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A Fat Startup from Virginia: Andrew Rose, CEO of Compare.com (Part 7)

Posted on Sunday, Feb 10th 2019

Sramana Mitra: What were the strategic nuggets of building that business? 2012 to now, what were some of the inflection points of the business?

Andrew Rose: One of the early inflection points was that we had to show success.We had to prove to consumers. I’ll give you a couple of indicative examples, and you can imagine how this started the ball rolling. As we got new employees here, they were inclined to check their own insurance.

We had one young mother of three. Once she started using Compare.com, she saved $800 per year. And you go “Okay, that’s great.” Well, that convinced her colleague sitting across from her – a younger lady, newly married, and under 25. She said “Okay. I’ll shop mine as well.” She did and saved $1,800 dollars. The crème de la crème was an associate in our data science area. She joined Compare.com and then checked her insurance. She had four cars, four drivers including a teenage driver. She saved $4,000 a year and it stunned her. She’d been with her insurance company for 10 years and seriously bemoaned she’d probably left tens of thousands of dollars on the table by not checking her insurance.

It was those stories that you get back from customers. When we did the math, consumers over their driving lifetime could overspend by as much as $50,000. It’s insane. When you can bring a product that you’re offering some of the biggest and best insurers and they can have those savings, they’re thrilled. That was part one. We had to deliver upon that promise. The other part was the difficult part. We had to get insurance companies.

When we soft launched in 2013, we’re launching with one or two insurance companies. We launched in 2014 when we’re doing a half-dozen insurance companies. But then every year, we would double our numbers. We would go from a half dozen to a dozen, to two dozens, to four dozens. Now we’re sitting at 70 plus.

We have some of the biggest names out there. We have two of the top three. We have other big names like Liberty Mutual, MetLife, General, and then lots of smaller insurance companies that you may not know but you should definitely consider. Ultimately, we leave it up to the consumer to decide what’s best for them. Getting those insurance companies along the way further enhanced the value proposition. So you had to show them they got savings. You had to add more insurance companies. That was another inflection point.

Sramana Mitra: Great. What else do you want to share about the story that would be interesting?

Andrew Rose: The story we like to share is, we continue to grow. As we look at our numbers, even this month we’re 40% up month over month. We’ve been very fortunate after that initial investment to have another round of $50 million in 2015 and another round in November of 2018 for $35 million. Across our lifetime here, we were able to raise $185 million to continue to grow and try to change this industry.

But as I said, it’s challenging. It’s not simple. You’ve got some very loud competitors out there that we have to work against. We have to deliver a better product and service. We have to differentiate by delivering accurate quotes through one quote process rather than going carrier by carrier, insurance company by insurance company.

You need to offer them a better proposition and our proposition had to change over time. When we were starting in January of 2014, 7% of our traffic came on mobile. Today, that’s north of 80%. While we were growing it, our business changed fundamentally right underneath us. We had to modify all of our processes to accommodate the fact that consumers were going to do this over their phone rather than on their desktops.

Sramana Mitra: With $185 million of investment, what kind of revenue levels have you reached?

Andrew Rose: That is one of the unfortunate parts of this particular business. Because we still fall under the majority owner, Admiral Group, they don’t let us release our revenues, which is frustrating when you have these kind of conversations and you want to talk about the business that you’ve grown. We can tell you the numbers that they will let us release which is we’ve done tens of millions of quotes since our inception. We’ve saved our customers hundreds of millions of dollars over that time period. Those are the metrics that I’m allowed to disclose.

Sramana Mitra: Does your revenue do justice to the $185 million dollars of investment?

Andrew Rose: Over time, we continue to build. Around 2014 and 2015, we were not generating a lot of revenue. We certainly flipped that script or passed marketing break-even as a business. We’re just in scaling mode at this point in time.

Sramana Mitra: Great . Thank you for your time.

This segment is part 7 in the series : A Fat Startup from Virginia: Andrew Rose, CEO of Compare.com
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