Vertically Integrating for UC Success: The Weave Way
Vertically Integrating for UC Success: The Weave Way by Joseph Williams
At November’s BC Summit I spoke about the upside that comes from verticalizing unified communications solutions. A verticalized UC solution can integrate with specific industry backends or platforms and/or can meet explicit regulatory or reporting requirements. Not only are vertical solutions “stickier” than generic solutions, but they also yield higher margins. Moreover, vertical solutions can be easier to market (a targeted audience), simpler to support (fewer ecosystem variables), and riper for innovation.
Weave is a late-stage startup that has verticalized its UC solution into the dental business. Founded in 2008 by brothers with experience in sales and in call centers, Weave started life by providing recall services to dentists, meaning that they contracted with dental practices to schedule overdue patients for appointments. The company reinvented itself at the end of 2011 into a dental practice communications system, offering a VoIP platform that is integrated with the dentist’s patient management software and with the practice’s email solution.
I’ll get into specifics of their model momentarily, but the key number is that Weave is getting $350 per month per dental practice ($450 if they buy the reputation management service) and that the Weave systems are paying for themselves in as little as 10 months. As you may have experienced, most of the business action at a dental practice is at the front desk, which typically handles scheduling, patient check-in and discharge, product and insurance workflow. Weave’s platform pricing supports up to 10 phones, with a monthly supplement of $15/phone. Contracts are month to month.
Weave’s VoIP solution uses open source FreeSWITCH, with PSTN termination provided by XO Communications. Weave can be used with most softphones, but they only support Polycom phones, which they ship pre-configured from Weave to the dental practice. The Weave software runs on a standard PC that installs on the computers already in the practice. The Weave software provides integration with the five or six standard dental management software platforms.
In reality, Weave is a CEBP solution. As a patient calls in, whoever answers gets a screen pop that identifies the caller and provides all the contextual business information for the patient, from upcoming appointments to unpaid bills to birthday reminders. The Weave platform also enables two-way texting and delivers appointment reminders.
Weave’s value proposition is multi-dimensional. In addition to managing the phones and providing the CEBP solution, Weave also allows the dental practice to eliminate its subscription to DemandForce or Lighthouse 360 automated appointment reminder services, which themselves can run $300 - $360 per month per office. It handles customer satisfaction surveying as well as some lightweight management reporting similar to what call centers generate.
About 2,000 dental offices now use Weave. There are approximately 160,000 offices for dentists, orthodontists, prosthodontists, and related dental specialties, so Weave has barely scratched the market. Which is why they have received a lot of attention from the VC community. In addition to being recognized as a Top 8 startup out of the Winter 2014 Y Combinator class, Weave secured a $5 million A round in 2014 and a $15.5 million B round in 2015.
Verticalizing is very rewarding – but it takes a lot of patience, which CEO Brandon Rodman has in plenty. I spent some time reading through all the dental forums in 2012 and 2013 where Brandon was trying to explain the Weave solution. I gather dentists are financially frugal and generally skeptical about vendor claims. But once the vertical solution takes hold, it builds its own momentum. It also provides credibility for expansion into adjacent verticals, like optometry or physical therapists.
I know UC service providers are often reluctant to verticalize because they believe they are leaving money on the table, but when you look at a deep specialized market the overall rewards can be considerable.