Balancing Experience and Innovation - John Swigart - Pie Insurance - Episode #47

When the CEO comes down and asks you to do something, you say yes.

Welcome to Not Another CEO Podcast. I'm your host, David Politis. Every week we talk to inspiring leaders and get the true stories, the ups and downs, the lessons learned, and come away with actionable advice for our own journeys. Today's guest is a seasoned leader in tech enabled insurance and financial services. He has over two decades of experience. Before co founding his current company, PI Insurance, he played a pivotal role at Esurance, serving as Chief Financial Officer and later as Chief Marketing Officer, contributing to the company's significant growth and eventual acquisition by Allstate. In 2017. He started PI Insurance with the mission to empower small businesses to thrive by making commercial insurance affordable and easy. Since then, they've had a pretty remarkable run. They now serve around 50,000 small business clients. Last year they were on Inc's list of fastest growing companies. He's been recognized as EY Entrepreneur of the Year and from what I can tell, they're just getting started. Please welcome co founder and CEO of PI Insurance, John Swigert.

Thanks, David. I'm thrilled to be here. I'm really excited to spend spend an hour or so with you and chatting about the trials and tribulations of founding a business and doing your best to run it as best you can.

Thank you. Thank you for doing this. So let's jump right into the first question. What is the one thing that you've done at PI Insurance, big or small, that's had the biggest impact and you'd absolutely do again if you're CEO of another company in the future?

Yeah, well, I'm going to pick something that I probably, I certainly don't feel I've done enough. And those who know me might say, oh gosh, John, this is not something you've done enough of. But it's something I would absolutely do in my next business and I want to keep doing. And that is being decisive and trusting your gut when it does not feel like you have particularly leaders in the business that are performing adequately or the right leaders for now, the right time in the business. Business needs change. Especially in a startup business, you go through different levels and stages of, of, of evolution. You have people that were great in a prior stage that aren't working out in the, in the next stage. And I would say making faster, quicker, more decisive decisions on those leaders and moving on to the next person is something I think is really key.

So you're the first person actually who has given that as the answer and I find that to be Such an important piece of our jobs as CEOs, but also if we're just being super honest, like very difficult to actually do, which is. I'm not surprised you say that you don't do it enough. I've never done enough. No one I've talked to, I don't think does it enough. Why is it so difficult to do consistently knowing that you need to do it?

Yeah, it's hard and it's emotional. Right. Especially when you. Because I'm not talking about moving people out who are just really poor performers, obviously that's not what I'm talking about. That's easier to do. And hopefully you don't have a lot of those in the leadership, but you have people, especially in the early days of the business, who were great colleagues, leaders, team members and so forth. But they're not what you need at the stage of the business that you develop to. Business often evolves faster than the folks that you have in the business can evolve. And it can be personally emotional. It can be challenging to be objective. It can have impacts in the business because otherwise team members, their colleagues, other parts of the business can say, oh my gosh, I can't believe I thought that person was great. And, and now they're leaving. And that's. And that's not a good thing. So it is very hard to do. But what I have found is that the longer it takes to do it, the, the. The sort of bigger deficit that you end up building as you go. And so I would say that in my. If, if I were to do another one, which I don't think I will, I'm a little bit of an older founder, but if I were doing another one, if I were just giving advice to. To a founder, first of all, it's very important to be leveling yourself up because the business can get away from you as well. And so you need to really be thinking about that, but it's to be as unemotional and as objective as you can about what the real needs are in the business right now. And does the team that you have meet those needs? And when it doesn't, you need to make a change.

You know, so like you, I think the emotion so much about the people, like I have that emotional attachment and, and cultural attachment, all that stuff. I got advice from one of my investors. I'm curious what you think about this. They said, you know, Dave, it's actually the way to have to do this is to have open conversation with that leader. And you'd be surprised when you have the open conversation is what the advice I got is. You'd be surprised how much they also feel that not in every case, but in some cases. And how when it's an open conversation, it actually makes the entire process easier because at least I'll speak for myself. My always fear of getting rid of someone who's. Who's doing a job. Maybe not the perfect job for the city is what am I going to do? To fill, to do, to backfill. But if you have an open conversation, you can do it kind of more in the open. Does that. I don't know if that resonates.

It resonates very strongly, I think clear expectation setting, because like I was saying, the business evolves. That means those expectations change and the needs change. And if we went when I have not clearly communicated that, it's been more problematic when I've done a better job. Not certainly the great job, but a better job of communicating how those expectations are changing and what the needs are in the business now. And it's a much more open conversation. It goes better and it does allow. Sometimes we've done confidential searches, sometimes we've done sort of out of the open searches. Sometimes the person's moved out and then we've done a search. Sometimes we did it while they were still in place. So there's different scenarios in every situation and you have to kind of be willing to be specific and bespoke on it. But what is always true is exactly what you said, Dave, which is the open, clear communication of expectations and needs and the potential mismatch of those. Because what you pointed to sometimes does happen where the other person feels it too, and they feel it's a mismatch for what they want to do and how. Whether they feel like they are delivering value in the business or not.

Yeah.

Often if you feel it, the other person feels it too.

I think so. I think so. I think so. And they're. They have the imposter syndrome. They're kind of like trying to make it work. But, you know, and, and anyway, so. So one question I have, like, as you think about team, we're talking about leadership team. How do you think about building your leadership team around you? Because I think in the conversations that we've had, you're pretty deliberate about how you fill kind of the skill sets. Like, how do you think about that?

Yeah, I think it's important to be as clear and specific as you can. And again, this changes. In the early days, it was, we need athletes, we need people who can really Dig in. There's a lot of, you know, sort of self work, but what happens very quickly then is that person needs to be able to then lead through others and get work accomplished through others and do that effectively. And, and then as we get bigger and we have more specific needs, we're in a financial industry, we're in a highly regulated industry and so forth, there's more and more need to bring in industry specific expertise. And so, but wanting to balance that because one of the things that I always, I talk to my team all the time about it is when we hire people that have insurance expertise, my hope for them is that they forget most of what they knew about how they did it at their prior company, but then they can still leverage that background and knowledge to do something different. When we hire people who don't have insurance expertise, my hope for them and the need that we have is that they become experts in insurance. Right. So I don't. We can't have people, especially leaders in the company who come in that don't have insurance expertise, that after some period of time aren't insurance experts. That doesn't work. You have to learn the business that you're in. And so I'm looking for that, I'm looking sometimes for insurance expertise, sometimes it's okay if you don't have insurance expertise, but you have to have that curiosity, you have to have that interest, you have to have that ability to lead through others, but still a desire to get into the business, be close to the business, connected to the details of the business, that is critical. And frankly, at times when we haven't had that, that's where we got a bit off the rails.

I used to say, as we got bigger at bettercode, I used to tell leaders that I was interviewing, I said, I need you to be able to go to a board meeting and inspire confidence with the board, but I need you to go all the way to the individual contributor level and be able to sit with them and help them do their job. And I'm not, you know, if you're all the way strategic or all the way in the weeds, that's that, you know, neither is good, but you have to be able to flex. And I think that's the reality in these kinds of companies.

I totally agree with that, David. And I think one of the key elements is that those two things are not distinct. In my view, they are actually the same thing. So the ability to inspire confidence at the board level comes from a knowledge and expertise in the details of the business. In the Right level, you can have high polish executive presence. You can be able to like have a conversation, be that person that somebody wants to have a beer with. That can inspire confidence in some board members. Right. That's sufficient to inspire confidence in some board members. But for that board member really does want to know, like, why is it working that way? Tell me how it works that way. It's fine to say, hey, I don't know, I'll come back to you sometimes. But if that's the only thing you can do because you're not close to the details, then you're not actually inspiring that confidence in mine.

I, I really. So one of the things when the whole, you know, the founder mode thing, we traded some emails on that and you have, you have some, some thoughts that I think are actually different than what I've heard other people's thoughts around that, that whole kind of discussion. And I think it goes actually to what you were just saying. Maybe can you share a little bit and I don't know, maybe give the whole. Since I don't know if everyone knows the whole founder mode thing, maybe just give a little bit of background. But I would like to get your thoughts because I felt like they were honestly pretty unique and actually really spot on when you describe it. I'm like, yeah, it makes sense.

Yeah. So founder mode is a, is a concept that was coined by Paul Graham in September 2024. So not that long ago, coming out of a Y Combinator sort of get together where Brian Chesky, who is the founder of Airbnb, was speaking about it. I don't actually think he used the term. I think it was actually a term coined by Paul. Listening to what he was saying. And Paul's write up, which anybody can access, you know, online, basically describes this notion of founder driven sort of closeness and touching all the parts of the business. And I think it was pretty compelling and it generated a lot of discussion sort of in the ecosphere of VC startup world and so forth. And when I read it, I sort of thought, oh, I connect with a lot of this and I think there is opportunity for this to be misused and abused and sort of misinterpreted. Because what I rate when I read Paul Graham note when I see is there's a lot of like sort of almost founder idolatry, like the founder, like is the secret and we need to make sure that we enable the founder often a he to be honest, even though that's gender neutral in the, in the, in the post. But to, to sort of make sure he's doing everything that he can. And if you don't have a founder driven business, then you don't have a successful business. Like that's, that's sort of a takeaway. Doesn't mean it's the only takeaway then. So I thought, okay, that's kind of interesting, but I'm not sure. And then I sort of fortunately happened to call upon Brian Chesky being interviewed by Scott Galloway on his podcast, where Brian, in my view, clarified what he really intended to mean when he was giving his talk that generated founder mode. And he said, you know, things like, it's about being in the details of being close to the business. And you can see based on what I said earlier, like, that really resonated and connected with me. And he was also clear, he was like, it's not just about Fender founders. He never actually specifically said this is only true of founders. But it's, it's true that like, you need to be in the details of the business, you need to be close to the business so that you can support the team. And what he had gotten off track of was he got advice of like, hire great people and let them do the work. Don't get too sort of micromanaging or too focused on them. Let them do the work, hold them accountable for the work and so forth. And that is good advice. But if it leans too far in one direction, these things are a spectrum or a dial, right? If you lean too far in the direction of let them do the work, hire great people and let them do the work, you can end up actually in the path of neglect. You can, and this is my view, this is not what he said. You can end up in this path of like, I'm not coaching, mentoring, providing guidance, directing, and I'm the leader, so ultimately I'm responsible and I need to do that. But on the other side of the dial where I do it too much, I get in this micromanaging view of, hey, I want you to say exactly this, this is exactly the way I want the code to be written. This is exactly the way I want that presentation to be to be done. And people don't want that either. And so you have to be able to balance it. It's, everything's a balance and you have to be able to balance. But if you're not close enough to the details, I believe you can't provide the right clarity, direction, guidance, mentoring of that great team that you brought. And, and as that team develops and grows, then you can, you can shift to Sort of being, allowing them to do more of it because, you know, and you can have confidence that they're, that they're going to do it in the way that is, is needed in the business. Founders are unique in that they have the, the, the heartbeat and the pulse of the business and the pulse of the customer in a way that almost nobody else can and does. So that is unique to the founder. But being in the details and close to the business and understanding exactly how it's working, what levers to push and what levers to pull, that can be true of anybody individual contributor all the way up to the CEO.

I think, I think when you say all of that, I think I've been in a bunch of board meetings or had CEOs tell me what is said in their board meetings. And so many times the investors tell them go get the CRO, who can go own that space and just, you know, go hire the person who has all the experience and everything and go let them. And it's exactly. Actually you're being coached to do that. And then you go out, you get a search firm, you do a search, you find the person who's done it three times before for, and you're like, okay, now they hire, we hired them. Sales is taken care of. Like, and, and it's it actually. And I'll speak for myself in my career, it's like I hired a person with a lot more experience than me, with a lot more knowledge of how to do that job. Who am I to, to give them feedback or advice or on the function that they're the expert in. But then to your point, there's something that the founder has that even if you have the best employee in the world, they do not the smartest, the best, the most dedicated. They don't have that same pulse or, you know, so I, that's why what you said resonated so much with me. Because I think it is the advice that we get a lot just get, get the really expensive execs who've done it and just let them own it so that you can go do blah. But if you go do blah, like, there's a lot of risk to that.

Yeah, I, I, I, I, I got the same advice too. And I think it's, and then Brian Chesky said he got the same advice too, right? Yes. This is what happens. And again, it does not mean that you shouldn't hire the best sales executive, but what it means ultimately my view of it, and this is actually conversations that I'm having with my team today, whether we're hiring new people or people that are in places like, you know, ultimately I still want to be involved, I want to be connected. It doesn't mean I'm actually going to make the decision for you. One, we've developed a collaboration decision making framework which is frankly like pretty enlightening, where one of the most key parts is being very explicit about who is the owner of that decision. And when we were talking about it with people in the company, when we were sort of first rolling it out, I would hear a lot of like, but wait a minute, John, does that mean you're going to make all the decisions? And I said, actually, no, actually this is the mechanism by which I don't have to make so many of the decisions because we're going to be very explicit about you're going to own the decision. However, I'm going to be one of the people providing input. And I'm explicitly giving you the clarity that what I'm providing is input, not decision or not direction. And sometimes I am making the decision and I'm clear about that and then I'm the one we call it. Right, but when it's just input, it's me being very explicit to say this is input. I'd like it to be considered. If you don't take it, you need to come back to me and tell me why so that we close the loop. But it's just input. I'm empowering you to make the decision. And when you make that very clear, you're actually empowering people to then make the decisions.

I'm going to ask you something super tactile, which is how do you, do you document in a. Are there like decisions to be made? Spreadsheet with a name.

We have what we call DMMs decision making matrices. And it specifically calls out who owns the decision, who is the, what we call the two role, which is the sort of the, the supporter, the, the responsible party. So that might be like in my case like chief of staff or like somebody who's like doing a lot of the work but not necessarily making a decision. You the one and the two can be the same person in some cases. And then you have what we call threes. These are people providing input early before the full proposal is done. And then you have fours who are responding to the proposal. And the goal of it is to develop the best solution possible. And the definition of best solution possible is maximizes the most number of needs possible. Doesn't mean all the needs, doesn't mean my input's going to be taken. But if there's always a closed loop. And so this is something we're continuing to get better at. We're not experts at it, but we're continuing to get better at it. And it's I think a really important key at empowering at the right levels in the right company and being very explicit about what different people's roles are because otherwise you end up in this spin cycle. And that's when decisions ultimately roll up to me because it wasn't clear who was going to make the decision and did they do the right work to actually get to that.

I like that a lot. Let me. So to switch gears a little bit, you. You have chosen to build a business where there's a lot of huge companies and competitors in a highly regulated market. I don't know, seems like one of the harder, you know, businesses to choose to start from scratch. Why, why did you choose this? What gave you, let me say, what gave you the confidence to do this?

Yeah, yeah. So it's interesting. So as you referenced in the intro, so I'd spent 13 years working in personal auto insurance at Esurance, three years in the finance area and 10 years in marketing. From $5 million in premium to one point to $50 million when I moved to $1.3 million of premium when I left in, in 2013. And I left saying, I left saying I will never work in personal auto insurance again. It was just so dominated by the, you know, frankly best companies in the industry. You know, you have progressive at the tip of that list, GEICO as well. And the advantages that they had and others were just so substantial that a. Even as good as we were at insurance, we were never going to be the best. We were always going to at best be third best. That's kind of how I sort of viewed it. And so as I got connected to my co founder and we started sort of conceiving of pie in the opportunity, what I saw was significant opportunity because of the market. So small business commercial insurance much more fragmented than. Than personal lines. The pricing sophistication, underwriting sophistication, use of data much, much less developed literally decades behind personal lines side of things. And then the use of technology, David, was just sort of like emailing applications. I mean it was, it was really not technology driven. And so it felt to me like sort of personal auto insurance maybe felt in the 80s to be honest, like. And it really was an opportunity to build from the beginning and compete against these larger companies. A company that could be a Preeminent player in the industry. And so that's why we did it. And that's the opportunity that we saw. And I think, you know, we're quite eight years in. We're certainly not the preeminent company today, but we are a meaningful player in the workers compensation space for small business in the U.S. right now.

And how, how have you done? Like how, how do you compete though? There are big companies and there are people who've been around and established like how. What is the rallying cry for your company of how you compete with those people and how you win?

Yeah. So we have a concept which is not unique to us. This is talked about in sort of insurance circles, not all, but in some case of spinning the flywheel, basically. So for us, our 12 o' clock point on the flywheel is granular data driving sophisticated pricing and underwriting that this is a risk business and risk lives on a spectrum. And the more specific we can be more matching the risk of a specific business to a price that we can sell the insurance, the greater opportunity we have to sell lots of insurance to people at a profitable price. So that's how we think about it. And then you start moving around that flywheel of then you can convert more, which gets you more customers, get you more customers, get you more scale, lowers your expenses, get you more data, feed that flywheel and spins it around. But the real key, after you get, if you don't have that, I don't think anything else really matters. But if you do have that, which, which I believe we do, that's also not sufficient in and of itself. It has to be paired with what Hamilton Helmer calls process power. Right. It has to be paired with doing all the little things in the business slightly better than everybody else does them. And when. And that compounds and accumulates over the course of the entire business to build true process power which can't be replicated. It's not a one thing silver bullet that somebody could copy or you know, the secret sauce of so forth. The secret sauce has like, you know, hundreds or a thousand plus ingredients in it. And you can't. And you can't. It's the combination of those things that makes the secret, not any one individual. And we have a long way to go on this. It takes a very long time to build process power. But being able to marry technology, I will tell you, like being able to start from scratch and build modern technology fully cloud based, I mean there are insurance companies, most of them are not anywhere close to being fully in the cloud. They're sort of living in these legacy systems. They have legacy customer bases. They grew through acquisition. So they're coddling together all these different pieces of the business. They have tremendous advantages in other areas. Like, I don't want to discount them, and I don't want to say it's easy to compete against them. That's not the. That's not what I'm saying in any way. But how do we lean into the things that we have real advantages in to create that process power and to drive that experience? And ultimately what we want to do is through that process power, we create a great customer experience. We sell through agents, so we want to create a great agency experience as well. And that then drives preference, which is how we articulate our vision. So our vision is to be the first choice, the first place people go when shopping for small business commercial insurance. Because in that risk environment, if you were the first one that somebody chooses to go and shop with, everything else works. You get positive selection, not adverse selection. You have higher conversion rates because a lot of people just go to the first one. If it's good enough, they buy it. You have the opportunities to scale and all that flywheel spins. And a lot of our expenses outside of the actual loss costs are relatively fixed. And so we want to drive that scale, which can bring our expense ratio down and expense ratio. David, Sorry, I'm giving you a little.

Bit of an insurance, I'm learning tax.

On the customer for buying the insurance. Right. When you think about it, like, when you buy insurance, most people don't have claims, but when you do, the claim is way more than the premium that you paid in, certainly probably for the entire life of your. Your buying insurance. And so you want to pay as little as possible to. You want to buy from a company that has the lowest expenses possible, because that means the tax you are paying to have the insurance is the lowest possible.

So I actually, I did not. I got.

It allows us to lower our prices more, have higher and higher percentage of what we collect in premiums go out to customers. That's what they want. Whoa.

Okay.

And they don't know that explicitly.

They don't understand. Yeah, but.

But that's. That's how it works.

Right, Interesting. So you're saying, basically what you're saying is execution process power. Execution is the differentiator. I mean, on many of. I mean, a hundred of them, coupled.

With the ability to segment risk at a more granular level. Put those two things together, you will win it. Like you. It will take years to do it because it is a accumulating business, right? You accumulate customers, those customers renew, they stay with you and so forth. And so the climb in the market share tables is slow, but you will win, right? You are better at both of those things.

I haven't been to a lot of big insurance companies, but we had a big insurance company as a customer and I went to visit their office somewhere in middle America, a huge office. And I'll never forget walking in and it was just like they had like the daily reports were on an actual like cork board with like, with pieces of paper that had been printed out that morning, you know, with like tiny. I'll never forget this. Like. And that was the dashboard. I remember walking. I'm like, this can't be the actual dashboard for the company. Like, it was as you came into the building and then we went upstairs and like they're using technology from. I, I don't even know, you know when. And you know, you were like, this is like a really well known, large successful insurance company. And when you see something, you know, when I reflect as what you're telling me, I'm like, it makes sense. And what you're saying makes sense, right? Is like each one of those things, you do it a little better. You bring in a better technology, you automate a different process, you use data in a better way, you use AI whatever the case is, like each of those things combined becomes super difficult for someone else. I mean, takes years for someone else now to compete with that.

Yeah, absolutely. And it's, and it's, it is really hard. The, the things that they have that are advantages, they have massive amounts of capital, they have big customer bases, they have distribution forces and so forth, those things are hard to pivot. They become kind of the, the, the oil tankers of being able to move them. And, and as when you're starting from scratch, listen, I mean you, I'm sure you experience this too. When you start from scratch, you build, you're building legacy, your own legacy systems from day one. So we have to try to like break that down as much as possible and not let it calcify too much. But we have, we have more flexibility to be able to do that.

So when you were starting, so you're starting from scratch. And again, we're talking about an industry where these people recognize the brands. Maybe in the small business is a little bit different, but they still, they're the brands. How did you get the first five customers? Ten customers?

Yeah. So we, so I had been at Esurance, which was primarily direct distribution. So I mean I was running the marketing department for 10 years. When I left we were spending over $150 million in, in advertising. You know, much bigger scale business than, than we even are today at 5. And it was very different. So promotional insurance is much more agent distribution and so and, and we knew from the outset that we were going to be multi channel in our distribution. We were going to sell directly, we were going to sell through agents and partners and so forth. We started direct because that was easiest. We didn't have to like, you know, have it as built. We can sort of like, you know, use a lot more of the duct tape and binder twine and chewing gum to hold it all together when, when you're selling direct. And so those early days were, it was funny actually. We were sitting in like a shared workspace, wasn't we work? But it was a wework style type thing and we didn't have that many people and I was sitting right next to one of our developers and every morning I would just come in and he'd be sitting there and he had to extract the leads from the Mongo database. We didn't have any CRM, we didn't have HubSpot or whatever, startup CRM, anything like that. Need to extract the leads from the direct production database and get that to the sales team that morning. And I'm like, you know, okay, what, where are they? Let's get them, let's get them out there. And you'd be like I'm coming John, I'm working on it, I'm doing it. And, and so then I would look at, sort of basically have a call every day with the sales team. At the end of the day, who do we talk to? You know, did you know, did we buy anything? We didn't have the instrumentation like we did was just nothing like. And asked them, tell me about why this person didn't buy, tell me about why this person did buy. Like what are you hearing? And you know, I didn't do that forever by any stretch of the imagination. But that's how we learned and how we sort of understood and, and figured out oh, this is broken. Oh, this doesn't work the right way. Oh, that actually works pretty well. Oh that's, that's something that a customer would have bought if we had had that. So and so, you know, now like you said, we have around 50,000 customers. We probably insured over our eight years, 150,000 customers in total. So obviously we're not doing that now. It's all instrumented. We can see it all. But that closeness, again, I'll just reinforce like that closeness to the business is really key and important in those early days. And then you, how you are close to the business just changes. It's not that I'm not close to the business anymore. I'm just not close to the business in the same way now. It's in dashboards and reports and information and so forth. So that's. We did it in the early days. Yeah.

From a fundraising perspective, was it easy to raise money when you were getting off the ground?

So it's never easy to raise money. You know, I don't want to. I've listened to a lot of podcasts, I've read a lot of things and it can some, you know, when I was an early founder, like, honestly, I felt this way sometimes. Like, oh my gosh, I'm a failure because, like, some VC told me no. Right. I mean, like, first of all, you're going to get told no so many, so many more times than you're going to get told yes. And, and so it's important to understand that. And it is hard to raise money. You have to have so many things go right and be right about you as a team, about the business opportunity, about the investors that you're talking about, and then you can have all of that thing, all that stuff go well. And you know what? They, you know, they already invested in a business that's similar space, so they're not going to double down. Like, all kinds of reasons why investors can say, know. That being said, we were fortunate to found pie in 2017 and do most of our fundraising in sort of up through 2021, which was a really good time to, to raise venture capital in insuretech and fintech and so forth. And so we've raised a lot of money. We've raised well over $600 million in total. We are a balance sheet business. So it's not just operating cash. We actually have to have capital to support the insurance that we write. And so, but it comes down to like, do you have a compelling story? Can you have a Com, like a real competitive advantage in the market? Is that sustainable? Do you have the right team? All of these things, so many different people have talked about. They talk about them because that's the real stuff. Like, that's, that's what it takes. I will say I'm not an entrepreneur by nature. This is the first business I found founded. I wasn't going around saying, okay, I'm Going to found a business. Now I just got to figure out what I'm going to do. It was because of this opportunity that I made the leap into true entrepreneurship. And fortunately we were at a time when, when raising money was, was relatively available, but still very challenging.

And you have assembled a pretty impressive board, both investors and independent board members, directors. Can you talk about that? Because I will say for myself, I've been through boards that had, you know, four people in boards that had 10 people. I think you may have 10 in total. I try to avoid the bigger, you know, the bigger boards, you know, at all costs because of the dynamics in the boardroom from my perspective. But you have more independence than I've ever had on any board or any board I've been a part of. Can you maybe talk through the mindset like, why, why did you do that? Why are you good with 10 people on the board? You know?

Yeah. So it is a big board and I will say, all things being equal, a smaller board is better than a bigger board. Like, I mean, it just like for all the reasons that you've experienced that anybody can imagine, I mean, just the simple thing of scheduling a board meeting is just harder when you have so many people.

You have to, you have to schedule like two years out.

Yeah, we do. We actually schedule two years out and then, and we try to like really lock it in. And, and obviously every company wants to have its board meeting roughly around the same, you know, calendar window and so forth. So you got to get out there early. I'm sure in a few years we'll be scheduling three years out. So we, we made a decision in 2021 that we wanted to bring independent board members into the company. And I would say that is somewhat unusual given sort of the, the stage of the business that we are and so forth. And our investor board members are great and they're very supportive, but it's not quite the same to have your investor board members versus the very specific and intentional targeting and selectivity you can have with the independent board members. And so that's why we wanted to do that. Because what we, what we wanted to do is we want to bring in specific expertise and knowledge and experience and connections in certain areas. So we have four independent board members. One we targeted to be on the technology sort of experience side, kind of former cto, former CPO type role. Another we wanted on a high growth technology people side of the business. The people side of the business is incredibly important and having an operator with that knowledge and experience. So we targeted A chief people officer. We targeted a insurance financial person. So we have former CFO of USAA on our board, and we targeted a sort of broad insurance president, CEO experience so that we could have that leadership of an insurance business in the company. And we have four tremendous independent board directors that really upleveled the entire board. Up leveled me and the leadership team. They are. Three of those four are basically professional board members at this point in their careers. And. And one of them is still working her. Her role. So. But all of them just bring tremendous value. So that is. That is a. I'm willing to have a large board to get that. To get that outcome. Yeah.

And so you were super deliberate about each of those.

Absolutely.

Searches. How long did it take you to find those? Each one, you know, is each search a six? Did you hire a search firm? Did you just reach out to the people?

We sort of. It was different. We hired a search firm for two of them, maybe three. One of them sort of came through connections that we had from some of our investors who were frankly doing some great work to help support sort of board additions and so forth with their companies. And that was really, really helpful. And. But we were really. We were really deliberate on. On the types of backgrounds that we were looking for, which obviously makes it super easy because you just narrow the window and you're not just spraying around all kinds of folks. And I would say, in total, it took us probably nine months to 12 months to add all four. So it wasn't like tremendously long.

That's not. Yeah, that's not too bad.

But it was. It was a focused effort, I found.

You know, one of my investors made this comment to me, which was actually pretty smart. He said, we have this independent board, open seat, and, you know, let's be super targeted about who we want and everything. But by going through the process, it allowed me actually to have conversations with people probably who never would have talked to me, you know, that. That had the.

For.

For the board member role. But I would reach out to someone who literally wouldn't take my call and say, but we're looking for an independent board member. I'd have the investor reach out. And I had crazy. I had conversations with people that definitely had no right having conversations with them. And it was amazing. And I've been giving that advice to some other founders of like, if you have an independent board seat, don't just like. At least for me, when I started the process, I felt like it was this extra work versus, like, it's actually a kind of unique opportunity to make, to have conversations because people of course will take that, you know, for an independent board role for a venture backed company that's growing. Like they'll take that meeting.

Yeah, absolutely. I agree. Yeah.

What, what is, what is the biggest challenge you've faced? Building PI insurance to date?

Yeah.

I'm sure you've only had one. So yeah.

Lots of challenges, but that's what you sign up for as an entrepreneur. Right. So. Or joining a startup company. Right. You're dealing with a lot of challenges. I would say probably the biggest challenge that we have dealt with as a company. And so therefore, you know, as the ultimate leader of me is the pretty abrupt shift that happened in, I would say in 2022 from, oh my gosh, you're not growing fast enough. How, how do we, how do we, how do we become the most valuable insuretech business to when are you going to be profitable? And that's not, that's not a, I don't mean that in a derogatory way with like who was asking those questions or making those statements. It's just the world changed very rapidly and, and that is a hard thing to do inside a business. I described some other companies as oil tankers, the older sort of companies. But we, you know, we have our own boat that we have to turn as well. And when you go inside the business from go, go, go, everything's going great. We're always able to raise money. We can, we were hiring, we can invest in this, we can explore this. We're expanding into new areas that we weren't doing before. That's a really good feeling that feels like everything is going great. And when everything stops going great and you have to actually make a pivot, it takes a, a big mental shift to say now we need to actually focus on getting to profitability. We're not going to be able to raise endless amounts of money to keep funding these things. We do actually have to make money at some point and it does matter how much we spend on things and so forth and it does matter how many different things we're doing. So we have to condense the focus, limit the priority list. And I actually think that's a really, really good and healthy exercise for a business to go through. So it was, we are a much better company now than we were before we made that shift. And it was the hardest thing that happened at Pie. Right. We did have to do a layoff. We have a hundred plus fewer people in the company today than we had at our peaks. And We're a much bigger company. So on that sort of rough measurement, we are dramatically more efficient. I don't say yes to everything that, that, that we could do. A lot of my team tells me I still say yes to too much, frankly. And, and so it's that shift of mindset that does take time. And I would say right now we are sort of largely through it and pushing forward in a very positive direction. But it's kind of when the music stops and you look around and there aren't as many chairs around, like, that kind of sucks. So that, that, that was a hard thing to navigate through.

And I think the speed, at least in my career, I feel like the speed at which it changed is the fast, like maybe the fastest that I've seen. Like, it was such a fast change. It was like literally one board meeting to the next. You know, it's just, what, what can you do? I mean, literally conversation like, where can you spend money to grow faster? Kind of regardless of efficiency, kind of to how. Who cares about growth? How do we get to profitability tomorrow? And you're like that. I mean, and to do the things that you need to do to grow, this is the thing. I think a lot of people that work in the company that are impacted by these changes which, which are painful to, to kind of go through, they don't see all the dynamics like to. You're having a board meeting, how do you grow as fast as possible? You go and spend the money and the time and the energy to put all the input things, things in place. And while they're like about to hit now, you got to shut all of those machineries like down. Like it's. I think it's. I. And the people who didn't shift fast enough for whatever reason are now the ones specifically. Right. Like in a really bad place, you know.

Yeah. So I'm a little older than you, I think, David, so like it, it did happen. I mean, and I joined Esurance three months after the dot com crash. You know, I like telling a story. You know, I was young, I was 27. And I didn't ask one of the most important questions. And I'm glad I didn't ask it. I didn't ask how much money you have left in the bank. Right answer would have been three months. And I might not have joined in. My, you know, life might be very different. So can change very quickly. It doesn't change very. That quickly that often. Yeah, but it was very quickly. And I will say that for you or me, as the founders, CEOs, we're in those board conversations. So like, it's hard for us to process, but for the team member, it's way harder to process. Because what it looks like you or me, what it looks like to them is we don't know what the Frick we're doing 100%. Like, wait a minute, we just launched this particular initiative two weeks ago or two months ago or whatever, and now we're shutting it down. We just hired these people and now we're firing these.

Exactly.

How can that possibly be? How did you screw that up so much? And I don't begrudge that view. Like, I can understand that view. I can't change it. But like, I get it, I understand it because it really does look that way. We don't know what the heck we're doing.

So to transition a little bit more to you, I want to something that I think I'm trying to think of all the guests that I've had, but one of the things, you definitely started PIE at an age older than I'd say most founders probably. I think you were 44 or something in that range when you founded the company. I, I, you don't see a lot of that. And so how was that process? How were you able to do that? Why do you think that we don't see more people doing it at that stage of their life?

Yeah, I have thought about this. I was 44, I'm 52 now, and I'd never founded a company before. My co founder actually is a little bit older than me, but he had, he was a serial entrepreneur. Right? He is a serial entrepreneur. Right. So that's kind of like what he does. And so I have a belief that anybody can found a company at any time. I don't want to say that like there's only a particular way or position you can be in in order to found a company. But predominantly it's going to be younger people who are less encumbered. They don't have the burn rate of, they don't have the financial burn rate, they don't have the family burn rate of may not and so forth. Because it is really hard and really stressful to found a company. I was able to do it at 44 because I had made some money from the insurance acquisition and my wife was not and doesn't work outside the home. And so I could, I had the ability to, to do it, to allocate my time and my focus in a very stressful situation. My kids were not super young My youngest was nine and, and so forth. And I have two others. So I could do it because I had money and I had a support system that enabled me to do it. And so I think one of the reasons you don't see a lot of founders sort of in that middle grown, middle zone or many older founders is because they may not have that money or that support system. I would not have been able to found this company if I didn't have the money or my wife also worked and I had to, and I had to do, you know, a full, you know, 50% share of the family duties. So I think that's, that's the reality. It's unfortunate because it does limit the potential opportunities, I think, for, for founders or makes it way harder to do it. I will say we got a lot of different reactions from investors in those early days.

Really.

You know, the, the grizzled gray guys coming in. Some will be like, I don't think so. You guys can't teach old dogs new tricks. And some would be, oh my gosh, this is great because you've seen all this stuff, you have the experience. And so obviously the ones who invested are the ones who kind of thought that. But you know, we got a lot of, not overt, not explicit, but we got a lot of. I'm not sure you're going to be able to build a startup business because you're not 25 years old in a, you know, college dropout kind of thing.

I, I actually think if you can do it, at least for me, how I feel is like when you get to whatever. I don't age exactly. Doesn't matter. But some amount of experience you, you actually do. There's so many things you're better at. I mean just from, from being in an industry, being, you know, and if you have the right mindset but, but it's hard. I'm working with a founder who, who's trying to start a company, but they have a family and they have kids and they have wife who works and they have, and, and they have a really, they're having a really hard time actually doing it because, because you know, to replace a salary of $250,000 as like you're not going to do that. You know, the startup founder day one. And that, that, that dynamic is, is kind of complicated and I think to your. It kind of sucks because there's a lot of people who have good ideas who have been in the industry who have that spirit, you know, and the entrepreneurial spirit. So I, it's It's interesting and I, I'm not surprised actually by the investor. You know, again, maybe not overt but like I, there's, there's probably a bias, you know, in, in investors minds most likely of course.

I mean they're in the business of pattern matching. Right. And, and you know they're, they're going to match against the patterns that they see has been successful. And, and so I don't, again, I don't begrudge that but it was there and it wasn't, wasn't like it was, you know, most of the, most of the no's we got were like yeah, I don't, I don't do an insurance which I get and understand it's actually a really tough business to invest in.

So as you've, you know, came in, never done been a CEO before, your CEOs company scaling quickly. How have you up leveled yourself on this journey kind of to what you were saying before to keep up with the business. And as the business scales the job comes very different. How have you done that? You have some mentor or, or coach or something like that?

Yeah, so a lot of things.

It.

Started with I got a professional coach early on and she's been with me almost the entire time. So over seven years we've been working together and it's been invaluable. I would recommend, suggest mandate if I were investor on a board or whatever, I would say, you know, I don't care who the CEO is or the founder is, they need a coach. And you know, it's not, it sounds maybe weird but like really is it weird like name me a professional athlete who does not have a coach. Right. I mean it's just there, there isn't one. Whether you're on a team or whether you're an individual performance sp or something of that nature. And this isn't that much different. Right. You want to optimize your performance and it's hard to do that by yourself. So I think that's been very key and very critical. I spent a lot of time picking and it's probably unusual to have the same one for so long, but it's worked out great for me and because we just have a great relationship and a great connection. But if that's not the only thing. Right. Adding those independent board members was really key. Making sure that I have close connections with, with our investor board members, investors who are not on the board and so forth. Frankly investing in my leadership team, you know, I grow and develop through them as well. Right. And so because there's different people that have different elements and, and you know, I can learn from all of them. And so I think the, the key is maintaining that really open growth mindset of I and, and trying to be as self aware as you can. Does that mean I have blind spots that I'm not aware of or that I don't? Of course I have blind spots. Everybody has blind spots. But trying to be better now than I was before and trying to be better, you know, in the future is really that embodiment of that growth mindset. And I don't always exhibit it. Right. But I try to be as self aware as I can when I'm not exhibiting it and reflective. And then surrounding yourself with as much as you can of a support network to help you up level and really have people hold you accountable too. Right. Frankly, a co founder is really important in that structure too. I don't know, I can't remember, David, if you had a co founder better file.

But. No, no.

Yeah, but founding a business is hard and it's lonely. That means, to be honest, right. You can't share the same things with the team that you can share with the co founder or. And so you need that support network around you and then you need to have open enough ears to listen.

Is there a moment that you can kind of think like, was there some kind of pivotal moment in your career that you got some shot that you shouldn't have gotten that you got, you know, like, was there something that kind of puts you. Because even the insurance kind of run was pretty amazing run, you know, like, was there, was there a moment that, that kind of set you off on the trajectory that you went on?

I mean, I think the answer is there are lots of moments. Right. And I think it's important for anybody who's, you know, had some. To substantial success in, in anything. You got to recognize there's an element of luck in a lot of things. Right. You know, all the way back to, you know, being a, you know, white male, you know, born in, into, you know, you know, a family that can support and send me to college and so forth.

That's true.

And so the one that I would point to though, the one element that I would point to or the one moment is I remember it like it was yesterday and it was, you know, now 22 years ago. I, I was CFO at Esurance. We, it was 2003. We needed a new head of marketing because the person we had hired who looked great on paper didn't really work out and so we had fired the person, and we were interviewing new people, and I was the last interviewer of the day. It was a Friday, and my boss and CEO and longtime mentor and still very close friend came down to my office after the interview and said, what did you think of him? And I said, I don't really think he's right for the role. And I was third. And he said, I don't really think he was right for the role either. Why don't you do it? That's how I moved from finance market. We couldn't find the right person to fill. And this was not the first interview we had. This was like many interviews, and we weren't finding the right person. And he had enough faith and trust in me to ask to say, I think you should do it. I think you would be good at it. And I was surprised and shocked and said, I need to think about it, and went home and talked to my wife about it. And she said, well, you know, when the CEO comes down and asks you to do something, you say yes. And so I went back in on Monday and said yes. And that was, I would say, one of the most pivotal things for me to do, because it forced me in the same company, in the same industry, to go and learn something completely different and to realize that, like, I wasn't going to be the expert, but I was still going to be the boss of that area. And so I have to be able to provide value and I have to learn. I have to be humble enough to learn and know where I'm not going to do well, but strong enough to know, like, okay, I'm being asked to do this for a reason. So I need to be confident in my. The value that I can bring an ad, but humble that I don't know everything. And again, it's that balance. And, you know, it worked out pretty well. So. So that. That's what I would say.

Amazing. Last question for you. What is knowing everything you know, today and your entire career and everything, what is the one piece of advice you'd go back and give yourself before you start your first job ever?

Yeah, so this is where luck comes in. Because, like, I happen to do this most of the time, but I would, like, really reinforce it and be like, make sure you do this kind of thing. And I would say this. And this is advice to sort of other folks who might be earlier in their careers, and it's that, say yes. Say yes to the challenge, say yes to the opportunity. This might sound like another piece of advice, but it's connected. Don't over optimize on the wrong things early in your career. Optimize on learning, growth, exposure, opportunity. Not on money or title or anything of that nature. If you don't absolutely have to. Never make a decision to join a company about money. Money matters and it's important, but it should not be the driving factor. I'm taking this job because they're going to pay me 10,000 more than this job. Sometimes that might be necessary, right, for different people in different situations, in which case, okay, but if that's not required, don't make the decision based on that. Optimize for all that other stuff.

John, thank you for doing this with me. I really enjoyed. I, I learned a lot about, I've, the couple times we've talked. I've learned a lot about insurance stuff I didn't think I would learn.

Passion for me. So I love, I love talking about it. If I can hear, have anybody who's willing to listen, I'll, I'll give them.

Well, thank you very much. And for everyone who's listening, I'm sure, I hope you took away a lot from this conversation. If you did, please share this out with your networks and and we look forward to seeing you for next episode of Not Another CEO Podcast.

Thanks, David. I appreciate it.

Thank you. That's a wrap for this week's episode of Not Another CEO Podcast. Thanks for joining. For show notes and more, please Visit not another CEOPodcast.com we'll see you next week.

Sam.