Greg Schimpff from VetSnap shares his experience and expertise on the management of vendor partnerships and understanding acquired hospitals’ preferences.
We also discuss better communication practices and the exciting innovations that Greg has noticed in the field during the last decade.
Welcome to Consolidate That. Thank you so much for listening today, Ivan. Great to see you again, today. I’m excited about our guest.
I am excited as well. I’m Ivan Zak and we have Greg Schimpff. He’s joining us as the co-founder of Vetsnap, which is the inventory management solution. They recently released their controlled drug solution. If you have any controlled drugs, then you can use their solution to record them and log them. Hopefully, you’re at the same time running a veterinary hospital, not just controlled drugs.
I don’t know, Vetsnap is not like ‘streetsnap’ for anyone, let’s just do another controlled drug selling.
Maybe a new market, maybe it’s new market. I’m sorry. Keep going Ivan.
The experience that Greg has and we want to dip into outside of the inventory management, which is also very interesting to consolidators. His experienced in the long-lasting career inside of NVA and he progressed there from starting right out of college and he changed positions growing up the corporate ladder, if you will from accounts payable, to inventory analyst, and then he was in business development, then financial analyst. Then eventually was the director of procurement.
Greg, thank you for finding the time and thank you for joining us here.
Thank you. Really happy to be here with both of you today.
I was going to Greg at his time at NVA was probably that person that I would send emails to over and over again as selling pens or any other thing. Greg probably saw my name and went, “Oh no! What does he have for me today?”
That definitely happened a lot during my tenure at NVA, while I was the director of procurement, essentially managing all of the vendor relations for National Veterinary Associates. Which I was really excited to do, it’s a really fun job. It was a great organization to be participate. Got a really great opportunity to meet a lot of folks like yourself in the industry that were developing software, developing technology whether that was software or whether that was an actual product that would be used, for a veterinary hospital to use and service to clients and patients. Yes, I was that guy that would get the email, I was the shield at NVA, so to speak of the middleman, the gatekeeper for all of the vendors. It was an exciting time.
I remember, Greg. I don’t know if you recall how we met, because you probably had so many people you met with. But when I joined MWI, they became our investors in Smartflow, so we traveled. For me, it was a huge event because we’re going to NVA head office. Then we arrived – I don’t remember the rep that was working with NVA, really nice guy. I don’t remember his name. But we arrived and I remember that –
That’s him. I know that his nickname was Yummy inside of MWI.
Yeah. They never let that one out.
I don’t even know if he knows. Well, if he’s listening, he’ll know.
He knows now.
He knows now. That’s right.
Exactly. Then, we came in and you guys were discussing for about 30 minutes of an hour that I was excited about how you are hunting boars. That’s –
Yeah. That’s right. I think John was a hunter and I candidly have never hunted boars, but I know a lot of friends that are hunters. It’s like, you have enough information to be dangerous, right?
I know how the gatekeeping worked, because we didn’t talk about SmartFlow, we talked about hunting boars. I guess that was a part of your ninja skills in there.
I joke with folks and I think there are some probably some truth to it, but procurement is like reverse sales. Like you’re still having to connect with folks that are coming to sell you a product. You have to engage with them. You also have to build a relationship. I feel like to be able to really build a true partnership, a good partnership with a vendor, you need to have – it starts foundationally with trust, familiarity and building that relationship so that you can both do business together. Of course, there’s going to be negotiations and folks are – your’e going to want to max. The vendor is going to want to maximize margin and you’re going to want to take margin away. At the end of the day, you’ve got to make sure that you’re building something constructive that both organizations can live with, and really like – and really drive the growth of the organization. That was really kind of how I approach procurement, still how I continue to approach it when I’m consulting with anybody.
That’s awesome. I think that this is an interesting balance. To kind of make this episode something, would the takeaways for consolidators that are listening to this, I mean, there are so many things that people are bombarded when you go do the tradeshow as a consolidator. I mean, we just started talking about Galaxy Vets recently and my email box is just exploding, just with vendors and people, “Oh! We heard you do this. We heard you do that.” When we’ve gone with couple consolidators to the tradeshows and it’s again, there’s many shiny objects, and then it’s so hard to prioritize.
My feeling is that the procurement has to be really tight with the strategy of the organization. Then I think, again, I’m not familiar with the topic. It would be great to hear from you that knowing this strategic filter and strategic plan for the next year quarter or quarter and what the next milestones for the organizations should be driving the procurement strategy and it’s essentially, I think should be well-connected. Was that the story of NVAs that you were guided by?
Yeah. When I started with NVA, we’re 75 hospitals. When I finally got into procurement, I think we’re at around 150. It wasn’t as sophisticated as you’re describing, but that’s exactly how procurement should work. Procurement is performing a process, they’re working with internal stakeholders and external stakeholders, which could be the vendor themselves. You’re trying to coordinate and make a deal, work for essentially both parties. More for your organization than the other organization, but the other organization should feel good about the partnership that’s been created.
For instance, when I work with, let’s say – I know you both have talked to Yang Shi, who’s my friend and co-founder but did a lot of work with the IT department at NVA. The IT department would work internally with the operators and with the senior-level executives to develop a strategy around the technology that they wanted to deploy or what they were looking at. Then they would engage with procurement and procurement would then go out and start to do market research, start to collect data. Do we already have a baseline of spend for these particular technologies? What does that look like and then who are these vendors? And start to really do that research, working in conjunction with the relevant department.
That’s a lot of what we did. A lot of what my team did, a lot of what we did at NVA was really trying to bolster and add to I think the research as well as the – just the overall conversation about the strategy that they were looking at deploying.
That makes sense. Again, it’s so cool that you grew with the company and you got sophisticated along the way. With, there’s couple sort of tactical steps that I wanted to understand. Because when you’re probably two, three men show when you’re just running around with your investment deck and trying to get the first 10 LOIs. It’s one story. Then you get bombarded with things and immediately comes to mind, “Oh! We need the process for this because this is going to go crazy.”
At which point — if you could like walk us through what is that when there is, actually the owner of the process, what is that sort of value stream if you will look like for the procurement and at what level of size of the product or how much it covers you need to step into things like creating RFPs? Or is it more sort of, did you have to step into that right away and say, “Okay. If we’re soliciting some sort of product, we’ll send out the RFP,” or, “This is too little for that.”? What are those steps when you started to create the process behind it?
It definitely evolved over time as you get size and scale. In the very beginning, we weren’t necessarily running RFPs. What was essentially happening was, there were already existing contracts when I came into the role with various vendors. A lot of it was, “Hey! Let’s look at these contracts. Let’s analyze them. Let’s get whatever data is available from our own internal system. Then let’s start to figure out, like can we get a better contract versus last year or versus the current contract that we have today.”
Then over time, what ended up happening was is we started collecting more and more data. We worked internally with our business intelligence team and we’ve actually built out a data mark that we could actually use to compare products over time, and really create like a very comprehensive spends cube for the organization, which was really cool. One of the things that I really believe and maybe this is just the way that I trained myself or the mentors that I have along the way was data was foundational for us.
Then leading into your question about RFPs, once we have the data, we know – okay. What are the different kinds of like spend thresholds? How do you then start to like prioritize the vendors that your ecosystem, your portfolio of hospitals are using? From there, you can determine who doesn’t want an RFP. Because an RFP is a very labor-intensive process. If you’ve ever been a part of one for both side –
Oh, geez! Yeah.
Right? It’s like –
You had one with NVA. Yeah.
Right. You’ve got a list of requirements. You’ve got to fill out a huge questionnaire, you’ve got financial information that you’ve got to provide. Then there’s all of these presentations that go along the way, meeting with different stakeholders within the organization. If you start passing through, going through that process and you’re not cut out of it, I mean, depending on how complex the RFP can be, they can run anywhere from six months. There was an RFP that I had with distributors that lasted almost 18 months. It was a really long process.
I wouldn’t recommend an 18-month process. There were external factors that were going on with both businesses that draw that timeline to be extended. But you know, it’s going to be very labor-intensive process. I think one of the things that you got to know is, are the partners that you’re working with, like if you’re doing a few million dollars’ worth of spend with them, you know that they’re going to be in it, they’re going to be engaged. They’re going to want to participate. Especially if they’re the incumbent.
Yeah. Now, that makes sense. This is interesting. What comes to mind is that, part of what you get is, with acquired hospitals, you get the list of vendors that are there. You need to understand whether you inherit those or whether you negotiate yourself out of it. Lab contracts I think would be like one of the most common ones.
Can you talk to us about that? Because I think that that is a question that interest a lot of people. Like how do you deal with acquired hospital that has Antech versus Idexx contract and if you want to change?
Yeah. It really depends on I think the organization and how they’re set up. With certain lab contracts, we’ve all seen lab contracts. To anybody that’s listening to this podcast and their consolidators, they’ve seen what these contracts look like, they know that there’s buyout amounts. The buyout amounts are calculated off of potential revenue. There’s penalties. There are sorts of things that are baked in there that somebody would need to analyze and understand if they were going to go buy them out. Because Antech or Idexx is not going to just let you – after you acquire a hospital to say, “Okay. They’re acquired. You’re not going to assume this contract and we’re going to just renegotiate something.”
You’ve got to look at, obviously, look at the contract, look at the term, really understand the mechanics of it. Then the other piece is, I think is really important as you’ve got to talk to the hospital. Is the hospital happy with the service? Is the hospital looking to use this vendor long-term? Then you’ve got to look at I think also like what’s the strategy of the overall organization. Is this a consolidator that is very influential, very directive in terms of type of change that they’re enforcing with their hospitals? Is that known before acquisition? Is that known after acquisition? Because sometimes, there can be miscommunication during the sales process because business development love to buy hospitals and that’s how they grow.
Really understanding I think what type of organization or is it like an NVA, which is an inspired – I think it’s still is, it’s an inspired not require organization. You look at that term of contract and then look at, “Okay. Well, do we talk to this hospital, and do we inspire them to change, and do we show them the economics and how much value you can actually capture from switching from Vendor A to Vendor B.”
That was a lot of like what my team worked on that quite a bit, which was, NVA would buy a hospital, they would be with, let’s say Antech because NVA uses Idexx primarily. We would look at – or Phoenix Labs or what have you and we look at the mix of test. We look at the pricing. Then we compare it to our Idexx prices, which is great. We had all of the mappings for like for like codes. It was very easy for us to communicate the value to those practices. I think that’s really important. That was part of the offering that NVA had, which was, we’re a sizable organization. We’ve got some great contracts, and like, you’ve sold to us for a reason. Here’s the value that we can provide post transaction. That was a little bit how we did it with the lab contract. I don’t know if I totally answered your question, but –
You did. But that leads to a very good question about the hospitals. Sometimes with organizations, especially there’s quite a few consolidators out there that their theses are, we’re not going to change anything. Then you’re probably that guy that goes, “Well, actually, you like that antibiotic that you always use, well, Vectrus has a different one and we have a contract with them,” or whoever you use. Then that, to substitute, what was your process of aligning with the vets and sort of the medical team. Because you don’t want to piss off people that were just told that the we don’t change anything. How that process works?
Yeah. That’s a really good question. I think one of the biggest things that we did in vendor relations, purchasing, procurement, whatever your organization calls it is, we had a really tight relationship with business development. Business development, they of course, they want to buy hospitals, but they also – seller satisfaction is very, very important, right? Is a metric that I think all consolidator should be looking at. It’s very important that you’re authentic, honest and upfront transparent in the beginning as to like what are the things that would potentially change. Are we changing our practice management software? Are we telling you which distributors you should be using? Are we switching your lab? All of these — are we installing Vetstoria for appointment?
So all of these different technologies or products, it’s very important for the business development team to know who are your preferred vendors, what is the “directive”, the recommendation that they provide to those hospitals. You’ve got to align with the team, so that they can have that transparent kind of conversation with those sellers, so they know upfront.
Because at the end of the day, you want to make sure, again, you want to make sure that the sellers, the staff, they’re happy. They’re the ones that are actually seeing clients every day. They are the ones that are producing the revenue for those consolidators, so you need to have them. The last thing you want is them to be like totally ticked off and disengaged after you just acquired them or partnered with them.
What was the cadence of the meetings that you guys would have? Was that something common that yourself and the executive team would be meeting or did you at least sit down and say, “Hey!”, review one or two that came through and didn’t go well or went well?
Yeah. There are obviously postmortems. You’re going to have postmortems when things don’t go well and try to understand, okay, what broke? Was there a gap in communication? But coming from business development and knowing, and also, again, being part of the organization for so long, I got to see them build up the business development. I was very friendly with the folks that work there. This was something that they had heard feedback after they were surveying hospitals, they had required that, “Oh! We didn’t know that this was going to change,” or that or “This felt like it was misrepresented,” or what have you. That may not have been intentional. It was totally unintentional that that happened. It’s just a miscommunication that goes on sometimes.
After that, it was like, you’re meeting with the business development team every quarter. You’re talking about any changes in the contracts that you’re developing. Then the other thing is, is, I was meeting with prospects. I joke that like I was in business development for a short spend. If you go on my LinkedIn, it was like six months. Once you’re in business development, you’re never out of business development. It’s like the mafia. They’re always pulling you back in. We met with a lot of prospects and I got the opportunity to talk about preferred vendors and the contracts. As much as you can talk about it because they’re not yet part of the organization. You can give them kind of directionally what they can expect. You can have that transparent. It helps to have that transparent conversation with them as well.
Really, I think it reinforces what the business development team says, and then myself as the head of procurement and purchasing was able to have those conversations with those sellers. I mean, by the end of it, I was probably doing couple of prospect meetings a week, where we’re meeting with sellers and just communicating to them what would change, what wasn’t going to change, what they could expect. I feel like that is really important. It relieves the anxiety for those sellers and their staff. Their staff, it’s very important that you’re relieving that anxiety, so they know what’s going on. It removes that layer of uncertainty.
The other thing that would be interesting to talk about. What have you seen change in the recent sort of years in the veterinary domain? From where you saw it as a, sort of inside of NVA, the hospitals, the veterinaries, there are couple of changes that are interesting and then with your new initiative. What have you learned in your NVA years that helps you to build your new venture?
Yeah. One of the biggest things I feel like that has changed is just the innovation. I mean, I think all of us can agree that you rewind back to 2014, not much innovation, right? And before, not a whole lot of innovation, a lot of legacy PIMs, not a lot of cloud-based software. Integration with legacy PIMs like Avamark or Cornerstone, which are still the majority of the market share. It was fairly difficult and expensive to do. I feel like over time, that became obviously less expensive for startups to do. That just really helped I think drive innovation.
We saw I think, from a technology standpoint, more technology entering into the veterinary space, which I think is a really good thing. Because I think it can ultimately help hospitals really reinforce the relationship with their clients, which is – it’s paramount in this business, the client-veterinarian relationship.
The other thing that we saw do was, I think help start to – help hospitals compete in different channels. We saw Vetsource, Vet First Choice, which then became Covetrus really come into the space and help hospitals really compete with 1-800-PetMeds and then when Chewy started becoming a much bigger player. That hospitals were able to actually compete in that, which is really cool. The other thing that we saw is or that I saw was just a lot more competition and consolidators. We’re seeing – I mean, how many consolidators are there today. It’s got to be like 40.
No, there’s 50 in North America only.
eah, North America only, 50 consolidators. When I first started, I feel like there were like three or four of us. Like three. I was like VCA, it was NVA and it was Banfield. Then we saw VetCor come and launch and joined the market. We saw Pathway. We saw all of these others just starting to come into market. You saw an immergence of GPOs, like VMG and PVC and all of these others.
What I think what we’re seeing is that, hospitals, while they’ve worked in these different silos, there’s a desire to be part of a larger network, right? I think that’s why we’re seeing just the acceleration of consolidation. Also, participation in GPOs because veterinarians, although they are very focused on their individual practices. I think that they’re eager to know and understand what their peers are doing, what others are doing. They’re always I feel like driving towards innovation. I would say, those are the things that I’ve seen or experienced.
Then how does that like I guess translate to like what we’re doing today is, well, what we know is that hospitals are very, very busy, right? We know that staffing is very difficult. We know that the two biggest issues and I feel like in veterinary practices and this is just one man’s opinion, is being able to staff and hire veterinarians, hire technicians. Then the other piece is around inventory and being able to manage it effectively. And on the latter piece, we didn’t feel like there was a really comprehensive easy way for hospitals to be able to manage inventory. That’s why we started VetSnap. Our whole mission is really focusing on hospitals, and the staff and try to make their lives easier, because they’re just busy.
We feel like it’s just going to be busier with more and more clients, more and more adoption. We know that the industry is growing and that there’s just going to be more of a demand of their time, so how do we make those processes easier for them to manage and using technology.
That’s great, Greg. Well, we’re coming up on are available time, but I do want to make sure that people check out your website, vetsnap.com. Also listen to the episode that Ivan and I did with your co-founder, Yang Shi. You can find that the same place where you’re listening to this, Just go back a few weeks and you’ll here with Yang as well.
Two questions we ask everyone and then we’ll let you go and get on with your day. First, what is a book that people should read that has been beneficial or influential to you?
I read a book a couple years ago called A Year to Live by Stephen Levine. He worked with people in hospice for like a year and wrote about folks, essentially on their death bed and ask them questions about, if you could have done something differently, what would you have done? A lot of these folks – some of them, “Oh! I wouldn’t have done anything different.” But others were saying, “I wish I would have planned. I wish I would have gotten some of my affairs in order, more in order. I would have mended relationships. I would have started a business. I would have move to France.” Whatever it happens to be, there’s all of these like different things that people think about.
That was really helpful for me in that and that part of my life was just being able to kind of look at that. I wasn’t not like I had really had a year to live or I was dying, but I think just being comfortable with the fact that, hey, at some point, everything is going to end. That doesn’t need to be like a horrible, morbid thing and there’s ways that you can actually kind of set your life up and do things, whether it’s managing relationship, building relationship, taking the trip that you have been putting off for years and years and doing those things, and trying to be present in the moment. That was just like really, really helpful for me during that time in my life. It’s still is today. I still try to live by those principles of being mindful and being present. Then also, am I like living each day — it’s like super cliché, right? Living each day like it was my last. Everybody hears that. I felt like the book really helped drive that point home. Yeah, it was a really cool book to read.
Awesome. Well then the last one is, if you could recommend someone to join us on the show that our listeners would find valuable, who should join us?
One of my good friends, her name is Angela Morrisette. She works at Scratchpay. I don’t know if you’ve had her on the show or not.
Not familiar with her, yeah.
Yeah. Works with Scratchpay, Director of Partnerships. She also happens to work at NVA in marketing operations, so she has the consolidator experience. But I think what they’re doing over at Scratchpay in terms of alternate financing really just, I feel like it’s just really interesting. I highly recommend her.
Fantastic. We’ll reach out to her and make sure that we can take care of that, because that is very timely. Scratchpay is a great product that I’m very familiar with too.
But before we jump off, I have another question that just came to me. What was on your bucket list that you’ve done after reading the book that you haven’t before? Are there any things that you were like, “This is what I need to do next,” and you actually did it?
Start my own business.
I was going to say. I was like, you read this pretty close to the time VetSnap showed up.
I don’t know, Ivan. We can’t let that book circulate around the office too much.
Well, we are pivoting a little bit. But I think I figured that a long time ago, that you go to chase the dream of whatever it is.
Greg, this was fantastic. Thank you so much for joining. I know how busy it is to start the venture and being in the startup, so I appreciate your time and your wisdom.
All right. Thanks guys.