The Exchanges

Q So what did Francois What, what, what happened? Did he, did he say to you, hey, Jennifer, we can do something on our own? Like, how did, how did the idea of even, you know, starting something on your own begin?

A Yeah, it was basically like that. So we were, uh, out of town, uh, working at an insurance company. We'd have dinner, uh, every night, and he'd start talking about, hey, this could be something. We should be thinking about this. I've been doing research. I don't think there's a good, uh, alternative to these government exchanges. Seems like there's something we could do in insurance and distribution, uh, And I said, sure, that's great. Uh, I don't, I don't know what it means to start a company, uh, or why I would leave, uh, a pretty good gig that I'm happy in. Uh, so it was slowly, you know, as we started getting into it, talking about it, kicking around the idea more. I also then got promoted, uh, in McKinsey to associate partner, which is the step before partner. And I didn't like that role as much as I did Being a manager, uh, of, uh, the team on the ground and being really in the problem solving piece of it. So that's, I think, the thing that got me started with, huh, do I really want to be, you know, not necessarily a lifer, but a partner at McKinsey and really invest the next several years in that. Uh, and we ended up taking a leave of absence from the firm.

AI assessment note: “Yeah, it was basically like that. So we were, uh, out of town”

Q What was the idea? Like, what was, what was the attraction for you to go, to go to the Peace Corps?

A It was part adventure, right? So just something completely, uh, adventurous, extraordinary, getting dropped in another part of the world. Uh, so that was a big piece of it for sure. Part of it was, uh, you know, again, being very ambitious and a total gunner, looking ahead that, uh, the types of jobs that I wanted in the State Department or in the UN, Required international experience. So you kind of have a catch-twenty-two of how do you get international experience without having prior international experience, and Peace Corps is a good way to do that. And the third piece was more personal. You know, I was acutely aware of how lucky I was to having grown up in America to an American, you know, dad and a mother who eventually became naturalized, but my mother grew up in pretty severe poverty in the Philippines, so I was always acutely aware of just You know, by luck of the draw, you know, being in a very privileged position, and also just wanted to, you know, put in some time and service in the developing world.

AI assessment note: “It was part adventure... Part of it was... the third piece was more personal”

Q So from what I understand, you spend, you would spend four years total in Honduras, and I know the last two years, you actually got a job at the World Bank, but I guess from what I've read, like, you weren't really into the whole Bureaucracy of an organization like the World Bank, right? Because, right, big institutions like, like that are sometimes bureaucratic.

A They are after having spent a couple of years on the inside and seeing very mission driven, very, very smart and passionate people, but you are a gear in a very, very large machine that has inertia and doesn't tend to move very quickly or very, uh, or drive a lot of innovation in the space that you're in. Uh, and you know, I fast forwarded, what would my life look like in five, 10, 15 years if I stayed on this? And it was looking more like, oh, great, I would be a, a senior portfolio manager, uh, of, you know, uh, one or two countries, uh, doing a lot of desk work, and, uh, that wasn't for me.

AI assessment note: “They are after having spent a couple of years on the inside”

Q Wow. So, I mean, that's like six months of rejection. That's, that's hard for anybody. Did you ever ask yourselves, hey, is this maybe a sign that we're not on the right track? Did you ever think that? Or did you just think they're all wrong?

A Mostly thought they're all wrong. They don't get it. Um, but you know, in your darker moments, uh, we would think, God, what are we, are we missing something? Is this a sign from the world that this is not the right thing to work on? Because the other, the other piece of feedback that we got, so again, people didn't understand the market or the opportunity insurance. And two, they looked at two McKinsey people and said, well, what do McKinsey people know how to do? Neither of you is technical. Neither of you is a software engineer. You're proposing that you're going to build a tech company. You've got zero experience doing that. And early stage, uh, investors bet on the team, and they really didn't have a lot of confidence in us as the founding team of a tech company.

AI assessment note: “Mostly thought they're all wrong... in your darker moments, uh, we would think”

Q pretty early on in that first year, you, you, you got kind of a lucky break with some earned media. You got an article in the New York Times about, or you were featured in an article in the New York Times about disability insurance. Um, how did that happen? Did you, did you guys contact the reporter? Did, how did, how did you give an, Yeah, get in there.

A We did. Uh, Francois, I think, tweeted at the reporter, uh, who was writing a column, I think he was talking on Twitter about writing a column about disability insurance. Uh, and I think, I think the story is Francois tweeted at him. He replied, was interested to learn more, because who'd ever heard of a tech company focused on disability insurance for consumers? Uh, and, uh, it all snowballed from there. Uh, he tested the product out, got quotes, uh, and, uh, we got featured, and that was, that was our big break. Uh, the article went live, and we had, uh, at the time a tracker that showed how many visits were on the website, so I think we literally went from, from zero to, to thousands, uh, within an hour of the article, uh, hitting the New York Times website, and normally that looked like 10 people.

AI assessment note: “Francois, I think, tweeted at the reporter, uh, who was writing a column”

Q Wow. So really remote. And what was your assignment? What did you do?

A I had a very atypical, uh, assignment in the Peace Corps. So following, uh, my college graduation, I actually did, uh, some postgraduate work as part of a Peace Corps prep program. So I studied urban and regional planning. And got assigned to the urban and regional planning sector in Honduras, uh, where volunteers are assigned to and embedded with local municipal governments to work on, you know, municipal projects, be it water and sanitation, or public services, or planning, uh, any sorts of assistance that the local governments need. So I was assigned to, uh, the Santa Barbara Municipal Government. My counterpart was the mayor of Santa Barbara, And so I worked pretty closely with the mayor and the municipal corporation, uh, for, for two years working on, you know, uh, what eventually became, uh, digitizing their property tax records and overall information management in the municipal government.

AI assessment note: “I was assigned to, uh, the Santa Barbara Municipal Government.”

Q now. But insurance, for, for those of us who don't know, I have a lot of insurance, like, you know, I'm doing the responsible thing. I'm insured here, there, I got insurance, but it's, it sounds boring to me, right? But, but, and, and I have to imagine that part of you thought it sounded boring at the beginning, but what was it about it that started to fascinate you?

A Uh, it does sound boring, but once you start peeling the onion, there are so many interesting pieces to it. So I'll give you a couple examples. Data science. There's nothing hotter in the tech world or in the business world than quote unquote big data and data science, right? The original quote unquote data scientists were actuaries, right? So these were people who were looking at mortality tables, morbidity tables, dating back hundreds of years, right? Because insurance has been around for hundreds of years and creating models to price that risk appropriately, right? Um, so that's one piece that's interesting. The second piece that's interesting is the consumer problem, right? So when you're selling something, it's easier to do it if it's a tangible thing, like a pair of shoes, right? Or a really beautiful cashmere sweater, or, um, lip gloss that you can see, touch, feel, see it on somebody else, or something that's fun, right? Like, uh, a trip or an experience or travel. Insurance is none of those things, Right. You can't see it. You can't touch it. Uh, you hope to never use it. It's not something that's fun. In fact, it forces you to think about a lot of things that aren't fun at all, such as a house fire or death or getting hit by a bus. Right. So how do you sell something that does not check any of the boxes for something that people want to buy? Right. So it's an interest…

AI assessment note: “once you start peeling the onion, there are so many interesting pieces to it.”

Q all these companies, and I actually think, They're not doing X right, or Y right, or they're not focused on Z, and it sounds like you and Francois start to kind of talk about things that could be better, or does it kind of just land in your lap? How do you start to think about, wait a minute, um, there's something going on here. Maybe we can do something.

A Yeah, so we had, uh, we started working together on insurance engagements, and this was around, At the time, nobody knew what was going to be on these marketplaces. As it turns out, it was, uh, health insurance, but back then, uh, there was an open possibility that it could be health insurance and disability insurance and life insurance, right? All of the benefits that you would typically get, uh, through your employer. So McKinsey had quickly spun up a practice as well as a marketplace simulator to advise these insurance companies around how to now move away from, you know, the brokered model where you're working with brick and mortar brokers who are, you know, putting, uh, health insurance and life insurance and disability insurance into companies, uh, or to consumers. And now you're going to be directly consumer facing on these online government run exchanges. Right. And so we were, we were working on this, uh, and, uh, started talking about, you know, if these government run marketplaces and because they're government run, it's likely going to be super clunky and not great. Why isn't there a private version of this? Right. Why? Why is this such a revolutionary thing that these insurance companies now have to be consumer-facing online? That was the initial light bulb that we started talking about, you know, over dinner.

AI assessment note: “That was the initial light bulb that we started talking about, you know, over dinner.”

Q So what did you guys do during that six-month leave of absence?

A Uh, let's see. We read books like The Lean Startup, or at least I did, because I had no idea what I was getting into. Spoke to other founders and entrepreneurs, uh, Uh, to get smart on what we should be thinking about, uh, not from an insurance perspective, but hey, what does it look like during, during the first year or two of, uh, starting a company, uh, and then building out that first prototype, which was basically a landing page, uh, some educational content. We started with disability insurance cause we were like, well, let's start with the absolute hardest product, which is disability insurance. And, uh, then got appointed to be able to sell it on the back end with a handful of disability insurance companies. So that first six months to a year was seeing how the thing comes together and getting to a go, no go decision about do we quit our jobs at McKinsey and, and commit ourselves to this, you know, full time.

AI assessment note: “We read books like The Lean Startup... building out that first prototype”

Q And so what were you doing? Were you just finding people like that you knew to, and interviewing them about disability insurance to just kind of understand what you could build?

A Honestly, it was, ah, we had our last engagement at McKinsey was with the big disability insurance company. So I think we suffered from a bit of recency bias. Uh, and we said, let's try it out on disability insurance first. Uh, we knew we didn't want to do auto insurance because auto is just really competitive to, to do lots of agents going after that. So we said, let's try disability. Uh, we, uh, you know, created a rudimentary website, a rudimentary backend experience, uh, and started messing around with online advertising, uh, On Google, on social media to see what it would take to get people to, you know, into the top of the funnel and pull them through to the funnel to be disability insurance, uh, buyers.

AI assessment note: “created a rudimentary website, a rudimentary backend experience, uh, and started messing around with online advertising”

Q How did that happen, by the way? Uh, what, why?

A Uh, after pitching know-it-all and getting a bunch of quizzical looks, and then, uh, people saying, what? What does that mean? How do you spell it? Know-it-all? We realized, oh boy, this is not going to work. Uh, and I, uh, quickly did some research on how to name your company, and what are the tests that you should subject, uh, Uh, your potential business name too. And there are some pretty straightforward heuristics. Like if you see it, can you say it? If you hear it, can you spell it? Right. Because when you hear it, like on a radio ad or TV, you need to be able to go directly to Google and type it in. Right. So puns plays on words, um, completely random made up words are tough. They don't work. Right. Um, or very common words, like you can't name your company tree. Because if you Google tree, you know, odds are your, your little startups not going to come up. So after getting pretty smart about that, we're like, oh, no, an owl is absolutely not going to work because nine times out of 10, people aren't going to get it. They're not going to be able to spell it. Uh, so we went back to the drawing board and ultimately landed on policy genius.

AI assessment note: “after pitching know-it-all... we went back to the drawing board and ultimately landed on policy genius.”

Q As you guys were starting to put all the pieces together, how are you getting attention? How are you getting anybody to even be aware of what you were offering?

A A few different ways. So we did not have enough money to do any sort of paid marketing or advertising, uh, because you can quickly, uh, spend upwards of 735,000 dollars on digital marketing if you don't know what you're doing and you're not careful, uh, So, uh, what we did in those early days was build relationships with personal finance bloggers to try to get them, uh, involved, aware of the product, to get them to write, uh, about us, uh, on their site, and to get them to refer their audience and their readers to us as the recommended place to get insurance. There is a, a big conference that happens every year called FinCon, Where all the personal finance bloggers get together. Uh, and so we, uh, went to FinCon, put up a booth, uh, had a few gimmicks. I think it's called FinCon, F-I-N-C-O-N, right? So Financial Blogging Conference, I think is what it stands for. Uh, we wanted to be clever and eye-catching, so we did a play on fin and shark fins, so dressed up in shark costumes. We had cupcakes at the booth with, like, shark fins in them. Uh, so In hindsight, it was kind of dumb, uh, but, you know, you need a gimmick to stand out, so, um, we went to FinCon, and that was, that was a big unlock for us, and where we got a lot of our initial, uh, blogging relationships and initial, you know, earned traffic and earned media coverage for the company.

AI assessment note: “what we did in those early days was build relationships with personal finance bloggers”

Q right? It is a fundamentally unsexy, um, area. It's like, like financial services too, but how do you sell something? How did you, you know, how do you sell something that is so, that's not, you know, a pair of Nike sneakers? I mean, like, how much of what you have, have had to do is to Educate the consumer, spend lots of time just educating consumers about, about this.

A Well, a big part of what we do is educate and, uh, link the insurance decision to life events, which is really what it's about, right? So again, life insurance or disability insurance or a homeowner's insurance isn't an impulse purchase. It's usually triggered by something happening in your life, right? The biggest trigger for life insurance is having a child. Uh, specifically what we have found in our consumer research, it's having child number two, because when people have their first child, they're so overwhelmed with Now they're a parent, right, and getting through that initial period with child number one, they actually don't get around to life insurance. It's if, if and when they have child number two, or if and when child number one is old enough, uh, that they start to think about life insurance. For homeowners insurance, it's typically the act of buying a new home, and for disability insurance, it's typically, uh, switching jobs, and now you're looking at your benefits, uh, of your new job offer compared to your job that you're leaving. So what we have done is figured out what those life events and those triggers are, right, and build kind of an ecosystem of content and advice around that to link that life event with the insurance purchase and get them comfortable with what insurance they need, how much they need, and then to work with us to, to get it.

AI assessment note: “a big part of what we do is educate and, uh, link the insurance decision”

Q And I mean, but presumably this is a highly regulated environment. Aren't there like huge regulatory hurdles? Because you're not an insurance company now. You're an insurance agent. Presumably, that's how you're classified, right? But becoming an insurance company is a different, it's a whole different, you know, ballgame.

A It's a whole different ballgame. We're also, uh, subject to 50 state regulations, uh, on the distribution and agency side. Uh, but everything that we've built, if you think about the capabilities, right, how to acquire customers, how to underwrite customers, how to, uh, think about the risk of the customers across the suppliers on our marketplace, How to manage those customers, uh, over their lifetime, because those customers are our customers, right? The end policy right now might be with Progressive or MetLife or, uh, Prudential, but that customer is with us and is our customer. So we've built the technology to track them, manage their policies over their lifetime. So we've actually built out every single layer that we would need to also be an insurance company, uh, except for, you know, the balance sheet to, to take on the risk.

AI assessment note: “We've built out every single layer that we would need to also be an insurance company”