Why I invested in Two Front
A modern, tech-enabled concierge service for orthodontics that takes a care-centered approach to clear aligners.
In this post, I want to share why I’m incredibly excited to invest in Two Front started by doctor Ingrid Murra, using the framework described in my post on Mental models for Angel investing.
Two Front is a modern concierge service for orthodontics that takes a care-centered approach to clear aligners. It’s a new way for kids and their families to achieve the smile they’re looking for — one that empowers orthodontists to use clear aligners over braces to treat kids while making parents’ lives easier by going to their homes.
Let me explain why you should care.
82% of Americans believe straight, bright teeth help you get ahead in life, and 78% of Americans perceive adults with crooked teeth to be successful. The path to get there, however, is often a very painful one for the patient.
Traditional orthodontists often still use metal braces to move teeth. Braces are uncomfortable, they hurt, and they require monthly clinical visits for easily 2 years, which leads to hours of time wasted from your life commuting and in a waiting room. You get all that for a hefty fee that’s hard to afford for many. Furthermore, many people find metal braces embarrassing to wear. The incentives are structured in such a way that the cost of clear aligners to orthodontists (the biggest brand being Invisalign) is 10 times more expensive than braces (about $2,000 versus $200), resulting in the average orthodontist office being 85% metal braces-focused to preserve their bottom line. Many teenagers don’t even get clear aligners as an option for this reason. And of course, only wealthy children can afford them.
Because of the above, many adults have turned to direct-to-consumer clear aligners as an alternative. Several billion-dollar companies have been started in this segment in the past few years (e.g. Smile Direct Club ($3.1B) and Candid Co. ($1B)). While clear aligners have quickly become the tooth movement material of choice for adults, some of these companies have faced thousands of customer complaints and there are real dental health concerns given that some or all parts of the process are not monitored by an orthodontist — a decision that is good for a company’s margins but not necessarily for the patients’ results and dental health.
While the clear aligner market is large and growing, orthodontists have largely stuck to using metal braces because of the incentive structure. The slide below summarizes the challenge with both approaches today:
Two Front is now bringing the clear aligner therapy experience together with orthodontist care, with a specific focus on teenagers. This market is huge: 4.3 million patients 17y old and younger had orthodontic treatment in North America in 2016. Two Front is creating a tech-enabled clear aligner treatment model that focuses on teenagers. Teenagers don’t like to go through the notorious difficulties with metal braces if they don’t have to (and parents would like to avoid monthly office visits for years for each of their children if they can).
On the other hand, orthodontists who have graduated in the past decade have faced significant challenges as well: They often spend 11 years in school, graduate with an average of $428k in student debt, and typically get in debt another $475k to get their own practice off the ground. While this is daunting for many, there often is no real alternative as there are little opportunities, especially in big cities. Worst of all, orthodontists biggest marketing is generally referrals from general dentists, and those general dentists are offered 45-minute courses to act as orthodontists for simple patient cases — but this is a business, so it becomes tricky for general dentists to refer out a product with an average price tag of $8,000.
1) Incredible Founder-Market Fit
Dr. Ingrid Murra has the right background to tackle this challenge. She’s a Harvard-trained orthodontist and had a first-row seat to many of the challenges described above. I met Ingrid in the summer of 2019 and was immediately blown away by her deep understanding of this market. I invested in Two Front pre-product and pre-revenue, which is always an additional risk, but what gave me confidence was the fact that Dr. Murra really was on a mission, had unique insight on the market as well as the practical experience as an orthodontist.
2) The expectation of Strong Product-Market Fit
As the product wasn’t in the market at the time of the investment, I made an assessment that product-market fit would be very likely for the following reasons:
- First-principle thinking: the pitch makes sense given the market and incentives on all sides (see above).
- Through analogies: Health care in the US is broken in countless ways. Tech-enabled concierge services for regular health care have demonstrated strong product-market fit.
- By benefiting from an existing shift: The rising popularity of clear aligners makes the timing ideal to go into this market.
There are two sides to Two Front’s model: the fact that many orthodontists are not happy with their existing options also presents an opportunity for the company to attract talented orthodontists.
Finally, given the pandemic, Two Front’s model of in-home care and digitally scheduled check-ins with orthodontists is a huge advantage compared to the existing option in the market.
4) Product-Channel Fit & Model-Channel Fit
When investing pre-launch, the biggest risk is often whether or not the company will be able to find the right channels to scale at a reasonable cost. In this case, I would consider finding product-channel fit one of the biggest risks ahead as well and was comfortable to make the bet that Ingrid Murra and the team will figure this out.
Given the price point of $4k-6.5k range, paid early in the process, there’s a long list of channels that could work for the company to reach potential customers.
5) Investor-Founder Fit
While I’m not a natural fit as an angel investor for Two Front as a business, I do hope my experience with a two-sided model at DataCamp and experience with fundraising will be helpful to the company.
This is a huge market with relatively little innovation and I’m stoked to be along for the ride.
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