Yang Shi, the Co-Founder and CEO of VetSnap, talks about the consolidators’ veterinary technology stack and the importance of staying focused on people first and then processes when it comes to business systems.
We delve into why it is necessary and how to follow your strategy with technology. Finally, we argue the hot topic regarding moving on to one PIMS when a new hospital is acquired.
Welcome to Consolidate That! Ivan, excited to chat with you again today.
Yeah, I’m excited as well, we had a pretty interesting quarterly planning yesterday, always a fun event. I am very excited bringing this guest today so we have Yang Shi. I met Yang when he was at NVA, he was a big shot there, it was a good gig for him, I think. It was very interesting to get his perspective so I was selling Smart Flow and he was not buying Smart Flow but I was trying. He was recommending you to something
I think I’ve had that experience before with a lot of people.
Yeah. Now, Yang is a Co-founder and a CEO of VetSnap, it’s a very interesting solution. It helps the clinic level inventory management process and they’re working on end to end solution to the entire inventory management process and before VetSnap he held the position of Senior Director and Head of Technology at National Veterinary Associates and he graduated from Stanford University in 2006 with a master’s degrees in electrical engineering and then he proceeded to receive an MBA education from Business School of the World.
The topic today, we’re going to talk more about your sort of experience with the technology at the macro level in the consolidation, it’s very interesting. We have a couple of episodes already with a couple of, sort of, vendors on the side of what I call a consolidator’s tech stack and there’s two levels that we usually talk about, there’s the business systems, and then there’s clinical systems.
I really want to talk to you about both and they’re always – they’re interconnected but if we could maybe air in the side of the business systems and what would be really cool to talk about what it was like, whatever you’re okay to disclose, and what would you do different if you were to start like a new consolidation, what kind of consolidation, all of that. With that, welcome and thank you for joining us today.
Hey, thanks. Thanks Ivan, thanks Ryan, really glad to be on.
We took a couple of minutes there before Ivan let you speak so I’m glad he let you catch up with this. We’re happy to have you. I think there’s going to be some cool stuff and you’ve got a really neat background.
When we sort of prepped for this and discussed this, you said that you know, it’s not about – you don’t start with technology, you said that first you want to determine what would I be known for as consolidators. What do you mean by that in the angle of technology?
Yeah, I think about technology and I think this is familiar to some people, this concept, you think about people first, then your processes, right? Like for your corporate processes and as a consolidator at your hospital level. You think about the people, you think about what they’re doing on a day-to-day and only last do you think about technology. You don’t want to make technology be the tail that’s wagging the dog because it’s going to not be well received.
That’s a good point. I think a lot of times it does go the opposite way. People think of – they go out and they shop for technology and then they decide, “Yup, this is the one we want and now let’s convinced all the people that is the right decision.”
How do you look at that as a way to frame what you want to be known for as a consolidator? Obviously people first but more so than that, where else do you see that leading?
Before going into that, it’s like, the reason why it’s important is, for us consolidators, right? You run the spectrum of large and small consolidators and capital that is sometimes scarce, unless you’re very big, like National Veterinary Associates or MARS or someone like that, but normally, capital is scarce.
Then two, is like technology investments, they only make sense if there’s a high degree of utilization and that’s why people in process is so important because if you don’t observe your people and process, right? If it doesn’t fit the culture, if it’s not helping them at the hospital level or at the corporate level do their day-to-day jobs better, it’s not going to be well received and it’s going to cost a lot of money, right? It’s going to cost money to deploy, it’s going to cost money to buy, customize, then it’s going to cause a lot of disruption, so that’s why it’s important.
Going through our question of how to determine what you want to be known for as a consolidator when it comes to technology, I think that’s important, right? Because in a lot of cases, you know very simply, as a consolidator, you know either you’re a geographically concentrated consolidator, you’re either in the southwest, southeast somewhere, or you’re a specialty hospital consolidator, or you’re thinking about doing some kind of a hub and bespoke approach to consolidation, or you also think about it along another axis, you’re more hands-off or you’re more hands-on.
All that, along with the maturity of your organization, the consolidators organization, your back office, that all determines what you want to be known for.
When you’re talking about – you think about the people and I can kind of escalate it. I had this coach that I was working with, he was coaching me. Systems are sort of the basis of the organizations that you pick to kind of perform the duties and then if you think about the systems, you should be thinking about the people that are going to be working in those systems, what structure of the organization is there and then the process and then you get up from that to what’s the strategy. Even one more layer up is, what’s the purpose?
We talk a lot about the purpose and, you know, how the organizations are, have any buy-in for change management and things like that. A lot of the times, unfortunately, consolidators don’t have that purpose well-defined. There is process, here’s the people, here’s the structure, how we going to function, sometimes there’s a bit of a strategy. How did those two things, strategy and maybe purpose if you can touch on that, what does it mean to follow your strategy with technology?
Things change a lot and this is my personal opinion, to answer your question, I think strategy and even your mission, whatever you communicate outwards in the process of courting and acquiring hospitals, that may change over time. I will say like at a very generalized level, don’t stay too married, don’t make too many big bets on your technology.
The only things that you really might think about that will impact your acquisition process from technology standpoint might be things like your practice management system, whether or not— this is a common question that comes up. Do you want to be standardized on one practice management system or are you allowing them to stay on their existing platforms? Related to that then is the data aggregation because as a consolidator, you need to have a really good ability to get to your hospital’s data, whether it’s for closing the books, whether it’s for doing marketing support, anything else.
I think those two things you want to constantly evaluate as you’re growing and maturing as a consolidator but this is just my opinion having gone through the ringer. There’s nothing that really is a big decision that you have to stick with for many years. Back office software, it’s going to change, you’re going to be leveraging QuickBooks when you’re small and then at some point, you might need to leverage a much more sophisticated bookkeeping management software and things need to tie.
I’d say there’s not a lot that you really have to think long term on. I’d say, just be nimble when you’re thinking about technology.
One of the things that we’ve talked about there, and I think that this is what sort of weird preaching in our consolidator operating framework, is that if you cultivate the culture of continuous improvement then the change is easier. If that’s one thing that you’re putting your strategy, not – we don’t change anything, we change anything, just cultivate the culture of continuous improvement then every change that you do is a part of that continuous improvement.
I think that’s important but in the NVA, I think is one of the most unique ones sort of on the market that did carry the message of “We’re not going to— You know, you do you and then we’re not going to change anything.” How was walking that line for you, needing the data from all of these PIMS, I know you guys convert a lot to AVIMark but when you didn’t convert, you had to work with what you have. Then you need to aggregate it at the top of the business systems and at the same time, carry the message of, “We don’t change”.
How was that walking that line from technological perspective, and was there any sort of argument at the executive level saying, “Well, yes, we said that but now we have to change because we’re a big company,” so can you give us a little bit of color what it was like?
Sure, I could give some general thoughts there. I think there’s definitely BD, business development messaging, join us to you, a lot of multi-side operators have – it resonates with a lot multi-site operators. It is true that there’s a lot to be said for standardizing onto one practice management system but when I started at NVA, a lot of the data aggregation was done using proprietary in-house developed technology.
I actually don’t think it’s as important, this is my personal belief again, It’s as important to strongly suggest or opt in, opt out, whether you’re letting someone opt in or saying you can only opt out when certain conditions are met in terms of technology, suggestions, when you acquire a hospital. I don’t think it’s as important anymore in my opinion to force people to move on to one practice management system.
I think there are exceptions like for instance, I can only guess but VCA, as an example, when they standardized all their hospitals on to WolfWare, there are probably reasons for doing that. They also had a formulary in terms of how medicine was practiced.
Again, technology if properly applied, it needs to be applied consistently everywhere then there’s benefits. If it’s not properly applied and it’s not consistent everywhere, then trying to deploy a consistent system, one PIMS, when the hospital level processes are differing, codes, transactions codes are differing how people manage their invoices, how things are edited are different, then you don’t yield as much of the benefits.
I think the exception is, perhaps, if you’re trying to comply to some kind of regulatory standard, then you need to potentially move on to one practice management system and lock things down. Otherwise, there’s a better experience letting hospitals be and figuring out how to get that data smartly and then do what you need to do at a corporate level with it.
As our resident PIMS background guy here, coming form Hippo previously, I’m a big fan of the PIMS but, Ivan, I think has talked me into the value of both unification of PIMS and non-unification of PIMS, depending on the size of it. You were talking about the need to be nimble and it made think of sort of, in the technology scope, Moor’s law of the rapid pace of development of technology and so, do you think that that’s one of those pieces that allowing outside companies, like your company, VetSnap, being able to do the updates and the tweaks and the changes to software and allowing the consolidators to focus on running a large organization, and practicing medicine, and all those things is maybe a better way to go? As apposed to building a technology company that also happens to do practice management in business and all of those things?
I have seen a lot more solutions out there to access and integrate with different PIMS in the market and, you know, for VetSnap as an example, we don’t do our own proprietary integration, we pay for integration. I remember when integration used to cost much more. The cost have come down almost the same as Moor’s law and has become a lot more efficient to pay for integration and it no longer makes sense to have to build your stack up from the ground floor so to speak, starting at the PIMS, just doesn’t make sense anymore, so yeah.
The pricing has become really interesting in that across the scope there. I remember even two years ago when we were looking at data migrations and things like that, you’re talking several thousands of dollars in multiple weeks and there’s groups now that are doing those things and hours and for free, so really, really interesting there.
With the different software packages, so right now there is things like Pentaho or Snowflake or things like that, is that applicable to our domain? Can we use like standard sort of data aggregators that will just, you know, bigger companies, other domains are using? Because I don’t know, there is so much stuff about the Snowflake and becoming such a big company but I don’t know and only one I think consolidator that considers that.
Yeah, first of all, I’ll just disclose, I am not a CIO by training, so I am actually not too familiar other than what I heard in terms of Pentaho and Snowflake, other than Snowflake had a great IPO but you’re absolutely right. You’re talking about using more robust solutions for doing data warehousing, data intake, structuring or restructuring and then creating your data warehouse and creating the right ins and pathways in and pathways out to integrate with additional software. I think that’s the right way to go.
That’s certainly a great opportunity because in the past, veterinary consolidators needed to rely on very esoteric solutions that were built for specifically veterinary needs. I’ll give an example, if you think about your review, online review management solutions and you think about your net promoter score and things like that, there’s a lot of solutions out there that are really good at helping you, but most of them are not interested in integrating directly with a practice management system, especially if there is 10 or 20 and five new ones every year now coming to market, right?
In the past, it has been very hard to do that, but it is not possible to leveraging the right data warehousing solutions, the right step to push data from your PIMS, like your client information, and then push that into your review management software in order to help provide a better experience as an example of marketing and client reputation management.
To shift a little bit here, if we were talking about – you know, we’ve talked about what the software does but how would you go about staying focused for the smaller consolidators that grow in that maybe have limited human and financial capital?
Two different things I would bring up. First is, there are certain decisions you want to make when you’re young as a company that will affect the DNA of your company so that as you grow, those decisions help you scale more efficiently and that would be what we just talked about, your data strategy because having the right data strategy when you’re young will help you hire the right mix of people in order to support your growth.
You know, as an example, if you are very inefficient, if you are very manual when you’re young as a company and you continue to acquire at a 20 percent pace every year, after three or four years, this exponential growth has now caused your original two or three people in finance doing manual data loads from your practice management system on a monthly basis to close the books. Now those people have grown to be a team of 20, right? It is not just 20 people doing the work, now you need four managers and a director. It’s almost like the opposite exponential growth you want.
There are certain decisions you want to make when you’re young in order to help your DNA scale or help your DNA be scalable. That is one way of answering your question, there are certain things you do want to do ahead of time.
In terms of staying nimble, there is very few things. Just don’t let great get in the way of good. A few really smart people told me that and it just means like just pick things that work. This is just my opinion.
A lot of times as a consolidator, you buy a hospital. We’re in a fantastic business, I really think so. Margins are good, customers are loyal, everything is growing year after year, we’re through the recession, through this COVID pandemic, everything has just been really great.
You may want to deploy technology in order to fix something or to feel like you’re fixing something, or to prove to them that you’re adding value, and I would just suggest think twice before you do anything at a corporate level that affects the hospitals day-to-day. You may not need to fix anything, they might be perfectly happy the way they are and then there are certain things where you may want to give them suggestions, recommendations and you know, we can get into the different areas since we’re talking about back office technology right now, right? In getting to the different areas where you may have considerations for business development, considerations for marketing, for financial accounting, different functionalities there, how it supports the hospitals.
I think if we were to take what you said there and make it a quote, you could probably get to the front of every veterinary line if you ever need your pets to be seen by saying just go ahead and leave the veterinarians alone. Let them do what they do best, don’t keep implementing things just for the sake of it. That’s a smart way to look at it in a really unique way. It is not always – I think you make a good point. People want to do something to try and add value but it might just distract.
It’s interesting because I always keep saying that let vets to do their vet work. It’s not like you can’t come in from another industry or from the finance industry and be like, “Hey, we’ll teach these idiots how to do their work.” I mean they might not know the business aspects of it but I think that if you leave the veterinarians to do their work and just help to point them in the direction with your technology or shine the light on some metrics, I think that’s important.
I think that that’s what we were trying to see through here because at the end of it, all the data that you are cleaning, you are trying to get to the point where metrics matter. It’s really I think connecting the strategy, the balance score card level and then trickling it down through the levels of organizations and then everybody has the metric that amplifies what they do if this number is leveraged, but I don’t think it’s that easy in the veterinary domain.
With that, are there key KPIs that, not just the clinic but the entire organization can look at, or is it consolidator to consolidator specific or is there five best KPIs to build your consolidation by Yang Shi? Can we do that?
Maybe, so I’ll try to answer your question. I think, fundamentally, I think things have changed, I think is the first thing I’ll say. There’s all kinds of metrics floating around when I started and more reporting was asked for on a monthly basis and I’d say that is probably the case with any multi-side operator that’s rapidly growing. Each time you hire a new executive and each time you hire operation folks on the ground, they’re going to bring to the company different requests for things that they want to monitor.
I think multi-side operator starting out nowadays have it a lot better, so not to make an excuse for potentially just the degree of over reporting, the complexity and the difficulty and I think what you are saying like reconciling metrics or being able to take one number at a corporate level, break it down to the hospital level and then be able to show to the doctor or to the HM at the hospital and then have them say, “Yeah, I agree with that number” that was difficult, totally.
Multi-side operators today, they really have the ability to plan out their metrics. I don’t know, there is exactly five that I would give. Any five I give I think would just be any five that any of your consolidators would be able to name and it would be very boring.
Yeah. I think it just reminded me, we were just talking about it today, the Cobra effect, I don’t know if the listeners know about this but it’s like, are you pushing the right behavior with the right metrics? I don’t remember where it was but I think this story is about some country where they had problems with snakes and then basically they said, “Okay, why don’t we leverage not the government money but the general population and the resources?”
“We’ll leverage general population to catch those cobras and to decrease the population of cobras” so they said, “We’re going to pay like a dollar per cobra that you bring in and we will pay you.” It’s interesting that the effect was that they started bringing millions of these snakes and they were like, “Oh my god, we didn’t realize how bad the problem is” but the reality was that they were driving a different behavior if people started breeding them, killing them and bringing them for a buck a piece.
That’s a great sort of metric story that I think is taught in business schools quite often, they talk about this cobra effect.
I would need more than a dollar to look at a cobra, breed a cobra, think about it, I’d do anything cobra-related.
I don’t think it was in Texas.
Yeah, we already have enough snakes, maybe a gardener snake I would touch for a dollar or something but that would be too scary for me. Okay, well Yang, I want to make sure you have given us so many great things to think about but two questions that we ask everyone when we wrap up is that we like to hear if there is a book that you’ve been reading, a book you’d recommend, maybe a podcast, TED Talk, something like that. What should people read about to gain some more of your sort of knowledge?
I actually read a lot of – I wouldn’t say trashy but really entertaining novels. I don’t actually have time.
You can recommend one of those too if you want, Harry Potter.
No, no, no.
Game of Thrones.
Don’t call Harry Potter trashy.
Harry Potter is awesome by the way and my wife and I were just restarted the series and movies now that it’s on HBO Max but things that I really enjoyed reading, one is Predictably Irrational and it’s by Dan Ariely I think, I can’t pronounce his last name. I think probably some of you read it, it is just a really cool book. I don’t think the cobra metric is in there but I guess it sounds like the kind of thing that them would be interested in covering.
The other one is, you’re asking me just general books that I enjoy, Sapiens, I forgot the name of the author but it’s also a very good book. It’s great for – I think it’s relevant in domain to what we’re talking about here because it talks about how humankind evolves from tribes and the relationships between people and how I think it was that book that talked about how corporate roles are kind of like religion and how the CEO is kind of like – I don’t know if that’s the book but I think it might be. The CEO is kind of like the high priest but yeah, anyways.
Oh yeah, pope.
That’s what we do with Ivan. Yeah, Ivan is our high priest.
Ivan is the high priest/pope.
Ivan the pope.
Yep, he is trying to convince us all to get his haircut but we haven’t converted that far.
You’ll get there, if you’ll work long enough with me you’ll get there.
Yeah, I think by nature but okay, so then the last question and then we’ll wrap up but who else would you recommend that we have on the show as a guest?
Not to be self-serving, I truly think he’s just a really great person to talk about a variety of subjects and he’s been in this industry for way longer than me, my co-founder and really good friend, Greg Schimpff. Greg was the head of contracts and procurement at NVA when I was the head of technology there and we became really close friends almost immediately when I tried around five years ago. He is just a really knowledgeable person, consolidators will have a lot to gain from hearing his experiences at NVA and what he learned and he’s also just a really nice guy and an entertaining person to talk to.
Awesome and so he is your co-founder and I was going to give you a plug here, VetSnap, so vetsnap.com. That is a great place for people to go to learn more about your inventory management products and the way that they can improve things at the practice level, so really, really great stuff. I know there was a ton of things more that we could learn from you and dive into as well, so we’ll have to have you back.
We’ll have to pick Greg’s brain as well but Yang, I really appreciate you being on the show. It was a pleasure to meet you and again, thank you so much for joining us.
The pleasure is all mine, thank you.
Thank you for your time.