My Worst Investment Ever Podcast
Business:Investing
BIO: Guillermo Cornejo is the CEO of Riders Share, the Airbnb of motorcycles he started while attending grad school at UCLA.
STORY: Guillermo had an insurance company handling claims for his customers. When he realized the insurance company had a 50% profit margin, he decided to start his own insurance business. This became a costly and challenging venture because he had no experience handling claims.
LEARNING: Don’t underestimate the value of experience.
“The startup path or raising capital is overrated.”Guillermo Cornejo
Guest profile
Guillermo Cornejo is the CEO of Riders Share, the Airbnb of motorcycles he started while attending grad school at UCLA. Before that, he worked in analytics roles for GM, Nissan, and Hyundai. He grew up in Peru and enjoys anything that makes your heart race.
Worst investment everGuillermo launched his company in 2018, and it grew immensely. The company booked over a million dollars in rentals within the first year. Guillermo was on top of the world.
The company was working with an insurance partner with pretty good rates but was providing terrible service to Guillermo’s customers. It took many months to handle the claims. When Guillermo looked at his company’s history of accidents and measured the cost of paid-out claims and how much he had paid the insurance company in premiums. He found the insurance company was making a 50% margin in profits. This got Guillermo thinking he should do it himself.
Guillermo raised some capital and used most of it to set up an insurance company. This was an expensive venture (millions of dollars). The more the company grew, the more bad customers it attracted—from risk-takers to fraudsters trying to steal his motorcycles. On top of that, he realized how difficult it was to handle claims, and just like the insurance partner, it took him months to pay out claims.
Lessons learnedDon’t overestimate your skills, abilities, and knowledge. Work with advisors and connect with more experienced people who have done it before. They will help you understand how much you don’t know and then try to fill that gap.
Guillermo’s recommendationsGuillermo recommends reading Factfulness: Ten Reasons We’re Wrong About the World--and Why Things Are Better Than You Think, co-authored by a previous guest on our podcast, Anna Rosling Rönnlund.
No.1 goal for the next 12 monthsGuillermo’s number one goal for the next 12 months is to double his company revenues while remaining profitable.
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Connect with Guillermo Cornejo
Laurens Swinkels – Stay Liquid Even When Investing Long-Term
Spencer Jakab – Don’t Take Investment Tips from People
Charles Rotblut – Realize When You’re Lucky and Walk Away
Arjun Murti – You’ve Got to Get Out of the Battle At Some Point
ISMS 25: Larry Swedroe – Admit Your Mistakes and Don’t Listen to Fake Experts
Steven Wilkinson – Your Success Is 100% Dependent on You
Shawn O'Malley – Geopolitics Can Take Your Investment to Zero
Peter Saddington – I Got Fired From My Own Company
Neville Medhora – Hot Stock Tips Are Generally Unreliable
Jack Farley – Don’t Play in Markets You Don’t Know
Carter Malloy – Valuation Is Not a Reason to Invest
ISMS 24: Larry Swedroe – Confusing Skill and Luck Can Stop You From Investing Wisely
Gisela Hausmann – Encourage and Appreciate Your Employees’ Creativity
Connor Steinbrook – Do Due Diligence Before Visiting a Real Estate Property
Zachary Resnick – Invest in People Not Just Ideas
Chris Mamula – Take Responsibility for Your Financial Situation
Michael Howell – Liquidity Is the Main Driver of Asset Markets
Brady Slack – What to Look For in a Coach or Mentor
Richard Lawrence – Avoid the Stock That’s the Hype of the Day
Vineer Bhansali – You Create Real Value by Being Different
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