Mike Cataldo On Raising $80 Million To Take The Drill And Needle Out Of Dental Visits

Mike Cataldo is now on his second healthcare startup. After a successful exit on his first venture, his new company is rolling out a whole line of new innovative products in the dental space. Convergent Dental raised funding from top-tier investors like George Gund Foundation, Arboretum Ventures, and LRV Health.

In this episode, you will learn:

• Applying and screening for the tenants of teamwork
• The line of innovative healthcare tools Convergent is releasing
• How to embrace culture

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About Mike Cataldo:

Mike is CEO of Convergent Dental, an early-stage dental device company backed by Long River Ventures. The company has developed Solea, a device that will eliminate the drill for the majority of dental procedures and along with it, the noise, vibration, and needle that cause patients to dread going to the dentist.

This disruptive innovation was completed within 18 months of the company’s inception and is now rated best-in-class for both hard and soft tissue cutting by leading laser dentists.

Prior to Convergent Dental, Mike was CEO of Cambridge Semantics, a Boston-based start-up that delivered the first development platform for the World Wide Web Consortium’s semantic technology standards.

In 1997 he founded MediVation, which developed the first Electronic Provider-Patient Interface connecting patients with their own doctors via the Internet. MediVation was acquired by McKesson in 2000.

Connect with Mike Cataldo:

• Crunchbase
• LinkedIn
• Facebook

Read the Full Transcription of the Interview:

Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. I’m excited about our guest today. It is very interesting how we’re going to be talking about different events that shape who he is and how he is tackling things. A great entrepreneur who is building, scaling, financing, and you name it. So without further ado, let’s welcome our guest today. Mike Cataldo, welcome to the show.

Mike Cataldo: Thanks, Alejandro. It’s great to be here.

Alejandro: Originally born in Massachusetts in Worcester. How was life growing up there?

Mike Cataldo: Worcester—as we say, “Whas ‘d mask” with the proper accent. It was great. It is an old industrial town. It saw its peak in World War II and was on a steady, slight downhill slide ever since then, which meant it was a big city, a good-sized city with old-time values. I thought it was a great place to grow up at that time.

Alejandro: Very cool. Obviously, for you, the competition started very early on with all of your siblings.

Mike Cataldo: That’s right. I’m one of seven kids. We were all close together. My mother had seven kids in 11 years. My dad was a surgeon, and I would say it’s safe to say that we spent a lot of time competing with each other to get our parents’ limited attention, and that will give you some drive that will show up later on in your life.

Alejandro: Yeah, no kidding. I guess that also polished, too, your way of thinking on trying new things until something sticks, which actually happened when it came to sports. So tell us, what was your lesson there?

Mike Cataldo: That’s true. When it came to sports, like a lot of kids, I tried out for whatever team was in front of me. The difference between a lot of kids and me was I literally got cut from every team I ever tried out for until I was a junior in high school. I mean, I tried out for everything—name the sport. If my school had it, I tried it, and I got cut from it until I was a junior in high school. My high school had a rowing team. I remember not wanting to try out for the rowing team because the rowers had to run to train. I hated running—hated running! It’s probably because I got cut from so many sports that require you to run. Finally, a friend of my brother’s who was on the team convinced me to try out for rowing, and I did. I’ll never forget the day on Lake Quinsigamond in Worcester when the coach pulled up to the rowing show I was in, and I was wearing a football jersey from my high school—of course, I tried out for football and got cut. That’s where the jersey came from. He said to me, “Cataldo, you’re not going to try out for football again.” I looked at him and said, “Why coach? Am I good at this?” He just turned and drove away. It turned out that I was pretty good at rowing. Even though I started late, I got recruited by a bunch of colleges. It helped me get into Columbia University, and I continued rowing there. There are more stories about rowing, but the point to your point is: just keep trying. When you hit a dead-end, turn around and try something else. Hit a dead-end; turn around and try something else. I still do that to this day in my work life and personal life. It’s a way of being, and it served me quite well.

Alejandro: And definitely the way of being an entrepreneur. Those that give up do so because they don’t know how close they are to making it happen. Mike, also, rowing allowed you to travel the world and get a perspective outside of the U.S.

Mike Cataldo: A little bit. That’s right. Somewhere in the middle of my time at Columbia University, my coach walked up to me and said, “Mike, you should try out for this national team.” I thought he was crazy. I’m like, “What are you talking about? Those are real rowers, Coach.” Which also speaks to even when I did succeed, and still to this day, when I do succeed, I never quite believe it. I said, “Okay, I’ll go try out.” A buddy of mine from Columbia and I tried out for this team, and we ended up making the team. I still couldn’t believe that. We went to race in Europe with the Henley Regatta. Anybody that knows anything about rowing, Henley Regatta has three royal sporting events in England: Wimbledon, Ascot, and the Henley Regatta. And we ended up winning the Henley Regatta. I got a gold medal from Princess Grace in Monaco. It’s hanging on the wall in the office that I’m interviewing from right now. I still don’t believe it. We did that and raced elsewhere in Europe. We won some races in Switzerland and Germany and won the Pan Am Games a couple of years later in Venezuela. Again, though, it’s that drive. I think it’s a combination of trying different things. I remember in rowing; specifically, I was very good at listening to the coach. I listened to whatever he said, and, in fact, what I would do is–they had indoor rowing tanks. One year, we trained at Harvard, and they had great indoor tanks. We would get a break in the day between workouts. I would go into the tanks and row by myself, watching the videos that they would show us how to do it right. I would go into the tanks, and I could see myself in the mirror, and I practiced, practiced, practiced, practiced until it looked, in the mirror, like it looked in the video. I think that was instrumental in me making that team, to tell you the truth. There’s a combination of perseverance and just plain doing your homework and understanding how things work. How does that stroke really work? Then learning how to do it. It’s not just perseverance; it’s not just different pathways; it’s also doing the homework, doing the work to understand how to do it right so that you can do it right. Then you’ve got to remember that you really never know. You’ve got to keep learning, and that’s another key piece I think to being a successful entrepreneur.

Alejandro: I love it. In this case, for you, as they say, ideas take time to incubate. They are dormant, and then eventually, we decide that it makes sense or not to do something with them. In many instances, there are triggering events. In your case, your first company was an idea that took some time to really bring it to life. So tell us what that process was like?

Mike Cataldo: My career, up until Convergent Dental, was mostly medical healthcare software. I was working for a company in the late ‘80s that connected doctors to hospitals via dial-up modems. Kids today don’t even know what that connection sounded like. The idea was to create a path of least resistance for doctors to refer their patients to hospitals where they would get better information. I thought to myself, that’s interesting, but what if we could do that between patients and doctors. Of course, in the ‘80s, there was no internet. People barely had computers in their homes. But then, in the late ‘90s, the idea came back to me. “Wait. With the internet now, that connectivity between doctors and patients is possible.” Even then, we were still dealing with how many people had computers at home. It was 1997. But I came up with this idea that just by tapping into information, it was associated with every medical visit and every bill, every visit as a visit type, and every bill has a diagnosis code and procedure code, every patient had a gender and a date of birth. Based on just those things, we figured out how to dynamically create a personalized health homecare page for every individual patient as soon as they logged onto the patient portal, which wasn’t even known as a patient portal back then. We figured out a way to do this, and then patients could request appointments, prescription refills, and all this stuff online. We took an old idea that wasn’t plausible because the connectivity wasn’t in place. It came into my head in 1997. I grabbed the guy who was working for me at the time at another healthcare software company, and I said, “What do you think? Do you think we can make this work? And we did. It took us seven months to launch the first product and get our first customers. From there, we built and patented the first patient portal ever. We ended up selling that company to McKesson Corporation in 2000 as the internet crash was happening. They stuck with us, and we stuck with them through the whole internet crash, and the patient portal was born. Subsequently, there was actually a lawsuit over the patent. Other companies were trying it. I’m actually glad they decided to drop the case because now, of course, patients have access to their doctors everywhere. Yeah, ’97, the first patient portal ever. That was my first startup from scratch.

Alejandro: That’s amazing. Going through that cycle, did you guys raise any money for this company, for this company?

Mike Cataldo: We did. We raised a little angel money to start. Actually, we never officially—I can’t say officially; we took venture money. When we got the offer from McKesson Corporation to buy the company, we were running on fumes at that point, and we took a little investment from a couple of venture firms—great guys. They were in it for a few months. They helped us over a hump, and they got something good out of it. I made sure every employee had substantial stock in the company. I wasn’t skimpy about it. That was a promise I made to myself that I’d never chinch on stock. Everybody helped us build it. Everybody benefited. Yes, we took some venture money. It turned over quickly, and it worked out well for everybody in the team. I was very proud of that.

Alejandro: What was the process like of going through an acquisition. I think that, for you, this was the first time going through a process like that. I’m sure it was not easy, so how was that process?

Mike Cataldo: I don’t know if this will make sense to people listening, but it makes me think of this old cartoon from the ‘70s or ‘80s. Some character, like a cat, gets dragged through a knothole in a piece of wood. It felt like getting dragged through a knothole. That’s what it feels like. You’ve got this gigantic corporation. I had a total of 30 people in my company. It was non-stop due diligence, a million questions, going through spreadsheets, asking questions, looking at financials. It was all a blur, and it was a lot of work. I do remember saying to them, “You’ve got to act like we’re in the same family because this is not good.” It was tough. But they came around and said, “Got it.” We said, “We’ll work on this stuff together. We got through it together. It took us four months of non-stop work to close the deal, but we did it.

Alejandro: First company, first exit, not bad at all, and you were 39, so I’m sure you had some time to take off, to reflect, and to realize that retiring was not in the books. So what happened there?

Mike Cataldo: That’s right. I thought it would be cool to retire, so I did that for a while. It wasn’t that cool, quite frankly. So, I did some consulting. Eventually, I went to a venture fund that I’m an investor in and asked them to keep me in mind if anybody came along with an idea that needed a CEO. Sure enough, around 2010, a guy came to them with an idea for a dental laser that would cut teeth and do fillings with no anesthesia and no drill. He wasn’t fundable. He was a science guy, not a business guy. They said, “Check this out.” So I did. I met with him a lot. I did a lot of due diligence. There’s a lot of science behind it that said this wavelength of light, this laser, could either be used to treat cavities without a drill or actually could prevent cavities by literally altering the molecular structure of enamel, making it harder, or taking the weak link out of the chain and allowing it to absorb more fluoride, make cavities better. And we picked to treat cavities because of what comes to mind when you go to the dentist. People think about the fluoride treatment that they got and how that went. They think about fillings; they think about drills, needles, and pain. Dentists really don’t even hurt people, but they do give them shots, and they do use loud drills. It occurred to us that was the first problem to solve. So we funded the company in 2011, and that was venture and angel money. Eighteen months later, we had our first product, and we had our FDA approval and put the product in the market. It’s pretty amazing.

Alejandro: In this case, how do you guys go about capitalizing the business?

Mike Cataldo: We just completed our Series C round. The first two rounds were primarily individuals. The venture fund that introduced me to the co-founder was the only venture fund until Series C. We just did Series C with our first new venture fund. Other than that, it was very wealthy family offices, which were like venture funds, but not. We raised about $80 million so far. The vast majority has been from individuals.

Alejandro: Very nice. Right now, how many people do you guys have on the team?

Mike Cataldo: Just about 100.

Alejandro: When it comes down to having the right type of individuals to hire and retain, how do you guys go about that?

Mike Cataldo: That is a bigger question than you think, and I’m really glad you asked it. There’s a process. The answer to your question is the first thing we screened for, which is teamwork. That’s a recent development. It’s not skill or tenure; it’s teamwork, which is a more direct way of saying cultural fit. I remember early on, MediVation never got to the side—we got to 30 people, and it started to feel like a real company, but it was gone before we had any kind of a big company. I remember people telling me, “When you get to ten people, it will feel different. When you get to 20, it will feel different.” We got to about 80 people, and it started to feel different. I didn’t actually know how to describe what that felt like. It was just different, and it wasn’t as good. In retrospect, what it felt like—back to rowing. In the early days, it felt like no matter what we did, everybody was rowing together. We had a feel for what each individual was doing, and we had each other’s backs. We worked hard to make sure that everybody was successful. Then when we got to 80 people, it started to change. Half of our employees were in the field. I wondered if that was the problem. It was actually frustrating because things started to slow down. We had some challenges in sales, product, quality, engineering, manufacturing throughput. One day, working with an outside company by the name of Nova Consulting—those guys are great. A guy named Steve Autry, who heads up the firm, is my executive coach. He’s a leadership guru, thought leader. He and I started to tackle this problem together. We started to define what teamwork really is. I developed a document called The Tenets of Teamwork. They are basically a set of rules and instructions on how to work as a team. Everybody says, “I’m a team player.” But we know that not everybody is a team player. It’s one of those things that everybody says they are, but nobody admits they’re not. So how do you line up around that? The Tenets are a fancy way of saying: you prioritize the team over the individual. It doesn’t mean we don’t pursue our individual goals. We do pursue our individual goals. We try to be as great as we can be as individuals. But at the end of the day, that’s to help the overall team win. We had some people in the company who had that backward. It’s hard to imagine. It’s like, how can that be? We’re all in the same company. You want to sell lasers; you want everybody to win. It became very clear to me one day when I was interviewing a guy for a position in the company. He was talking about a company where he used to work. He was a program manager, and he was working with a new head of engineering product development. He told the story of how this guy said, “Yeah, we’re doing great here. We’ve got this new product. We’ve been working on it for x-amount of time. We’re going to roll it out the door on time, on budget. He was very proud of that. On time, on budget. Then he just happened to casually mention, “When it gets to the market, it’s going to fail.” The guy I was interviewing said, “What? It’s going to fail? How do you know?” “Well, we’re connected. We know what the customers say. We’ve heard other people say: this thing is not going to work. When it gets to the market, on time, on budget, is going to be total market failure.” “Well, did you talk to the marketing guys about that?” He said, “No.” “Did you talk to your boss about that?” “No.” “Why didn’t you talk to those people?” “Look. My job is to get the product out the door, on time, on budget. That’s how I get my bonus. If I talk to those guys, it’s going to slow things down. I might not get my bonus. That’s not my problem.” Amazing! So he went and talked to the guy’s boss. The guy’s boss said, “That’s right. We don’t want to talk to marketing about this. It will affect our bonuses. They all think they’re team players, but none of them were team players because real team players would say, “The success of the product in the field is what the whole company benefits from. If I have to risk my individual paycheck to make that happen, in the long term, that’s what I’ll do.” That’s what The Tenets of Teamwork is about. We created that structure. They’re pretty straightforward. They control all you can and should. Everything you can do to be successful—pathways I talked about—control all you can and should. There are certain things you shouldn’t do, like doing other people’s jobs and stuff like that. But explore all pathways. 2) Have your teammates’ backs. At all cost, you have your teammates’ backs, which includes the hardest thing, which is calling them out when you see them doing something wrong or think they’re doing something wrong; just ask them about it. “Hey, teammate. It looks like this to me. Is this what’s going on?” If it is going on, and they aren’t willing to raise their hand and say, “yeah, I’ll fix it,” then you have to escalate. You do run it up the flagpole. “Hey, Boss. This isn’t going to work.” You go with your teammate, and you can argue over it, but you have to do it. That’s how you have your teammate’s back. There are other aspects to having your teammate’s back, but I think you get the point on that one. The next one is: call your own failures. If you make a mistake, call it out before anyone else does. Why all these things? Because they build trust. Ultimately, it’s about trust. If you don’t prioritize the team over yourself, sooner or later, somebody won’t trust you. The team falls apart. The last one is: celebrate your successes. Those are the four tenets. So that’s our framework. And I’ll tell you, back to interviewing and hiring the right people, we have to run people through this when they interview. I walk them through it as the CEO of the company. I say, “Look. If this isn’t who you are; if you aren’t willing to have your teammate’s back; if you aren’t willing to admit your failures; if you aren’t willing to explore multiple pathways, don’t take the job if we offer it to you because you’ll lose it within six months. That’s a guarantee. Don’t take it. I’ve had employees who worked at the company self-select out once we published The Tenets of Teamwork. I’ve had prospective employees say, “No, thank you. I’m not interested.” And do you know what’s interesting, Alejandro is when people selected out, the teams went faster. They went faster without their boss or their teammate when those people weren’t team players. You’re better with less people on the team working together than you are with one person working against. That’s literally the biggest career lesson I’ve ever had. I was almost 60 years old when I figured this out. It was The Tenets of Teamwork. I learned it the hard way. I had a handful of people in the company who were working against the team, and they almost killed us. Now that they’re out, we’re fine. That was a long answer to your question, but it’s a very important one. I’m very proud of it. It’s everything from how we manage now to how we hire and more.

Alejandro: Let’s say we’re thinking about the future here, and imagine you go to sleep tonight, and you wake up in a world where the vision and mission of Convergent Dental is fully realized. What does that world look like?

Mike Cataldo: When, do you mean, we have a Solea in every dentist’s office?

Alejandro: What is that incredible world where everything finally came to fruition and is fully crystallized that you guys had hoped for?

Mike Cataldo: First of all, that would take a long time, Alejandro, because one of the things about lasers and wavelengths of light is once you figure out how to use it for a particular thing, you can refine it for years and years and years around that. For me, at Convergent Dental, we did solve the problem of [24:29] fillings. We’ve also solved the problem of scalpel-less, bloodless, suture-less, painless, and anesthesia-free gum surgeries. We recently came up with a non-surgical cure for snoring. Later this year, we’ll roll out that cavity-prevention treatment I talked about earlier. We will have a product of delivering laser wavelength that prevents teeth from demineralizing. That is what prevents cavities. Prevention of demineralization is the technical term. That will be a thing. It will come out this year. Beyond that, there are applications for treating root canals with lasers, periodontal disease with laser, potentially whitening and desensitizing teeth. So the vision realized is to create the platform and that standard of care and then just keep adding value for our customers and their patients. I think that will take me to the point where I just—if I’m innovating, it won’t be work anymore. I’ll retire.

Alejandro: Now, looking back, it’s been an incredible journey for you guys, and a lot of lessons learned, a lot of reflection. The question here that comes up is, what would you say has been your biggest mistake, and what did you learn out of it?

Mike Cataldo: I alluded to that earlier. Never in my career until a few years ago did I hire anybody that worked against me. That’s where The Tenets of Teamwork was born. I talked about how it started to feel different. I had a few folks that I remember in the interview process now who had a lot of skills, a lot of positives, and a lot of great experiences. But in the interview process, there was something I felt that I could teach them. What it was, I could show them a better way. I could almost show them a better life. “Come here. We’ll show you how to work as a team player.” It wasn’t articulated as such. When they talked about their former environments, I could hear that we could do it better for them. That was a huge mistake. You can’t fix people. It just doesn’t happen. Maybe early in their careers and that sort of thing, but people tend to either be team players or not. My mistake was thinking I could take their great talent and teach them how to leverage it as part of a larger team. It turned out that they just weren’t interested. They were much more interested in managing more of the company. That’s a dead giveaway. Somebody comes in a few months later, and they say, “Look. If you give me this responsibility, I can do more.” Or another dead giveaway is they compare themselves to other people. “So and so is doing such and such, and I’m doing this. Therefore, I should get more,” whether it’s money or responsibility, that’s really bad. It’s really bad because when you hear the way I said that, that’s them talking about them. If people came to me and said, “Look. Hey, teammate. Here’s what I’m observing as I look out there. I see a challenge for the company. I think I could help. Here is how I can help the larger team.” It’s a similar concept, but it’s a whole different perspective. It’s a team perspective. So I hired a few people who were more “I can do better than the other guy? Why am I getting as much as the other guy?” Me, me, me—disastrous. The other thing I’ve learned is you can hear it in an interview. When people talk about their past, and they say, “I did this. I did that,” that’s one type of person. They say, “On my team, we did this, and we accomplished that, and we figured that out.” Now you’re talking to somebody who thinks about the larger theme.” The mistake was not hearing those verbal cues and letting people in the company who really were poisonous to the culture because they hire people like them, and they wreck people who aren’t like them because they break trust at the end of the day, which then makes people who used to trust, trust less. It’s like cancer. It spreads. It’s terrible. We had to let a lot of people go to get to the point where we are today, where it really feels like a team. That was the big mistake, and the benefit of the cure is it just feels different. When I talk about trust, another word that goes with trust is safety. Convergent Dental is a safe environment. It’s safe in a lot of ways, but safe like you can speak up, and you won’t be judged. If I say anything in any meeting that I’m in, at some point, I say, “Remember. This is a no-judgment zone. Nobody is allowed to judge anybody. Get your thoughts on the table. If they are criticisms of other people or new ideas that you have, you cannot be judged because if somebody judges you, they’re going to get called out for their behavior, and their teammates; they’ll fix it, so just trust. It’s a safe environment. Speak up.” You hear so much more, and you get so many good ideas and so many more potential pathways and so much more buy-in to what you’re doing. It makes work fun and productive. It was a horrible mistake, but from which a way of building culture was born that I never understood before.

Alejandro: I love it. We definitely learned quite a bit today during this show episode on team building and also how to make sure you have the right people that are rowing in the same direction. So, Mike, for the people that are listening today and watching, what is the best way for them to reach out and say hi?

Mike Cataldo: You can feel free to send me an email. My email is mc******@co**************.com. You can also Google Convergent Dental. You can Google the product Solea. You’ll find our website, and if you really want to get a hold of me, it’s just not that hard.

Alejandro: Amazing. Hey, Mike, thank you so much for being on the DealMakers show today.

Mike Cataldo: Thank you for having me. It’s really been fun talking about this.

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If you like the show, make sure that you hit that subscribe button. If you can leave a review as well, that would be fantastic. And if you got any value either from this episode or from the show itself, share it with a friend. Perhaps they will also appreciate it. Also, remember, if you need any help, whether it is with your fundraising efforts or with selling your business, you can reach me at al*******@pa**************.com.

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