The Exchanges

Q I mean, I don't want to disrespect you, but you weren't our developer. How are you able to build something that this guy's never seen before? And you're not even a developer. I mean, what, why, why hadn't someone else done this thing yet?

A It's a slow, non tech savvy industry, you know, and back in 2013, um, there weren't many solutions, uh, and the ones that existed looked like they're from the nineties. So when we came in with a responsive, modern looking thing that was easy to use, then, you know, I mean, we had background in creating product, so it was obviously superior. And what we added as a nice touch was that we branded it Uh, we basically made it a white labeled web app for each and every single customer so that when they put out this rate calculator, it was representing them and it was nicely branded and all that. So it won with ease of use and aesthetics.

AI assessment note: “It's a slow, non tech savvy industry, you know, and back in 2013”

Q And where were you exactly one year ago?

A One year ago, we were, um, six percent less, because I remember the growth in 20, 22 was six percent. Um, the real estate market definitely took a bit of a hit towards the end of the year, last year. We have seen a bit more churn than usual. Our churn is normally at about point, 6.7% month over month. Um, but in the sort of last couple of months of 20, 22, we did see it up to 1.8. Um, people got scared. A lot of title agencies decided to kind of cut costs across the board because they didn't know what was coming, you know, so they take, took all this sort of preemptive action. Um, but it has come back down since then. So people are starting to get a little more confident. About where the market's going, but it's been kind of three, four months roughly our net new MRR was negative.

AI assessment note: “One year ago, we were, um, six percent less”

Q Two 80. Okay. So, I mean, this is the definition of like, you know, people say overnight success, but no, you're just plugging away five to 15% year over your growth for the past seven, eight, nine, 10 years, right? Yeah. Well, it's actually

A Totally bootstrapped. And what's actually, uh, now becoming very evident is that growth is tapering because of the fact that we're going higher into the sort of market share, um, quota. And because you have other competitors, because whatever, you've already signed up the people who are tech savvy and, you know, they want to use technology. It's getting increasingly difficult to grow or to maintain stable growth by Share new customers. So now what really becomes a necessity for us strategically is to start looking at building more product to increase that ACV. So for example, um, you know, our, uh, product is a rate calculator, but the next, uh, step of the process is a full-on settlement software, which helps the title agency manage the whole transaction.

AI assessment note: “growth is tapering because of the fact that we're going higher into the sort of market share”

Q maybe you would make on the company over time, like we're at 25 grand a month from the dividends times 12 months, I think is like 300,000 dollars per year. And the reason I set that context is if someone came to you and offered you and your partner to buy the whole company for, you know, say, uh, ten million all cash up front today, right? Do you sell?

A Uh, it's a tough, that's a tough question to answer. Um, we're definitely open to an exit opportunity, but at the same time, we know that there's room because of my conversations with all the, our customers, there's a lot of opportunity. And on one hand, there's more we can build and grow the company. Um, on the other hand, um, When comparing a financial buyer's offer with the existing bigger sort of settlement software or insurance company, the value of our customers that we have today to them is a lot higher than what a financial buyer would offer, right? We were actually doing the math. I'm not going to name any names, but we realized that for one of our partners, a buyout would be in the range of 60 to eighty million. You know, that would be fair value to them. Actually, that would be a discount, you know, so.

AI assessment note: “we realized that for one of our partners, a buyout would be in the range”

Q how did you structure this in the early days? Because I have a lot of founders listening that are launching their first product. Someone has told them, yes, we're willing to pay. But making the leap from someone verbally saying yes to actually signing a DocuSign and maybe actually wiring via Stripe the first, you know, down payment is a whole nother issue. So how did that work for you?

A Well, I mean, we were pretty fortunate. Um, What, what happened in the earth? Well, here's another funny story. We were supposed to be three partners, right? Um, I was kind of on the design side and we had a programmer and then my co-founder who was doing sales and business development. Right. And when we decided that we were going to build this thing, we also in parallel booked a booth at the annual convention in West Palm beach called Alta one, like Alta being the American land title association. The problem was that three weeks or four weeks before the trade show, our programmer kind of Went missing in action. Like, forget about it. We didn't have any code. We didn't have anything. So I had some background in computer science and I did figure it out on my own. So obviously our VD one point O, I don't think it was very functional. It looked great. It was something to show people at the trade show. Um, obviously we pivoted and we made it work, you know, the coming weeks, but we went at the trade show and our go to market strategy was practically non-existent. We got lucky because one person at the trade show, Who was a, the national sales rep for a large title insurance company, uh, loved it, right? And our customers are the title agencies, right? They're the resellers for title insurance policies. The title insurance company is, they're like the brokers, the middleman, right?…

AI assessment note: “we went at the trade show and our go to market strategy was practically non-existent.”

Q I don't know if you're competitive. You play varsity sports back in the day. Maybe you want to go build a billion dollar company. That would be a different model. Or maybe say, you know what? I want to go build a family and get out of operating and free up my time and sell the whole thing. Which of the buckets do you fit in or a different bucket?

A Um, I would, I would be in the second because I always want to challenge myself and build a bigger thing and more. So the way I see it, it's, you know, this is an asset, so I need to grow its value or build more assets. If I can't do this, it's, it doesn't matter, right? We've, the sky's the limit and no matter how small the niche is, if you dive deep in it, you'll find opportunity everywhere. We've actually discussed Finding a distressed insurance underwriter that we could buy, you know, that we would need an investor. Obviously we would need, you could take outside money by that distressed underwriter and use our technology, right. To position it, to create an angle and start competing with the bigger underwriters. And that's a different market altogether. Cause we're talking about hundreds of millions in revenue every year. It's insurance, right? So, There's, there's all sorts of things. We, I, I feel like the best, um, the most important thing is, is for the owners and the founders to get on the same page and, and make these calls, you know, cause you don't always have the same values. You don't always have the same, uh, you know, wants. Right. And so, um, I think moving forward is usually slower. Very good. When there's a pie in the beginning, there's no pie. You move at the speed of light, but then, you know.

AI assessment note: “I always want to challenge myself and build a bigger thing and more.”