Episode Thumbnail
Episode 12  |  45:43 min

S3 Ep 12. Alex Frommeyer: Beam Dental

Episode 12  |  45:43 min  |  06.29.2021

S3 Ep 12. Alex Frommeyer: Beam Dental

00:00
00:00
This is a podcast episode titled, S3 Ep 12. Alex Frommeyer: Beam Dental. The summary for this episode is: <p>Today we're talking with Alex Frommeyer, co-founder and CEO at Beam Dental in Columbus, Ohio. Beam Dental was founded in 2012 by three engineers at University of Louisville, who saw the opportunity to modernize the dental insurance industry by using technology. The first product was the Beam Brush, which was one of the earliest examples of the Internet of Things in healthcare. We had a great conversation about the power of OKRs, Objectives and Key Results. The important thing about OKRs is clearly stating your goals and intentions, and making sure it relates to every single person in your organization so that you can articulate and re-emphasize, and re-state, and reminding everyone, at all times, what they're doing and why they're doing it. If you want a high performance team, you need to master the art of OKRs. </p>

Today we're talking with Alex Frommeyer, co-founder and CEO at Beam Dental in Columbus, Ohio. Beam Dental was founded in 2012 by three engineers at University of Louisville, who saw the opportunity to modernize the dental insurance industry by using technology. The first product was the Beam Brush, which was one of the earliest examples of the Internet of Things in healthcare. We had a great conversation about the power of OKRs, Objectives and Key Results. The important thing about OKRs is clearly stating your goals and intentions, and making sure it relates to every single person in your organization so that you can articulate and re-emphasize, and re-state, and reminding everyone, at all times, what they're doing and why they're doing it. If you want a high performance team, you need to master the art of OKRs.

Guest Thumbnail
Alex Frommeyer
Co-founder and CEO at Beam DentalFro's LinkedIn

Tim Schigel: Welcome to Fast Frontiers. I am your host, Tim Schigel, managing partner of Refinery Ventures. In this episode, we're talking with Alex Frommeyer, co-founder and CEO at Beam Dental in Columbus, Ohio. Beam Dental was founded in 2012 by three engineers at University of Louisville, who saw the opportunity to modernize the dental insurance industry by using technology. The first product was the Beam Brush, which was one of the earliest examples of the Internet of Things in healthcare. In this episode, we're going to go through the interesting path that these engineering students took to revolutionize the healthcare industry. The biggest theme, or what I hope you take away from this conversation though is the power of OKRs, Objectives and Key Results, in planning methodology, first established at Intel, and John Doerr took it into Google. And it is widely used throughout Silicon Valley. But the important thing about OKRs is clearly stating your goals and intentions, and making sure it relates to every single person in your organization so that you can articulate and re-emphasize, and restating, and reminding everyone, at all times, what they're doing and why they're doing it. If you want a high performance team, you need to master the art of OKRs. Please enjoy my conversation with Alex Frommeyer. Welcome, Alex Frommeyer to Fast Frontiers.

Alex Frommeyer: Hey.

Tim Schigel: This is awesome.

Alex Frommeyer: Tim, thanks for having me on. Great to be here.

Tim Schigel: I'd love to start at the start, the origin story. We were just talking about Kentucky. And so you grew up in Kentucky, went to University of Louisville with a master's in engineering. And that is a great school, by the way. I mean, I went down there and toured. Very early into 3D manufacturing and things like that. Just unbelievable. So yeah, tell me a little bit about how that start in engineering got you into this track of entrepreneurship?

Alex Frommeyer: Yeah. Louisville was great to me and my co-founders, both of my co-founders, Alex Curry and Dan Dykes. We all met at the University of Louisville in their engineering program, which is called the Speed School of Engineering. The Midwest, and I think one of its unfair advantages is the density of and quality of engineering schools in the area. And I didn't really put together how unique that was, because of course, there were also some phenomenal coastal engineering programs, MIT, Stanford, et cetera. But just within a couple 100 mile radius, the schools that I looked at to go to for my engineering education included The University of Cincinnati, great engineering program, Purdue, one of the best, Rose Hulman, one of the best, Louisville, Ohio State. There are some just phenomenal engineering programs to get that grounding in problem solving, learning how to learn, working your way methodically through problems, and using math and science as the foundation. Louisville was really attractive to me because I wanted to be, of course, like as far away as possible from my parents, pretty typical for an 18 year old I think, but in an urban environment. And the University of Louisville's pretty close to downtown Louisville and just in the midst of these phenomenal neighborhoods, and a program that would allow me exposure to the outside world. And this is really what I think accidentally kicked off all of Beam's co-founder's interest in entrepreneurship. It was a co-op program. It's baked into the fabric of the engineering school-

Tim Schigel: Yeah. Just like Cincinnati.

Alex Frommeyer: Cincinnati has the same thing. And that was in a very high quality version of it as well. And so in both schools, you do three semesters of work in the field, and you get paid real money, to work at a real company, doing a real engineering job. And I ended up working in the construction industry for a general contractor. One worked for an oil refinery. And one worked in medical devices. And so even though we had very disparate industries that we were working for, we came back from our first semester with all this shiny, new experience, I think having the exact opposite reaction that our instructors in the program hoped we would have. I think what we were supposed to conclude is, "Oh, this is amazing. This is where I want to work. This is the job I want to get out of school." And instead, we came back and said, "Man, that was either insanely boring, or I now see that I'm probably going to be pretty successful in a traditional career path, because I've met the people that are actually doing the job full time, and have 10 years of experience." And so now I'm wondering if I should actually do this, or if I should do something much different. And much different would be more risk. Yeah. And it's not an insult at all, actually. I mean, take for example one of our co-founders, Dan, he worked at the Marathon Oil Refinery down in Catlettsburg, Kentucky. It is a wonderful community there. The largest employer by a mile in that world, at some of the most beautiful land, anywhere in the world, I think right in the Appalachian foothills along the Ohio river, wonderful people. But if you want to do something highly differentiated and ambitious with your career, the Marathon Oil Refinery is not it. So it's naturally attracted people that when I think Dan walked in the door and he met somebody who's degreed engineer and doing really well financially and has all this experience, they weren't doing work that was particularly creative or interesting to Dan. And so he rejected that culture, which was a great learning for him at 20 years old. And I was going through my own version of it at the time. And that brought us three of us together, conspiring in the back of our classrooms on well, let's try to build our own thing. And so instead of getting you these big boy jobs, when we graduated, is there another path and what might that look like?

Tim Schigel: Wow, that's pretty early. Well, you're hitting on something else that I come across often with either young folks I talked to inaudible to my kids as well or parents who are saying, "Hey, what advice would you give our kid as relates to entrepreneurship in schools?" I said, "Go learn something." Like getting an engineering degree, having a foundation, especially in the technology oriented world we're in today. I think that has so much more value. And you're a perfect example of somebody who you studied the fundamentals, but you went off and launched into an entrepreneurial thing, because you found out from a personality standpoint that fit. And you had this comradery with your co-founders, which I think is just a really great story.

Alex Frommeyer: Yeah. And that's exactly right. I do think that we are doing the entrepreneurship thing better, but still a bit backwards in schools today. So I'm, first of all, overall, still very jealous that over the past 10, 15 years, it feels like many schools have added exposure to entrepreneurship. However, it's still grounded in an academic, very safe environment. That is a little bit the antithesis of course, of real entrepreneurship. And so I still am more in favor of the flavor of entrepreneurship, which is go get the paper route. Go out and actually have real customers, not ones that are like the parents of your classmates in school. Like you need to experience real customer acquisition and customer churn and service and what it's like to actually build in the real world as early as possible. If that's your interest, or it can become something that you know isn't your interest as well. But there is something a little bit still safe and protected about many of these like entrepreneur degrees and entrepreneur classes that exist in schools today.

Tim Schigel: If you want to teach entrepreneurship, you would teach this one thing, at the end of the day, being an entrepreneur of a fast growing company is about people. Leading and managing and developing people and talent is, I would hazard a guess your number one job.

Alex Frommeyer: Far and away and there's no close second.

Tim Schigel: Right.

Alex Frommeyer: There's no close second. And this was a surprise to us. I mean, we're all three degreed engineers. And when we started Beam, I was actually the least important of the three of us from our perspective collectively, because at the time we saw technical risk and technical challenge as the difference between success and failure. And only later was it super obvious. And this was once we started raising money and building teams and having a real business behind the product, then you're like, oh, man, now I get it. It really is all about the people. If you can attract talent, retain talent, develop talent, build teams, articulate goals, get everybody rowing in the same direction. If you can do that and you can do at scale, you can build anything. You can do anything. And if you don't have that talent, you'll struggle to grow anything beyond a core group of people that resonate with a technical challenge or a particular project.

Tim Schigel: Absolutely. Way more than just problem solving. You're coming up with solutions. It's getting people to all buy into a shared vision and objective and build, execute against it. Okay. So, Beam, tell us the story about how that idea came together and what the inspiration was.

Alex Frommeyer: Kicking off of where we had the thread earlier around these co-ops that we had gone on. We had established by let's say our junior year at the latest in school that like our destiny was our own company. The problem was we were working backwards from not working at the oil refinery and the construction company. We weren't working backwards from some amazing light bulb goes off product idea. Many entrepreneurs don't have this. And so I think we're good examples of like the journey was so interesting to us, much more interesting than what we were actually building. And so we ended up launching our own services business. Engineering services company when we were undergrads. And basically what we did is my job was a CEO which was admittedly a self appointed title. My job was to schlep around Louisville, Kentucky, convincing people to pay us by the hour or on a per project basis to do whatever. And I said yes, to everything, anybody that said yes to us, I said, yes, but can you build a website? Absolutely. For sure. Can you do this, some technical writing? Totally. Not a problem. Can you do some CAD modeling? Absolutely. We got ourselves into so much stuff within about, we did this for 18 months, two years as we were finishing up undergrad. We were running a full-time business alongside being full-time students for about two years, employing some of our friends on a part- time basis. And the three of us were all in from hours per week. And it was because we were I think some combination of cheap and charming. And so a lot of people wanted to hire us for 10 bucks an hour or 25 bucks an hour or whatever to do some side R&D work that they couldn't prioritize in their business or some scope that they would have had to spend 3, 4, 10 times as much money to get otherwise. And we ended up accumulating skills at an incredibly rapid pace. This would be in a lot of stuff that comes in really handy later when we decided to build an insurance company around regulatory, intellectual property, technical writing, mechanical design, custom electronics and software. And this was timeframe is like, '09, 2011 through that range. So IoT is very new at the time. And so he ended up carving out a niche in that arena because nobody really knew how to do it. And we were willing to just act like we did and then actually trying to figure it out. And ultimately what happened is this really interesting living room based company that we were building, which was still looking for a product, something we could really sink our teeth into and own ourselves, culminated or overlap perfectly with two other external forces. One was the passage of the affordable care act, which had been like early '09 and then its subsequent unrolling or implementation into the market, kicked off a lot of conversations nationally about health equity, access to health insurance and access to health services, digitization of medical records and just the entire healthcare stack. And we found this really interesting. It was like for the first time we were interested in the market, which was what if healthcare and technology got together? What's going to happen here? And Fitbit was just getting going as well as one of their early IoT examples. And so we saw all these pieces starting to move in a direction that we found really interesting and very worthwhile as well. Healthcare is a very noble pursuit from the perspective of being both clearly valuable and important to society and it's wellness. And then the other force was my sister getting into dental school. So she is a couple of years ahead of me. Graduated, went into dental school, met and married another dentist from her class who comes from a family of dentists. I think all three of his brothers and his dad are all dentists. And one of the other co-founders his mom actually is a dental hygienist and had been her whole group. So all of a sudden we had these dental forces floating around this healthcare tech thing that we were really interested in and we were already running this business, accumulating all these skills. And so it was not obvious at all at the time, but of course now it looks super obvious that we just started just put all that in the cauldron, mix it up a little bit and out pops a digital first dental insurance company. That process really took probably a full two years as it baked and marinaded in our brains and then became the beginning of Beam.

Tim Schigel: Okay. That was one of the questions I want to ask you. Was the insurance component of the business part of the original vision or was it an IoT device?

Alex Frommeyer: Yeah. Both is the answer.

Tim Schigel: Sounds like, Yeah.

Alex Frommeyer: Yeah. So, we were always, and I think this is one of the things that certainly I advise early stage entrepreneurs on today and I think it's one of the things we got really right in the early days, unbeknownst to us, I think we accidentally got it right. We were working backwards from an outcome from a belief about how a market should work and be shaped. And so the true north of the business from day one to still today is modernizing dental care and coverage. That's how we articulated internally and externally at Beam. And at the time we would have said it differently, but it was always about access to dental care. There's 100 million people now, thankfully less, but still tens and tens of millions of people that don't have dental insurance today. And so they don't have affordable access to dental services when they need them or want them. And that was the true north of the business. How we went about solving that problem has changed a lot and transformed and pivoted and all these things. But when we started, it started around the hardware, which was the first connected toothbrush. The idea was what if we could actually get data about daily dental hygiene, routines, and habits, and then bring that data back to your clinician, AKA the dentist. And if you could bring that back to an insurance company, they would give you credit for it. That was the big idea, so there was always connectivity to insurance. We didn't imagine building the insurance company ourselves day one, we thought we could be a vendor to the major insurance companies and bring them this new stream of data that they could use in underwriting. And they could use it to give their customers credit for exercising good habits that would obviously yield better dental health over time.

Tim Schigel: How much time and effort did you spend trying to sell that idea to insurance companies?

Alex Frommeyer: Too much. So that was the thing. Was, again, we thought of ourselves as technologists and had that build it and they will come attitude because we didn't know any better. This was us at the very early stages of learning.

Tim Schigel: I see that so many times when people come up with a solution and a good solution to something, a technical solution to something and they try to sell it to the incumbents. The current stack. They assume they can't build the whole stack. They have to go enable it. And they find that there's really not a whole lot of reason to catalyze the incumbent to do something like that. And so for those who are either have the resources or have the vision and the capabilities going after the whole thing and doing the thing that's really transformational is where the real opportunity is. And the value.

Alex Frommeyer: And that's exactly the view that we came to. And so, as we faced denial after denial in insurance companies, that we were trying to sell a solution to, I think we realized that two things needed to happen. One is we needed to find a venture capital firm to partner with, to give us the capital to be able to look further downfield than three weeks. And where's lunch going to come from? So we had that scarcity mindset because we didn't have access to capital in Kentucky. And we knew had no connections, no family members that could help support us. And then the second thing we realized is we needed to just start thinking way bigger about this thing. And that really formed the idea that instead of being a vendor to the insurance companies, what if we built a dental insurance company from the ground up on a digital first chassis and made improvements to not just underwriting data and this application of IoT inside the dental industry. But what if we could also build a better way for employers to design dental benefits for their employees and a better customer service approach and a better service and experience approach, and a unique uses of data to better understand risk and the actuarial component of the insurance product. And then we subsequently started learning and banging through each of those modules, culminating in Beam in 2016, launching our first policies in the state of California, that for the first time had a user journey or a customer journey that was inherently digitally native, which is something we're now seeing playing out very successfully across pretty much every line of insurance.

Tim Schigel: So yet I'm going to get into that in terms of preventative care and outcomes here in a second, but just to summarize for folks. So you just closed your $80 million series E round with Mercato Partners, right?

Alex Frommeyer: Sure.

Tim Schigel: In March. So total raise to date is-

Alex Frommeyer: 160, I think.

Tim Schigel: 160. Wow.

Alex Frommeyer: Yeah.

Tim Schigel: And your first round was Drive. Drive led that first round, right? Back in 2013.

Alex Frommeyer: Sure.

Tim Schigel: And what impact did that make at the time and was this vision that you're describing, was that part of your pitch at that time?

Alex Frommeyer: Yeah. Actually funny enough, I had, so Drive Capital themselves based in Columbus, we were in Louisville at the time and Drive was pretty much brand new. They were maybe nine months into their first fund. And so we had heard this rumor that some people from Sequoia Capital had moved to Columbus, Ohio, what? And were investing in the Midwest. And so we had heard that this was happening, but we didn't of course know anyone there and didn't really have a reason to meet them. This was where the Kentucky Derby came in and saved my business. So the handful of business leaders in Louisville every year, of course, all the way. I mean, one of the world's great events is the Kentucky Derby. And it's a great excuse to bring people into town that otherwise wanted. And so some business leaders in Kentucky had invited a couple of Drive Capital's partners to the Derby. And we found out about this there a couple of my seed investors and arranged for me to get a invite to like a brunch event before the Derby, where we knew they were going to be there. And so I did an elevator pitch with mimosa in hand at some guy's house before the Kentucky Derby. And everybody's all dressed up and it's not a business atmosphere, it's a very festival. And that pitch, which was literally probably an elevators ride long because that wasn't-

Tim Schigel: That wasn't the main topic of the meeting. Yeah.

Alex Frommeyer: That turned into an invite to come up to Columbus and deliver the full pitch to the full partnership at that Drive. And in that pitch, I had been trying to raise money unsuccessfully throughout the Midwest and where we could get our claws into funds that did exist at the time I had two decks. One was we're going to continue to do IoT stuff in dental, which keep in mind, was not working. So this was not my preferred pitch to give, but it was the one that made sense that you could pull a string through what our company was and what I was suggesting that it would be in the future. The other deck was one that I almost never took out in the meeting because it almost instantly shut down the conversation. It was, we want to build an insurance company. And so every meeting I'd walk into what I had to choose which deck to pull up on the screen. And I almost always took the IoT deck because my experience with pulling out the insurance company deck was, "Sorry, we don't know anything about insurance. And by the way, that's not a venture investible business model, sorry. Hopefully you can find the capital you're seeking elsewhere." This was 2014, IoT at the time was actually pretty hot. It was emerging as a real class of a startup. And so it would at least get traction at a high level, for whatever reason. I chose to pull out the insurance deck when I showed up at that Drive Capital. And I think we made it to the second slide, which was something along the lines of Beam is a digital first dental insurance company. And which of course we weren't, we wanted to be a digital first dental insurance company. Chris Olson, who's sat on Beam's board ever since and ended up leading the investment. He goes, "Whoa, whoa, what'd you just say?" And I was like, shit, this is the moment where I'm going to say, it's an insurance company and he's going to say, oh, this isn't venture backable and we're not interested. And so, I said, "Beam wants to build the first digitally native dental insurance company." And Chris said, "We built a thesis around insurance, and we've been looking for companies that want to build, not just components of an insurance company. That's a software play. We want companies that want to take risks and actually build a full stack insurance business." And so it ended up being then this, I don't think we made it through another slide in the deck. It ended up being this conversation about how we might go about that process, because of course we were transforming the three of us from hardware IoT guys into people that would know things about insurance and of course, early on we didn't. And so we moved the business in the early stages up to Columbus to leverage Drive's resources and a community here in Ohio. That's actually has a ton of phenomenal insurance companies. Some of what you're now partner with, like nationwide that allowed us to access the talent and the know-how to actually build this thing into what it is today.

Tim Schigel: That is a great story. A lot of lessons in there for our entrepreneurs that are listening. It's terrific. Real quick on the subject of preventative care and outcomes in terms of the industry, what kind of uphill battle is that? Are you battling the current infrastructure and how has that as an upstart?

Alex Frommeyer: EMS approach to preventative care has always been a unique commitment that we've made to our members. So what we've basically done is interwoven an insurance program with a wellness program. In health insurance, this has become pretty standard now, any of the major health insurance companies have partnered with in some cases purchased or built their own wellness programs, but they're doing something with wellness and the idea of course, in health insurances, if we can get people eating better, if we can get them moving, if we can get them more actively managing chronic diseases like diabetes, that's going to abstract way, very expensive claims over time. But the complexity of course, in healthcare is extreme, but many people with phenomenal diets still have hereditary issues. And there's so many different ways things can still go wrong even despite best efforts. And we do think that's an important investment for the industry to continue to make. In dental though, it's a much more like correlated one-to-one relationship. If you do proactively and consistently take care of your teeth, that's brushing and flossing, it's the basics. You don't have to be that fancy about it. In fact, you don't need the world's most expensive toothbrush, though that does help you don't need to have incredibly elaborate and expensive tools and processes and coaches and all those things-

Tim Schigel: Brushing coaches?

Alex Frommeyer: Yeah. You don't need to go-

Tim Schigel: -.

Alex Frommeyer: If in general, you brush and floss routinely over a long period of time, you will have solid to good, to great dental health and oral health over your lifetime. And your teeth will prob you'll be able to keep most or all of your natural teeth for all, or most of your lifetime. You won't have huge decay issues, gum disease issues, and all these other things. And so knowing that has actually made us more confident than I think we otherwise would be about continuing to invest in dental wellness because of its simplicity.

Tim Schigel: And you've seen the outcomes, so you can see.

Alex Frommeyer: That's exactly right.

Tim Schigel: Right.

Alex Frommeyer: And so now a few years on, we can demonstrate exactly what the value is in taking care of your teeth every day. We know this from a clinical perspective, brushing your teeth yields fewer cavities than population average. We've actually been able to take that a step further, which is how that affects claims that subsequently are filed in the context of an insurance product, how it affects your health from a preventative checkup at the dentist perspective, and then whether or not you need more intensive work subsequently. And we've been able to tie it out to a gamification model that actually saying brushing your teeth is fun now would be a bridge too far, but we can get a level of engagement and consistency of usage that the average toothbrush company wouldn't only dream about. And the reason why is because the connectivity of the brush allows us to reward members. So when you don't want to brush your teeth it's you know, 2:00 AM and you're pulling yourself into bed when you don't want to brush your teeth and you do anyway, you're making progress toward a reward from Beam. And that is now a hook to actually get that behavior loop sustained from a behavioral perspective.

Tim Schigel: It reminds me of early days of Amazon. They started with books because that was one of the clearest easiest way to sell something online that you didn't have to see in touch beforehand. And you're entering the healthcare world in a very specific use case that you can manage and show outcomes. And then that has an opportunity to progress into many other things.

Alex Frommeyer: That's a great analogy. The simplicity of the model really does resonate. And if you think about Beam actually has multiple customers, we distribute our product through brokers. Companies are the purchaser of dental insurance. They're giving it to their employees as an employee benefit. And then there's the end member, the employee, or a dependent in a family for the actual usage and consumption of the product. The difficulty there is how do you make a product resonate with three totally different audiences? And the way we've done it is everybody knows what a toothbrush is. It takes no explanation and it takes no special training. It takes no elaborate tutorial. So when we explain it to a broker, they can actually take that message and translate it to an employer. And when we explain it to an employer, they understand the value of wellness in this context. And when we go to an end member, they see the opportunity to get a high quality toothbrush and then toothpaste and floss and other dental care goods delivered right to their door, without them having to go cut a check and buy a Sonicare or the other options available to them. So the simplicity really does end up mattering a lot in adoption and then efficacy down the road.

Tim Schigel: That simplicity idea is a great takeaway here for entrepreneurs, because as you're describing the rest of the business building is really, really complicated. And the more simple and compelling you can make it proposition better likelihood you have of executing against it, all those details of the execution, the complexity of it, which relates and takes me to then, OKRs, because OKRs I love, and I work with all our startups on OKRs I've used OKRs for years and it can be something else, but it happens to be a good, simple framework. And the important part of it is, and you've written about this, and we want to dig in a little bit, is trying to get a group of people who coming into a situation with different assumptions, different definitions. How do you expect them to execute in a complex environment? Well, when you have all those differences and they're not on the same page. So share with us when you started using OKRs and what you've learned about the power of them to help basically transform your people in the organization?

Alex Frommeyer: I love it. I think they've been so transformative for us, which I think is both a response to OKRs specifically, but I think multiple frameworks for this style of thinking can work for businesses. The first few years of being, we were small enough and simple enough that we had nothing. If anybody needed anything, just like ask me, or ask a founder. And the accessibility that we had and the culture that we had built around us was highly unified between the three of us. And so that consistency brought a lot of value and clarity to our early team. What was really interesting. And by the way, totally caught us off guard is at about 50 employees-ish. We started seeing weird behaviors and assumptions being made in corners of the business that just totally surprised us. And they were antithetical to like the decision that I would've made. And it doesn't mean my decisions better. It's just I didn't even know it was happening before the decision was made and we shipped the thing, or we decided to do it in such a such a way. And that had never happened before. And so at first, my inclination was the person in question, they must be doing something wrong or they must not get it, or it's probably definitely their fault. I think it was inaudible. And what I learned, which took a long time was that it probably definitely was my fault and what I hadn't done, because I didn't know to do it, was to set the company up to scale and be successful, especially as more and more foreign people to us were coming in as new Beamers was we needed a framework in which to think, which was twofold and articulation of what our culture and values actually were. Everyone else had classically just taking the cues from the founders and how we acted as our values. And we needed to actually articulate them to the business and then emphasize them and then abide by them. And then second is we needed a decision making framework to understand what the priorities of the company are and in what order and where we wanted to allocate resources and those all important questions when you're growing a business, which is what is the definition of good enough? Where do we want to be better than the market? Where are we okay with being at the market? And maybe where are we okay with being behind the market? Where are we willing to set it down?

Tim Schigel: Yeah. Because at this stage, the biggest challenges for a company is learning to say no to things, because you can't do it all. And you got to figure out what's that one thing we can do that nobody else can do. Our super power, if you will. Right. Yeah.

Alex Frommeyer: And so we started phase one of the business we grew to about 50 people with all the cues, culturally being taken with no formality from the founders. Phase two of the business was probably a three-year stretch up in through 18 or 24 months ago, where more people were coming into the business and we were starting to put framework into place and articulating a culture, but still strategy lived in this little pocket of the business. And then this new person is being trained a little bit differently than this new person in this other department. And everything's uneven. Like everything's growing at a different rate and we're trying to figure out just those questions around what is going poorly in the business that we need to fix and what is going poorly in the business that we actually strategically need to not fix? And those were really difficult trade-offs that we were trying to make throughout that period. And then things have really sharpened up over the past two years. And the difference has been the introduction of OKRs into Beam. And so what we did and OKRs a construct from John Doerr at Kleiner Perkins. Who's also an investor, not John Doerr, but Kleiner Perkins in business. And as they came into the business and as we started really seeing the shortcomings of how in effect of our articulation of culture and goal setting was at the time we discovered OKRs and instituted our first rev of objectives. And the value instantly of OKRs is it allows any company, any person, any department to say, what is my objective? That's the O, and then how am I going to get there? Those are the KRs. And the KRS are ideally very measurable and they can be moved around as you learn more about the business and as time unfolds. So you can replace the KRS whenever you want, as long as you're still headed toward the objective. So you want the objectives to be in movable. And the KRs is highly flexible and measurable along the way. And we got it right. I would say like 50% there in our first year setting, solid objectives and messing up a lot of the KRs that weren't as measurable as we wanted. And we did have the telemetry into the business to really be able to tell the difference between good and okay. And then I think our biggest insight over the past year has been the density and velocity of communication. And what I mean by that is I thought once we shipped OKRs and then we put them down on a piece of paper, like my job has done here. We killed it. Great job, guys we have a KRs now. But what I learned is it takes every single day, every time I'm in front of the business, a little pockets of the business, even one- on- one all the way up to an all hands meeting of articulating and reemphasizing and restating and reminding everyone all the time in many different ways for our visual learners, for our touchy-feely learners, for all these different types of personalities in the business, it takes tons of repetition of what our objectives are, what we care about a reaffirmation of our progress toward those goals, the measurable progress that we're making, and then the watch outs along the way that really bring everybody together. And I think this is true probably for the first time in our business's history. As we sit here today, I think I can pick a random Beamer on our team and say, what are our cultural values? And they can spit them back at me. And I can say, what are our three core company objectives this year? And they can articulate them to me. And in what order of priority do we care about these? And they can tell me what order of priority they are. And that's an exercise I literally run. We do an all hands meeting every month. And I pick a random person on the team, which has got a pretty high intensity. And in front of 250 other people that person is going to be asked those questions and can articulate that answer. And that's so much harder than I ever thought it would be to get to that point in the business's ability to understand itself all the way through the organization.

Tim Schigel: That's amazing. That's such an important story for entrepreneurs to understand that, to get 250 people to go the same direction without this, it just seems impossible. On the flip side is my experience similar to yours. Once you have people on the same page, it's almost like there's nothing they can't do. You transparent about the metrics, you know what you're trying to do. You've got the resources. Now you do it, right?

Alex Frommeyer: Exactly.

Tim Schigel: And you can win all day long as long as you're doing this, but it takes that concentrated effort to make sure that you've worked those things out and people know what they're doing and why they're doing it. Why it's important.

Alex Frommeyer: Human's natural inclination is when they have information is to hold onto it and to use it selfishly. And their natural inclination is when bad things happen, hide it and try and fix it in the background before nobody notices. And when good things happen, tell everyone you've ever met in your life. Right?

Tim Schigel: Right.

Alex Frommeyer: And making a culture safe for people to actually bring the bad news into the room first and loudest and ask for help and collaboration on a solution and to raise their hand and admit fault and mistakes were made along the way. And then to teach the business what you learned. So we don't make that mistake again, but of course a new one will come along is that's where we're at as a business right now. I think some folks in tech like Netflix in particular, Spotify and others have built really, really intentional cultures around that exact concept where feedback can be shared in an honest and open manner where mistakes are celebrated, because it means the businesses learning what not to do in the future, or how to do things differently. And that people don't fear retribution or demotion, or getting fired, or getting in trouble at any number of definitions when bad things happen. And I think the founders at Beam and I think founders probably in general, are so used to making mistakes and hearing no, and things going wrong. I thought everybody was comfortable with living in that constantly failing, oh, no, imposter syndrome. And it really is, I've been shocked at how much training and emphasis it's taken for us to take folks that have come from established legacy industry businesses, which of course, most Midwestern startups are hiring from big companies in the area. So I'm sure everyone has this challenge. It's like shocking culturally when we're like, no, no, no, no. For real, you screwed that up, right? And it's like, totally cool, because they're just going to tell us that you did, and then you're going to say-

Tim Schigel: It's like inaudible phase plan. Right.

Alex Frommeyer: Yeah. But it's cool. Nothing happens at the end to you. It's not like a preamble to you being fired. And then ironically, the people that do end up not making it at a company like Beam are the ones that were hiding their mistakes and the ones that were acting like it was someone else's fault or saying that, oh, this wasn't my job. I couldn't be expected to do this. Or the company sent me up to fail or whatever. It's the people that are the most vulnerable, the most honest about are the ones that flourish and that we lean into and help coach through their blind spots, et cetera. And that is such a inverted way of thinking relative to most people's entire careers when they intervene.

Tim Schigel: Yeah, no. I love that you've lived through that and it hits on something that we focused on. And the key reason they actually, why we created Refinery was an observation I had when I was in your shoes, growing a company quickly. And realizing that those employees, if they hadn't been in the growth environment like this, they were probably a bit scared. Because it's a managed a bit of managed chaos. You're going to fail, all these things. It makes people uncomfortable. And until they get comfortable with it and learn how to deal with it, they're just going to be afraid. They're going to pull back. They're not... And so you have to create that environment and atmosphere. And for those of us in the Midwest, employing those folks, we have to recognize that they good likelihood. They did not come from one of those environments before.

Alex Frommeyer: Right. And that's, I think the fundamental way, I tend to try to articulate to friends of mine who are running companies and the bay areas and the New Yorks and Bostons of the world. The Midwest has this great push and pull in talent. The huge advantage is that people are extremely loyal, incredibly high energy, they have that win mentality, which I think comes from just like the industrial grit backgrounds that many of our families, including mine have, agriculture manufacturing. Getting to a good harvest is success. Like nothing else matters. So everybody's very focused on it and like achieving the goal is very focused and that industrial mindset. So you get this credible loyalty and focus on winning from people. And the disadvantage is just the lack of experience going through fast growth in particular, or a culture that rewards vulnerability and where mistakes can be celebrated. And isn't just a exit out this door, please style approach from leadership. And so it's a much more egalitarian approach and it really is shocking to people. But if you can square the circle in the Midwest and you can accent that loyalty and willingness to humbly learn with that culture shock because they might've worked at a big bank or a big healthcare business or something previously then I think the Midwest can be the single best place maybe in the world, certainly in U.S. to build and scale a business so that the intentionality of that culture building can really turn into a massive superpower over time.

Tim Schigel: Love it, love it. Well, this has been incredible. I really, really enjoyed it. Thank you so much for your time. I have no doubt that Beam Dental is going to be massive success. Given the groundwork that you've laid in the lessons that you've learned and that you've shared with everybody here today. So thank you very much.

Alex Frommeyer: Well it's much appreciated. Thanks for having me on, and thanks for what you're doing to help tell these stories and highlight all the great stuff happening in this region of the country. It's a really exciting time to be here and be doing the work that we're doing.

Tim Schigel: Thanks. Thank you for listening to our third season of Fast Frontiers. We appreciate our listeners for your continued support through your emails, reviews, and sharing it with friends and colleagues. It reinforces for us why we put out Fast Frontiers. We continue to have an amazing time connecting with new and old friends to bring you great conversations about accelerating innovation in unexpected places. We are taking a pause over the summer months, and we'll be back with season four in the Fall. Thank you again. We will see you back here soon. The Fast Frontiers podcast is brought to you by Refinery Ventures, our producer is, Abby Fittes, audio engineering by Astronomic Audio, marketing, content, and social media support from Content Callout. And our podcast platform is Casted.

More Episodes

S4 Ep 4. Adam Sharkawy: Material Impact

S4 Ep 3. Elaine Bryant: Dayton Development Coalition & Jobs Ohio

S4 Ep 2. Sarah Anderson: Vault Fund

S4 Ep 1. Jeff Bloomfield: Braintrust

S3 Ep 11. Kimberly Reed: Export-Import Bank of the U.S.

S3 Ep 10. Brian Hopcraft: Lewis & Clark Ventures