Trish
Hello, listeners. It’s Trish Hammond here from the transforming body’s podcast again. And today, I’m at the NSS, and we’ve got the pleasure of actually having David Percival, who is the VP and General Manager of Sciton International. And I’m actually chatting with him today. I did chat with him a few years ago with our first podcast when Sciton first came to Australia. So now, fast forward a few years. I’m gonna chat again about where we’ve been, where we’re going, and what’s been going on. So welcome, David.
David
Thank you, Trish. It’s good to be here. So we’re always good to see you and always great to be here in Australia, such a beautiful place.
Trish
Yeah. Fantastic. And we love seeing you here too as well. It’s nice to be out in the sunshine.
David
Yeah. I wish it was the only thing I wish it was in the summertime because it’s hard looking at this beach and not being able to truly enjoy it.
Trish
So Get a wetsuit. We’re still swimming in this weather.
David
Yeah. I guess you’re right. I guess I could get a wetsuit, but Yeah.
Trish
Awesome. Well, look, thanks so much for joining me today. And I just wanna check because we spoke years ago when Sciton first first started in Australia. And, like, we all know that Sciton is the Bentley of, you know, the Bentley of devices and stuff like that. But I wanna look at where we were in and where we are now because the item is really spreading its kind of like tentacles, I guess, if you like worldwide. And people are starting to really realise the quality of the devices that they are. But how’s the growth been like looking at it from your end? What’s that been like?
David
Oh, it’s well, it’s just been an incredible ride and, you know, I guess, several years ago, when we first came direct here, it was kind of a, you know, we were just testing the waters with going direct and operations around the world. And Australia was the first kind of flagship market that we were gonna do that in. And I was lucky enough to partner up with Phil and Phil Schramm has built an incredible team and he’s just helped bring a lot of credibility and a lot of respect in the industry to our organisation. And it’s just been fun watching him continue to hire and build out and bring new customers on. And, you know, we’re focussed on bringing new products to the market. And so as long as we’re continuing to innovate and bring fresh and new exciting technologies to the table, that we’ll be able to stay relevant in the market and provide the team with things to talk to customers about and continue to bring new members of and new customers under the Sciton family. So very exciting.
Trish
You’re absolutely right, you know. And what you said about what Phil and what is brought to the table.That is his credit. He’s managed to create this kind of family culture that you don’t see everywhere. If you know what I mean? Like, it’s a family culture where everyone’s out to help each other and it’s and I know it’s like that insight on in general as well because I I know that everyone goes on their boot camp training and everyone becomes a part of this family. So tell us a bit more about the Sciton family. And, like, how have you guys managed to create that from the grassroots?
David
Well, that’s a great question. Well, I think, you know, I think, you know, some people kind of maybe get offended when you use the word family because it’s such a, you know, such an important part of life. Right? But I think, you know, sometimes, you know, family can mean a lot of things that can mean, you know, a lot of times you go through life events with people. And I think about this job in this industry and how much and how committed, you know, most people are in this space to this industry. I mean, we’re putting a lot of time and energy into work, and you’re spending a lot of time with people that are your colleagues. And I think when you go through life events, whether that be birth, death, marriage, divorce, all those kinds of things. Like, you’re doing life with these people. And so, we have been very, very you know, it starts at the top down. I mean, the, you know, the founders of this company kind of ran the business like a family. So they’ve, you know, there’s been times where we’ve just done incredible things to help members of our family out that are in tough points in time or they’re just they need that extra little support. And I think when you do that, continually over twenty five years, you can start to really use the word family because we don’t have a lot of turnover in our people. I mean, like any organisation, especially of our size. I mean, of course, people come and go and that we’re not the fit for everybody. But there’s a lot of tenured employees with the company. And so when you have people that have with the company. I mean, Phil was my first hire here and he’s still with me almost eight years later. Right? And so, you know, you start to think about all those life events and those kinds of things that you’re going through. And if you’re taking care of your people and loving them, then, you know, that’s another word that we use a lot and I think it’s kind of maybe faux pas to some companies that we love. I mean, I think that we lead with love as an organisation. We make decisions about people first and foremost. I think a lot of times people say, oh, you’re supposed to put the customer first. And I think we believe that we’re supposed to put our employees first. And if you put your employees first and you love them and you take care of them, then they’re gonna go out and because they love the place that they work at, they love what they do. They’re going to go out and deliver exceptional service to the customer base. And so I think it’s a lot of times it’s people always you hear that saying saying, you know, put the customer first and we’ve kind of flipped that on its head and said, no, we’re gonna put our employees first, make sure that they’re in a, you know, in a place where they love what they’re doing. They have high job satisfaction. And in turn, that’s gonna mean a great customer experience. And that’s kind of the essence of the culture that we built. It is based on family. But there’s a lot that goes into it. And, you know, really we work very, very hard, Trish, on creating culture. It’s something that the leadership team talks about. Every week and some of that’s it’s it’s on our minds, you know, first and foremost of what are we doing to take care of our people, how are we empowering them, how are we building them up, how are we helping them maximise their opportunity and potential in life, not just in this in their career.
Trish
Vanisha said it because I was lucky enough to attend a conference where Aaron from the US came. Yeah.
David
Yeah. And even he said, we are actually in the business of people. We’re not, you know, we’re not in the business of selling later or anything like that. We are in the people business.
Trish
Right.
David
And I love that. And that’s exactly what you’re saying. 100%. Yes. Again, it starts at the top. I mean, our founders, Jim Hobart and Dan Negus, started the company with that philosophy. Aaron and his leadership team, myself included. I mean, we just work hard to kinda continue to foster that. And so, again, it always starts at the top.
Trish
Yeah. Totally. Totally. And so tell me, so in the short time that I’ve been involved with Sciton, which I think it’s been about seven it actually know how to use
David
Yeah. Tell me, believe that. Yeah. I know. It’s been that’s all you understand. Can you believe that?
Trish
I know. But even that time, I’ve just seen things get like, what you think is already great. You’re just seeing things get better and better and better. Hence, you know, even the latest product that, you know, we’ve released, like, their BBL HEROic but what happens behind the scenes with it? What they’re always thinking of is something else like that. Does that even start? Like, Can you I mean, I guess you can go past when, you know, perfection kind of thing. But like, is it ever gonna stop? Or is it always gonna be something better?
David
No. Look, that’s another we could spend a whole podcast talking about that. And I feel like, one of the things that people think, the founders of this company are physicists, first and foremost. They’re scientists. Yeah. Right? So they needed people to come in and help them with the commercial side of the business because they’re engineers. They’re people that are out there developing technology. And they needed a commercial team, and that’s why they built a team of people that were experts at building out commercial operations to help them kind of take their ideas and bring them to market. And so at the foundation of the cornerstone of Sciton is we’re an R and D company. And I think, you know, this is a complex question because there’s a lot of layers to it, but I would tell you that I’ve seen, I mean, I’ve been in the business now for almost seventeen years. And I’ve seen a lot of companies be acquired and they end up selling out or they end up going public or doing something that changes the fabric of the business. And a lot of times when that happens, when those companies get acquired or when there’s acquisition at play, they come in and the first thing that gets cut is, they end up cutting R and D spend. Yeah. And that’s something that we have just you know, it’s active at the foundation of who we are. So it’s something that we’re never gonna take our eye off of because we’re gonna continue to innovate and build, you know, the best in class lasers and best in class technology. And that is hard to do. It’s hard to find engineers that are outside the box thinkers that can come up with their inventors. Really, in the day, like, that’s what they’re doing. And I think one advantage that we do have is that we’re based in Silicon Valley. And we’re based in an area in the U. S. Where there is a lot of innovation, both in technology just happening organically. But we’re in a very tough position in terms of recruiting and trying to get engineers to come into this industry because I do feel like it’s such a specialised industry that finding good optical engineers or people that are maybe experts in ultrasound or experts in radio frequency or experts in magnets. I mean, guys, I mean, this heroic product that we came out with. I mean, we found a guy that was working in a lab, in a military lab that was an expert on the use of magnets. And that turned into this technology. Right? So it’s like, you know, he got his PhD in this study of magnetism. Like, I didn’t even know that was a thing, but apparently, you can go get you know, you can become a specialist in that field. Yeah. And that’s and that’s how, you know, at the root Yeah. Of how that technology is working with BBL and heroic, is it communicates its magnets, communicating with each other. Right. And there, you know, there’s a lot of complex mathematical algorithms that are going on that are talking to each other and measuring that output. And that’s what is giving us that intelligent control. Yeah. But it took somebody that came from outside the industry, and had no aesthetic industry of any kind. They were working in, you know, in a field in, you know, defence for the U. S. Government. And that turned into innovation in the aesthetic space. And so finding those types of people is very, very difficult. But again, if that’s the foundation of your business and you have a science background, and that’s what we work really hard to try to find people.
Trish
And you have a funny you should say that because even in the people that are out there on the road, like, they all seem to know so much on the science side because and I guess that comes from because Sciton makes all of their devices in their own factory that night. Tell us a bit about the factory.
David
Yeah. We’re, again, we’re based in Palo Alto California. So, look, that’s probably it’s something that we always struggle with because we’re building the next sort of Google and Facebook and we have a manufacturing facility in the heart of Palo Alto California, which is I think we’re probably in the only industrial strip centre in the industrial area of the whole city. And so that provides challenges because that’s obviously the workforce getting people to kind of do manufacturing jobs in Silicon Valley is difficult. But it also speaks to our price point. I mean, we’re empowering and bringing on really high quality talent in that area and that’s reflective in the quality of the craftsmanship of the device. I mean, everything we do is really handmade and hand built. So of course, we outsource components from all over the world. That’s, you know, normally, you do it. We’re not saying we’re building our own silicon. But yeah, of course, we’re buying chips and those kinds of things, some different suppliers from around the world. But I think at the cornerstone of how we build is that we don’t start out and think, okay, we need to be at this price point in this area to go into this sales point. We kinda start with does the technology work? Mhmm. And then what kind of components do we need to put into it to make the most incredible device that’s gonna deliver the best results. And then we figure out, okay, well, this is how much we’re gonna have to sell it for, to make it work financially for the business. And we start there like the handpiece that we’re using. We’re actually competing with NASA on some of the ceramics that we’re using. In the BBL HEROic handpiece. I mean, the coating on it is the same stuff where we’re literally competing with NASA for ceramics. To help build their products. So when you think about that, just, you know, that is not we could buy ceramic from other places, I’m sure, but it wouldn’t be of the highest quality. And we could use brass plated mirrors versus gold, but there’s reasons from a scientific standpoint that the guys that are smarter than me could give you all the reasons why we’re using gold plated mirrors or highest quality sapphire crystals versus quartz, I mean. And so all that stuff, you know, speaks to the decision making process. Our decision tree is, what’s the best? What’s gonna have the most longevity? What’s gonna be robust and stay in you know, be able to to be in our machine that’s gonna last for decades, because a lot of our technology is now ten, fifteen, twenty years old, and those things are still kicking. Right?
Trish
So I’ve spoken to people that have actually had a machine, the the very first machine that they bought, you know, in the nineties or the nineties or and they still or even to I can’t remember that someone that did the podcast, but and her first machine, I think she bought about twenty years. She’s still using it.
David
Right.
Trish
Same machine.
David
Oh, we hear that all the time. I mean, I’ve been with the company again for seventeen years. And there’s machines that I know that I sold in two thousand and five, two thousand and six that are still in use today. Right? So, yeah, it’s wild to think that. But, I mean, again, I think it speaks to companies that are based on science and based on, you know, doing what’s right for the customer. It’s kind of the main street versus Wall Street mentality. You know, if if you’re in working with a company that’s got a lot of outside debt or you’ve got people that you’re answering to on Wall Street that are basically, you know, maybe pushing you to more towards margin improvement or making sure that you’re hitting certain growth metrics and that means that you have to cut costs certain areas or move your manufacturing from Palo Alto California to Mexico or to somewhere else in Asia where you could get much lower labour costs. But at the end of the day, maybe that would impact the quality of the output of the device. I mean, you have to really take a hard look at it. And I think for us. I mean, when you have machines that don’t fail for, you know, ten, fifteen, twenty years in a practice, I mean, that’s not great for selling a bunch of new equipment. Right? Because, you know, obviously, we want second and third machines, but what we found is that about sixty percent of our customers end up coming back to us and buying something else. So we know when we bring them into the family, like they come in, they’re going to have great results, their patients are going to be happy. And if we continue to innovate and bring on new technology, we’re gonna have a lot of customers that are gonna come back to us because we’ve taken care of them, and they’ve actually had success with the technology and their practice. And Trish you know as well as I do, like, you know, walking around here. There’s there’s companies out there even today at this meeting where, you know, the machine might work great some of the time, but not consistently every time. And there’s some stuff in there that there’s a lot of snake oil in this business. And I think that can be challenging because there’s a lot of good sales tactics and a lot of good sales stories behind a lot of the stuff that’s out there. But, you know, being able to weave through that and find technology that’s robust and that’s just gonna be a workhorse in your practice is hard. But for those that have been lucky enough to partner with us, they end up, you know, loving the technology, loving the results, and so they’re gonna come back and continue to buy from us.
Trish
For sure. And look, from my side, I’ve actually seen time time again where someone, you know, may not have any device in their clinic. And decide to buy a device and choose that device to be a Sciton device. And then that just propels a small, you know, clinic that’s just one person and, like, one or two years later, and you probably knew how I’m doing that particular. But they’ve got, like, you know, four devices, you know, four clinics, you know, four different clinics around the country, four different devices of the same sorry, four devices in each clinic. They’re all Sciton and they’ve actually based their whole business on the Sciton technology and gone from zero to HERO, not I mean, HEROic, but HERO. That’s great. No pun intended, but that was great. I know. And it’s quite mind blowing to think that that’s possible if you’ve got a good quality product producing a good quality result. And that’s going to happen. It’s just like it’s a given.
David
Right. Yeah. I think it’s we’ve been – we’ve always had a strong presence in dermatology and plastic surgery. It’s been kind of the cornerstone of who we’ve continued to sell to, but the bigger part of the market now is in this emerging market. It’s a lot of dermal therapists. It’s nurses and investors that want to get into the aesthetics space and come into this. Yeah. I just I don’t know if you saw this, but just this week, there’s Mandela. It was acquired by a company. TaylorMade golf, the golf club company. Uh-huh. The private equity group. Yes, there’s something that’s going on there. There’s a deal in the works where Taylor Made, the people that own the brand TaylorMade Golf are interested in the aesthetics space. So they’re coming into this and acquiring the Mandela business. But I just think that this industry isn’t going anywhere. And I think there’s a lot of runway for us to have a lot of years of growth and a lot of new technologies that will come. But Yeah. No. It’s just super exciting. And those stories where you hear people like coming into their first laser purchase. I mean, for us, A lot of times, because we were so strong in dermis and plastics, we weren’t our price point wasn’t conducive to being the first laser buyer. It was usually somebody that started their practice on their second or third device, and they had made some mistakes along the way with things that they were purchasing. And they had heard about Sciton, but it was kinda something that they were aspiring to. The ones that, you know, get lucky enough to kind of just take that risk in the beginning, I kind of I was telling a lady last night because she was telling me her story, and you know, she’s gonna she was going out on her own.
Trish
I know. I love that story.
David
I mean, like, you know, I’m like, you know, how lucky you are, you know, because you just saved yourself what I know you’re spending a lot of money right now, and that’s scary for everybody. But you just save yourself hundreds of thousands of dollars and, you know, decisions that you’re gonna, you know, ultimately, you didn’t have to, like, go through those same kind of roadblocks and hurdles that some of your competitors probably did kind of to find Sciton.
Trish
So A lot of people do get left with a bad taste in their mouth.
David
They do.
Trish
Well, you know, it and so they’re all, you know, like, devices. I don’t know. Because I don’t know, because you hear that all the time. Because it’s just not the right one.
David
Right. And I think those stories are always great because you love hearing, you know, people that and it’s not always just with Sciton it can be anything.
Trish
I love hearing stories of people that have success in business and go out and take those kinds of risks and then are rewarded with tremendous upside. And I think we’re just – we’re happy for those kinds of success stories.
David
Yes, totally. And one thing I meant to that said before, and the good thing about like, the fact that Sciton makes their own devices, it’s they never because a lot of companies out there are just they see something that works well, I think I’ll copy that, and it gets copied somewhere and it goes like that. So that’s not what we’re about.
Trish
Yeah.
David
It’s about innovating. Right. Right. I think I don’t know if we talked about this the last time we were together or not, but it’s something I’ve talked about with others. I think you know, creating the future is very difficult. Right? And so an easy pathway for that is there’s a lot of innovation coming out of South Korea. There’s a lot of innovation coming out of Europe. And so if you’re a med device company based in, you know, somewhere in the world and you need new technology. If you can’t go find engineering and do it in house. Well, an easy pathway is that you do like a licensing agreement or a royalty agreement with the company and let them be your outsourced R and D. But again, you’re not – you weren’t necessarily involved in the creation of the product from the very get go. You’re looking for ways to impress investors or keep that growth story going. And if you don’t have your own internal R and D, well, the best way to do that is to go out and buy technology or lease technology from somebody else. And I’ve seen a lot of companies in our space take that approach. And sometimes it can be a big win. I mean, there’s been plenty of stories where it’s been a success, but there’s also been times where it, you know, it forces you to kind of lose your fundamentals or lose some of the things that it actually got you to where you were to be able to to have a successful business in this space and you kind of lose your way to some extent and you end up having not become your new R and D pipeline. And I just – I don’t think we’ve never done that. And I’m not saying that we’re right or we’re the best because we haven’t. I think there’s different ways to do it, but we’ve just had the ability to create our own technologies internally. And I think, again, with that science based approach and that, you know, that r and d based focus, our customers can sense that. They know that they know that what they’re getting is something that we created and that we put a lot of energy and thought into.
Trish
We’ve got your ethos and you’ve got your mission and you guys don’t divert from that ever.
David
We don’t. And it’s and a lot of that is because, you know, we’re still a private company and we don’t answer to anybody, but ourselves. I mean, at the end of the day, like, there’s nobody pressuring us to hit some growth goal. We put that pressure on ourselves, Trish, because we know that if we’re not growing, then how can we empower our people to grow. Right? So you want to create opportunities for your sales team, you want to create opportunities and operations and finance and all the different parts of the business that push it forward, you want to create opportunity for all those people. And that only happens, you know, you only get to build out teams and you get to open new markets when there’s growth. Right? So it’s an important fundamental of how we talk internally because it’s not about you know, somebody, you know, getting rich and and, you know, buying a plane and flying off into the sunset or buying a yacht and sailing off into the sunset. This is about creating a sustainable business long term where we can build people, grow people, have them reach their goals and ultimately why they will end up staying with us for an entire career. I mean, that’s our, you know, we bring somebody on. We hope that this is the last place they work and that there’ll be enough opportunity for them in their career both financially and personally and their personal growth and development that they’ll reach their goals. And again, if they’re reaching their goals, we’re gonna be reaching ours.
Trish
Well, funny you should say that because as a patient, it’s the same for us. Because once you’ve had a really good treatment, that’s what you want. Joe, that’s how I feel about myself. Like, I’m addicted to BBL HALO. I’m a junkie. I’m a BBL HALO junkie. And once you’ve had that you just look, that’s what you’re gonna have. And that so it’s the same for the patients.
David
I’ve actually never thought of it that way, but that is yeah. No. It is true. It is twenty percent. It’s so true.
Trish
So I wanna ask you, so just because I know, you know, you’re really busy, but I wanna ask this question. So I’m really excited because I’ve just seen how much Sciton has grown. Not in Australia, but it’s actually grown around the world as well. So just give us a quick rundown. Like, because we’ve got Sciton Europe, you’ve got Ireland, you’ve got England, you’ve got France, South Korea, and South Korea.
David
South Korea. Yep. That was a ship. Yeah.
Trish
Japan?
David
Japan. Canada, we’ve been in Canada for a long time. Yeah. And then we’re doing some expansion in Latin America as well. So we’re looking into some opportunities down there. I’ve got a direct employee working out there now and she’s doing market research and development and helping us scope out the best markets. Yeah. So it’s a big part of me. Look, internationally, we solely make up about You’re busy.
Trish
You’re busy.
David
Yeah. We’re busy. Not me. I haven’t. I’m busy, but I have a team of people that are really, like, that are the ones out there doing all the heavy lifting. Yeah. But, you know, it’s still about 30% of 25% to 30% depending on, you know, the fiscal year. Of the business. And we think that there is a huge opportunity for international business to be closer to 40% or 50%. And so we’re always looking for markets that we can go in too that have the right kind of set up for us and we’re the right type of partnership.
Trish
And, yeah, it’s exciting because, you know, it’s a little tough on the travel sometimes, but you know, we’re learning a ton about all the different nuances of international business. Everyone is completely different. And the regulatory landscape and You have to have one hat for Europe. One hack for Australia. What like, because everyone’s different. Everyone engages differently. So it’s Yeah. We’re learning all the ways people relate in those different countries. Japan, Korea, like, that’s all different.
David
Yeah. Look, I feel like, you know, I’ve always kind of felt like I wanted to be a lifelong learner. And every every time we go into a new market, it’s such you know, it’s yeah. For me, that’s what keeps me passionate about it is because I love just the opportunity to learn about new cultures and learn about the way things are done and look. If we can hire great people, that’s the cornerstone. Again, if it goes back to the people and if I can find the right leader, I don’t really necessarily get caught up on what’s how big is the GDP in the market. I look for just the right type of person that I can kind of get behind?
Trish
Because you can teach people things, but you can’t, you know, teach people the people skills or whatever it is. I know what you mean.
David
Yeah. If I can find somebody that is just very passionate, they have the type of work ethic that, you know, is a fundamental fit for our culture and for our team. Again, I don’t really care how big the market is. I could name some markets around the world where we’ve sold a lot of equipment. And these are economies that you wouldn’t think would support the type of success that we’ve had. And a hundred percent comes back down to the person that’s in that market, the type of work ethic that they’re bringing to the table, the way that they approach their business. And those are the types of people we go after and we find a market like that. Again, that’s when we made the investment and that was how we made the investment in Australia. Same thing in South Korea, Japan. All the markets that you named, Trish, were all the foundation of it is there’s a really strong leader that’s in charge of that business. And we have been – we’re fortunate enough to empower those people to kind of you know, teach us
Trish
Yeah.
David
And show us the way, and then give them just the resources and the backing and the support to go in and just let them go out and succeed. Yeah.
Trish
Awesome. Look, I’m so excited to actually be my little part of it as well. I really love it. Oh, love it. I’m totally new to say thank you for talking with me today. And just before we go, so for anyone out there who actually wants to just out a little bit more about sight on to a little bit more background. You can actually even go to Scitoninternational.com, and you can check out all of the websites around the world and what we do. So, yeah, thank you so much for joining us today, Percy.
David
Thanks, Trish. That’s been great.
