Sramana Mitra: You said there was a chicken and egg situation. Can you double-click down on that? How did you address the chicken and egg situation?
Andrew Rose: Part of it was for the early insurance companies that took the leap with us saying, “We’ll come on as your initial insurance companies.” It was that we had to back up the fact that we would go out there and spend millions of dollars on advertising. This was a big leap from those early investors.
You’re going to have to go out there ahead of your economics to convince insurance companies you’re here to stay. Their investment and integration with you is an IT project. IT projects in insurance companies take a lot of red tape to get through. We had to prove to them that we would advertise, that we did advertise, that we did generate the costumer volume, and that we’re worth their investment in time to connect with us. That’s the chicken and egg. We had to advertise to get them. The advertising was the big bet and we’re fortunate that it worked.
Sramana Mitra: In terms of customer acquisition on the consumer side, what worked for you?
Andrew Rose: It’s interesting that you’d choose the terms well because we’re very careful about what we say our customer is. We live in a world where we have two customers. We have consumers and we have the insurance companies. We’re sitting in the middle. We’re a matchmaker. Often, when folks ask what our business is, I say “We’re a Match.com for auto insurance.”
We tried to make that equation work. That was the big push for consumers. How do we end up with that value proposition? People understood this for hotels, for cars, for travel, and those kinds of things. We said “We’re like that but for insurance companies.” The challenge for us is auto insurance is not a product people want to shop for. This is not a fun product. Getting the new iPhone or the new Pixel are things you’re excited about that you post online and tell people about.
With auto insurers, I bet you and I can both search right now and see that there are very few posts saying “I’m so excited. I just got my new auto insurer.” It’s just not there. I’ll challenge you and your listeners. Come up with another product category, other than insurance, where both the buyer and the seller of product hope it’s not used. It’s a weird product. It’s misunderstood. Thus, it’s not shopped for. That’s ultimately the challenge that we had to face – to draw consumers in.