--:-- Host: So unless you're trying to go, and I think this is the answer to the question, is that you have to decide, are you shooting for a number and a lifestyle? Or are you trying to grow something that is bigger than that? Depending on what you want, that's a goal you have to decide. Some people want to grow big enterprises and that's what they want to do. That's phenomenal.
--:-- [Intro music fades in and out]
--:-- Host: In a crude laboratory in the basement of his home. Hello, everyone, and welcome back to the show. Today, we have a tremendous episode for you, a conversation with Peter McDonald, one of my favorite people in the industry, one of the smartest guys in the industry, the founder of WonderWrite, a tool that we used heavily at my last agency that I highly recommend. I think it is well-positioned for fast-growing agencies, particularly those who are seeing a mix of both direct and ENS or wholesale business that want to make sure that they're gathering the right information, but doing it in a way that delivers an ease of use to their customer that matches that kind of human optimized experience that I preach so much about.
--:-- Host: But we're not here to talk about WonderWrite, although Peter does give us an update at the end. Peter's dialed into the industry and just has a very thoughtful and unique perspective, coming out of both the Boston InsurTech area, which is different than other sections of the country, as well as having gone through some of the well-known incubators and raised money, et cetera. I love Peter's perspective. I love what he's trying to do. I love that his experience is born out of an independent agency like so many of the most useful and successful InsurTechs are. Any chance I get to talk with Peter about the industry, about leadership, growth, entrepreneurship, et cetera, is worthwhile and tremendously valuable. I know you're going to enjoy this conversation.
--:-- Host: Before we get there, I want to remind you guys that my consulting firm, my coaching agency, Finding Peak, will be launching an official program that you can sign up for. The first iteration is going to be a membership program. We're going to have monthly lectures and coursework that you can take, but really it's going to be a DIY system for you to build out the three modules of success from an inbound standpoint: filling the funnel, one call close, and maximizing lifetime value of those customers. That program is going to be open to anybody. You can come in, follow the coursework, come to the lectures, be part of the community. That is launching in February.
--:-- Host: I'm launching the membership part, the masterclass part of Finding Peak first. The reason I want to get this out first, and it's going to be an affordable price point, is because I'm building this for me when I was two or three years into the business. When I knew insurance, when I had a good feel for the product, when I had a good feel for what I wanted for this career, but I didn't know how to consistently get business in. When I was struggling with prospecting, with branding, with letting people know who I was, what I did, what value I added. I wanted to make something that was accessible all the way down to that individual.
--:-- Host: So if you're in an agency where you don't have the resources to overinvest in large scale, expensive consulting programs and you like to get your hands dirty, I want to make it accessible for that person all the way up to the top 100 brokerage who has producers that want to build branded niches and drive business in addition to their outbound prospecting. This baseline monthly program is exactly what that's going to be. To get on the waiting list, if you're listening before the actual launch in February, go to masterclass.insure. Put your name and email in. You'll be on the wait list. As soon as we go live, you'll be the first to know.
--:-- Host: Guys, I'm so excited about this program. It is a culmination of 18 years of experience, thousands and thousands of conversations. I've implemented this program in four different businesses and in just under two dozen coaching clients that I've had on the side. My ongoing learnings as I go — this program is going to be where, as I learn things and see things coming, I deliver that information to this group. I couldn't be more excited about it. There will be in-depth programming eventually, a higher level mastermind style, hand-to-hand combat one-on-one coaching. If you're interested in that, you can email me at ryan at findingpeak.com.
--:-- Host: Guys, I just couldn't be more excited. I feel that energy coming back. Helping you guys grow is what I love to do. I've always found more satisfaction in watching the light come on for others and seeing their success than my own personal success. What we're building at Finding Peak, I just couldn't be more proud of. So I want to get that in front of you. Masterclass.insure. If you have questions, comments, or you're looking for something else, email me, ryan at findingpeak.com. I'm out on the speaking circuit again. If I see you at an in-person event, I can't wait for that. Guys, I love you for listening to this show. Let's get on to Peter McDonald.
--:-- Host: I'm doing good, buddy. Doing real good. I am coming out of the fog of the holidays and life transitions. My house is coming together and life is good.
--:-- Guest: Yeah, man, you've had a lot going on, haven't you?
--:-- Host: Yeah, that seems to be what the universe has lined up for me. So I've decided to embrace it. I don't like to complain in general, so I just tend to keep moving forward. That seems to work pretty well. If you don't complain... I'm actually reading an awesome book. Have you ever read *The Gap and the Gain* by Benjamin Hardy? My dad's talked about it a lot. I think Dan Sullivan from Strategic Coach probably referenced it.
--:-- Guest: Yes, so it's a Dan Sullivan concept.
--:-- Host: So there's this really cool series of books that I highly recommend to anybody who is growth focused and likes to read. I've read two of them, I'm going to read the third. It's not as high on my priority list because I think it's one of the concepts I just intrinsically understand a little more. Dan Sullivan has all these ideas, and Strategic Coach is incredible, but it's so much. He partnered with a guy named Benjamin Hardy, who is a doctor — not the medicine kind, the philosophical kind. He took these three concepts and broke them down into a series of books. I'm reading them in reverse order.
--:-- Host: The one I read was *10X Is Easier Than 2X*, which was my number one recommended book for 2023. Absolutely incredible. Now I'm reading *The Gap and the Gain*. The first one in the series was *Who Not How*, which people rave about as well. I just feel like intrinsically that's a concept I understand a little better. But *The Gap and the Gain* is really interesting. I'm only four chapters in, to be fair, but when they first introduced the concept, it hit me like a ton of bricks. It completely defined when I feel good about something and when I don't.
--:-- Host: The concept is basically we have where we started, where we're at, and our ideal. What most people do is measure themselves between where they're at and the ideal, and that's called the gap. Dan Sullivan recommends measuring yourself from the start to where you're at, and he calls that the gain. If you're always operating in the gain, you say, "Hey, I used to be able to run a 10-minute mile and now I'm running a nine-minute mile. Even though my best friend can run a seven-and-a-half-minute mile, I'm actually a minute quicker than I used to be. I should be happy for that one minute gain, not the fact that I'm still a minute and a half behind my friend."
--:-- Host: The reason I like this concept — and we'll talk about something relevant to why you're on — I read it for an hour this morning. I couldn't put the book down. My kids were almost late to school because I couldn't put it down. The reason I like it is because they were getting into this idea that success is often just outlasting your desire to quit, not necessarily hitting some mark. That's really what Dan Sullivan's concept is. As leaders, as entrepreneurs, as growth-focused people, when we operate in the gap, we get frustrated, we get depressed, we start having negative thoughts. That's where we give up or make bad decisions. In the gain, you're always coming from a place of positivity because you're like, "Our goal may have been 300 customers by the end of the year, but we started with 50 and now we're at 275. Even though we missed our goal by 25, we put 225 new customers on the books. That's pretty darn good." That kind of stuff really resonates with me. I know it's kind of ethereal, but I live off that stuff.
--:-- Guest: My dad did Strategic Coach for a decade or something. He taught me about The Gap and the Gain when I was in high school. He'd be like, "Peter, you're gapping on me. You're gapping on me." It's funny because he's been talking about the book. I've never read it. I probably should. But the concept, I think he did a great job explaining it, at least how I've learned it.
--:-- Host: Are you a big reader?
--:-- Guest: Recently, honestly, Ryan, I haven't been. It's one of those things where I'm like, I should make time for it. But I have young kids and the startup. It's wake up, get the kids off, work, kids go to bed, back to work. So it's one of those habits where I'm like, I should probably make time for it. My brother reads a book a day or a book a week. I know you're a big reader. I feel like sometimes you read books and you're just like, "Man, there's so much filler content. They could condense these down to a quarter of what's in there."
--:-- Guest: You commented on that thing I posted from Daniel Goggins. I do read a ton, by the way. I'm on Twitter a lot, on LinkedIn, reading a ton of news stuff relevant to the industry. So I do read a ton, just not necessarily books. I listen to a lot of podcasts. I love audio. I listen to audio or videos at 2x speed because it's so much better. But Daniel Goggins, he's like, "You already know what to do. Just go do it. You're trying to build a business. Just go get those 300 clients. It doesn't matter if half come from cold calling and half come from an intro. Just go. You know what you need to do. Just go do it."
--:-- Guest: I do love reading. If I could get into reading right now, I feel like I want to read *The Hobbit* or *Lord of the Rings*. It wouldn't even be a business book. I need to just escape and unplug.
--:-- Host: You know what I read? I read *Brave New World*. I have it right behind me. I also have *1984*.
--:-- Guest: Both great books.
--:-- Host: Yes. I read *1984* a long time ago, just after I finished college, but not for the reasons I would read it today. I read it mostly for the story, not with the political undertones. I just didn't understand all the complexities interwoven into the narrative. It's a great story. Even if you're not reading it for the political commentary, the narrative is phenomenal. I almost feel like my understanding of the political undertones of *Brave New World* wrecked the story for me a little bit. It's a great book and I loved it. I finished it. It's too much like real life. You're like, "This is like reading the book."
--:-- Guest: Unfortunately today.
--:-- Host: I hate to say this because I know every guru success expert says don't listen to politics and don't get involved. I do enjoy it. If I could go back and do my college career again, I would have done economics and psychology because I love business and how it works.
--:-- Guest: Would you have gone to college? If you did it again?
--:-- Host: In that day without the internet, without the access to information that exists today? If I were to go in 2024, would I go to college? If I wasn't playing sports, I would not have gone to college today.
--:-- Guest: I also think it's like a country club with an academic component and networking.
--:-- Host: Yes. Given the option today without sports... At the time, I came from a little shit town of less than 900 people. My parents did the best they could. I was blessed that I had two parents that loved me, but they had nothing. For me, college was the only way I could envision getting out of that little shithole. Playing sports, even though I love them, was my way out. Getting good grades was my way out. It wasn't that I loved school. I did love sports, but it was how I got out. So back then, yes, just to escape.
--:-- Host: To be honest, I love economics and financial shit and I love psychology. So I get into politics not so much for my side winning because I don't really have a side. I've flip-flopped so many times. If you looked at my political register, I've been Democrat, Independent, Republican, Independent, Republican, Independent, Republican, Democrat, Independent, Republican. It's like that because for me, it's about the psychology of how all this stuff works. How you could say something, and the way you look, how you deliver it, the timing, the venue, the color shirt you're wearing, who's standing next to you, how loud the crowd cheers when you say all these things impact whether I believe you. That's what I find fascinating. Why is that the case? I'm so intrigued by it.
--:-- Guest: I think the smartest people are the hermits, the prophets who go out into the wilderness and shut themselves off. I know people like this. They say, "Don't read the news anymore. Don't watch it because it's all made up." They go off and have breakthrough ideas because they're not bombarded with the thing of the day. There are so many things of the day that get your blood to boil if you feed into it. I know you and I chatted about aliens and other things, but as a leader, you need to be well versed in it. You need to know what's going on with sports. If you look at somebody running for president, they have to throw that pitch to open the game. They need to know who's going to the Super Bowl, who's going to the playoffs, who they're rooting for. You have to be aware of it and operate your business within it without getting mentally sucked into it. That's the challenge.
--:-- Host: Dude, I think it's seasons of your career. When you are in the early days — and I'm sure with WonderWrite it's the same thing. I want to talk about WonderWrite and the industry a lot, so I don't want to get too off the rails. I'm very interested in some of your takes on what's going on in the space. I have some notes too, by the way. I prepared.
--:-- Guest: Oh, yeah. I love it.
--:-- Host: I'd like your thoughts on this. In examining my own career, I've had... If you look at my LinkedIn, you're like, "What?" I did this podcast. I got invited on this entrepreneur's podcast randomly by two guys I didn't know. It was a lot of fun. They saw the rogue story of the startup in the insurance industry. They were interested in entrepreneurial stories, what they were calling a "Cody saying boring businesses" kind of thing. They brought me on and said, "Give us the 10-cent tour of how you got to here." I said, "I don't know that I can tell it with 10 cents, but I'll do the best I can." I broke down the last 18 years of my life. The guys got done and had nothing to say. They were like, "Holy shit, that's quite the journey you've been on." I was like, "Yeah."
--:-- Host: I reflect on that quite a bit. What I've come to is this idea, and I'm very interested because you are past the initial startup phase but still probably feel very much in that startup mode growing WonderWrite. I feel like we have to be very intentional with the season of our career. In the early days of Rogue, you couldn't avoid COVID, but other than that, a bomb could have gone off in my town and I wouldn't have known. I'm 16 hours a day. If the kids aren't awake and home, I am at my computer doing some sort of work trying to grow my business. I didn't know anything else that was going on.
--:-- Host: As I started to add employees and hit a next phase — we were almost at escape velocity when Rogue was shut down — I had to pick my head up and start to say, "What's going on in the industry? What's going on with the economy? What is this hard market all about? How are we going to position our business?" I had to take my head out of that hermit mentality and engage because otherwise there would be blind spots that I could run my business into. I think we have to be very cognizant of that. If you want to be that high-level leader of an organization, I don't think you can have your head in the sand. If you want to be that unique, disruptive creator, then going into the woods maybe is the best play for you. Does that make sense? How do you feel about that?
--:-- Guest: 100%. By the way, you talk to any startup founder, and I know you've gone through this. There's a season where you need to go fundraise. People think you're always fundraising, and that's not true. For the best, you might be building relationships, but honestly, the best investors, you don't necessarily need a relationship. If this is a great investment, they want to buy right now. They don't care about the relationship they've had historically. When I go into fundraise mode, all I do the entire day until midnight every day is fundraise activity. I stack my calendar morning to night, meeting after meeting after meeting. That's all I do. You get really good at the conversations. They get better every time. You get a sense of the market. I block everything else out. There's nothing else that I do. I ignore everything. I ignore my emails. I ignore my texts. Nothing.
--:-- Guest: I remember in the earliest days of WonderWrite, Ryan, when I was literally coding, I couldn't check my email. I would wake up and just code all day and code all night, every day. You ignore everything. That's the way you get to be successful. I think the hermit mentality is like you go out, shut off everything, and just focus. That's where you get the brilliance. But on the flip side, when you come back and you're running an organization, you need to be aware. This is one of the things I'll talk about that I see coming this year. What's happening with non-competes? What's happening with pay transparency? These are political issues we need to be aware of. Some of them might make your blood boil where it's more of a current issue, social work setting, layoff stuff. It's good to be aware of, but it doesn't really impact your business. But if you're in insurance, "Hey, what's happening to non-competes? New York just shut it down. California is accelerating it. Massachusetts. What does that mean for me? What does it mean for hiring?" There are things that are good to be aware of. But for the most part, I 100% agree. You just got to shut it out of your mind and focus on what you need to do right now.
--:-- Host: It's funny. I get asked a lot, "If your agency was so successful, why did you sell?" There are a bunch of reasons. One reason I don't talk too much about because I am not in any way a financial guru, so I do not want to pretend to position myself as such, but part of the reason I sold when I did had to do with the fact that I saw hard financial times coming because I read a half dozen independent financial journalists.
--:-- [Interruption for ad read]
--:-- Host: Sorry to take you away from the episode, but as you know, we do not run ads on this show. In exchange for that, I need your help. If you're loving this episode, whether you're watching on YouTube or listening on your favorite podcast platform, I would love for you to subscribe, share, comment if you're on YouTube, leave a rating review if you're on Spotify or Apple iTunes. This helps the show grow. It helps me bring more guests in. We have a tremendous lineup of people coming in, men and women who've done incredible things, sharing their stories around peak performance, leadership, growth, sales — the things that are going to help you grow as a person and grow your business. They all check out comments, ratings, reviews before they come on. So as I reach out to more people and want to bring them in and share their stories with you, I need your help. Share the show. Subscribe if you're not subscribed. Leave a comment about the show because I read all the comments. If you're on Apple or Spotify, leave a rating review. I love you for listening to this show and I hope you enjoy listening as much as I enjoy creating the show for you. All right, I'm out of here. Peace. Let's get back to the episode.
--:-- Host: They're not an MC. It's not Jim Cramer. It's stuff I get directly to my inbox. Two of them I actually pay for every month. I read these things in my downtime because I feel like this crosscut of individuals gives me a good feel for what's happening. No one ever knows exactly what's happening. But what I did know for a fact back in 2022 was something was coming. We had seen some initial rate increases. COVID had impacted us in a way. I was like, "If I don't raise money and or sell this business today, what am I going to be able to do two or three years from now? What is this going to look like?" We had to make a move for different reasons. There were other variables, but then you see people in 2023 talking about how they didn't see the hard market coming or what to do about it. It's like, guys, if you had your head up and had been looking a little out ahead and reading some things and being aware of your environment, maybe you could have started positioning your agency, your business in a way. Whether you're raising funds or just the products you're selling, how you're setting up your staff, you could have made some adjustments to handle these huge rate increases and some of the disruptions that have come from them. No one can prognosticate what's going to happen in the future, but I do think as a leader, we have to. It is mandatory that we every once in a while put our periscope up and see what the heck is going on.
--:-- Guest: If you've seen that movie *The Big Short*, Christian Bale predicts the mortgage crisis and profits from it. That's the perfect example. This crazy guy who doesn't wear shoes in the office blocks himself off and figures something out that the biggest banks in the country are laughing at him. This is where I think, Ryan, you've done a great job being true to yourself. I think you've always looked internally and been like, "Who am I? What do I want?" You haven't self-centered yourself on your thoughts. You've done a good job of saying, "This is who I am, this is what I believe, this is what I know." So yeah, I agree. You got to know what you think is coming in the next year, two, three years.
--:-- Host: Some of that might be the hardcore ADHD, ADD that I have that I just can't stop my mouth from moving. If I don't keep it moving at all times and all those thoughts get bottled up in my head, I start to get crazy. That could be what it is. Who the hell knows?
--:-- Host: Dude, you took notes. So I'm interested. What did you take? You came prepared. I'm going to let you drive this. What was so relevant to your mind that you wanted to do some preparation on? I'm excited because guys, in case you don't know, and I will have said this in the intro, we have one of the smartest dudes in the industry on the show today. I absolutely adore Peter and the way his brain works. Plus on the sneak, when you get a pop in him, he's also a conspiracy theorist, which makes me enjoy and admire him even more. But we won't go there today.
--:-- Guest: We won't go there today.
--:-- Host: I want to talk insurance. So what was the first thing that came to your mind, man? Let's dig into it.
--:-- Guest: I think the conspiracy theories, Ryan. It's just... I don't believe a ton of conspiracy theories, but I think you can't believe everything that's on the surface. There are just too many things where it's like... By the way, I tell my kids this. My kids are in preschool and second grade, and then a baby. They'll tell me things and I'm like, "Why do you believe that?" I think this is a skill we need: to ask questions and to think critically. That is the number one skill you need to learn in school. Think for yourself. Think critically. Don't just accept answers that are given to you. You have to think. It's okay when your doctor tells you something to be like, "I probably should listen to my doctor," but you got to think critically.
--:-- Guest: That's why conspiracy theories are so interesting. If nothing else, they're just fun mental gymnastics to think through. Most of them have ended up being true recently, so I think that's the other part.
--:-- Host: Oh, I love how every Thanksgiving now the meme is me walking into Thanksgiving dinner with all my relatives who told me I was crazy for my conspiracy theories. You know what I mean?
--:-- Host: And it's like the list of all the things that actually, that actually were true. This is also what you're advocating for. And I completely agree with it—the Socratic method, which is basically just continuing to ask why until you can't ask why again.
--:-- Host: I'll tell you, I saw Jordan Peterson, one of the guys who I think embodies this, and it's why I love him so much. I don't agree with everything he says, but I saw him live this year. Chris Paradiso invited me to an event out in Utah, and I went along. Wasn't he just censored in Canada or something?
--:-- Guest: Yeah. Canada is basically a communist country at this point. I can't even stand it.
--:-- Host: So we went to Utah, and Jordan Peterson was speaking at this event live. You got to see this dude. I think you would really appreciate the way he works. It's cool to watch him on video, but live, he is working through a problem. Obviously it's a problem he's thought about and talked about before, but you can see him literally asking himself—he'll say something and then you can see him asking himself, "Why did I say that? Do I believe that?" Then he'll either reframe it or ask himself another question to go deeper. He's basically operating the Socratic method on himself in real time as he works through these thoughts.
--:-- Host: By the end, if you take where he starts and where he finishes, it isn't the standard speaker stump speech where it's "I'm going to start here, then say this, then say this." He starts with an idea and kind of wants to get somewhere over here, but how he gets there and exactly where he ends is 100 percent based on him working through this process in real time. It is freaking amazing to watch. You can tell how honest it is, whether you agree with him or not. You could think his conclusion is completely crap and you don't believe it, but you do believe that he believes it.
--:-- Host: I think this is important for people in leadership positions as well. When you work this method, people believe that you believe it, which is incredibly important. They believe you are giving them your honest take on this topic. I think that's almost more important than whether I agree with you or not in today's world, because you just don't know who's telling you the truth.
--:-- Guest: No. You've got to be able to think critically. You've got to be able to put yourself in the other person's shoes, think from their perspective, steel-man the argument.
--:-- Guest: So Ryan, you had texted me. I think I was on ski vacation with my kids—which we're going to do this winter. We are going to get out this winter. I promise. I've already been out nine days. It's middle of January, and I've been out nine days. I went all in. We're doing it. Season's pass. So we're going every weekend.
--:-- Guest: But you were like, "Hey, you want to come on the podcast and discuss what you see happening in 2024?" That's kind of the text. So I'm like, "Yeah." Then I'm like, "What do I see coming?" It's one of those things where right now I'm the hermit working on the business, just in the weeds. I'm like, "Dude, I haven't even thought about that. I probably should think about what I see coming." I know what I see coming from my business, but when you said, "Hey, what notes have I taken?" I just put down a few thoughts.
--:-- Guest: I think one of the things that I see is data warehouse slash data lake. In the insurance world, every conversation, every top brokerage is talking about data warehouse, data lake. For those who aren't initiated, a warehouse is like an actual warehouse—you have stuff that lives in it, packaged and ready to go, ready to use. So if you have a lot of data, packaged and ready to go. A lake is data that's not necessarily structured, but it's there. You could use it later at some point. It's raw data.
--:-- Guest: I think as agencies, we're all excited about AI. We see it. We know there's huge potential. We think about voice interfaces, training AI models, targeting prospects better, identifying prospects better. Right now, you go to the average agency—and I know this because we work with hundreds of them and we look at their data when we do integrations—the data is a mess. Even at Wunderite, our own Salesforce—do we use "New York" or "NY"? Do we use "USA" or "United States"? Small little things. You have to go through systematically thousands and hundreds of thousands of records. So we have bad data across the industry. Maybe a key contact left. There's just a lot of issues.
--:-- Guest: If you can get that data in a clean spot, how do you take all that data to run your agency much better? For agents, we've had an AMS system like AMS 360 or Epic. We have a sales CRM, Salesforce or AgencyZoom. We have a forms tool like an Indio or a Wunderite. You have a website and web chat. You have photos and videos. You have contacts. All this stuff. How do you use that to advance your business?
--:-- Guest: The big picture theme is the customer journey. How do you make a seamless customer journey for your customers from beginning to end? It's not going to happen if you have things living in 20 different systems to make the experience happen. How do you get that data to live and talk to each other? I don't even know how to make this whole thing work. I just know that people are talking about it. They want to get a place to have all their data—whether it lives in your AMS, your Salesforce, your LinkedIn, any correspondence or email. How do you pull that data, extract it, and do what you need to do before you get back to your team or your customer?
--:-- Guest: That's probably one of the biggest themes that I've heard that I would double down on for 2024. I don't know how relevant it is for small agencies. They still have the same challenges. I just don't know how to solve them at scale.
--:-- Host: Can I ask you a technical question about data warehouse and data? This is an honest question that I've always wondered. When it comes to data quality, the specific example you gave—do you use in your AMS "NY" or "New York" or "NY State"? What do you use in that field? You can even see this if you run a report in your agency management system. One of your CSRs is using "NY" and your producer is putting "New York." You run a report and you're like, "Where's all our New York accounts?" Then you realize, "Oh wait, we also have to run a separate report for this."
--:-- Host: This is a naive question. Why is there not a—Google has semantic search, right? Back in early 2012 to 2014, a big leap in search functionality was semantic search. If I typed "New York," Google knew that "NY" in a page meant New York. So if I searched "best insurance in New York," Google knew that if I created a video that said "best NY insurance," those were the same thing. That's semantic search. Why can't we do that? Why isn't there an algorithm or a bot in our industry that you can run through our AMSs and clean that up? Then it doesn't matter whether Tammy's writing "NY" and Tommy's writing "New York." The semantic bot can tell they're the same thing. What is the holdup? Or does that exist and I don't know?
--:-- Guest: I think broadly the issue is economics. You said you're interested in economics, right? If you went back to college, you'd study it. Insurance is the prime industry driven by economics. You have thousands of competitive companies. From a high-level perspective, it's not a commodity product, but it's more or less the same who you buy it from. Obviously you can have risk management and whatnot, but there's so much commoditization in general. I know you want to sell a differentiated process, win through broker record, et cetera. I'm not saying that's not fair and true, but it's driven by economics. It's such a vast industry.
--:-- Guest: Then it comes down to the economics of your insurance agency. How much money are you as an agent willing to spend on stuff? I think you actually asked this question when we did the CEO panel back in August at IndyTech.
--:-- Guest: The question you kind of rudely grabbed the microphone for.
--:-- Host: I didn't know I was supposed to not ask live questions. I didn't know that. I said, "Can I ask a question?"
--:-- Guest: Sure. But you basically were like, "How do you build a product when a third of your customers are the leading edge customers, but the middle doesn't care, won't care, can't implement?" The reality is, how many agents out there would raise their hand and say, "I want this tool and implement it?" If you're listening right now, you're like, "Oh, I would definitely want that. I want clean data." Well, there's a company right now called Relativity6. You've interviewed them. If you listen to Ryan Hanley, you probably should know about Relativity6. They can literally just tell you what the appropriate NAICS codes are for all your customers programmatically.
--:-- Guest: I think the tools are out there. It's just the economics of whether people are interested in hearing about them and paying for them. The answer is no. It's a huge market, but it's also a small market when you compare to Google looking at every business in the world, not just insurance agencies in the United States.
--:-- Host: It's funny. I love this. Customer journey, all this—it's core to what I love. All my work comes back to how do we create an experience for our customers that maximizes their lifetime value for us. It's not just the virtuous "I want you to be happy as a customer." If you're happy as a customer, it maximizes your lifetime value to my agency. That's why I enjoy this process.
--:-- Host: That being said, one of the things I've found over and over again is as much lip service as we give to data, our industry is unique in this one characteristic: it doesn't matter. You write the business with the carrier, the carrier sends you a check, and you cash the check. Does it matter how much data you have on the client? Not really. There is a certain level where you start to see diminished returns on crappy data, but in the early stages when you're grinding it out and you have to sell every policy you can just to put enough revenue on the books to keep the lights on, slowing down to make sure you have good data quality is not an option. It's quite literally not an option to move that slow.
--:-- Host: Then what happens is you get to $500,000, $750,000, a million dollars in revenue where you can maybe exhale a little bit, and you're like, "Oh my god, my data is horrible." Some's in carrier portals. Some's in my agency management system. Some's just in my CRM. Some's in my phone in text messages, personal text messages to my clients. Then you go, "Oh my god, it doesn't matter because I'm making this amount that I never imagined I would make." All of a sudden you're like, "I have to spend $50,000 to clean all this up? For what?"
--:-- Host: I really think this is the answer to the question. You have to decide: are you shooting for a number and a lifestyle? Or are you trying to grow something bigger than that? Depending on your goal, some people want to grow big enterprises. That's phenomenal. In that case, stepping back, cleaning up data, really focusing on customer journey matters. If all you care about is making enough money to provide a lifestyle for yourself and your family, you don't need any of that. You could run it all off a spreadsheet or off your phone. The carrier has all the data. You can just log into their back end. You don't even need an AMS or a CRM. You have one to write for the forms you need. The carriers send you things in the mail. That's all you need to get to a number.
--:-- Guest: I need to do a meme generator. The bell curve meme where there's the loser on the left and the whiz kid on the right with the hoodie on, and the weird mid guy in the middle. The middle guy is like, "I need clean data and I need to spend all this money to clean everything up." The guy on the left and the guy on the right of the bell curve are just like, "Sell more insurance." If you want to make more money and run a great business, just sell more insurance.
--:-- Guest: On the edges, the part about clean data is, if you really care about this stuff, once you get to a million or two million in revenue, it's like, "How do I optimize my placement in my book of business? Because I can get an extra point of commission by getting rid of my bad carriers and only working with the good ones." There's so much stuff you can do. For the most part, if you start to really focus on that and distract yourself from just selling more insurance, you could be losing. That's why I said with data warehouse, for the really big agencies that have scale, that point really matters. You can afford to employ teams where that's all they think about—customer journey, optimizing their book of business placement. But the producers, the salespeople, they're not looking at that. They're just like, "How do I sell more business?" And they shouldn't be. It's leadership's job to make those decisions.
--:-- Guest: I was talking to a vice president, regional vice president, whatever—not a top 100 broker, but probably top 250. We were just chit-chatting. In his region, they used four different agency management systems. As a producer, you could be in one segment of that region working on an account in Applied, then have a renewal for another account in Vertafore, another one in AMS 360, another one in Sagitta. You're just like, "Oh my god." Think about data warehouse.
--:-- Host: By the way, there's one idea: get everybody in the same AMS. You know how much people are going to cry?
--:-- Guest: Oh my gosh, yeah. The tears would be brutal.
--:-- Host: So what if you just say, "You know what? Let's just keep all the AMSs in a data warehouse."
--:-- Guest: The data can live in Salesforce. It can live in Vertafore. It can live in Epic. Who cares? There are people trying to do this. The agency management systems are fighting it. Some people have tried to do it with Salesforce. I do not think Salesforce is the tool to do this. It's too big. It's too expensive. I don't think it's the answer. There are companies out there trying to solve this problem and probably could if the vendors of the industry wanted to solve it. I'm not just blaming the agency management systems.
--:-- Guest: Let's talk about your example. You're talking about a sales guy. You're like, "Hey, my sales guy needs to access data from Salesforce, Vertafore, Applied." It shouldn't be that hard via API to pull basic account info from all three systems and put it into one interface. Maybe Salesforce as well. If it's just, "Hey, I don't need a thousand fields. I don't need everything that ever happened under the sun with this account. I just need the account names so my producer can know whether the account is in our books already." There are some things you can do.
--:-- Guest: I'm not an expert on data warehouse. I just hear it a lot. It makes a lot of sense to me. The biggest agencies are going after it. For 2024, this is probably a theme that's going to continue: data warehouse. I don't know what it means for small agencies, but there's probably a thread there about how you can leverage your data across multiple systems. I've been chatting with Jason Cass. He's doing some stuff with tech to create this whole tech stack and ecosystem where he's trying to get the tools to talk to each other better so you can have better flows, more integrations. It's a similar idea—trying to have a unified experience.
--:-- Guest: For smaller agencies, less, more accurate data is always the answer. People are like, "I need to know the liability limits in my AMS." Do you really? In a small agency, all you need to do is sell more insurance. That's your job. What policies they have, maybe the policy numbers and effective dates. That's about all you need for the policies. Basic contact information and notes around the account. You don't need anything more than that to cross-sell, upsell, service the accounts, and know where else to go to write more insurance.
--:-- Guest: We get bogged down sometimes, especially someone who is growth-focused, technology-focused, maybe younger to the industry—not necessarily young in age, but newer. They're coming from another space and they've seen what other industries can do. They're like, "I need to know this." You don't. Get the basics. Have the basics be accurate. As you said, sell more insurance. If the tool is not helping you sell more insurance, it's not valuable to you until a certain point, until optimizing your book becomes relevant.
--:-- Host: Okay. Awesome. I love this. Data warehouse, data lake, structured, unstructured data. I love it. I completely agree with you. It's an issue of economics. I can't not go contextual when it's there.
--:-- Host: There was a post on this economic Instagram channel I follow called Financials Simplified. It was a graphic meme. It said 85 percent of all post-40 research goes into erectile dysfunction, yet only 19 percent of men have erectile dysfunction. Only 15 percent of post-40 research goes into PMS and menopause, yet 100 percent of women experience PMS and menopause. The point was that men will pay anything to make sure that function in their body is operating properly. The guy who puts this channel together made the point that research goes where people will pay. If you can't do that function and you're a dude, you will pay just about anything to make sure you can. That's why the research was there. It was funny.
--:-- Host: I saw it 10 minutes before we went live, so that's why it was on my head. Erectile dysfunction—maybe you can put that in the show notes for the listeners to go check out the graph. They'll be like, "What the hell is Ryan talking about?"
--:-- Guest: All right. So what else did you have?
--:-- Host: I think the next thing is insurance in general. Hard market—that's been a massive change for those of us who've been around for more than 10 years in the industry. We've never seen this before. Let's talk through a couple of things I see in insurance. Hard market, obviously, with the cash in the system. Housing, commercial real estate is interesting. That's already happening. If you're listening, you're probably like, "Yeah, duh." It's an economics problem because insurance is driven by economics. There was a ton of free cash, and now there's not. There's less capacity. There's less surplus at these insurance carriers. They can't sell as much insurance.
--:-- Host: I'd be curious about some of the impacts. I'm hearing that some insurance companies are forcing agents to use portals as opposed to raters. It's been a theme forever, but now it's like, "Hey, if you come to our website, you're more intentional. We're trying to be more selective." This is a decision driven by the economics of who's the best client for an insurance company—most profitable, least likely to lose customers. It'll be interesting to see what the carriers do. If you're an insurance carrier, you need to implement multiple strategies to make sure you are writing the best economic business. Some will be solved with tech.
--:-- Host: I know someone who started a venture capital firm focused on wildfire startups. You're going to see better tech for better underwriting. The insurance industry has been behind on a lot of things. Two-factor authentication on computers—if you don't have it, you can't get cyber insurance anymore. If you don't have airbags, anti-theft, anti-lock brakes, you can't get car insurance. If you don't have building codes and sprinklers, you can't insure your restaurant. In the construction industry, there's so much opportunity to be building better buildings. You'll continue to see more push from an economics perspective.
--:-- Host: Self-driving cars—Waymo did over 700,000 trips with no human behind the wheel last year. No human behind the wheel. This thing that has been promised forever—full self-driving, Level 5. For the listeners: Level 0, no driving automation. Level 1, driver assistance, like adaptive cruise control. Level 2, partial driving automation—your car can steer and do speed control in a traffic jam, like when it pulls you off the rumble strip automatically.
--:-- Guest: You get a little close and it pulls you back to center.
--:-- Host: Yeah. I'm not an expert on the different levels, but the car can kind of steer for you in a traffic jam. Probably like what a Tesla does. Level 3, conditional driving—the car can do all aspects of driving. You can take your hand off the wheel and your eye off the road in most situations, but you have to be ready if the car beeps at you to take over. Level 4, high driving automation—the car is fully autonomous in most situations. When I was driving back in the snowstorm, the car probably couldn't do that at Level 4. Level 5—the car can do full automatic. No driver needed. Drive you in the snowstorm. Maybe we never get to Level 5. But clearly, when there's 700,000 trips with no human behind the wheel, something interesting is happening.
--:-- Host: When you look at insurance, I have a whole thing on triggers to shop for insurance. Why do people buy insurance? Most of the time, it's because a government body or a bank requires you to buy it. Car insurance—you get a car, the government requires you to buy insurance. What's the impact of having 700,000 trips with no driver behind the wheel? That's something I think about. What does that mean for our industry in the next five, ten years?
--:-- Host: Electric cars in general—there's a lot of regulation. In Massachusetts, apparently they won't be allowed to sell gas cars in 2035. It's crazy because you're like, "How is this ever going to work? Are the economics going to work? No. Are there enough batteries? Are people going to want them?" It's regulation as opposed to market demand. Our grid's not ready. You're already seeing issues with fires from batteries. Scooters had the same thing. I read in Norway, a shipping company banned electric cars from going on the ferry. Norway is one of the biggest purchasers of electric cars in the world. The ferry operator was like, "The risk is too high."
--:-- Host: If you have a bunch of electric cars together and one catches on fire, this is not good. In the insurance industry, we're underwriting. It's not just cars. You're going to have Tesla Powerwalls in the house. I read recently about a startup that builds a stove with a giant battery inside it because it can heat your water faster and recharge your house when the power is low. What are the new risks that come from that? What if you're plugging your car in to be the generator for your house, like with the new F-150? There's a lot of things with cars, self-driving cars, batteries, second and third order effects. These are going to be questions on your application. Like, "Do you use your car as a generator?"
--:-- Host: Like that should probably be a question on home insurance and auto insurance if it isn't already. Or, maybe it will be in the future. These are some of the things on the insurance side between the hard market, technologies that can solve it, self-driving cars, and EVs that I've thought would be interesting for 2024.
--:-- Guest: Yeah, I think so. I love the idea. And again, I think this goes all the way back to the beginning of our conversation about being a leader. If you're grinding out in a production role and you haven't hit escape velocity in your life yet, don't worry about any of these things. Write more insurance. Don't waste your time. And honestly, if you're an entrepreneur starting a company or in your production career, don't worry about these things. Don't think about them. Think about tactics, think about strategy, think about prospecting.
--:-- But if you're a leader, unless you're a niche specialist... Ryan, I know you love niches.
--:-- Host: Oh my gosh. Yeah. I love it.
--:-- Guest: Talk about taking a shot. I couldn't help myself.
--:-- Host: I couldn't help myself. We can get to that in a second. But if you're a niche specialist in electric vehicle insurance, maybe you should pay a little more attention.
--:-- Guest: Yeah, exactly. So if it's your target market, etc. But when you think about second and third order effects... I'm renovating a home that I live in currently. Very excited. Post-divorce, I had an apartment, finally got a house, but it needed some renovation. Something I didn't realize when I purchased the house is that we are actually both slightly below the water table in our basement. It's not bad, and we're not in a high-volume water area, but at all times water is trickling into the home. Every 15 to 20 minutes, some pump kicks on and pushes the water out. Great. I don't currently have a generator. It's something I have to do, but of all the things I have to do, I haven't gotten there yet. If the power went out today, in about five hours, it would overflow into my basement. So I have a backup battery-powered sump pump as well, which would get me 24-plus hours on the backup. So it's not like I'm completely out to lunch.
--:-- But the idea here is look at California. As they push towards EVs only, the power grid cannot sustain it. We do not have the capabilities. And because for some reason, climate changers won't embrace nuclear power, there is no way to produce enough electricity for every American, let alone the world, to have an electric vehicle. Not even close. Not even 10 percent. Or a heat pump in your home or a battery backup. So when we're talking about second and third order effects and things to consider, this is why I love the industry we're in. It's ever-evolving to what's coming.
--:-- So say rolling blackouts become an issue. If the Democrats have their way, it's most likely going to be in our future. Well, probably all of our establishments because Nikki Haley would do it too.
--:-- Host: Just to that point, my furnace is breaking, Ryan, and I have a gas furnace. There are big subsidies to put an electric heat pump and an electric water heater in the house. The government would literally pay half the cost and give me a 0% loan. If you do gas, you have to pay 100%. There's no subsidy. And we have gas. It's already here. So what you're saying is we're going to have an electric vehicle, an electric heat pump for heat and air conditioning, an electric heat pump for water heating. All this stuff.
--:-- Guest: Yeah. What does it all add up to? And if you don't eat your bug pills, Peter, they're going to turn off the power and you are out.
--:-- Host: You think about these things. And if you're paying with your digital wallet that the government controls, and they're going to shut you off like Canada did with the truckers, right?
--:-- Guest: Exactly. This is the conspiracy theory part. This is why you have to bury all your gold around the county in which you live. Like Ron Swanson from Parks and Rec.
--:-- No, I do think it's interesting. You look at areas that have been dammed. Not to bash California, because not all of this was Democrats in California. Republicans did this too. But what they've done with their water supply and how they've dammed off different water systems has drastically impacted water issues related to California. Some would say it plays a role in some of the wildfires because rivers don't flow the same. They've changed ecological systems. I know it's not the only reason, whatever. My point is not who's to blame. There are many decisions being made at all times, and there are second and third order decisions. As leaders in our company, I think that's where we need to spend our time: thinking about what's happening today, and then if X happens, how do I make sure my business is set up to sustain it?
--:-- You were going to say something. I interrupted you. You were just going to say that if the power went out for a certain amount of time, your house is going to flood.
--:-- Host: Yes. And that's my thing. Let's say I'm a homeowner's insurance carrier. And I know that you have some whack job communist Democrat like Kathy Hochul running the state. She has literally said electric gas stoves. She's the same one who just shut down non-competes, right?
--:-- Host: And is putting an exit tax into our state. How shitty of a leader are you if you have to put an exit tax into your state so that people don't leave? That's another point. But she has passed initial legislation. She shut down the non-competes so they weren't going to be a thing in New York.
--:-- Guest: I thought that was a big deal.
--:-- Host: Oh yeah. I think I can't remember if that got pulled and is now being repositioned or something. But New York is going full communist, and it's working out really well. Not to beat a dead horse, but I thought non-competes were going nationwide and then New York was like, "No, we need non-competes." I thought Kathy was like, "We're keeping them."
--:-- Guest: No, the other way. I'm pretty sure the big eye of New York was fighting the fact that New York wanted to go... In California, if you hire a producer in California, which I did not know—I had three producers at one time, great guys—they could at any given time say, "Hey, I'm out," take their entire book with them, move it to someone else. And there was literally nothing I could do.
--:-- Host: When you say take their book, they would have to solicit them, have them sign BORs.
--:-- Guest: Yes. But I could not go after them for taking their book. There's not a document they signed. They could just say, "Hey, come over," and there would be nothing I could do. New York is headed that way if Hochul gets her way.
--:-- To finish my point on this electric thing: say you're in a state that is doing all this electric stuff, and you know from past experience looking at California and some of the Norwegian states that when you over-index on electric, you get rolling blackouts. So now you're looking at your homeowners book going, "Oh my gosh, if it's the wintertime in upstate New York and they start getting rolling blackouts, what happens?" You start to have frozen pipe issues. You start to have flooded basement issues. You get all kinds of problems with the eaves because the water starts to melt due to heat issues, and then it freezes underneath the eaves. This is a second or third order problem to some legislator being bought by whoever is buying up all these politicians around this electric stuff, saying, "We're going to make our state fully electric by 2035," yet we do not have the infrastructure to do it. You get rolling blackouts and all of a sudden homeowners claims go up. That's the kind of thing we have to think through. What makes our industry so interesting is that now that's a problem we have to solve and protect our clients against, which continually makes the insurance industry relevant and important to the sustainability of our lives.
--:-- Host: Absolutely. It's not a pure market adoption. It's an accelerated adoption. And when you have accelerated adoptions, there are impacts. I think it's 100% right. All these things are pretty interesting. I was chatting with a friend of mine recently. He has an electric car. He's in a condo association. He's like, "We need to install hookup pedestals so you can plug your car in." What are the insurance impacts of installing electric pedestals in the condo association from a liability perspective? There are interesting questions. So I think there's a lot to be aware of.
--:-- The insurance companies that are out there don't have to ask questions on the underwriting right away because they'll look at the claims data. But I think you need to be aware of high-level trends that are happening. Electrification is a theme. What are some of these second and third order impacts? Go reanalyze your claims and see if there was an incidence of an uptick in freeze-ups because of heat pump systems failing and not having a backup. Go analyze your claims and see if there's something there.
--:-- And you made a point earlier as well. If you're an agent, you can look at these things and say, "Can I talk to my carriers? Find out who maybe is looking out ahead at electric vehicles, electric appliances inside of homes, and become an expert? Find some way to prospect these types of people who are building homes this way or improving their homes in this way. Can I be the agent or agency for that type of client?" We can use these things for both prospecting and risk management. I think it's really interesting.
--:-- Before you go, and I know we're getting close to the number and I want to be respectful of your time, I want to hear a little bit about Wunderite. I'm a big fan. We were a client for almost three years at Rogue Risk. I love what you're doing. I love you as a leader. I'm always trying to promote Wunderite because I think it's a great tool for the industry. Tell us a little bit about what's going on and what you're up to.
--:-- Guest: Ryan, we didn't even get to AI yet. We'll have to save that for another day.
--:-- Host: Yeah, we'll have to come back. Let's come back on AI.
--:-- Guest: Yeah. So things with Wunderite are going great. We have an integration we've been working on with VertiFore Direct Integration. It's in production with a number of agencies. It's really cool to see. We've put a lot of time into it. That's been a big thing we've been doing.
--:-- Big picture, for those who aren't aware, Wunderite is the fastest and easiest way to complete insurance applications, supplementals, ACORDs, whatever. You literally just type in the name of the form you're looking for, and chances are we already have it in our forms library. We have over 6,000 forms. You can instantly share it with your customer the same way you would share a Loom video. It's so fast and easy. Or like a Dropbox. You just share the link or send them an email. They can fill out the form digitally.
--:-- At Wunderite, I went through this with my own family agency. We bought a bigger cyber liability policy. I was sitting in bed at 10:30 at night, filled out a few quick questions, assigned the cyber questions to my VP of engineering. He answered them. Then I signed the document with Wunderite's equivalent of DocuSign. It goes back to the agency. And with the VertiFore integration, it can automatically put that back into your agency management system. That's exciting.
--:-- Another big thing we've had going on is cross-form mapping. Let's say you are marketing cyber insurance. You fill out one application with Travelers. Because it's a hard market, you want to go to multiple markets. You want to be the first to market so you're not getting beat out by a competitor. We can map the data from one form to five other forms. It's a huge undertaking to get that right because if you're familiar with the AI tools that are out there, you have to have this level of precision. It's tough to do well. We built that tooling about a year ago, and we've been rolling it out slowly across our forms library. That's pretty exciting.
--:-- As I think about not just filling out a cyber form, but a single intake form that doesn't even tie to a PDF or a supplemental, now you can take that data—this was the whole thesis of Wunderite—capture the data once and then use it infinitely wherever you need it to be used. That's a pretty exciting thing that's out there.
--:-- Host: Yeah, I know. Towards the end with Rogue, we dropped DocuSign and we were using Wunderite as our eSign tool. I know that's not your primary value proposition, but in conjunction with these forms, with a lot of other tools you have to export the forms and then import them into the eSign and then send them out. It was saving us a tremendous amount of time. And to your point, data quality in different places. We would just build everything into Wunderite. Any questions we didn't gather in the initial kind of one-call close system, we would send out two or three questions that we needed answered from the Wunderite form that would come back, market it. Once we had whoever we were going with, we just send it right out of that system back for e-sign. It created a much easier flow.
--:-- One of the things that was very important to me when bringing on any piece of software technology is how easy is it to train my team on this tool? That was one of the things I really liked about Wunderite. It was finger-snap easy to train. There are tools that are really well done—I'm not knocking anyone else—tools that have tons of firepower and are great for your agency, but it might take three months for someone to become comfortable using the tool. For me personally, how easy it is to train my team on a tool is a really important data point when I'm making a decision on what to use. I found that to be the case with Wunderite.
--:-- Guest: I appreciate you mentioning that. That was critical for us in the software. We actually wanted something you could try for free, and we didn't have that originally. When you signed up, you couldn't try Wunderite for free because it wasn't easy enough. It's actually easy enough now. We turned on a free trial. You can use Wunderite for free today for 14 days. We also opened a power producer pricing for one user. We wanted to have something that was the easiest thing to buy. You don't even have to talk to a salesperson. You can try it. We're seeing really good conversions from people who sign up and try it. When I was at my agency, you just want to try it yourself. If you can figure it out in 30 minutes, you give it a shot. That's something else that's big for us.
--:-- It's tough to pitch the boss on a tool that you've never actually had your hands on. If you've never actually gotten in and used it and you want to bring it to the boss and say, "Hey, I think this is something we should integrate in the agency," it's almost impossible to make that pitch if you haven't had a chance to get your hands in there and use it.
--:-- Host: Especially in this climate where there are so many tools. That's another theme for 2024: what tools are going to stick it out? There are so many tools, and everybody's looking at belt tightening. What are we doing with our expenses? What are we keeping? What are we cutting?
--:-- I love it, dude. I want to bring you back in to talk about the AI thing, but I also want to be cognizant of your time and of the audience's time. I appreciate the hell out of you. I love our conversations. A big fan of what you're doing at Wunderite, have been from the beginning. Any chance we get IRL to dive deep into conspiracy theories is also a fun time for me because you're one of the few people who will placate my absurd viewpoints on certain topics. I appreciate that about you. Thank you so much, man.
--:-- Guest: Oh, that's the best. Hey, thanks for having me. I can't wait to go deep and scratch that curiosity itch, which I think is what it is. It's pursuing curiosity and thinking critically. A hundred percent.
--:-- Host: All right, brother, be good.
--:-- Guest: All right, take it easy.
--:-- Host: I'm going to Shaboos! Thank you.
--:-- [End of conversation]
--:-- [Advertisement]
Host: Close twice as many deals by this time next week. Sound impossible? It's not. With the one-call close system, you'll stop chasing leads and start closing deals in one call. This is the exact method we use to close 1,200 clients in under three years during the pandemic. No fluff, no endless follow-ups, just results fast. Based in behavioral psychology and battle-tested, the one-call close system eliminates excuses and gets the prospect saying yes more than you ever thought possible. If you're ready to stop losing opportunities and start winning, visit masteroftheclosed.com. That's masteroftheclosed.com. Do it today.
