5 Lessons for First-time Entrepreneurs: Starting an Insurtech (w/Bob Frady, VP HazardHub acquired by Guidewire)

Bob Frady, CEO of HazardHub decided to start a company when a family member’s home unexpectedly flooded. HazardHub's goal was make those tools available to every single homeowner in the United States. "While we can’t prevent disasters from happening, we can give you a leg up in preparation."

Today Bob provides direct, no-nonsense insights into what it takes to bootstrap your vision, not take early capital, having enough confidence in your vision to walk away from partners who are not ready, and operating as a team.

✅About raising capital: "People offered is cheap money but I knew what the pipeline was, and wasn't going to sell out my pipeline." "We were older, and people look down soon giving money to older people." "We are not easy people to work with, we've been fired 9 times between us (two co-founders) so we wanted less people at the table rather than more.

✅Insights about confidence in starting your own business: Starting alone meant when someone said no, they just said goodbye. The desire to be right, and say no to companies whoa re not ready for you is hard. 

✅About the co-founding team: One person owned the product and vision/hype, and the other person owned all sales for consistency of process. It changed over time as the business grew, Bob was able to hand off a lot of the roles and could focus more on marketing and product vision.

✅About working with the insurance industry: Bob says that understanding the risks of a property, its root condition, can be improved through technology. Insurance does not love revolution, it can barely get its hands around evolution. Founders need to keep their expectations of what others can take low.

✅About capital structure: Bob's plan was always to sell the business, so from day one they founded as a C-Corp, being serious about selling B2B and focusing on profitability are easier. And keeping the cap table light so there is more to give away later. The founding team set an early exit target, but as they hit that initial number they reset a much higher number for acquisition, and when they started to hear that number, that's when they hired a banker.

✅About becoming a founder: Bob encourages anyone to start a business, to take the chance, it's not as hard as people make it out to be.

Follow the Insurtech Leadership Podcast airing weekly hosted by Joshua R. Hollander. We give you up-close access and personal insights from the leaders of the fastest-growing #insurtechs and most innovative #insurance carriers and brokers.