Nicolò Frisiani, Co-Founder & CEO at Lupa, on Building the AI Operating System for Vets, Enterprise Sales, and Scaling at Speed

0:00Hello and welcome to Riding Unicorns. Today's guest is Nicolò Frisiani, founder and CEO of Looper, the world's first enterprise-ready AI operating system for vets. Looper's raised over$25 million from Singular,$2 ,100 ventures, First Minute Capital and others. So Nicolò, welcome to the show. Thank you so much for joining us. I want to start by asking about your product because you just have to go to your website to see that you now offer a whole suite of features to help veterinary practices operate in a better way. But I noticed that you really platform your note taker. So can you tell us a bit about what version one of the product was, how you use that as a wedge and how then you expanded the product offering over time?

0:45Nicolò Frisiani:Yeah. Yeah, happy to. And thanks for having me, first of all. So, funnily enough, actually, the first version of the product has nothing to do with the note-taking. We started this with the consumer angle. So, the mobile app and a client journey with pet owners interacting with veterinary clinics. That's the first little bit of the part that we built. We had identified that there was a terrible problem in the tech setup of veterinary clinics. had identified that part of the problem was the dependency on so many different plugins that bolt on top. And so we really told ourselves we need to build this whole holistic operating system.

1:28Nicolò Frisiani:But where do we start from? And the answer that we gave ourselves was the client interaction. So the online booking and reminder system, the mobile app for the client. So the thing that literally lives on top of the veterinary clinic to talk with the outside world if you want. And so we spent a few months at the very beginning before we had even quit our jobs yet, developing that. And then quite quickly after we went full-time, we started pivoting already from the initial idea, which was just do the app, let's penetrate the market with the app, and then expand sideways into the other things that we can build into actually what we need to do is expand immediately, which was a bit of a big bet.

2:08Nicolò Frisiani:But when we started going to market with just the app, we realized that it's a bit of a unique market. It was also like right after the COVID boom of pet ownership. So it was a crazy number of pets. And the big problem with vets was actually that the calendars were, if anything, too full. The problem that clinics had was vet retention. It wasn't, how do I find new clients? Not at the time, at least. And so when we were showing up with this tool that promises that there is a platform with all sorts of pet owners and you can find them there and they're going to book appointments, you're going to get more volume.

2:42Nicolò Frisiani:No one cared. No one wanted that. It was just some extra plugin that plugs on top. already had 17 plugins and want 18th and so we actually then told ourselves okay well it's going to be a big journey if we start this from scratch with the big system but really what solves the problem here is that unified holistic experience that's what they're struggling with so instead of doing bit by bit and taking five years to get there let's just put our efforts already from the get-go to build that unified experience and that's when we started building the operating system we call it then the note-taking just became a side uh thing after a year and a half or so when we started building the whole holistic system we started building all sorts of functionalities in it we realized actually there's a huge value added the note-taking stuff and unlike most of the other things that have a big advantage by living within one ecosystem that natively talks to each other note-taking is the easiest to take out and sell as a standalone right and so obviously when you're building the whole system, you're selling the entire operating system is actually quite hard to go to market, right?

3:41Nicolò Frisiani:It's really hard to convince a clinic that they need to switch from their entire setup into a whole new thing that you're selling them. And so we started using that note-taking as a little bit of a wedge product, if you want, to get into stability in the relationship to actually show them the kind of tech that we have and the kind of things we can do. And then we sell the whole holistic system, but it became a later wedge, if you want, rather than the the starting point. Nicola, it's a fantastically hacky first set of steps into sort of entrepreneurship. But how did you discover this set of problems?

4:14Like, are you a pet lover? Were you a vet? Was your co-founder a vet? Were you sitting alongside vets? Tell us a bit more about that.

4:21Nicolò Frisiani:So actually, funnily enough, none of the three co-founders are vets. We do have pets at home, though, not even in London. And no, it was a little bit random. So two of us used to work in consulting before this. We spent a few years at Boston Consulting Group. And one of the projects that BCG was doing out of the thousands from the London office was on this topic. So for a PE fund that owns a bunch of pet stuff. And coincidentally, on top of a bunch of pet stuff, they also own a veterinary chain. And so that's where the exposure to the problem on the veterinary side came through. So really, if you want a work project for these large chains, looking at their technology stack and figuring out actually they're really living in the 80s.

5:09But what were those first few steps, like once you'd identified this as a problem, did you go and speak to vets? Did you go and sit next to them for whole days at a time? How did you really establish what to do as your MVP, what to build?

5:26Nicolò Frisiani:it's a combination of uh a different a few different things we spent a bunch of time just researching ourselves uh then we spent a bunch of time talking uh so literally walking into clinics and showing them uh figdom designs of what we had in mind to build claiming we had built it already and seeing if anyone would want that and talking with with uh connections uh via friends via family to the veterinary world. And then actually, I think what was a really useful experience for us to learn really what the nitty-gritty of the system, what you really need to build, was my co-founder. We shipped him for about a month and something with a veterinary clinic back home to be a receptionist to them.

6:08Nicolò Frisiani:So he took, I think, a month of unpaid leave from BCG to go do that. And that was super helpful because actually being a receptionist for a month, you really notice what the problems are and what needs to be built. So combination of a number of things, I think that was probably the most helpful one that guided us all the way to picking the thing we're doing. Yeah, and you mentioned that a lot of veterinary practices are now PE owned because there's a bit of a roll up sort of phase in the industry. So how do you go about acquiring customers and what added complexity does it have having a PE firm kind of calling the shots, but they're not necessarily the end user using the product.

6:48How does that all kind of play out when you're actually trying to sell it?

6:52Nicolò Frisiani:Yeah, so I mean, we are interacting with both types of customers, right? So there are some multi-sites that are owned by VEs and still a number of independents that are not owned by fund. The complexity of a fund simply adds an extra element to the sales motion, which is pitching the enterprise functionalities and the data quality and data availability of the solution to the fund directly. So usually the way we do it is we still, whether it's owned by the fund or not owned by the fund clinic, we still anyways pitch to the vets and to the users and to the receptionists and to the head vets what the actual functionalities of the core systems are, from the iNodeTaker to the invoice writing to all the intricate bits of communication between different functionalities in the operating system.

7:43Nicolò Frisiani:but then when there is a PE owner, usually it's a multi-site, and when there is a multi-site, the big pitch then becomes what can you do as a multi-site because you have Lupa versus other solutions. So all the other solutions that you'll see in the market, mostly because they were built ages ago, right before this consolidation started. So they were all built for individual independent clinics, database configuration, everything lives at the individual clinic level. And so one of the things that we are solving for is that, that we have a little bit flipped architecture if you want, So the database lives at the enterprise level.

8:15Nicolò Frisiani:And so if you have a single site, you're just trickling down the database once. But if you have a thousand sites, you can partition and trickle down the database the way you see fit in the core configuration you see fit, which allows you to have much more control and do much better analytics than you would if you had the old school systems. So that's usually the pitch that we go in for the funds. and then yeah i mean the complication is simply that the approval needs to be coming from both sides in in these kind of clients right so the the clinics need to be excited the management needs to be excited for sure but then the p usually is the one giving green light there is a board meeting which for a decision like this they give green light so you need to also convince the p that this is a smart strategic choice for them and nicolo has the vision changed at all since when you started you know i know that it was quite hacky at the start and you made a few pivots but has the vision remained the same and could you talk us through that vision?

9:11Nicolò Frisiani:Yes I think so actually the long-term vision has remained the same and the vision that we work towards is a bit long and quite ambitious but I think broadly split into three phases in our heads one is the one we're going after right now which is really trying to the technology issue of veterinary clinics and growing enterprises behind them. The day-to-day operations of vets, which can be, like, honestly, half of which can be automated because they still do loads of manual stuff and really tedious things that they shouldn't be doing. They should be focusing on actually doing veterinary work. So cracking that and meaning substituting usually seven, eight, nine different individual SaaS solutions they have in the clinic with much more comprehensive, much more modern AI-driven systems.

10:00Nicolò Frisiani:The vision for that is to build this veterinary, enterprise-ready AI operating system for vets as a global solution across clinics, across the world and across types of clients. That has always been step one, though how to get to the step one has changed a little bit, but that has always been step one and it's still there. What we think also is that there is a very important step two right behind that on how do we help once we are with these clinics, obviously work with so many clinics and we have solved their technology issue day-to-day and run the operations of the clinic, how can we support them in monetizing their clients?

10:36Nicolò Frisiani:Because right now clinics monetize clients in a pretty narrow vertical of just like brick and mortar healthcare services mostly and they sell them some products on the side, but it's been less and less because e-pharmacists have taken a lot of that revenue away. And there's a big mismatch between how important the figure of the vet is in a pet's life versus how much money the vet actually makes for that pet. And so what we think we can do is help with that. So once we have built a technology infrastructure for the veterinary clinic, because the operating system really actually does involve the pet owners quite heavily, right?

11:11Nicolò Frisiani:They do interact with the veterinary clinic via us. What we think is we have built really the infrastructure, the technology infrastructure for the clinic or the groups to actually bring the pet owners into an ecosystem that they can monetize better, whether it's recommending them insurance, selling them food, doing delivery at home of prescriptions, it doesn't really matter what the thing is, right? But there is a lot of opportunities for clinics to use that technology infrastructure that you have given them to monetize the pet owners. So to tap into that pet owner stand a lot more broadly than they are right now.

11:40Nicolò Frisiani:And then I think the third and very important step is around what can you actually do from a, if you want, medical perspective long-term once you have built this technology infrastructure. The whole thing of building the technology infrastructure is not just technology, it's also data infrastructure. You are collecting, cleaning, and keeping the data of all of these clinics. And right now, these clinics are not using their data at all. They barely even use it for doing basic business analytics of what's happening within their business, let alone properly anonymizing it and selling it to pharma to do proper research.

12:21Nicolò Frisiani:or anything like that, right? They don't do that. And I don't think we should be stealing their data and doing it for them. I think we should set up an infrastructure so that they can actually monetize that, right? So we set up the data infrastructure because we have set up the technology infrastructure that involves also a data architecture behind it. And so we set up the data infrastructure for them to actually be able to use and or monetize that data in ways that they're not doing. So driving research in AI in the medical field, obviously in the veterinary vertical where we are in, which actually very interesting within different medical fields is the only vertical in healthcare that doesn't really have any regulations on data.

12:57Nicolò Frisiani:There is not even GDPR on pet data. So you can do loads of stuff in terms of driving that medical research and AI innovation in the healthcare field within our vertical. You need the infrastructure to be able to do that. Right now, the blocker is not that there isn't enough data to build really cool medical AI. It's just that that data is a mess and it's really hard to use and it's really hard to get. After you've built infrastructure, that's when you have the possibility to actually solve that problem as well. So that's a little bit longer term step three of the plan if you want. That's really cool.

13:30And I think that's a really interesting insight into, you know, you've built a product, your growth is insane from what I can see from a few articles. And so people might sort of think, well, why do you need to raise money? And I think you famously, you raised twice last year, in very quick succession, so you kind of stacked funding rounds. So, and then that's a great, what you've just told us is exactly the sort of reason why you probably felt like you wanted to really seize the opportunity and invest a lot into this kind of data infrastructure. Can you tell us a little bit around that mindset of you've just closed a seed round and suddenly you're kind of preempting a series A in very quick succession.

14:11is that to do with just a need for capital or is it capitalizing on momentum was it preempted by a fund that came in and made an offer can you just tell us a little bit about how that all kind of came about and the the motivation behind raising and such quick succession yeah so i think the the

14:31Nicolò Frisiani:probably the best descriptor you have you have put there is capitalizing momentum it's not out of a need we didn't need money we had just raised so i mean yes our burn went up a little bit after we had just raised, but we didn't quite burn for the entire pile of cash within three months. And to be honest, it still is, there is right now a lot of momentum. We're going really fast. Things are happening really quickly. And I think there is a very strong argument for why speed really matters, both in terms of the product development and things we want to deliver. And this long-term plan is a long plan.

15:04Nicolò Frisiani:There's a lot of stuff to do. And so we need to do it quickly, but also because of just like general market trends and competition in the various different countries, whatever country you're looking at that we are expanding into, there is a really solid argument of why you want to go there yesterday and not in three years. And so we don't want to lose momentum. And so the way we have been thinking about it is that's for the short term, the last two years and probably the coming two or three, literally the only thing that we are optimizing for is that momentum and growth. We barely look at the burn rate unit economics and when do I actually need to raise because of how much cash I have in the bank.

15:50Nicolò Frisiani:This doesn't really matter, right? If I have enough growth momentum to justify more money coming in, there is so much stuff happening. I could invest 10 times more money than what we have and it wouldn't really go to waste. There is almost a lot of stuff that we can do. There is no lack of potential clients, no lack of product to build, no lack of international expansion, no lack of people that want to work with us. I think the blocker is just our time and our resources. And so if I can fix the resources, whenever I have the opportunity to fix that, time I can't fix, but resources I can. And so that's the logic behind the fundraise.

16:27Yeah, completely makes sense. and you brought in some great investors as well, which is great. And then I'm just going to pick up one of Hector's questions, but it's been such a fast journey. Obviously, from the outside, it just looks like everything's been plain sailing, minus a couple of early pivots and things. But we know that that's not always the case. So maybe you could share some of the harder moments. What have been the most challenging parts of this journey? I'm sure it's been very exciting. but just to reflect on some of the learning.

17:02Nicolò Frisiani:To me, if you want, I don't know if there is a single individual moment that has been a tremendously challenging one that struck me. The entire thing has been extremely challenging from start to finish. I'd say that the big challenge for me and for my co-founders has been that no one teaches how to do this. I guess it's pretty bloody obvious but it's not obvious enough until you actually try it. And there's a lot of things that come with building a company and doing everything from scratch that make it complicated. We had a few complicated hiring problems where you really need someone, you need to hire them like yesterday and you can't find them.

17:47Nicolò Frisiani:And you spend all your time and all your resources trying to find the right candidate and you delay two months and lag behind on projects because you can't find hire and versus also the opposite problem of you have hire too fast at some point. And then now suddenly you have people that don't fit the organization, that don't make any sense, that don't actually fit with the bill of what they need to do. And so you find yourself in a complicated situation, even on the other end, right? On the other spectrum. I would say people challenges have definitely been one of the things, right? On either side of the spectrum, like I really want someone now and I can't find it versus I have, if anything, hire too fast and now I need to fix it.

18:25Nicolò Frisiani:also has been the most exciting part because I think the team is phenomenal and maybe it's because we put in so much effort and because it was so complicated that the team came out to be phenomenal but it's definitely one of the challenges and then one of the other things I would say is probably that we underestimated is how long some of the sales cycles with the larger clients are. I guess it's the lesson every single startup underestimates when they go after large clients. You'd think it's a very stupid lesson to not have learned before you started but yet still underestimated then things end up going really well anyways and and you find ways to fix it and i think that's the beauty and the fun of this is that there is always a way around that there is always a solution there is always something that you can do some something that you can figure out which i find really exciting but at the first glance whenever you face one of these huge problems you're like what do you do now did you start off with kind of smaller clients that weren't PE owned and then the sales cycle eventually caught up and you managed to land the bigger clients and when was the moment that you got a sort of multi-clinic larger group that you'd been hunting for a while yeah so uh to answer your question yes we we did start with the smaller in reality our if you want our self-defined ICP has always been a multi-site because there is things, and it doesn't have to be a multisite of 900, it can be a multisite of five, but there is a lot of the things that we built within the system that enable multisite functionalities to work in a way that others can't make it work.

19:57Nicolò Frisiani:So we always had this thought of going after multisites, having said that you can't really ring a fund when you are a startup of three people and have barely built a proof of concept. So first, you need to start with the small independence. So we did definitely start with the smaller independence. We spent about a year just with small independents iterating on the product. And the first ones that went live, honestly, God bless them, they went live on a really, really proof of cost piece of tech. And it really helped us actually iterate on that. And it was only after about a year, year and a half, that really we started getting through to multi-sites.

20:39Nicolò Frisiani:we actually start to have the functionalities that we had thought of building since the beginning of that enterprise data sharing analytics at the multi-site level. And then once we started building that, then we started being successful with the multi-sites. But it took about a year and a half because you anyways, on top of the fact, you need to show these guys that you are working with someone smaller before. There's a growth in the logo size of the clients that you go through for a reason, right? but there is also an element of product that made a big difference right there is it what we're trying to build is a very big piece of piece of tech it does a lot of stuff and we are replacing practice management software that are really deep in functionality they might be really old they might look really terrible they might be super clunky but they do a lot of stuff and so to be able to replace them you need to build quite deep functionality so we had to first build all the basics make sure that we have feature parity across the board and everything that we're replacing uh for for the day that's before we could actually start delivering on those fancy functionalities at the multi-site level so there was even just a product element that we had to wait for about yeah a year and a half or so before we really started penetrating that nice and obviously you mentioned that you and your co-founder had been at bcg did you do you guys know each other before BCG?

21:59Yeah.

22:01Nicolò Frisiani:So actually we met via BCG, but we met each other a bit more than a year before we started at one of the events that BCG organized for the people that received an offer. And we really liked each other at the event, so we stayed friends. Actually, we were friends by the time we started. And then, yes, we worked together there. And then with the other co-founder, who is the CTO now, him and I started in university together. We lived together for years. So yeah, we were really good friends. Nice. And so obviously you have that consulting background. And my question is, what do you think we've had enough, we've had founders of all different types come on the show.

22:38And we've had a number who are ex-Bain, ex-BCG, etc. And they do seem to be amazing operators. What do you think the management consultancy experience gives you that has helped you with Looper? And also, if someone's listening who isn't a management consultant, should they consider hiring one as an early employee to give them that kind of operational rigor?

23:03Nicolò Frisiani:Let's get to the second question in a second. So I think it's the thing it taught us, I mean, there's a number of them. I think the most important ones that apply the most when you're doing a startup is a standard to excellence of output that you're producing, which they really ingrain into you because it's, you know, you are working on the output, I guess, delivered to big clients for huge projects. And it's really important the quality of the output you deliver and, you know, the silly things, but not having any typos anywhere and making sure everything is perfectly aligned. And I think we have a bar to output out of that, out of spending years doing that.

23:42Nicolò Frisiani:we have bar to output that's usually a lot higher than people who haven't done this. And I think it teaches you mental rigor in problem solving. And if you want a bit of an element of working hard, it's not to have relatively long hours. So you're quite used to the relatively long hours. I think I'm working about twice as much as a founder, but still, you're used to the relatively long hours. In terms of hiring consultants for the early employees, I mean, we have done that, right? There is a number of consultants in our company, so I would highly recommend. I think consultants have a great toolkit that they learned in the first few years in consulting.

24:24I think one of the things to keep in mind that consultants don't learn in their job is sales.

24:32Nicolò Frisiani:And depending a little bit on what you're recruiting for and depending on who you have in front of you, maybe they are a natural salesman and they don't need to have learned their job at work. but it's not something that you do in consulting until much later. And so if you're recruiting someone who was there for, you know, four or five, six years, they usually haven't really sold anything. They've just worked on the actual output and the actual content. And I think what I found, at least for myself and for Matei, my co-founder, what we felt was one of the biggest gaps we had in our skills between where we were and what we needed to be to be successful founders was sales because in the end you're selling all the time, right?