Frédéric: AI is overhyped in Silicon Valley but underhyped in Iowa. I would actually argue software just kind of took things that were stored in paper format and then they made them available first on prem via green screen computers but people still had to do the work.

Alex: I never forgot what I saw the number one great adopter on Yelp spending 200 hours a month on paperwork.

Frédéric: The models are trained on so much data and they're so large and yet they actually don't really know how to do any of this work. Initially we were actually the humans in the loop. We kind of automated away our own problems.

Alex: The battle between every startup and incumbent comes down to whether the startup gets the distribution before the incumbent gets the innovation.

Steijn: We come by and we say, "Hey, we actually have built this agent that can provide you already with tens of hours of labor. They then adopt it like very quick. They see us as someone they break in to like actually run the practice [music] for them."

Olivia: There was a great quote from Dr. Quan about you guys, which is that Lassie isn't replacing humans, but like freeing them from wearing so many hats.

Alex: It's not like, oh, AI is going to take the jobs. In many cases, you can't find somebody.

Olivia: How are you prioritizing what you build, who you sell to? Is there a world where Lassie for dentists makes Lassie for physical therapists better?

Steijn: The end goal here is that

Olivia: so welcome and thank you for joining us.

Steijn: Thank you for inviting us. Excited to be here.

Olivia: Maybe we'll start with the basics. So, Stein, this whole company started with a conversation with you and your own dentist, Dr. Quan. What did he tell you that made you decide to quit your tech job at Robin Hood and go process payments for him by hand?

Steijn: Yeah, I did not know that my American dream would look like this. It was interesting like I was at Robin Hood at the time. And I came to this country to start a company. So after 6 years I moved from Amsterdam to Silicon Valley like I was looking for a hard problem to solve.

Olivia: though I have to ask when he gave you this offer were you like was it like that kind of reclined? Could could he actually process your answer as yes versus no if your mouth was open and drills were in your mouth or how did that go down?

Steijn: Well up until now I don't have cavities so you know there was no drilling happening yet. So you know knock on wood

Olivia: examination.

Steijn: Exactly. Exactly. Yeah. No like he took me aside like after that.

Olivia: Okay.

Steijn: Because he knew that I was looking for this like hard problem. I was roaming around. And then like after like that appointment he showed me kind of like what was going on. And then I thought maybe it's him, right? But that didn't really make sense to me because he is a great dentist.

Olivia: Yeah.

Olivia: Um, how did you convince them to let you in and to kind of look through the the heart of the business and get into the financials?

Steijn: Yeah, it's a little weird, right? It's like, hello, I work at Robin Hood on growth on the referral program. Uh, can I get a job like here? And by the way, Frederick worked at Superhuman on product. can we do the billing for you and take over the finances? Um I think that was the first sign that we had a real business.

Alex: Yeah. And from a technical perspective. So Frederick you the business started in 2020 and so much was different then in terms of what was even possible to build like how has your product building process changed over time. How is what you thought possible then different from what you think is possible now?

Frédéric: Yeah. Well, so I've given this whole presentation on the origin of software was basically take a filing cabinet and put it in it to a database

Alex: and kind of pick the time equals zero moment for that with this company the Saber Systems because airlines would just keep reservations in filing cabinets. Saber Systems was a joint project between IBM and American Airlines. That's why Saber is spelled with two A's, Saber. Um but then that evolved.

Frédéric: Mhm.

Frédéric: Um because in 2023 it's like you know next word prediction wasn't really good at like going and executing tasks, which is basically what AI is. Uh that was not good enough to go say I'm going to go run my practice or you know do background checks. I know I'm going to have statistical, you know, inference play out, which is too risky.

Alex: but like Toast could have existed in 1985.

Alex: Like you know, everybody had an IBM PC. They worked pretty well. Microsoft DOS worked pretty well. Why didn't why wasn't there a restaurant software company in 1985? Well, number one, it was too hard to use. But then number two is you have this chicken-and-egg issue because could you get a big restaurant that wanted to adopt it?

Frédéric: It was a great collaboration.

Alex: Um so um my my first dentist hopefully he's listening to this podcast. His name is Ronald Sloop. Um it was my parents like first friend when they moved to Florida. I'm from Florida. Um he retired as a dentist.

Steijn: Was he a Dutch uh guy? He sounds very Dutch though.

Alex: No, you know, Ashkenazi Jew from, you know, somewhere in Poland, Ukraine, whatever my family's from, too. So, you know, uh, but, you know, he's probably 75, 80 years old right now. But part of why he retired was he lost his like, you know, key woman that did the books and everything else.

Alex: And then he sold his practice to his like junior practitioner and now he's out of the dentistry business. So, he saw this announcement. He's like, oh my god, this is amazing. And I'm not talking this up because my dad called me about this because he saw the press release. I talked to Dr. Sloop.

Alex: Like this is why he's now like doing nothing with his life. Just like playing golf or something in Southern California. He moved there from Florida apparently. Um because it's just too hard to hire the person. So it's not like oh AI is going to take the jobs. In many cases you can't find the staff.

Steijn: Because, you know, there might be a guy that only speaks Dutch that shows up. Yeah. Like, why not hire somebody who speaks Dutch? Well, because there's only a one in a hundred chance that a Dutch person shows up.

Steijn: Um, concentrically around that, you have like you know big on financial transactions that's even bigger.

Steijn: Where SaaS can exist for these businesses. But then you go to the concentric circle around that, which is just like the rest of the workflow.

Alex: Yeah.

Alex: And we also see that so like the um there are about 160,000 dental practices in the US alone and they spend roughly $200,000 a year on like administrative costs. And then the interesting thing is...

Steijn: [snorts]

Steijn: they then adopt it like very quick. So it's super interesting to see. And then indeed like...

Olivia: Yeah, there was a great quote from Dr. Quan about you guys, which is that Lassie isn't replacing humans, but like freeing them from wearing so many hats.

Olivia: your launch video had a clip of him talking about how he can actually coach his kids soccer teams now because he has time. They do really appreciate it.

Steijn: They do.

Olivia: How did you approach the technical build process for that? What was it like getting the product to that level?

Frédéric: Um I think another part we already kind of talked about it, but I think a huge difference between us and others...

Frédéric: loop at night.

Alex: Yeah.

Frédéric: Yeah. [laughter] Needs to go into the tool.

Frédéric: We from the very beginning we focused on um you know initially we were actually the humans in the loop, figuring out the edge cases that way.

Alex: Yeah.

Alex: For a business it also doesn't matter that much right like if um let's make Dr. Sloop famous in this podcast.

Steijn: he's going to learn.

Alex: Yeah. If Dr. Sloop said he can become a customer. So maybe we should talk about reactivating him [laughter]...

Steijn: We could reactivate him.

Alex: Yeah, we he might he might come out. That's how he sounded.

Alex: Yeah. Yeah. [laughter] Dang. That's the series B story. We got Dr. Sloop out of retirement.

Olivia: We had a dental shortage and now we don't [laughter] have dentists coming out of retirement.

Alex: We got 100 million more people in the states that get good dental care. Um that's fine for Lassie.

Frédéric: it saves 10 20 hours. Um if there are a handful of claims that you need to file yourself, but the majority kind of like is on autopilot makes it tremendously more easy to run a business.

Alex: Yeah. From an implementation and onboarding perspective, you guys integrate with existing practice management systems for the most part versus kind of making them switch a bunch of software to use you?

Alex: which is an amazing innovation but a terrible company because you really have very few outcomes that are good. You either end up selling to one of the...

Alex: and they take all the economics because they have all the customers. So that hence you know my recognition was like the thing that a lot of startups lack is distribution.

Alex: And this company that was funded by Ideal Lab and all these VCs, you know what they did? It was like search for your Outlook email, which was so good, but...

Alex: uh but the other is that there are a lot of categories where there never was an incumbent software company because the only job to be done was like manually hiring people.

Frédéric: Yeah. And we see exactly that is that um there isn't an incumbent...

Frédéric: that kind of like does this job or can do this job like quickly.

Alex: Well, the incumbent was named Betty and she quit two weeks ago. That's the incumbent.

Frédéric: Yeah. Or or a billing agency.

Alex: It's Dr. Sloop's old assistant. That's the incumbent.

Steijn: or version of that that like is somewhere overseas or in the states. Uh so that's indeed exactly like what you're competing with and that's what in...

Steijn: Um and then if you show up with software that they have never seen before which is now possible they will adopt it and you can grow. Um which is very exciting.

Olivia: that adoption. Well, I imagine the other part of the question for you, I'd love to hear your thoughts on this. Um, or I'm sure our audience would love to hear...

Olivia: right? Like how do you actually do the onboarding?

Frédéric: Yeah.

Olivia: Um, and how much of that can you automate? Because that's part of what makes a business that is selling these things work or not work,

Olivia: right? Because if you have to, you know, send your own Betty...

Alex: to every single office in the country. Yeah,

Steijn: it would be amazing if it's just like download the lassie app like these these systems and processes are very manual...

Alex: and like there are a lot of people in Iowa like how do you solve that last mile distribution problem for Lassie?

Steijn: Yeah. Yeah. I think uh it's a super interesting problem. Assume you can knock on all these doors and get them to try it, right? Then like how do you get it embedded?

Olivia: yeah I guess to that point like there's more you can build and are building for dental practices then there's all these other types of healthcare practices.

Olivia: how are you prioritizing what you build, who you sell to. Is there, you think, a world where Lassie for dentists makes Lassie for physical therapists better?

Steijn: The master plan.

Olivia: Yes.

Steijn: Are we at that part of the episode?

Olivia: Yes.

Steijn: Um, yeah. I think three steps like the end goal here is that every small business should run itself, right? And the busy work is done by agents.

Olivia: But the end goal is to help them all.

Olivia: Amazing. I love that as a master plan. It's a good one. A big one. Um you both have been part of scaling many important companies in the past. Robin Hood, Superhuman. What are the lessons you are carrying over?

Frédéric: There's a bunch of stuff that we're applying now that I learned at Superhuman. Um I think for one focusing on the right ICP and being really crisp about making the product experience outstanding for them.

Alex: that's safe to say.

Alex: You go twice a year. That's pretty good. I think for the average...

Olivia: you're supposed to, right?

Alex: Yeah, of course.

Olivia: I'm just doing my [laughter]...

Alex: not a saving duty to say.

Olivia: Um when you're Well, maybe tell us like how big is the team now? When you're hiring, are you looking for expertise in dental? What are the kinds of talents you want?

Steijn: Yeah. Uh which is now mainly on our mind, right? Because like we found there a really great product market fit in a large market where you can go and scale.

Steijn: Um we we currently have two takes on that like one not much has changed contrarian maybe take here. You still need people with steep slope.

Alex: if it's so much easier if everybody can hire Betty right? Just materialize a Betty.

Steijn: Yeah.

Alex: Um how does that change? I mean like it could actually work out where like small businesses it's much easier to start one and run one but then...

Olivia: because you do have if you think about moats in the AI era in general...

Olivia: we often talk about it with respect to software companies.

Alex: Y.

Olivia: um so it's so easy to go replicate XYZ software. I did it on Replit or I did it on Lovable or I did it on Claude. You hear this all the time.

Alex: Um much much harder to say I'm going to go replicate Dr. Sloop's practice.

Steijn: Yeah.

Alex: But one of the things that makes a small business somewhat defensible is actually it is an accumulation of people that are required to deliver the end service.

Steijn: Yeah.

Alex: And it's like uh if you know who Yogi Berra is, you know, famous Yankees baseball player that said all these things that make no sense.

Steijn: Yeah.

Alex: And um but like quoted often though, right? And my one of my favorite ones, "it's so crowded nobody goes there anymore."

Steijn: Yeah. It doesn't make sense.

Alex: Um but I guess my question is how do you think small business changes if it's easier to run a small business and start one?

Steijn: Yeah, I think our our current take on that is that this assumes there's a cap on kind of like demand and if you just look at the dental practice, but there isn't.

Alex: Yeah. So you started the business in 2020 and that was like arguably pre-AI or pre what we think of as being this generative AI revolution...

Alex: where it's just not quite good enough and then what do you think the curve of that looks like when so it's not you know it's like a question of AGI...

Frédéric: I think one thing that's interesting is that the models are trained on so much data and they're they're so large and yet they actually don't really know how to do any of this work.

Frédéric: I think we have a big advantage there because we have all of this like historical data out of their ERPs that we can look at and kind of infer how to do it.

Alex: right? So I was thinking about this because Sigma, who I have for my health insurance, will only send paper checks. I was like, "Oh, I must have missed something."

Alex: But now that everybody has this like superpowered thing that costs effectively nothing to go argue in perpetuity, it's like I can argue with you and...

Alex: but like how does that change the business dynamic of things like insurance payments and collections? I mean, I'm sure you thought about this a lot...

Alex: because in many cases the counterparty that the dentist is dealing with is the insurance carrier.

Frédéric: Yeah. Right.

Alex: A big part of the accounts receivables or or revenue comes from insurance companies,

Frédéric: right?

Frédéric: Um yeah, I think it's quite interesting because um it's pretty like well regulated. So um if a dentist does a crown like and you provide them with the correct narrative, we can automate the approval.

Steijn: And then they will like bait that out. Uh the other thing because indeed we are very deep in this industry. Um that is interesting dynamic um it took me a while to understand this but...

Olivia: So obviously there are a lot of dental practices that want or even desperately need products like Lassie, but they are distributed and they're all over the place.

Steijn: Yeah, this is a very different playbook than where currently I think the cutting edge is. It's like you have these models good enough and apply them into deep vertical workflows to deliver the work itself.

Olivia: Thank you both so much for coming to chat with us today. This was awesome. We are very very excited for the future of Lassie. Uh, anyone who's listening...

Steijn: Oh, yeah.

Olivia: Amazing. Great. Well, thank you guys again.

Frédéric: Thank you so much. Thanks for hosting us. [music]