is, obsolescence, as grant, this industry. Every two years there's some new story. And historically, what companies have done have said, Hey, let me give you a trade-in value on the device that you still have three years left on your lease.

And, the doctor gets rinsed, at 20 cents on the dollar, or has to now be a laser sales rep and sell it themselves on used lasers.com. And and then they still have a payment with their leasing company and they double down and they do the exact same thing for the next platform.

What we prided ourselves on is no matter where you are in that 36 month spectrum whether it's at 12 months, 24, whatever, if you wanna now change gears and you wanna move from hair removal to fat, or you want to go to hair removal 2.0 or whatever, we simply do it like a cell phone model.

We, we forgive the balance of the contract that was on the first one. We replace it with the new one. We start the clock again for 36 months. Clinic, the doctor is only using the technology that they're actually monetizing and there's nothing sitting in a closet that's not being used, that's still being paid for.

And that was, we recognize that certainly only in a clinic. I appreciated, the burden of having, these costs that are really not generating any kind of revenue for you for one reason or another, sitting in closets or back rooms while you're always trying to chase your tail to stay ahead.

I'll call it the technology advancement curve. And that was a big part of our model as well that I think has differentiated us from everybody else. And the benefit to us on that, quite frankly, is you don't see a lot of our devices in the used market. So we're not competing against ourselves per se.

We're able to control our distribution channel, we're able to refurbish those devices, put them back in play for a tier two, tier three customer. for whatever reason, may not be able to afford the original full, program or whatever the case may be. Or we ship them, overseas to other markets that are more price sensitive than say North America.

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Dr. Grant Stevens

At the end of 36 months then, does the practice own the the device?

Subscription-Based Aesthetic Technology  Park City

Dom Serafino

They own the device. They do, they own the device. They own the device.

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Dr. Grant Stevens

And in terms of the payments are, spread out just equal payments, 1/36th, if you will, per month? Or is it based on consumption?

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Dom Serafino

Yeah, so what we do, just to be clear so we have a, as Chad said, a licensing fee upfront.

And then the first 12 months typically represents 40% of the total value of the contract. So that get paid in the first year. In the second year, that goes to 35%, or sorry, 25%. Of the payments. Of the total value. And so by the time you get to third year the payment schedule mimics depreciation so that it, that's an advantage to the doctor as well, so that they're not getting rinsed, if you will, on the trade-in when they give it back to us because they've got disproportionate amount of payments.

We know that the maximum time or the best time to monetize the investment is usually within the first two year window, and so therefore, the payments. The earning opportunity off of that device so that when they get to the end of year two, which is normally when we upgrade customers , to another platform, and they, and we forgive the last year of the contract, there's very little left on the contract.

So the doctor doesn't feel like, I have, a big payment that has to be made or, there's still value in the machine and so on. And then, at the end of that, the machine always has a sort of an intrinsic value at the end of the day, after 36 months. But what this allows us to do is, Position the payment schedule so that it cash flows properly with the clinic when there's peak earning periods in the clinic versus non-peak. As time goes on.

Subscription-Based Aesthetic Technology  Park City

Dr. Grant Stevens

Yeah, that's a very interesting model. Very creative and very user friendly and I applaud you guys for doing that. Can you guys go through your product line and what you have? You mentioned fat Re. Reduction. So let's start with the fat reduction technology and then go from there.

Cuz I'd like our viewers to hear about all the different things that Venus offers, cuz it's quite, it's a quite broad offering and so why don't you guys pick it up from there and start with the fat reduction technology.

Subscription-Based Aesthetic Technology  Park City

Dom Serafino

Yeah, sure. I think in many ways we're the best kept secret in the market. 12 different platforms that we make available in every category.

Subscription-Based Aesthetic Technology  Park City

Dr. Grant Stevens

You're not gonna be a secret after this. Lay it on me, baby.

Subscription-Based Aesthetic Technology  Park City

Dom Serafino

That I appreciate. So Chad, maybe you can talk about, the clinical efficacy, the number of treatments that, typically the cost certainty, that type of stuff would be great on the fact.

And then I will talk to you about that. Absolutely.

Subscription-Based Aesthetic Technology  Park City

Chad Zaring

Absolutely. We're focused on, as Dom said, we have 12 commercial products, but we're really focused on six. And I'll start with too, you brought up the bliss 1064 diode with also our RF device for Octopolar for skin tightening. And so far, we're in the, call it, the first phase of launch.

We've been, customers have been really happy with it. The clinical data shows after one treatment up to a 41% reduction in the adipose layer at 12 weeks, 27%. It's six weeks, 41% at 12 weeks. Oftentimes our, what we're learning from our clinics is they're packaging a different way. Some combine it with the RF treatment and they wanna do multiple treatments, and they want the patient to come in every week.

Some clinics package it as a package of three laser treatments, perhaps. But what we've, the anecdotes we've gotten back is it's very tolerable for the patient. Our IOT data is pretty promising. It's as the brand recognition's increasing and the cus clinics are getting comfortable, it's increasing to, I believe it's now over $6,000 per week.

So when there's no consumable and it's a three year warranty. So you start to look at the roi. If you take advantage of the investments we've made recently in the B2C campaigns, like with Venus Williams, if you attend Bliss Academy and you really underst, how to counsel the patients, how to position it in a competitive market, how to price it, you know how to create this brand recognition in your clinic and you're using this as much as possible.

We're not taking anything back. There's no direct cost associated with consumables. There's no direct cost associated with warranty for three years. So the customers have been really happy. And we're generating a payback now in six months, in a lot of these clinics. And we have some clinics that are far exceeding that.

So we're starting to get a little traction, a lot of traction. As the global market for fat reduction, body contouring is really exploding right now. And the results have been really good so far.

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Dr. Grant Stevens

How many installs do you have on that?

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Chad Zaring

So we're we're over a hundred now. And happy to say we're starting to, clients are, we have one chain. It has. A lot, and they're starting to look at second units, which is great. We've seen our pipeline consistently grow. We've also in conjunction, really hired a ton of people in the us. We're making serious investments in the US and North America, and that's starting to pay dividends.

So I think, once the idea was to hit that first, get a PR stable product out there that is getting good results that patients can tolerate, that the clinics can learn how to use, it, doesn't have a lot of technical issues, and then really turn on, hit the gas. And that's really where we're at right now.

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Dom Serafino

One element to be added to that, just because Chad touched on it, but the IOT, our system has internet of things built into it. So we can see in real time exactly how many treatments are being done, what areas of the body are we treating. How long, who the operator is so we can actually audit the technician that's doing the treatments to make sure that they're getting consistency in the clinical outcomes.

And that's really important for a clinic because it gives you valuable information. We, you can't be in the room all the time. So it ties into just how effective you are, the payback periods. Am mean, as Chad alluded to right now on a, this is the average, not the best performing clinics.

The average clinic in the US is paying back the act. The total acquisition cost in 34 weeks, I think is the number. 34 weeks. That's pretty damn good. I mean, for a platform that has an ASP of about $120,000. They're easily monetizing their investment. The, we have one clinic that has done over 3 million in the first 12 months, to a point where I'm asking myself, why don't I have a disposable on the device?

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Chad Zaring

They keep all the profits.

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Dom Serafino

Yeah. But we're letting it, look. My, my attitude again, having run a clinic, my attitude is a doctor is usually gonna reinvest in himself. And so that's the best possible in the shortest distance to making a doctor happy.

And, if they're making money, we're ultimately gonna make money. And that's why 43% of our customers are repeat customers that have bought a second platform or some, or a third or whatever the case may be. So fat is, one of our key leading products, certainly as a growth driver in 2021 and beyond. As Chad had mentioned.

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Chad Zaring

I think Grant, one of the most exciting things I've heard this just in the past two weeks, being out in the field, I started to travel again finally. From some select plastic surgeons and dermatologists is the category's been pretty well established now.

So patients are coming in asking for this. They're not necessarily, they may be identifying with a CoolSculpting name, because it's been around. But now that the category is established, they're, the patients are pretty. If the doctor believes in it, if they've gotten good results, if the patient tolerates it well, if they can point to some clinical study or white paper, they're really open to it, especially since it's a better economic model.

As Dom points out, why should we, why should we continue to pay high cost of consumables when we can just bring this technology and use it as frequently as we possibly can and then just pay this subscription agreement. So we're super excited about we're also very focused, the second strategic category is hair restoration and robotics.

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Dr. Grant Stevens

Yeah, let's talk about that. The artist.

Subscription-Based Aesthetic Technology  Park City

Chad Zaring

So that's actually that we're pretty optimistic on that, just from traveling around. We're meeting with some of the largest dermatology groups, that. Map market's consolidated to 25 large groups.

And it's really interesting. A lot of 'em, dermatologists early on, did a lot of hair restoration procedures and then got sidetracked and it was tedious and manual and so a lot of 'em abandoned it.

And now you find these huge clinic chains that see tens of thousands of patients and they treat the, they may treat the retention, the prevention, pharmacologically, but they, but the procedure the procedure that patients are really demanding and paying a lot for ends up going somewhere else down the street.

So we're really devising this hub and spoke model, focused on training, marketing. That's where your friends at Engage, I actually brought them into a few meetings. I can't think of a better model, they brought up the ophthalmology model.

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Dr. Grant Stevens

Ophthalmology, optometry. They have a hub and spoke. They were on the program also.

Subscription-Based Aesthetic Technology  Park City

Chad Zaring

It makes so much sense, that, and then, the select plastic surgery groups, as well that are experts in facial aesthetics that could easily be incorporating this into their practice.

We just have to show 'em how, how do you incorporate a new vertical into an existing practice and make that office productive when you're off operating or you're not there, or you're seeing patients from room to room. So we're getting a lot of traction. Automated device, the robotic device is Artis, which is a form of robotics called programmed automation.

So you actually program what to do and it does it, which you can imagine when you're doing 2000 mini surgeries in a hair restoration procedure. It's a perfect place for automation. And then our manual device you may have heard of as NeoGraft, which we brought in to the portfolio in 2017.

And most customers now are bundling these. So I'd say, what we're doing is a trying to recreate the landscape of hair restoration procedures with automation so that regardless of where you go, a patient can have a consistently good outcome. Number two, we're also trying to take advantage of just this growth in robotic surgery.

There's seven over 75 companies developing a robot. It's amazing. Every time I, if you Google robotics, you'll find five companies that are raising money or have raised money and are close to commercial. And some of the largest companies in healthcare getting into that space. So that's the second piece.

And then the third piece is we're really focused on we acquired this company this was Dom's idea, to Restoration Robotics was an example of a great product, but the company really tried to get too broad, too quickly, and so we were able to bring it on into our portfolio in November of 2019.

I came on board shortly after, but what we've quickly done is build a programmatic approach. It's, it's not about getting a robot or getting a new aircraft, it's about building a program around it. And so we're pretty excited. We've gotten a lot of traction.

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Dom Serafino

And the other piece to that puzzle is that, as we look at a very crowded call, a sandbox in other devices where there's a significant commoditization in hair removal and wrinkles and cellulite, all of which we have solutions for, and we think very good solutions under our subscription model.

Predominantly, hair restoration is sitting in its own sandbox and from an ROI perspective, now that the technologies are automated, predict. and so on, and certainly less stressful for the physician that they don't have to sit in the room for eight hours to do a 2000 follicle transplant.

The ROI is 12 to $1,500 an hour, which is very nice compared to, all of the other items that originally placed hair restoration when lasers came available in 94, 95 back in the day. And so it's evolved and it's coming. The pendulum is swinging back. As Chadd said, the spoken hub model, like a LASIK model and so on is really appropriate for large chains.

But even the individual, I'll call it mom and pop operations, now that they can actually have a device that sort of helps walks them through with artificial intelligence how to do a hair restoration procedure effectively. There, there's a level of confidence that's being created there. And, we've got a lot of work to do, to correct some of the errors and sins of the past of Restoration Robotics.

We continue to do that. They chose to sell to urologists and anybody who would cut the check, which is fine if you're reporting your numbers on a quarterly basis as a public company, but it isn't great the day after when you actually have to teach them how to market themselves and how to actually do the procedure and ask for money, because, Out of paper, paper procedure.

I think we, we took a step back and we knew what we were buying. And the main reason we did this as opposed to say a conventional i p o is because of the depth of the IP that restoration was able to create over their 10 years of existence. We were quite impressed with that.

And the most important reason, I think, is in order for a company to understand where the industry's going, you have to understand its past, right where it's been. and, the luxury of gray hair and thinning hair tells us, that we've seen a commonality of problems in the industry.

Number one, the continued commoditization, as I just described, it makes it very difficult for most derms and plastics to compete. With the med spa down the street that's very happy, generating a hundred dollars an hour and group on advertising all day long, and they're competing with the same branded products regardless of which company.

As a plastic surgeon in Durham that wants to generate and should be generating a thousand dollars an hour out of a treatment room and would be caught dead group on advertising their, their brand. And justifiably so that was one of the problems we identified. And we think that as time as robots ev, evolve, we're gonna be able to combine.

The majority of our energy-based solutions with robotic delivery systems, with artificial intelligence and machine learning and speed and accuracy and all the things. And that addresses, I think the second problem that the industry has had pretty much from day one, where 20 to 25% of patients that are treated with non-invasive technologies don't get the clinical outcomes that they were hoping for or expect.

And when that, and that usually isn't because of the technology. It doesn't matter which company, it's usually about operator experience. Fatigue, apathy, multiple treatments and so on. So there are so many variables that get thrown into a manual procedure regardless whether it's Candela, Cutera, us, whoever that the outcomes are, all over the place.

Robots are agnostic to fatigue opinion. It doesn't matter if you're doing a treatment at nine o'clock on Monday morning, it's the same on a long weekend night at five o'clock on Friday. It doesn't change. And what it does for the clinic, quite frankly, is it gives you as plastics and derms, and that's where we're going predominantly with all of our robotic technologies that we start are developing and we'll continue to develop.

It'll give you a competitive advantage that you guys should have, quite frankly, to separate yourselves from the rest of the field, cuz we will not sell robots outside of the core audience. That is what, that's been my mandate to the company, that this has to be exclusively available to you guys because we think it's time that you take back the leadership if you will.

On technology evolution and the procedures are properly suited for the derms and plastics that we're working on. So that makes sense. And at the clinic level. Last but certainly not least, is, and you know this grant, clinics you find a good injector, whether it's fillers or Botox, and they become a business of their own, and the problem is that many times if an injector decides to hold a clinic ransom and they decide to go down the street, Because of whatever reasons. It's like a hair salon. Many of those patients follow them because they love the way they do their lips or they do their nasal labia folds or whatever, and that's problematic for the clinic.

So if we're able to provide solutions in many different areas, different procedures that aren't dependent on the technique, Of the operator, but rather it's observational more than anything else, to set the algorithms, set the, the customized plan for that particular patient. Regardless of what we're treating, we think that we're giving you guys ultimately over the next five to 10 years, different solutions that I think will allow you to create some daylight between the commoditization of the industry and what you guys are offering.

Subscription-Based Aesthetic Technology  Park City

Dr. Grant Stevens

That's fantastic. So we've talked a little bit about fat and skin as far as tightening, and we've talked about hair. What other areas are you chasing? What other problematic areas in the aesthetic space?

Subscription-Based Aesthetic Technology  Park City

Dom Serafino

So one of the, one of the areas that we're really focused on right now is a product that we, a code named Robo Core. It sounds like a bad B movie. But anyway, it's Robo Core, but we've treated 16 patients now, 90 zones, and we're focusing really on the body mostly. So what we're trying to do now is take a microcoring capability. We actually, we treated our first patient with a robot, a breadboard, obviously prototype, this week.

And we're quite excited in how it worked. But what we're doing is we're taking robotic technology and doing a series of microcoring, various steps, various widths so that we can actually excise this tissue very cleanly, and then have a directional tightening. What does that mean?

What are the areas that we're gonna focus on? Where we did a lot of our clinical work so far for feasibility and so on, is to potentially replace a brachioplasty. A female that has bat wings does not need to go through a surgical intervention, leaving a scar and the pain of recovery and all on.

So we think we can do that robotically in a minimally invasive way. We think that we can do directional breast lifting. It with robotically. The same kind of mechanism of action we think that we can do above women's knees. When you get to droopiness and saggy skin so that you can't treat it necessarily non-invasively, you can only, minimally invasively, we can treat it and this will allow them to, not have to go through, under anesthesia and all the stuff that, typically you have to do with a full surgical intervention.

This is an area that, we, companies really haven't focused on as much as they probably should because it's either full surgical intervention, or non-invasive multiple treatments, and they're the inbetweeners where we're looking at with some of these robotic solutions, and of course, facelift, brow lifting, jowls, and things of that sort.

But we want to start first, quite frankly for selfish reasons. We want to make it sure it was safe while we go through all of these. Iterations of the technology and I think the big one, that's why on the back of the arm it looks very promising right now. And who knows, maybe we'll be able to replace an abdominalplasty, at some point because of the speed and accuracy of the the way the technology can map out the area, hopefully measure the thickness of the tissue.

From that we're working with a third party as well that's in the ultrasound business, and we think that we can integrate ultrasound technology into robotic fat reduction devices. So now, before we actually treat. Over the entire area, we will actually be able to measure where the thickest fat is and the problem areas are, and actually adjust the algorithms to deliver the energy proportionately to the areas that need the most work versus the areas that need the least.

It all sounds crazy, we have really strong belief that this is just a matter of time and we think that we're gonna be able to accelerate this process pretty quickly.

Subscription-Based Aesthetic Technology  Park City

Chad Zaring

And Grant, I'll just add to what Dom said. You know about, gosh, it was 17 years ago, I was in Atlanta. I met a cardiac surgeon that had the greatest value proposition, with technology innovation, and he said Patients value is efficacy over invasiveness squared.

which means if you can develop a procedure that provides good clinical outcomes and do it in that, like in the robic, Corrin context in a minimally invasive way with minimal downtime, minimal pain, where you're out, in and out that's a really strong outcome for the patient and people are gonna come after that.

And so that's a real value proposition. And one of the things that, we probably won't spend too much time on, the exciting thing is we have a lot, we have a clear view of where we want to go in the future. But actually our top selling products are the Vever, Venus, versa which is a platform that has skin rejuvenation, hair removal skin tightening, all in one device.

It's like a platform for the clinics, up to 10 hand pieces. We have the venous velocity for hair removal, the venous fever, which we're get, we have a new configuration, a higher power, it's a nano fractional resurfacing device. Competes with microneedling, getting great outcomes from some of the dermatology clinics we work with.

And we have the Venus Legacy, which is, we have got this resurgent demand all of a sudden. I don't know if the product's been out for seven years. I don't know if it's the clinic's reopening. It's amazing. we're, it's amazing. Like we're seeing tremendous demand. So it's fun right now. It's fun cuz we have a diverse bag that we can go offer pretty much anything a clinic's gonna need to build the cosmetic and aesthetic part of their business.

But it's fun to just go in and meet with the core doctors, dermatologists, plastic surgeons and say, Hey, what do you think about robotic? If you just came out of training or fellowship where do you think 10 years from now, how do you think technology's gonna be deployed? What's it gonna look like? And that's where I think we, we want to go.

Subscription-Based Aesthetic Technology  Park City

Dr. Grant Stevens

So speaking of that, what do you think it is gonna look like in five or 10 years?

Subscription-Based Aesthetic Technology  Park City

Dom Serafino

It's funny you say that because that's always been my vision as to how do we help the doctors, quite frankly, add value in their clinics. At some point, every doctor is going to retire.

Okay. And one of the things. that most doctors don't think about, because business isn't their primary acumen. They're trained in sciences and they're very good at what they do, and most of the stuff they do is from their hands. But how do you monetize that when you're 65 or 70 or whenever you decide to retire?

So we're focused on trying to create a different level of EBITDA return and value as a multiple to the clinic that is driven by the evolution of technology and so on. New doctors that are coming in have some real tangible asset value to coming in, other than the goodwill that the clinic may or may have not created under the previous physician.

That's why these derm chains and that are being created by private equity because most of the derms that, in the early days didn't really think about. That they thought about. Yeah, they're building their product, they're building a very nice living for themselves and so on, but really didn't take into consideration the holistically what the value of that clinic was going to be.

At the point when they're saying, no moss I wanna do something else. And so we focus a lot on that as well. And we do believe that in the next 10 years, nothing will be done manually. I think every one of the procedures that's in demand, the expectation absolutely will be that there'll be some sort of a re a robotic customized treatment protocol for that patient specifically geared to that patient.

And I think that we're very thankful that we're in the leadership role. One of the main reasons I did this very unconventional, unorthodox acquisition of restoration was because they had over 200 patents, that they had filed in a variety of. Areas from tattoo removal to hair and so on.

And so we think that we can leverage that ip with the skillsets of the guys in Silicon Valley, which is where we're located for the robotic development, and really accelerate the process of developing additional solutions. A and by the way, At a reasonable price. We wanna make sure that the doctors understand that when we come to market with the next generation of robotics, as pricing continues to improve and our volumes continue to increase.

Right now, globally, I think we have about 300 artists, robots. For hair restoration, we think that number should be 3000 systems as we move into skin tightening, directional lifting perhaps tattoo removal with LA or with robots as well as fat reduction and ultimately facial structure to do.

a simultaneous injection of fillers, and we've talked about this in the past, where we can map the face, we can create a customized plan for the patient and do fillers like nasal labia folds, and brows and whatever it might be with Botox. We think that's gonna be a huge competitive advantage again.

For the derms and plastics, because that's also an area that's been heavily commoditized because there are so many injectors out there and it's price sensitive and all the things that go along with it. So w we keep our eye on the prize, which is ultimately providing the doctor the best possible way to monetize their investments and ultimately create value within their clinic over, next number of years.

Subscription-Based Aesthetic Technology  Park City

Chad Zaring

I'll add one piece of that too. Dom and I discussed this, and I think we discussed it with you as well, Grant. I came from the spine company. The spine industry prior to this. And when you think about spine screws, historically, the prices have come down, but they all look the same and, but for decades it was all about the screw and how do you put the screw in.

It was about the payload. But with robotics, a company called Maor Robotics that was acquired by Medtronic. It became about delivering the payload. Payload didn't matter. It was how do you deliver the payload underneath the scan without opening the patient up and deliver the payload. With some combination of preoperative scanning, pre-procedural scanning, in this case, facial scanning.

Advanced algorithms that can be embedded into a planning software, and then mechanical. so a robotic arm can execute the procedure, taking out all of the variability. And so you fast forward and look at the adjacency with like fillers and injectables. A lot of it becomes about the payload, but delivering the payload right is very important too.

Sure. And can you assure your, can a clinic assure themselves that this injector is as well trained and has done as many procedures as this injector? So it's using robotics to take some of that guesswork out and we hope we can lead.

Subscription-Based Aesthetic Technology  Park City

Dr. Grant Stevens

It certainly sounds like you are leading the way right now and very creative with robotics and your financing and we could continue this forever.

Yeah, I'm sure. And the next time you're in LA we'll pick up what we're leaving off cuz I wanted, I wanna talk to you about some more of the AI and robotics as it relates to injectables.

Subscription-Based Aesthetic Technology  Park City

Dom Serafino

And I gotta see the man cave.

Subscription-Based Aesthetic Technology  Park City

Dr. Grant Stevens

Yeah, that's right, Marina man land, where a man can feel good about looking great.

Exactly. So I wanna thank you Chad, and thank you Dom for sharing your time with us and look forward to seeing Total pleasure seeing you.

Subscription-Based Aesthetic Technology  Park City

Dom Serafino

Yeah, thank you Grant, really a pleasure. And we definitely look forward to talking to you about the whole facial stuff cuz I think that's gonna be a really hot area and so do, I'd like you to be involved. We'd like you to be involved in that because it's great.

Subscription-Based Aesthetic Technology  Park City

Dr. Grant Stevens

I would welcome that opportunity. And you mentioned Engage, and I am now the Chief Medical Officer for Engage Technologies. And and aesthetic innovation. We definitely want to talk to you.

Subscription-Based Aesthetic Technology  Park City

Chad Zaring

And definitely gotta keep promoting. We have a Zoom on the calendar, Dom, it's on your calendar.

Subscription-Based Aesthetic Technology  Park City

Dr. Grant Stevens

Terrific. Awesome. Who knows? I may end up on it. You never know. So again, thank you very much and I'd like to thank all of you for joining us today on another episode of The Technology of Beauty, where I have the opportunity to interview the movers and shakers of the beauty business.

Thank you very much, and I'll see you next Tuesday.

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