A couple weeks ago, a headline from Inc. caught my attention: Why Google's CEO Only Buys Companies That Pass His Crazy Toothbrush Test. Larry Page talking about toothbrushes? Count me in.
The post starts by noting that Larry does not subscribe to many of the classic finance driven metrics when looking at buying a company; they then reveal the 'toothbrush test':
So what is it that Larry Page is really looking for, if not sales or proven performance, in a company when Google is considering an acquisition? Page will ask, "Is this something you will use once or twice per day, and does it make your life better?"
Of course, Larry Page uses the metaphor of a toothbrush, which falls into both categories, to underscore a broader point about Google's acquisition strategy. However, Beam is inclined to look at this dynamic in the more literal sense. In short, very few consumer products are as ubiquitous as toothbrushes, and fewer still require a daily use, or 'touch point'. The most rabidly popular consumer internet products of the past 20 years, sites like Facebook and Twitter, have 100s of millions of users globally, and these users log in multiple times daily to use the product. These companies, and others that have scaled to enjoy this level of success, are considered to be among the most valuable companies in the world.
By contrast, toothbrushes have had multiple billions of users for decades, and these users tend to their teeth on a daily basis as well. This provides the basic framework for the value that can be created with a potential base of engaged users of that magnitude. The users already exist; they are a captive audience. The exercise from there is using this fact as an advantage. Namely, can the experience of caring for your teeth be enhanced to become entertaining, rewarding, even productive? And, what services can be stacked on top of this experience to help make your life easier, more efficient, and cost effective?
Working backward from behaviors that are already built into most people's daily routine provides a more convenient pathway to not only changing this behavior, but more importantly harnessing it for creating impact. This simple fact serves as the fundamental building block of Beam's foray into connected dental.