Transformation & Innovation

Recognizing that capital may be needed to bring some initiatives to life, the AAO 2019 House of Delegates established the Innovation & Transformation Fund with a dual purpose to support the goal of “Drive Transformation and Innovation” and 2) drive non-dues revenue. The long-term vision of increasing non-dues revenue is to diversify revenue sources for AAO to reduce reliance on member dues.

The fund is governed by the AAO Board of Trustees (BOT) who appointed the Business Development Task Force to oversee the initiative. The Task Force is comprised of four Trustees, one New & Younger Member (voting members), AAO CEO and a Venture Capital Consultant (non-voting members) who meet frequently to vet opportunities and report quarterly to the BOT and annually to the House of Delegates. AAO Growth & Transformation staff lead the development of programs with oversight from the Business Development Task Force. This is a long-term initiative with three phases:

• FY19-20 Planning and Preparation
• FY20-21: Implementation
• FY21-22: Revenue Generation

Endorsements

AAO’s Endorsement Program is designed to provide members with peace of mind and exclusive price discounts because companies and services have been thoroughly vetted and AAO member special offers are negotiated.

How endorsements work:

• Product/Service categories that would be meaningful to members and/or orthodontic patients are identified by research.
• Companies submit proposals for evaluation and references are checked.
• Companies are selected based on the quality of product/service, customer service and member discount. Endorsements pay a royalty to the AAO for use of the AAO “Endorsed by” logo.
• Endorsements are vetted and approved by the Business Development Task Force.

Explore current AAO Endorsed & Discount programs 

Have an idea for new endorsements? Please email Mindi Brothers, AAO VP of Growth & Transformation at [email protected].

New Programs For Members

New programs to help advance member success are in development with the first planned to launch to members at Annual Session 2021.

How new programs are developed:

• A Stage-Gate Process is followed to provide discipline and rigor where go/no-go decisions are made by the Business Development Task Force.
• Opportunity areas are identified by research.
• Product/service concepts are developed, evaluated and refined considering member research.
• Business case with financial model is evaluated.
• Programs that require investments of more than $100,000 require Board of Trustee approval.

Progress report: Two new product/service concepts are in development. The process began with 18 ideas that were narrowed by the Business Development Task Force to 7 concepts that were then further developed and then evaluated by members in a research phase. The results of the research identified the two concepts that are now in development.

Have an idea for a new program? Please email Mindi Brothers, AAO VP of Growth & Transformation at [email protected].

Support of Industry Entrepreneurs, Including AAO Members

With innovation in orthodontics coming from both start-ups and established companies, there is not a one-size fits all approach to supporting innovation. One path is supporting Industry Entrepreneurs, including AAO members, with opportunities to build awareness for their initiatives and in some cases provide financial awards. Current opportunities include:

1. Ortho Innovator Award – Now in its third year, the Ortho Innovator Award recognizes outstanding innovation in the field of orthodontics among members and industry partners.  Applications are judged by AAO’s Committee on Technology with the winner announced at Annual Session.

• Ortho Innovator Winners:
  • 2019 – KLOwen Braces
  • 2020 – Easy RX
  • 2021 – Grin for Ortho

2. Ortho Tank Pitch Event – Ortho Innovator applicants who are seeking VC funding can apply to participate in Ortho Tank where up to 7 finalists will be selected to pitch to a panel for possible funding support.  The AAO had planned to run an Ortho Tank event at the in-person annual session scheduled in Atlanta in 2020, but unfortunately, that event was canceled due to COVID-19. AAO 2021 in Boston will be the first Ortho Tank.
3. Innovation & Transformation Fund Awards – For innovative companies seeking funding to fuel their growth and who have the potential to generate a return to the AAO.

For a company to be eligible for consideration it:

• Has the capability to advance member success;
• Is supportive of AAO’s vision that all orthodontic care is provided by qualified specialists who successfully address patient needs;
• Is aligned with AAO values;
• Is an early stage company who is new with a proven concept or in the expansion phase who estimates its first liquidity event in 3-5 years from the time of investment

How opportunities are vetted:

• Each investment opportunity will be vetted by a venture capital consultant, AAO Growth & Transformation staff, consultants with specific expertise as appropriate and the AAO’s Business Development Task Force.
• The scope of the evaluation will include the company’s business model, business plan, financial projections, management/leadership team and risk.
• Go/No-Go decisions are made by the Business Development Task Force

A diverse portfolio of companies is desired as is the diversity of ownership including women and minority-owned businesses.

How do companies begin the process?

• Ortho Innovator award winners and applicants and future Ortho Tank participants.
• Open call for any companies who meet the eligibility guidelines (above). To initiate the process, submit a pitch deck and 5-7 minute video pitch to Mindi Brothers, AAO VP of Growth & Transformation [email protected].

Innovation & Transformation Fund Award Recipients (recipients as of December 31, 2020):

• PhotoDynamic (January 2020) – an oral hygiene start-up that uses botanical science and light to disrupt and destroy biofilm in only 1 minute to prevent white spot lesions.
• KLOwen Braces (June 2020) – Ortho Innovator Winner 2019.
• Azone (December 2020) – parent company of orthazone, an inventory management software company and orthodontic supplies e-commerce site
• Grin (January 2022) – Ortho Innovator Winner 2021
• Several other companies have been vetted and were found in some way not to be in alignment with AAO’s vision, values or strategy.
• The intention is to build a portfolio of up to 10 companies all with 3-5 year exit timeframe.

The goal of supporting innovation in the specialty is to advance the success of AAO members. The goal and long-term vision of generating non-dues revenue is to reduce the reliance on member dues.

AAO is leveraging the success stories from other associations and will continue to evolve and improve. Some examples of non-dues revenue-generating success stories include:

• Cystic Fibrosis invested $120MM with Vertex Pharmaceuticals to bring to market two drugs and sold royalty rights for $3.3B.
• American Health Information Management Association launched a subscription service to support health care coding, partnered with a technology company to launch an app for doctors and launched a number of training and certification programs growing non-dues revenue to 75% of Revenue.
• The American Association of Cardiovascular and Pulmonary Rehabilitation launched a number of tools that kept its members’ patients at the forefront at as a result increased membership by 21% and doubled revenue from education.