I Built A Startup, Then 2020 Happened
I created a toothpaste brand in 2019. In March 2020, everything changed.
In 2018, I started making my own toothpaste. I would get a mixing bowl and a whisk from the kitchen, fetch some Sharpie-inscribed bags of white powders from the lab in my garage, and mix until I had a paste.
Between each batch, I’d tweak the formula. A little more xylitol to make it sweeter. A little less calcium carbonate to make it softer. Before long, I’d perfected my blend of toothpaste—all in my kitchen.
By 2018 I’d been a dentist for over 35 years. I noticed the toll that mainstream toothpastes can take on patients’ mouths. Natural alternatives to giants like Colgate and Crest were limited.
Sure, there were a couple smaller brands here and there, but these were trying too hard with fad ingredients like charcoal and hemp oil. Why wasn’t there a brand of toothpaste that had easy-on-the-mouth ingredients, and a rigorous formula created by a dental specialist?
My home-brew toothpaste was for my wife and daughter, who were finding their normal toothpaste more and more irritating to their mouths. It was they who first suggested that this especially mouth-friendly toothpaste could be marketable.
Oralast Toothpaste was born.
The Start Up
It’s 2019. I have my formula. I’m starting to conceive of how I want to market my product. I’m going to go for the tried-and-true buzzwords natural, organic, specialty, etc, because they work, and they’re appropriate for my toothpaste.
I’m gathering some human resources together; the daughter of a friend of mine just graduated in business, and I plan to employ her as sort of a jack of all trades to help with marketing, design, and outreach. My own daughter is going to help with cashiering and admin. But wait; if I have a cashier, that implies I have a retail space too, doesn’t it?
Correct. This is probably my most important initial decision. I’m going to order 5,000 tubes of toothpaste, but I’m also going to get a retail/clinic space going. This is a kind of insurance for the toothpaste.
When I go to secure my loan, the banks are going to want to see that I’ve got some kind of contingency plan, or integration of what I’ve shown to be my strengths during my career. I’ve been very successful running clinical and diagnostic services, so having a space for that as part of my business plan should placate the jittery folks over at the bank.
And my product and services can work together: I can see patients for dentistry and oral pathology, and the income I generate from this can support the first few years of my toothpaste venture, which is what I actually care about.
When I did a bit of research on some other smaller toothpaste brands, I noticed that the Hello Toothpaste founder made a point of saying that it took him four years before turning a profit (he now sells over $20 million in toothpaste per year). He describes securing initial investors, but he doesn’t say how.
One of my maxims is to always “invest in yourself”—so maybe I can invest in myself here. Maybe my clinical work can be what subsidizes the first few years of growing pains I can expect for my product.
I end up securing a decent-sized loan. Part of what helps me do this is the fact that I have a history of creating successful businesses and selling them at a solid profit: one dental practice, and two oral pathology diagnostic services. I’m not new to this game—just venturing into a new area.
The loan is going to cover my 5,000 tubes of Oralast Toothpaste, and the retail space. It should be more than sufficient, since I am going to get the ball rolling soon on selling my product and seeing patients.
The toothpaste itself is being made in America. The tubes are coming from China. It takes a bit, delays happen, but eventually I get my inventory. I stick the pallets in my garage for now (I live in Phoenix, AZ, so thankfully it’s wintertime). The retail space gets finished in a few months, and it looks fantastic. A beautiful combination of high-end retail and spa-like clinic.
All of a sudden, it seems, I’m ready. I’ve got my stuff, and a place to sell it. Now, I just need customers.
Also, Happy New Year.
I opened my doors in November 2019. The lockdown started in March 2020.
Four months of normal operations. Four months of the typical trajectory that startups prepare for: the slow initial sales, the little encouragements here and there, the new ideas that come in a steady stream and keep you excited, the setbacks that are tough but can’t quash your drive. Four months. Four months marked by slow but encouraging growth.
The dentist offices in the area were becoming aware of my product. I had brought them some samples and a few orders were coming in. I had drafted some applications to the big retailers like Walmart, Whole Foods, Sprouts, etc.
These retailers accept submissions once a year, and it’s about as competitive as you can probably imagine. They expect brands to have built a respectable base before they are willing to take a risk on them, which makes sense. I can’t help but wonder how the Hello Toothpaste guy got into Walmart so soon. Along with his mysterious investors, it’s another one of those “what is he doing that I’m not doing?” things. But it’s still early. We’ll get there.
And no matter what happened, I had my fail-safe: my clinic. I could see patients for oral diagnostic services, and even provide other dental services if need be. I did what savvy businesses are supposed to do, right? Take certain calculated risks, but develop a fall-back plan. Checks and balances.
My Proforma looks sound, because of my history of successful businesses. Plans B and C in place. Bankers are happy and the loan is secured along with a big chuck of my own funds. On paper, it checks out.
On paper, though, it says nothing about a pandemic.
Whispers about the virus began, for us, in late December. Do you remember the first articles you read? I recall some initial irritation, before the articles rose above the realm of clickbait. Why monger in this kind of fear?
The articles kept coming though, and before we all knew it the virus wasn’t a remote consideration, separated by a sea. It was right here. A few hundred people in Washington. A couple dozen in Phoenix. A couple thousand. Lockdown. Mask mandate. Mass quarantine.
In what felt like the blink of an eye, everything had changed. I, and all small business owners in my state, were suddenly in grave danger. Would we see some strong leadership from all levels of government? Would we see a firm, unbroken quarantine yielding quick results? We were consumed by uncertainties.
I had to sit down and ask myself some questions. Questions that, if you too are a small business owner, I know that you asked yourself as well in March, April, and May. How much cash do I have on hand?
How much borrowing power do I have with my bank? Will there be any help from the government? Will an emergency loan be offered? Can I hope for that? How do I avoid relying on that? I have to review all my finances, all my sources of income. Hunker down. Look at my business plan. Rethink.
Soon I realized that this was going to be long term. Nothing was going to clear up over the summer, no “miracle” was going to waft the virus away. My dentist friends were telling me that customers were staying home.
My retail space, which had seen few patrons to begin with, was now totally hamstrung. Same with my clinic. Diagnostic services went out the window. When our governor reopened dental practices, folks still weren’t comfortable going to the dentist.
Sure, you see the vocal people on the news protesting their right to go get a haircut; but the fact is, the majority of individuals didn’t want to leave the house.
This is a good thing on the one hand, but on the other hand if the quarantine had been done right in the first place we might have been able to get our patients back by June. Uncertainty and fear made potential customers rightfully timorous.
Should I revise my marketing strategy? What for? For whom? Toothpaste, which I could sell online, was still doable. But with everyone suddenly wary about expenses, and with so many sources of income being taken away from people, marketing a new health product was going to be challenging.
To make matters worse, Phoenix was edging into summertime. Heating bills were starting to climb. They would soon become exorbitant not only for my home, but for my empty store and clinic.
I sold three or four tubes in April. Same in May. It’s been like that ever since.
SO, WHAT DID I DO?
I had to diversify my sources of income. By late summer, I was spending hardly any time at all with my toothpaste—the very product for which I had opened my business in the first place.
I took a course in facial aesthetics. Botox and micro-needling specifically. Living in Scottsdale, I figured that this might be a safe idea (Botox, by the way, isn’t just cosmetic; it can also be used for clenching and grinding, headaches and TMJ pain. 2020 is stressing us all out. I’m sure there are more than a few people suffering from jaw-clenching at night.).
Luckily the course was straightforward and I took to it easily and enjoyably; by mid September I became certified to deliver these services. Of course, it would still require a significant marketing strategy to bring in patients for these services. Marketing takes time, money, and ingenuity, three resources that I’d found stretched a little thin by September.
I did some lecturing for a few different public and private universities. They paid me by the course to devise and digitally deliver lectures for their dental students. This is a bit of a safer source of income, but very time consuming. I did some work for the new owner of my old diagnostic services company.
Again: a solid source of cashflow, but time consuming and distracting.
I finally decided to “hire” my second oldest son to take over the toothpaste brand, and to see if he could come up with any low-cost or no-cost ways to revitalize the product. He’s creative, and quickly set to work coming up with commercials, advertisement plans, and guerilla marketing strategies.
We have yet to see if any of it will work, but it has taken some of the pressure off me and allowed me to focus on my alternative sources of income, like the facial aesthetic services.
We’re working hard, in ways we never anticipated, to survive the pandemic.
When even dentists and doctors are facing bankruptcy, you know that the economy is in a bad place.
Coronavirus has been almost lethal to my business, but we are afloat. We are flexible. We adapt to changing circumstances. A business—particularly a small business—resembles a living organism. It either has the ability to adapt to changing environments, or doesn’t. But above all it possesses a singular biological drive to stay alive.
Moral of the story? We are on our own. There has been no guidance or leadership at any level of government. Politicians put us in lockdown just long enough to assassinate the economy and lull people into a false sense of having done their due diligence, but not long enough to ameliorate the spread of the virus in any significant way.
Small businesses have been hung out to dry, struggling to pay taxes while drawing less and less revenue, while huge corporations continue to make record profits and pay zero taxes. All the while, legislators bicker. Congress stalls on relief-legislation for months, and congresspeople take their usual vacations.
Expect it to get worse. Expect recovery to take years. I am not a negative person by nature, but I believe the worst is yet to come. Small businesses and start ups have to fight a feeling of helplessness. Nothing takes the wind out of your sails like feeling when the game is rigged. What incentive does Congress, which is in the pockets of the huge corporations who are doing just fine, have to help me?
Nevertheless, we are going to stick it out. Because that’s what small businesses and entrepreneurs do. That’s what small business owners are trained to do. We are as smart and savvy as any comfortable corporate big-wig. We are clever people assessing our circumstances and doing what we need to to stay afloat.
So you’ll forgive me if I end with this: screw Colgate. Buy my dang toothpaste!
Allan Dovigi, DDS, MS
CEO of Oralast Health & Wellness