[Raised $3 million] Ep.162 - This Founder grew his company to 1200 customers in 12 months

Josh Pillsbury Joffe is the co-founder of Summit Insurance national insurance brokerage and risk management firm headquartered in Kelowna, British Columbia. Shaping the future of commercial insurance through technology-driven risk management and insurance solutions. Summit Insurance has now raised a total of $3.5 million since its 2020 inception.

Where to find Josh Pillsbury:

• Website: Summit - Commercial & Business Insurance Solutions Canada (summitcover.ca)
• LinkedIn: (3) Josh Pillsbury | LinkedIn

Where to find Hadi Radwan:

• Newsletter: Principles Friday | Hadi Radwan | Substack
• LinkedIn: Hadi Radwan | LinkedIn

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Transcript

I have a small favor to ask that takes you literally a few seconds. If you like the first 100 podcasts and the guests that we have invited so far, can you do me a small favor and give us a thumbs up on any podcast platform that you are listening on? It helps the podcast more than you think, because the higher we go on the ranking, the more interesting guests we can invite. Thank you again for your support. Let's do it. Broadcasting from around the world. You're listening to the first 100, a podcast on how founders acquired their first 100 paying customers. Here's your host, Hadi Rodwan. Good to have you on the show, Josh. How are you doing today? Hey, Hattie. Thanks for having me. I'm doing good. How about you? Thank you for stopping by. I'm doing amazing. Josh Pillsbury is the co-founder of Summit Insurance, which is a national insurance brokerage and risk management firm in British Columbia. And you're trying to shape the future of commercial insurance through technology driven risk management and insurance solution. And you've raised 3.5 million today. Take us back to the top, Josh. How did you start in the insurance space? Yeah, I started in insurance about 10 years ago. I started out on the underwriting side, working for a large US carrier down in the States, doing very specialty corporate underwriting and larger enterprise underwriting. So that was where I got my start, but definitely saw inefficiencies right off the bat. And I'm always wanting to start my own business and really wanted to just get a... a couple of years of experience to sort of understand the insurance industry before I ventured out. And then, you know, during that time, I started actually a small business on the side called Insurer Solutions that was automating applications between brokers and underwriters. So that was actually prior to InsureTech practically even being a word. So at that time, InsureTech was just sort of starting and lemonade, but there's some buzz around lemonade just sort of being founded. So. we can dive a bit more in, but that was sort of where I got my start in the insurance industry. Amazing. Take us back to the early company that you started. So how did you convince brokers to buy an enterprise solution? Because it's always hard to get them to adopt new solutions. Yeah, that one was definitely a big learning experience for me. I think any entrepreneur, obviously, they go through many different stages of their journey. And for me, that was very, very early on. So... There was only three of us, I had two co-founders and we were building a minimum viable product for brokers and underwriters to exchange standardized application information. We were going out to market, looking to raise some funds to sort of expand our customer base. But actually during that journey, I had sort of been introduced actually to another company called Apollo Insurance, which was just starting out based in Vancouver, British Columbia. And my other two co-founders at the time, that one was working at SAP, another was a software engineer at Salesforce. And we were exploring going out full time on our own to start Insura and really, you know, going all in on it. But, you know, the other two co-founders and I, we had a bit of a different direction that we wanted to take the company even at that early stage. So I think that was one of the big learnings is how important it is to find a co-founder that's very aligned with you in the long run and you can, you know, At the end of the day, when you're picking a co-founder and you're going to be spending the next five to 10 years building a business together, you really want to make sure that you're aligned on the end vision. So I was very fortunate to sort of be able to roll in my experience of Insura into Apollo. They had actually acquired Insura for anti-competitive reasons, is probably the simplest way to put it. And then I led the sales and growth on the wholesale side of the business. So Apollo was a digital NGA. At the time, a digital wholesaler. So what we would do is that we would build insurance products. We would distribute those through third-party insurance brokerages. So one example would be we'd turn their website into a Shopify style e-commerce store, get our products set up and white labeled on their website so their constituents and consumers could purchase online. So that was really what I had spent the next couple of years investing my time and efforts into is scaling up the wholesale channel of the business. And during that... period of time, this was around 2019. So Insurtech was just starting to really get moving quite aggressively. And this was pre-COVID. What happened is during COVID, all of a sudden COVID happened and no one was able to purchase insurance in person anymore. So at least in Canada, insurance was very much still a human to human interaction. People would walk into the office, do the transactions. Most of 99% of transactions were probably being done in person or over the phone. And when COVID happened, no one could really do those purchase policies anymore. So that actually really accelerated the growth of Apollo quite dramatically because every single broker in Canada was very interested in a digital solution that they could have their customers buy online. So the timing actually worked in our favor in that respect. But what we also found is that, you know, Apollo was a small business oriented wholesaler. So we, we learned fairly quickly that not that many Business insurance customers, even small and micro businesses are inclined to purchase insurance online without any human interaction whatsoever. So, you know, we were getting, I would say moderate traction at Apollo, but, you know, where we felt it would make the most sense is if we started building a few personalized products as well, because those products were able to be distributed online at scale much, much better. So. We built actually a renters insurance product and then we started distributing that through the brokers. We had quite a bit of success there, but again, you know, when you're distributing through the wholesale channel, or if you're selling through a broker, you really have to, like any NGA or any wholesaler, you have to really be focused on the volume and driving the growth and having a broker who knows how to do digital marketing, generate customers. And we just felt that given the stage that we were at, it actually made sense to start our own brokerage to be able to sell our products direct to consumer. So I had actually met my current co-founder, Davis Gilbert. He was running a large regional brokerage out in Manitoba, which is in central Canada. I had met him through Apollo because they were using the Apollo software. And then we decided at Apollo that we wanted to start our own internal brokerage. So I had reached out to him and I knew that he wanted to start a brokerage. He actually came over to Apollo and we co-founded the direct channel of Apollo, which ultimately generated the vast majority of the growth thereafter. So in the first year of operations, we scaled from zero to over 15,000 new policy holders. We generated almost a hundred thousand leads. So, you know, customers that had filled in complete full applications, gotten quotes online. So that was really a... a very interesting stage of my entrepreneurial journey, even though I was working for Apollo at the time, but it was a pure play startup. When I joined, there was only about six of us and the next phase obviously is Summit and where we're at right now. But when we left Apollo, there was over a hundred full-time staff and we had really gone through a very significant amount of growth. So took a lot of learnings away from Apollo and fast forward now to Summit and we're sort of two and a half years into Summit. I'm on a whole new journey now and this is sort of my third crack at it. So we're very excited for where Summit is going right now. Amazing. When you were working at Summit, sorry, at Apollo, you mentioned direct growth through the channel. Which tactic worked well for you to scale from 0 to 15,000, you said, right? Yeah, we went from 0 to 15,000 customers very quickly. I would say the first, like any... Like anything, the first 100, the first customer, let alone the first 100 is always the most difficult. And really what we had actually originally our model was that we were going to generate leads through partnerships. So I was leading partnerships at Apollo. We were going to partner with sort of larger national groups, for example, large property management company or a large association. drive-in bound lead flow, and then we would direct that lead flow to sort of a subset of preferred insurance brokerages that would then close the leads for us and ideally place that business back with us as the MGA. What we found is that actually the closing ratio wasn't quite where we had hoped it would be. And we sort of went through a few different strategies to try and figure out how do we get the closing ratio higher. I think the first 297, I remember we had 297 leads that we had generated with one brokerage specifically and they had only closed one customer. out of the 297 leads. So, you know, we had to try and figure out how do we get more of these customers to actually convert? And when we don't have control over the front end of that experience, because we're selling through a broker, it was sort of challenging to really get to the bottom of that. So that was really the genesis of why we started our own brokerage, because, you know, we were the lead generation engine and the product. And so it felt like a natural fit for us to also build out the sales function of the company as well, which ultimately an insurance broker could really is a sales company. So the first a hundred customers, I would say really it was a function at that point and to boil it down very simply was, you know, response time, you know, it was making sure that we were reaching out to these leads in a reasonable period of time, um, and not just sitting on them because, you know, when it comes to a small micro business or even a personal insurance customer. A lot of brokerages are more focused on higher ticket commercial sales. And so, you know, if you're getting a massive influx of small business or micro small business, that might not be quite as big of a priority to you as a brokerage, whereas for us, that was the number one priority because that was like our products and our leads. So I would say that was really the, the initial driver and there was a lot more that came after that, but the initial driver was just making sure that the leads were being responded to in a timely manner. Amazing. I believe we discussed this before the call on summit that you're following a B2B2C approach where your end user, the revenue generating customer is the policyholder, but in the middle you have actually maybe agents, brokers, third party distribution channels that are bringing in those leads for you. Talk to us on the strategy on not only acquiring those intermediaries, but also making sure that they're getting you. the right leads because you need the conversion rather than just the leads to get the revenue in. Yeah, you sort of nailed it is that, you know, we have right now over 1200 commercial insurance customers and customers. At our core, we're a tech enabled commercial insurance brokerage. We do primarily use off the shelf best in class technology to streamline a lot of the day to day operations and the policy management. Although we do. after this most recent, and I'm sure we'll touch on this most recent round of financing, have plans to build in internal technology to really accelerate everything that we're doing. But even though we have 1,200, 1,300 commercial insurance customers, the way that I view our business is that our customer is the broker or the producer. And we don't work through third party brokers or producers. Everyone who is a broker at Summit is a full-time employee. They're producing business on behalf of Summit, and that's our model. We like the idea of building Summit as a brand and building a very large entity when it comes to a commercial insurance provider in Canada. But hiring the first commercial producer and then hiring the second is very challenging, especially when there's the state of the market is that it's highly competitive and there's a very big talent gap, I would say, in Canada when it comes to producers. So. You know, hiring the first seems almost impossible than hiring the second. The third is very challenging. Fortunately right now we have a team of 23 full time and we're continuing to grow and hire more and more producers. But you know, at the beginning, it's very much like anything. It's just getting someone to understand the vision, the end goal, you know, where we're headed, ultimately being part of something that's bigger than just yourself is a big part of the decision. And. And in the end, it has to be worth their time, of course, from a compensation perspective. So, you know, our first quote unquote hundred customers, I would view as producers and account executives. And we have 11 full time right now. So we're actually not quite where we want to be in terms of, you know, the end goal, but in terms of end customers, we do have 1200, 1300 customers that are recurring commercial clients at this point. Amazing. Is there any strategy that you've deployed early on that's not scalable? but you had to do it to get the early brokers or customers to come into the door. And why did you decide to work on a model where your distribution are internal versus having third parties to bring in those leads? Yeah, it's a good question. The first part of the question, you know, things that we do that aren't scalable. And I think that every company has to do. a lot that isn't scalable because certain things that aren't scalable actually can be very good for the business. Like one time sort of strategic operations or projects, things like that. But at the beginning and even to this day, our business is sort of split into two channels in the simplest view. We have our outbound sales channel and then we have our inbound sales channel. So up until this point, we've been a very heavily driven outbound sales oriented company. So we, at the beginning, we're doing a lot. cold email, cold calls, obviously driving as much content and building up a brand as much as we can to drive inbound. But 90% of our business for the first year was all driven through outbound sales. We did have a very well-defined sales process and I would say we have a very good sales process right now in terms of how to generate interest and bring customers in the door. But that in respect of having one account executive or two account executives running the full sales cycle. That in itself probably isn't scalable, but at the end of the day, that's where every customer, where every business starts, is that you sort of have to do everything yourself. Fast forward to where we are today is that we have a team of sales development representatives that work the front end. They open the conversations, they book the meetings for the account executives. The account executives then will, you know, qualify the client, obviously place the business and then when the business is placed, we have a customer success slash account management team that will oversee the customers. and make sure that all of the servicing and all the inbound sort of inquiries are handled thereafter. So, you know, where we're at today, I would say is a very scalable operation. But at the beginning, one person sort of has to be the SDR, they have to be the broker, they have to be the account manager. They have to be the person that's dealing with all of the various different administrative tasks. So, yeah, it was not scalable at that point, but it was necessary for where we needed to get to. Amazing. One of the common questions. I face when working with SureTech is how can they get their profit margin higher? And there's many factors, of course. One of them is the sales cycle. If you can shorten the sales cycle between the lead and the conversion, then you make more money on the long run. In a B2B to C space, how are you currently shortening that cycle between the lead and the conversion? Yeah, that's a great question. So the way that we view... shortening the sales cycle, I would say at the top end, it really boils down to making sure that we have the data that we need to be able to properly qualify the customer. And when it comes to shortening the sales cycle, I think a lot of businesses, if you would look at the aggregate or the average sales cycle, it would include a lot of deals that probably weren't very well qualified, that took a really long time to get across the line. And in that respect, those deals... you know, whether you retain them or not, may not have been the best use of time from an opportunity cost perspective, if you're going to refocus that time on someone who has actually had a higher intent and higher chance of closing much quicker. So for us, we're very focused on making sure that we have the right data to properly qualify intent and properly qualify at the end of the day, how quickly someone is willing to move forward. And, you know, one example would be, you know, expiry date, we work on a variety of different insurance partnerships with large groups and enterprise companies where they have data for the expiry date of say vendors or the constituents that they work with for the insurance. And we are able to sort of put ourselves forward at Summit and put our value proposition forward at the right point in time when an insurance customer is just about to renew their policy. It might be top of mind. They're very interested in sourcing other options. And that has really accelerated our sales cycle and ultimately that's what would improve our gross margin in the long run as well. Makes a lot of sense. Thank you for sharing this. Is there a principle that you live by that has served you well on your journey? I would say if there's one thing it would be you can only control, you can only focus on what you can control, really. And I think a lot of anxiety and stress comes from focusing on things and dwelling on things that are outside of your control. And I think that's where a lot of entrepreneurs or salespeople or anyone really can get tripped up is that, you know, if you spend your day focusing on things that really you don't have the power to change that much, that's where anxiety and stress comes from. And, you know, the days and weeks and months can be quite stressful when there is that level of uncertainty. But if you just really focus on those few or, you know, it could be more than a few things that you really know are within your control. That's something that I really like to live by. And it's, you know, if I go into a week, you know, what can I do this week? It's fully within my control that will make an impact in the business and help, you know, the employees or help our customers. And as long as I live by that, I know that I can sleep at night, not feeling like I'm losing too many hours sleep. Makes a lot of sense. One last question, Josh, what's next for Summit? Yeah. What's next for Summit? Well, we just completed our seed round of financing with IACAP. Group and Harvest Ventures. So we're very fortunate to have raised capital in this market. I'm sure you know it's been challenging for InsurTechs over the last couple of years. Fortunately, we're a very revenue-centric company. We have a revenue-first mentality. And I think at this point, now what we're really focused on moving forward is the technology. So most companies, I would say previous to this, when capital was a little bit more free-flowing and It was much easier to raise. They would have been focused very much on building out technology infrastructure day one, not maybe as revenue focused, not as efficiency focused. We took the opposite approach. And so now we actually have the luxury to be able to invest into some very specific projects on the technology side that we feel will set us up for scale. And ultimately our goal is really to be the largest commercial insurance provider in Canada in the long run. It won't happen overnight, but To be able to get there, we definitely need to continue to lay the foundation when it comes to our technology stack and make sure that the policy administration and the transacting of those policies is very scalable in the long run. So I'm very excited for the future and what the future holds is definitely not guaranteed, but we have a very clear vision of where we're going and that's to be the largest commercial insurance provider in Canada. Amazing. We put all of this in the show notes. Thank you for joining. It's a pleasure to learn your journey, Josh. How can people reach you and are you hiring? Yeah, people can reach me on a few different channels, but I am very active on LinkedIn. I check LinkedIn multiple times per day. So my name is Josh Billsbury. You can add me on LinkedIn. You can pop me a message. I do my best to reply to everyone in a timely manner. And beyond that, I would say, you know, feel free to just reach out directly to Summit if you have anything that you're curious about and we're always hiring good people. So... We're hiring a full stack developer right now that we're going to be hopefully bringing on in the next month or so. And we're also always hiring account executives and the revenue team is going to be a big focus moving forward. Excellent. Thank you very much, Josh. We wish you the best of luck. Thanks, Adi. Thanks for having me. Thank you so much for listening to the first 100. We hope it inspired you in your journey. If you're enjoying the podcast, please subscribe to our podcast. on Apple iTunes, Stitcher, Google Play, or Spotify, and share it with a friend starting their entrepreneurship journey. Leave us a five-star review. Your support will help spread our podcast to more viewers.