How do you grow a startup into a transformative force in a highly regulated, slow-moving industry? John Swigart, Co-Founder and CEO of Pie Insurance, joins David Politis to discuss the importance of decisive leadership, the balance between founder intuition and executive delegation, and how execution at scale can be a long-term competitive advantage.
From assembling a thoughtful board to reorienting a business for profitability, John shares lessons from building a modern insurance company from scratch.
Takeaways:
Decisiveness Around Leadership Transitions: John emphasizes making tough calls on leadership team members who may no longer be the right fit as a company evolves. Waiting too long creates compounding challenges and stalls progress.
Balancing Founder Involvement with Delegation: He reflects on the “founder mode” concept, describing the need for leaders—founder or not—to stay close to the details while avoiding micromanagement. Clarity and context are key.
The Decision-Making Matrix at Pie: John explains Pie’s internal framework for decision-making, which clearly defines who owns decisions, who contributes input, and how final calls are made—helping empower teams without chaos.
Why Pie Competes in a Difficult Industry: Despite the dominance of legacy players in insurance, John saw a real opportunity: a fragmented market with outdated tech and poor customer experience. Pie’s modern, data-driven model aims to change that.
Process Power as a Competitive Moat: Pie focuses on doing hundreds of small things better than the competition. John describes how consistent operational execution and better technology form a durable advantage over time.
Adapting to a Profitability-Focused Environment: John details the major internal shift required when venture markets changed in 2022—from “grow at all costs” to sustainable, efficient operations. Layoffs and restructuring followed, but the business emerged stronger.
Advice to His Younger Self: John would tell his younger self—and others early in their careers—to say yes to opportunities that offer growth. Don’t over-optimize for money or title; focus on learning and exposure instead.
Quote of the Show:
"Early in your career, optimize on learning growth, exposure, opportunity, not on money or title or, or anything of that nature." - John Swigart
Links:
LinkedIn: https://www.linkedin.com/in/johnswigart/
Website: https://www.pieinsurance.com/
Ways to Tune In:
Spotify:
Apple Podcasts:
Transistor: https://podcast.notanotherceo.com/
#NotAnotherCEO #BusinessSuccess #PieInsurance
Chapters:
00:00 Intro
01:42 Key Decisions and Leadership Challenges
07:24 Building and Evolving Leadership Teams
11:03 The Concept of Founder Mode
20:58 Competing in a Highly Regulated Market
31:13 Early Days and Customer Acquisition
31:53 Early Days of Multi-Channel Distribution
34:35 Fundraising Challenges and Successes
36:59 Building an Impressive Board
42:33 Navigating Business Challenges
48:39 Founding a Company Later in Life
53:46 Personal Growth and Mentorship
57:06 Pivotal Career Moments
01:00:48 Advice for Aspiring Entrepreneurs
01:02:17 Outro
Transcript:
John: [00:00:00] When the CEO comes down and asks you to do something, mm, you, you say yes.
David: 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, pie 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 Pie Insurance with the mission to empower small businesses to [00:01:00] 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 ink'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 Pie Insurance, John Swigart.
John: Thanks, David. I'm thrilled to be here. I'm really excited to spend spend an hour or so with you and, and chatting about the, the trials and tribulations of founding a business and
David: Well, thank
John: your
David: you.
John: Uh, to run it as best you can. So,
David: 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 Pie 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.
John: yeah I'm gonna pick something that I probably, I certainly don't feel I've done enough [00:02:00] 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 decisive and trusting your gut when it does not feel like you have a particularly leaders in the business that are performing adequately or the right leaders for now, the right time in the business.
David: Hmm
John: needs change, especially in a startup business. You go through different levels and stages of of, of evolution. You have 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, and moving on to the next person is something that I think is really key.
David: Hmm. 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 [00:03:00] 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?
John: Yeah, it's hard and it's emotional, right? Especially when you're, 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 that's, that's easier to do and hopefully you don't have a lot of those in the leadership. 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
David: Mm.
John: Developed to The business often evolves. than than, than the folks that you have in the business can evolve. And it can be personally emotional. It can [00:04:00] be challenging to be objective. It can have impacts in the business because other 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, and, and now they're leaving.
And that's, and that's not a good thing. So it is very hard to do. 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 a as you go. And I would say that 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 but if I were doing another one, if I were just giving advice to, to a founder, I. First of all, it's very important to be leveling yourself up because the business can get away from you as
David: Hmm,
John: 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 [00:05:00] are in the business right now, and does the team that you have meet those needs?
And
David: hmm,
John: you need to make a change.
David: hmm. You know, so I like you, I, I think the emotional, I'm so much about the people. Like I have that emotional attachment and, and cultural attachment, all of 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. This is what the advice I got is you'd be surprised how much they also feel that, uh. In, 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 stage is what am I gonna do to fill, to do, to backfill? But if you have an open [00:06:00] conversation, you can do it kind of more in the open. Does that, I don't know if that resonates with you.
John: very strongly, I think clear expectation setting, because I was saying, the business evolves. That means those expectations change. And the needs change. And if we, when, when I have not clearly communicated that it's been more problematic when I've
David: Hmm.
John: 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. Uh, 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, in every situation and, and you have to kind of be willing to be specific and bespoke on it. what is always true is exactly what you said, David, which is the [00:07:00] open, clear communication of expectations and needs and the potential mismatch of those. 'cause 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. how, whether they feel like they are delivering value in the business or not,
David: Yeah,
John: often if you feel it, the other person feels it
David: I think so. I think so. I think so. And they're, they have the imposter syndrome, you know, they're kind of like trying to make it work, but, you know, and, and anyway, so, so one question have, like, as you think about team, we're talking about leadership team. Um. How do you think about building your leadership team around you?
Because I think in the conversations that we've had, you, you're pretty deliberate about how you feel, kind of the, the, the skill sets, like how do you think about that?
John: yeah. I think it's important to be as clear and specific as you can. And again, this changes in the early [00:08:00] days, it was, we need athletes, we need people who can really dig in. Uh, there's a lot of, you know, sort of self work. I. 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.
David: Hmm.
John: 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. more and more need to bring in industry specific expertise. Uh, and so, but wanting to balance that because one of the things that I always, I, 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.
And when we hire people who don't have insurance expertise, my hope for them and, and the need that we have is that they become experts in [00:09:00] insurance. Right. So
David: Hmm.
John: 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.
Uh, and frankly, at times when we haven't had that, that's where, that's where we've gone a little bit off the rails.
David: I, I used to say as we got bigger at Better Cut, 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 [00:10:00] job.
And I, I'm not, you know, if you're all the way strategic or all the way in the weeds, that's not 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, you know?
John: 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
David: Interesting.
John: At the board level comes from, and 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
David: Yeah.
John: In some board members. But for that board member who 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[00:11:00]
David: Hmm. Hmm.
John: Not actually inspiring that confidence in
David: I, I re 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, and I think goes actually to what you were just saying, maybe can you share a little bit, and I, 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, I would like to get your thoughts. 'cause I felt like they were honestly pretty unique and actually really spot on. When you describe it, I'm like, yeah, it makes sense.
John: 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 was the founder of, of Airbnb, was [00:12:00] speaking about it. And 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. Paul's writeup, 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 and I think it was pretty compelling and it generated a lot of discussion you know, sort of in the ecosphere of, of VC startup world and so forth and. When I read it, I sort of thought, oh, I, I, 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 re when I read Paul Graham, no, what I see is there's a lot of like, sort of almost founder idolatry, like the founder, like [00:13:00] is the secret. And we need to make sure that we enable the founder. Often a he, to be honest, even though it's it'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 kind of thing.
Like that's, that's sort of takeaway. It doesn't mean it's the only takeaway then. So I thought, ah, okay, that's kind of interesting, but I'm not sure. And then I, I sort of. Fortunately happened, acro upon Brian Chesky being interviewed by Scott Galloway on his podcast, where Brian, 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 and being close to the business. And you can see, based on what I
David: Mm-hmm.
John: That really resonated and connected with me. he was also clear, he was like, it's [00:14:00] 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 micromanage or too focused on them. Let them do the work, hold them accountable for the work and so forth.
And that is good advice. 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, you, this is not what he said, but you can end up in this path of like, not coaching, mentoring, providing guidance, directing, and I'm the leader.
So ultimately I'm responsible and I need to do that.
David: [00:15:00] Hmm.
John: 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, to, 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, as that team develops and grows, then you can, shift to sort of allowing them to do more of it because, you know, and you can have confidence that they're gonna do it in the way that is, needed in the business.
David: Hmm.
John: Founders are unique in that they have the, the heartbeat and the pulse of the business and the pulse of the customer in a way that almost nobody else [00:16:00] can and does. So that is unique to the founder, 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.
David: Hmm.
John: Individual contributor, all the way up to the CEO
David: I think, I think one, 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, I'll, 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 [00:17:00] 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 resonates 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, 10 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.
John: Yeah. I, I, I, I, I got the same advice too, and I think it's, and Brian Chesky said he got the same advice
David: Yeah, right.
John: this is what happens. it does not mean that you shouldn't hire the best sales executive. It, 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 [00:18:00] in place, is 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, we've developed a collaboration decision making framework, which is frankly 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 but wait a minute, John, does that mean you're gonna 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 gonna be very explicit about you are 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 [00:19:00] 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 as we close the loop, but it's just input, I'm empowering you to make the decision.
And when you make that very clear, actually empowering people to then make the decisions
David: Uh, I'm gonna ask you something super tactical, which is how do you, do you document in a, are there like decisions to be made spreadsheet with a name?
John: it. we have what we call dms, decision making matrices, and it specifically calls out who owns
David: Wow. Wow.
John: Who is the, what we call the two role, which is the uh, sort of the, the supporter, the the responsible party. So that might be like, in my case, like a chief of staff or like somebody who's like doing a lot of the work but not necessarily making a [00:20:00] decision.
You the one and the two can be the same person in some cases. And then you have 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, 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 gonna be taken, but it, 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 and the right company and being very explicit about what different people's
David: Hmm. I really, I really,
John: the spin cycle and that's when decisions ultimately roll up to me because it wasn't clear who was gonna make the decision and did they do the right work to actually get
David: wow.
I like that a lot. Let me, so [00:21:00] 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?
How, what gave you, let me say, what gave you the confidence to do this?
John: 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 Nsurance 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 billion of premium when I left in in 2013. And I left saying, I left, saying, I'll never work in personal auto insurance again. It was just so [00:22:00] dominated by the, you know, frankly, best companies in the industry. You know, you have Progressive at the tip of that uh, list. as well. And the advantages that they had and others were just so substantial that a, even as good as we were at Esurance, we were never gonna be the best.
David: Hmm.
John: we were, we were always gonna 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, of pie and the opportunity, what I saw was opportunity. I. Because of the market. So small business, commercial insurance, much more fragmented than than personal lines.
David: Hmm.
John: The pricing sophistication, underwriting, sophistication, use of data, much, much less developed literally decades behind the personal lines side of things. the use of [00:23:00] technology. David was just sort of like emailing applications. Like, I mean, it was, it was really not technology driven. And so it felt to me like sort of auto insurance maybe felt in the eighties, be
David: Hmm,
hmm,
John: there 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
David: hmm
John: why we did it. And that's the opportunity that we saw. And I think, you know, we're not 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
David: hmm.
John: Right now.
David: 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 how. What is the rallying cry for your company of how you compete with [00:24:00] those people and how you win?
John: Yeah. So we have a concept which is not unique to us. This is talked about in, in, in sort of in 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 riskless on a spectr and the more specific we can be at matching the risk of a specific business to a price that we can sell the insurance. 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, gets you more customers, gets you more scale, lowers your expenses,
David: Hmm.
John: You more data, feeds that flywheel and spends it around. But the real key after you get that, if you don't have that, I don't think anything else really matters. But if you do have [00:25:00] that which, which I believe we do that's also not sufficient in and of itself. It
David: Hmm.
John: 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 cu and accumulates over the course of the entire business. build true process power, which can't be replicated. It's not a one thing silver
David: Hmm.
John: 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, and you can't. It's the combination of those things that makes the secret not any one
David: Hmm.
John: 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 [00:26:00] 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, they're, they're sort of living in these legacy systems. have legacy customer bases. They grew through acquisitions, 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 wanna say it's easy to compete against 'em. 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 wanna do 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
David: Mm-hmm.
John: The first choice, the first place people go[00:27:00]
David: Mm-hmm
John: 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 an expense ratio, David, sorry, I'm giving you a little bit of an
David: No. Yeah, no, this is good. This is, I'm learning.
John: the 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
David: Mm-hmm.
John: And so [00:28:00] you wanna 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
David: Oh,
John: So,
so by
David: I actually, I did not, I got it.
John: 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.
David: whoa. Okay.
John: know that explicitly,
David: under, yeah. Yeah, yeah.
John: but, but that's, that's how it works, right?
David: 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.
John: coupled with the ability to segment risk at a more granular level and put those two things together, you will win. Like you, it will take years to do it because it [00:29:00] is a accumulating business, right? You accumulate customers, you, you, those customers renew, they stay with you and so forth. the climb in the market share tables is slow, you will win
David: Right.
John: you
David: Well,
John: both of
David: I.
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, 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. And 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're like, what? This is like a really well-known, [00:30:00] large, successful insurance company.
And when you see something, you know, when I reflect as what, 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. That's
John: And it's, and it's, it is really hard. The, 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, of,
of being able to move them. and, and as when you're starting from scratch, 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
David: Yeah. Yeah.
John: [00:31:00] So, so we have to try to like break that down as much as possible and, and not let it calcify too much. But we have, we have more flexibility to be able to do that.
David: Hmm. 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 businesses a little bit different, but they still, they're the brands. How did you get the first five customers? 10 customers?
John: So so I had been at Esurance, which was primarily direct distribution. So I mean, I was running the marketing department for 10 years, and when I left we were spending over $150 million in, advertising, you know, much bigger scale business than, than we even are today at pi by and uh, it was very different.
So commercial insurance is much more agent distribution. And
David: Hmm.
John: and, and we knew from the outset that we were going to be multi-channel in our distribution. [00:32:00] We were gonna sell directly, we were gonna 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.
Uh, we can sort of like, you know, use a lot more of the duct tape and binder twine and chewing g uh, to hold it all together when, when you're selling direct. And so those early days were, it was funny actually 'cause we were sitting in like a shared workspace. It wasn't WeWork, but it was a WeWork style type thing.
And we didn't have that many people. And I was sitting right next to you know, one of our developers. And every morning I would see, we'd come in and he'd, he'd be sitting there and he had to extract the leads from the Mongo database. We didn't have, like, we didn't have any CRM, we didn't have HubSpot or whatever startup CRM or anything like that. You need to extract the leads from the, from the direct production database. get that to the sales team that morning. I'm like, you know, [00:33:00] okay, you know what, where are they? Let's get them, let's get them out there. And he'd be like, let's, I'm, I'm coming, John. I'm, I'm, I'm working on it. I'm, I'm doing it.
And uh, and so then 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 didn't, it was just nothing like and ask them, tell me about why this person didn't buy.
Tell me about why this person did buy. Like, what are you hearing? 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've bought if we had had that. So and so you know, now, like you said, we have around 50,000 customers. We've probably insured, I don't know, over our eight years, [00:34:00] 150,000 customers in total. So obviously we're not doing that now. It's all instrumented and we can see it all. 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, you, how you are close to the business just changes. It's not
David: hmm.
John: Not close to the business anymore, I'm just not close to the business in the same way.
David: Hmm,
John: it's in dashboards and reports and, and information and so forth.
David: hmm.
John: So.
David: Yeah.
John: How we did it in the early days. Yeah.
David: from a fundraising perspective, was it easy to raise money when you were getting off the ground?
John: so I, it is never easy to raise money. know, I don't wanna I, I've, 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 [00:35:00] me no. Right. I mean, like first of all, you're gonna get told no so many, so many more times than you're gonna get told.
Yes. And and so it's important to understand that and it is hard to raise money. 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, 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 gonna double down. Like all kinds
David: Hmm.
John: why investors can say no. That being said, we were fortunate to found Pie in 2017 and do most of our fundraising and 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, [00:36:00] so it's not just operating cash. We actually have to have capital to support the insurance that we write. So, 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 that so many different people have talked about, talk about 'em because that's the real stuff like that. That's, that's what it takes. I will say I'm not an entrepreneur by nature. This is the first business I founded. I wasn't going around saying, okay, I'm gonna found a business now.
I just gotta figure out what I'm gonna do. It was because of this opportunity that, that I the leap into true entrepreneurship. And fortunately we were at a time when, when raising money was was relatively available but still very challenging.
David: And you have. [00:37:00] Assembled a pretty impressive board, both investors and independent board members, directors. Can you talk about that? 'cause I, I will say for myself, I've been through boards that had, you know, four people and boards that had 10 people. I think you may have 10 in total. I, 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 a, 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?
John: 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
David: Yeah. Yeah.
John: So many
David: You have to, you have to schedule like two years out, you know, to like get that
John: [00:38:00] schedule two years out and then, and we try to like really lock it in. Um. and obviously every company wants to have its board meeting roughly around the same, you know, calendar window and so forth. So you gotta 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 uh, 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 wanted to bring in specific expertise and knowledge and experience and connections in certain [00:39:00] areas. So we have four independent board members. we targeted to be uh, 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. Uh, so we targeted a chief people officer. Uh, we targeted a. financial person. So we have former CFO of USAA on our
David: Okay.
John: and we targeted a sort of broad insurance president, CEO experience so that we could have that leadership of an insurance business in, in the company. And we have four tremendous independent board directors [00:40:00] that really upleveled the entire board, upleveled me and the
David: Hmm.
John: 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. Uh, so but all of 'em just bring tremendous value to the business. So
So you were very deliberate. I mean, you were,
I'm willing to have a large board to get that, to get that outcome.
David: and so you were super deliberate about each of those
John: absolutely.
David: 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?
John: 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 uh, to help support sort of board additions [00:41:00] and so forth with their companies.
And that was really, really helpful. 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 'cause you just narrow the window and you're not just spraying around all kinds of folks. I would say in total, it took us probably nine months to 12 months to, to add all four.
So it wasn't like tremendously
David: That's not, yeah, that's not too bad.
John: it was it was a focused effort.
David: 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 I. By going through the process, it allowed me actually to have conversations with people probably who never would've 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 [00:42:00] investor reach out. And I had crazy con 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.
'cause 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.
John: Yeah, absolutely. I agree. Yeah.
David: what, what is, what is the biggest challenge you've faced? Building pie insurance to date.
John: Yeah.
David: I'm sure you've only had one, so.
John: yeah lots of challenges. Uh, but that's what you sign up for as an entrepreneur, right? So or joining a, a startup
David: Mm-hmm.
John: Dealing with a lot of challenges. [00:43:00] I would say probably the biggest challenge that we have dealt with as a company. And so therefore, you know, as, as the ultimate leader me is the. Pretty shift that happened in, I would say 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 uh, insurtech business to when are you gonna 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 [00:44:00] know, we're 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 we're 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.
David: Hmm.
John: 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
David: Hmm.
John: how many different things we're doing. So we have to the focus, limit the priority list. And I actually think that's a really, [00:45:00] 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.
David: Hmm,
John: And it was the hardest thing that happened at Pie, right?
David: Hmm.
John: Did have to do a layoff. We have a hundred plus fewer people in the company today than we had at our peak. 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,
David: Yeah,
John: that was a hard thing to navigate through.
David: and I think the speed, at least in my career, I feel like the [00:46:00] 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. 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 imp things in place, and while they're like about to hit, now you gotta shut all of those machineries like down. Like it's, I think it's I, [00:47:00] I and the people who didn't shift fast enough for whatever reason, are now the one specifically, right.
Like in a really bad place, you know?
John: yeah. So I'm a little older than you, I think David, so it, like, it, it did happen. I mean, and, and I joined Esurance three months after the.com crash. You know, I I, 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 do you have left in the bank? Right? The answer would've been three months, and I might not have joined. And my, you know, life might be very different. uh, it, it, it can change very quickly. It doesn't change very that quickly, that often.
David: Yeah,
John: but it was very quickly, and I will say 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, [00:48:00] way harder to process what it looks like, you or me, what it looks like to them is we don't know what the frick we're doing.
David: a hundred, a hundred percent.
John: 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 people. Like 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.
David: Mm-hmm.
John: Change it. But like I get it. I understand it 'cause it really does look that way that we don't
David: Hmm.
John: Heck we're doing.
David: So to transition a little bit more to, 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've, you definitely started pie at an age older than I'd say most founders. Probably [00:49:00] 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?
John: Yeah, I have thought about this. I was 44. I'm 52 now. I had never founded a company before. My co-founder actually, He was a little bit older than me. But
he was a serial entrepreneur, right? He is a serial entrepreneur. Right. So that's kind of like what he does. so I have a belief that anybody can found a company at any time.
I don't wanna 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 gonna be younger people [00:50:00] 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 it may not and so forth.
'cause 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 Esurance acquisition and my wife was not, and, doesn't work outside the home. And so I could, I had the ability 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 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 [00:51:00] many older founders is 'cause 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 do, a full, 50 share of the family duties
Mm-hmm.
and
John: so I think that's. the reality. It's unfortunate because it does limit the potential opportunities, I think for founders.
or It makes it way harder to do it.
Also, I think What, we got a lot of different reactions from investors in those early days.
David: Really.
John: You Know, the grizzled gray guys coming in, Some will be like, Hmm, I don't think so. You guys, you 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 [00:52:00] gonna be able to build a startup business because you're not 25 years old in a, you know, college dropout kind of thing.
David: 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 the age exactly, doesn't matter, but some amount of experience you, actually do. There's so many things you're better at. I mean, just from, being in an industry, and if you have the right mindset, but, it's hard.
I'm working with a founder who's, trying to start a company, but they have a family and they have kids and they have a wife who works and they have, and, they have a really, they're having a really hard time actually doing it because, to replace a salary of $250,000 as like, you're not gonna do that when you're the, you know, the startup founder day one.
And that, dynamic is, kind of complicated. And I think to your, it kind of sucks because there's a lot of people who have good [00:53:00] ideas, who have been in the industry, who have that spirit, the entrepreneurial spirit. it's, interesting and I'm not surprised actually, by the investor.
You know, again, maybe not overt, but like I, there is probably a bias, in, investors' minds most likely,
John: course I
I mean, they're in the business of pattern matching, right? and, they're, gonna match against the patterns that they see has been successful. And, so I don't, again, I don't begrudge that. But it was there and it wasn't like it was, most of the, nos we Got were like, yeah, I don't do an insurance. Which I get and understand it's actually a really tough business to invest
in
David: as you've, you know, came in, never done been a CEO before your CEOs companys scaling quickly, how have you upleveled yourself on this. Journey, kind of [00:54:00] to what you were saying before, to keep up with the business. And as the business scales, the job becomes very different. How have you done that? Do you have some mentor or, or coach or something like that?
John: Yeah, so a lot of things uh, it started with, I got a professional coach early on at pi, and she's been with me the entire time. So over seven years we've been working together and 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, they, they need a coach.
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 [00:55:00] sport or something of that nature, this isn't that much different, right?
You wanna 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 know, I can learn from all of 'em. And so I, I, I think the, the key is maintaining that really [00:56:00] 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 it is really that embodiment of that growth mindset. And I always exhibit it right, but I try to be as self-aware as I can when I'm not exhibiting it and, 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, is really important in that structure too. I don't know, I can't remember David, if you had a co-founder at BetterCloud,
David: No. No. Yeah.
John: but founding a business is hard and it's lonely, I mean, to be honest, right?
You can't share the same things with the team that you can share with a co-founder or, and so you need that support network [00:57:00] around you, and then you need to have open enough ears to listen.
David: Hmm. 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 Esurance. Kind of run was pretty amazing run, you know, like, was, was there, was there a moment that that kind of set you off on the trajectory that you went on?
John: I mean, I, I think the answer is there are lots of moments, right? And I, I think it's important for anybody who's, you know, had some to substantial success in, in anything. Uh, you gotta recognize there's a element of luck in a lot of things, right? You know, all the way back to, you know, [00:58:00] being a, you know, white male you know,
David: Uh,
John: in, into, you know, a, a, you know, a, a family that can support and send me to college and so forth,
David: that's, that's true.
John: 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 was CFO at Nsurance. We, it was 2003. We needed a new. Head of marketing. 'Cause the person that we'd 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 a long longtime mentor and still very close friend came down to my office after the interview and said, what did you think of him? [00:59:00] And I said, I don't really think he's right for the role. And I was 30. Uh, 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
David: Oh my God.
John: we couldn't find the right person to fill. And this was not the first interview we'd had. This was like many interviews that we had had. We weren't finding the right person. And he had enough faith and trust in me. Uh. To ask to say, I, 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, mm, you, you say yes. And uh, and so I went back in on [01:00:00] 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 gonna be the boss of that area.
And so I have to be able to provide value, and I have to learn, and I have to be humble enough to learn and know where I'm not gonna 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 and add, but humble that I don't know everything.
And again, it's that balance and you know, it worked out pretty well.
David: Wow.
John: So that, that's what I would say.
David: 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 started your first job ever?
John: Yeah. [01:01:00] 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 it's that say yes. Say yes to the challenge.
Say yes to the opportunity. This might sound like a, another piece of advice, but I'm connected. Don't over optimize on the wrong things.
David: Mm-hmm.
John: Early in your career, optimize on learning growth, exposure, opportunity, not on money or title or, or anything of that nature. Like if you're, you don't absolutely have to never make a decision to join a company about money.
David: Hmm.
John: You know, money matters and it's important, but it should [01:02:00] not be the driving factor. I'm taking this job because they're gonna 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.
David: Hmm. John, thank you for doing this with me. I really enjoyed, I, I learned a lot about, I've, a couple times we've talked, I've learned a lot about insurance. I, you know, stuff I didn't think I would learn.
John: for me, so I love, I love talking about it. If hear have anybody who's willing to listen, I'll, I'll, I'll go.
David: well, thank you very much and for everyone who's listening, I, 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.
John: Thanks David. I appreciate it.
David: Thank you.
[01:03:00]
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