--:-- Ryan Hanley: Hello everyone and welcome back to the Ryan Hanley show. Today we have a fun episode because we get to talk to someone who is very recently an outsider of our industry, and that is David Davis. He's a former Silicon Valley rock star flying around the world solving technology problems who makes a big transition to working for his father-in-law and his brother-in-law at Fudge Insurance, which is an incredible insurance agency down in Florida.
--:-- Ryan Hanley: He's now taking his filters, his technology filters, and passing our industry through them and coming up with solutions. It's not necessarily the sexy, new business, some new fangled way to throw policies on the books, ideas that I think you'd expect from someone from Silicon Valley. It's refreshing and it's exciting. In general, Dave's just a super good guy. I got to meet him at IOA and it was incredible to have him on the show. You're going to take a lot from this episode, and I think you're going to have a good time too.
--:-- Ryan Hanley: Before we get there, we got to talk about our sponsor for today's episode and that is Advisor Evolved. Chris Langell and his team are creating the best websites in the marketplace for insurance agents. I mean, just hands down. An Advisor Evolved website isn't just a website. It's a tool. It's a new business and retention generating tool. There's so much more to a website that you get from Advisor Evolved than just what you see on the interwebs. There are all kinds of processes, procedures, and tools behind the scenes. Things like quote vids and other tools that I use at Rogue Risk. If you go check out roguerisk.com, you can see the work that Chris and his team does. Some of the best agents in the entire country are using Advisor Evolved as their digital storefront. I think you should give them a look too if you are considering a new website. They are my first recommendation when people ask me where to go and I am happy to do so. As a user of their tool as well, I think I can say wholeheartedly that I'm incredibly happy with the product that I got, the service I get from Chris and his team, and I think you will be too.
--:-- Ryan Hanley: So with that, let's get on to David Davis.
--:-- David Davis: You know, it's hard for me to complain. I feel like I've taken a process that normally is like three to six months and bumped it up to like, it's been nine weeks since the company was formed.
--:-- Ryan Hanley: That's a testament to just the network that I have, the quality of the people, you know what I mean?
--:-- David Davis: Absolutely. I'm willing to share and very blessed in that standpoint. So yeah, and just pushing hard. I got a pretty clear vision of what I want to do.
--:-- David Davis: You know, what's been interesting, I'll tell you what's the most interesting thing to me is that as an outsider to the agency ownership space, I see agency owners do things and I'm like, man, why do they do that? Why do they chase that rabbit? Or why do they get caught up in that thing? And I have found myself making all those things. The tech game, chasing every carrier appointment. Most recently it was like trying to work on low, low value lead funnel systems. Part of it is boredom. I don't mean that because I say that, but not boredom, but like, I can't, I don't have a direct appointment yet.
--:-- Ryan Hanley: Right. And I think it's also like, if you're like, we are, I think we end up so like big things are cooking, but in between we want to be working. So we're like, wow, let me just spend some time on this little thing, which then becomes a bigger thing. And you're like, what the hell, what am I doing? Why am I working on this?
--:-- David Davis: Yeah. I find myself like an hour later, I've built out a funnel for a type of business that I don't even want to write. I don't even want to write. I just was like I didn't have anything to do for an hour. And it's a hundred percent. I'm downloading, just copywriting ebooks. I'm like, what am I doing?
--:-- Ryan Hanley: I feel you. I think sometimes that's when, like I was telling you that it's been a crazy week for us. I'm just incredibly busy, startup busy, but it's so fun. The cool thing about it is I don't have literally zero minutes for those kinds of distractions. Which is nice. Cause everything I'm working on is always value add, value add, value add. And it feels really good. So I love those times.
--:-- David Davis: Yeah. I'm with you, man. I said to my wife the other day, she's like, how's it going? And she's been good. She's been awesome about being slightly hands off. She's obviously, but I'm a non-revenue producing spouse right now. So that's a stressful time for anyone, but she's been very good about giving me a little bit of space. No one wants to be hounded when they're in growth mode. She said, how's it going? And I said, part of me would love to have like a partner in this, like someone just to kind of say, don't do that thing. Don't spend your time on that. That's not where you want to be. Because it is easy left to your own devices, especially when you're a tinkerer, to get on these time wasting paths. I feel like I'm getting better at pulling myself back out, but man.
--:-- Ryan Hanley: I think highly productive people tend to do that, right? Because idle hands aren't natural. So you end up like, well, I have an hour or two hours here before this next big thing. I bet you I could do this real quick. And you end up with all those threads. It's hard to control that. I feel you on that.
--:-- David Davis: Yeah. The other side of it is, I love to know how things work. Even stupid things that I shouldn't really care about. I like to know how they work. I've never been interested in like how a car works. I understand a basic combustion engine system. I never cared to break down my Ford and put it back together. In today's version, I couldn't even do that. But when it comes to business, I'm pretty much intrigued by almost every aspect of it, outside of maybe accounting. All these different systems and processes, like I know I should be outsourcing them, but at the same time, I don't know if I agree with that.
--:-- Ryan Hanley: I get it. Look, I know there is economy of scale in outsourcing them. But my heart is closer to your heart in this. First, I want to know about them. Second, honestly, sometimes, and you call this selfish or controlling or whatever, but I want to have those in house sometimes. Outsourcing is great economically. And there are some places and some functions, I think it makes enormous sense. If you're not doing it, it's dumb. But sorry, someone just slacked me and I lost my train of thought.
--:-- Ryan Hanley: There are functions that I like to keep in house, because I have them there, I can touch them, I can see them. I can watch them. That's just my thing.
--:-- David Davis: I also feel like, so yes. So I don't outsource a lot. One of my key things is that I only outsource stuff that I know how to do.
--:-- Ryan Hanley: That's actually really smart.
--:-- David Davis: Yep. So a good one for me is my marketing automation. I'm using Infusionsoft and I'm working with Austin Moorhead from Lava Automation, who's a great guy, very smart. I know 85% of how automations work, but I hired Austin and his team because since I know how it works, I can talk to them as peers and then they can just execute in a way that it's time I don't have to spend doing it, but I know how it works. So it's not like I'm talking to a Martian or they're talking.
--:-- Ryan Hanley: Right. So in that scenario, I feel like that's an acceptable outsource because what I'm doing is getting time back.
--:-- David Davis: A hundred percent. It's going to sound weird to say this and maybe it's going to sound privileged to say this, but it's kind of the same logic to where you make that decision for the first time that you're not going to mow your own lawn anymore. You're going to pay a service to come mow your lawn for you. And you feel a little bit guilty because you're like, dude, I know how to mow a lawn. I can mow a lawn. It's not that hard. It's good for me. I get to walk around. I get pride of ownership out of it. But you get your time back.
--:-- Ryan Hanley: Yes. And that's your most precious commodity. Right?
--:-- David Davis: This was a huge argument that my wife and I had when we first started outsourcing our mowing. She's like, everyone else mows a lawn. And I'm like, first of all, no, that's not true. 90% of our community gets their lawn mowed. It takes me two and a half hours to mow our lawn, pick up shit, put everything away. So would you rather have me around going to baseball games and doing all the stuff that we do for two and a half hours? Or would you rather have me walking circles around the yard? Because one of those things is actually productive and one is not, especially when you consider how much it actually costs to have someone to mow your lawn. It's not that expensive.
--:-- Ryan Hanley: Exactly. I love that your brain is working so fast that you have all these things in your hands right now. So far he's had a deck of cards and a fidget spinner in his hand. I can tell his brain's like, I want to focus on three other things other than Ryan.
--:-- David Davis: Sorry. I didn't know if we're doing X recorded exposition or just exposition.
--:-- Ryan Hanley: That's what I'm doing.
--:-- David Davis: Well, that's good. That's what it's about.
--:-- Ryan Hanley: So let's talk about what I guess now the only reason I wanted to have you on, but I want to get to know you better. Podcasts are a good excuse for that. I know you're recently on the Atomics podcast. I listened to that, which is awesome. I'm interested in a bunch of things. I'm going to start kind of high level just to get our audience there, but just tell us a little bit more about yourself. Everyone at home knows this, and they've already heard it, but I do a little who you are at the beginning before this.
--:-- David Davis: Sure. So you've all heard that. The insurance industry, right? So you're from Silicon Valley, which is super cool to be able to tell people that. It immediately emasculates every other nerd around. Then you come into insurance. So my first question is which one is nerdier?
--:-- David Davis: You know what, this actually may be surprising. To caveat this answer, I've been in insurance for six months and I've been to, let's say five or six insurance events. I think the people in Silicon Valley are nerdier in a pure nerd sense. But what may be surprising about the people in Silicon Valley is that they know how to party after they're done being nerdy for the day in a way that probably people don't imagine. At the nerdy Silicon Valley conferences, the after parties, I mean, it's like entourage. The insurance people, I think, in the office here, much less nerdy, much cooler, much hipper. We have a young office. I feel it is not very nerdy at all here in comparison to Silicon Valley. But when I've gone to the insurance after parties, and maybe I'm getting invited to the right ones, but when I've gone to the insurance after parties, they're pretty tame, man.
--:-- Ryan Hanley: You're not going to the right party. Next time we hang out, just send a text. You got it. We'll roll. I was going to say the opposite. The thing about insurance that I found when I started events on a national stage, I thought was so interesting. When I was in college, I played on the baseball team, was in a fraternity. I've lived that life. Then you kind of become a professional in air quotes. Then I started going to these insurance events and maybe it's just cause I hang out with Cass when I go to them, but insurance people know how to get down.
--:-- David Davis: Definitely.
--:-- Ryan Hanley: I kind of feel like there's this hard worker, hard having fun person dichotomy that happens with people who are super driven.
--:-- David Davis: Yeah. I've thought through that particular aspect of life a lot. I keep coming back to like, I don't know that it is possible to be dialed in 24/7. You need to have a way to vent. Is yelling crazy ball busting jokes at each other at some bar the most productive way to do it? I don't know. I think it kind of is.
--:-- Ryan Hanley: I do actually too. I honestly do think that. I think everybody's probably reached that point where you're so engrossed in what you're doing in a day, you reach that moment in the afternoon, it's like 5:30 or whatever, and you're like, I should go home or I could order a pizza and keep working for another three hours because I've got that much stuff to do and I'm that jazzed about it. Those are the moments where if I was with buddies, we would say, dude, let's cut out. Let's just be done for the day. We'll start again early tomorrow, but let's go get some beers. Honestly, some of my best ideas have come three or four beers into the bar.
--:-- David Davis: Right.
--:-- Ryan Hanley: In a different life in the industry, I worked for a company called Agency Nation. Two of the guys that work there in particular, Derek Hyde and Margety Agatha, and I, after long days of conferencing or since we were a predominantly remote company, Marty in Minnesota, Derek lived in Milwaukee, I lived in Albany, when we would all be in the same place at the same time, we would hammer out a hard day's work. We're very hard workers. Then six, seven o'clock would come around and you'd go and you'd get dinner and then dinner would turn into drinks and then drinks would turn into after drinks. And then after drinks would turn into what bar is still open so we can have one more. Part of me would say to myself, that's pretty unhealthy behavior. The other part of it was, Agency Nation as a company was born out of Derek Hyde and I being hammered drunk at a bar at 11:30 at night. The whole idea for Agency Nation in a nutshell came out of us just talking to each other, probably yelling at this point, yelling at each other about, here we need to do this, this is what we're missing. And then he goes, well I got this URL Agency Nation. I was like, we got it. And that was how it all started.
--:-- Ryan Hanley: I think you have to have both worlds. If you're too constrained, you never let your mind wander into places that you don't like. There's like retreats you can go to that help you with this too. But I just found like a couple of good IPAs or a good scotch and a buddy who will let you yell at him for a while will really help you let your mind go.
--:-- David Davis: 100%, man. 100%. Real quickly on that thing. It made me think like when I first started working in the previous role, I was all over the world. We had customers in different countries. One of the things we did is we would take these classes on how to work with different cultures. The one on how to work with Japan was very interesting to me. There was something that stuck with me. They said, in Japan, you're going to go to the business meeting. It's going to last two hours. Then after the business meeting, you're going to go to dinner and that's where the deal is going to get closed. It's not at the meeting. Even if yeses are said around the table at the meeting, it doesn't matter because two, three beers and some sushi into the night is where the actual deal gets closed. I've always kind of kept that in my head. Our interactions as human beings, we've got our business side and we can sit here and be totally serious with each other and do it in a boardroom, but the relationship piece is what cements it, man. That's exactly what you're talking about.
--:-- Ryan Hanley: It's funny. I've bumped into different people. I think this is part of, and I don't like to be generational, but I do feel like people who are professionals that I've run into that are say in their early 30s or younger, this is an idea that I think is lost on a lot of them. I've just found that they believe that a quality product in their mind to a company that supposedly has a need, that deal should just get done. Why isn't that getting done? I built this thing. It solves the problem that I perceive you have and you should just buy it. That is not where deals get done. Not at all. It's almost like a ritual. The actual meeting at 11 o'clock in the boardroom where you're sitting across from someone, that's just this formal presentation of the guard. You take hands and you're like, okay, this looks good. I'll have my people look at it. We'll get back. Then you leave and you go get afternoon drinks or you come back together for dinner. Then that's where you're talking about families and hobbies. Then there's this moment where you look at each other and you're like, this is happening. Okay, good. Let's go get hammered. That's where you get your confidence from, not from the boardroom piece, but from the over the table piece. That's where you find out if the other person is crazy.
--:-- David Davis: Exactly.
--:-- Ryan Hanley: I think that's what the younger generation is missing. People who don't understand this aspect of business, it's not about the drink. I've had people say to me, Ryan, that's unfair because I'm not a big drinker. It's not about the drinking. Not at all. It's not about the eating. I've had people say, I'm vegan. I don't like going to steak houses. It's not about the eating. In a boardroom, we all have our battle armor on, we all have our uniforms on and our team flag is behind us, and the fans are all watching, and we need to present our arms the best way possible. What the other side wants to know is, is this a crazy or no? Is this person gonna stab me in the back or no?
--:-- David Davis: Your intuition on that, all of our intuition is finely tuned to pick those people out. When we all have our battle colors on in that boardroom, we're opaque in that way. We're much more opaque. You get somebody out to dinner, you get somebody out to wherever, you start talking about family, you start talking about how'd you get to this job. You hear their life a little bit. Okay. This person is legit. We're going to work together. It's very, very important. That definitely transcends industries. At least it seems to, and it certainly is true in our industry and the insurance industry.
--:-- Ryan Hanley: I think it's really interesting, transcending industry. There are certain skills that are very portable, which I've found in a surprising way between industries. This sort of interpersonal people skill stuff that we're talking about right now is one of those skills that is absolutely portable. If you've ever read How to Win Friends and Influence People, which is, in my opinion, the absolute best book ever written on how to do what we're talking about right now, that stuff is completely portable from one industry to the next. It's just as important here in the insurance space as it is in Silicon Valley, honestly.
--:-- Ryan Hanley: So you come from the technology space. You're traveling all over the world. And now you work at an independent insurance agency. I know this is your brother-in-law and father-in-law.
--:-- David Davis: Brother-in-law and father-in-law, yeah.
--:-- Ryan Hanley: So it's not like you were completely naive to the world. You had been around, you heard them talking stuff, but you walk in the first day, you got the colors on. What are you like, this is amazing? Or like, holy shit, what did I do?
--:-- David Davis: I think it's probably somewhere in between those two things. From the moment I graduated college, I was in a big corporate job. I had never really experienced anything other than a massive sort of corporate engine, 100,000 person company, full-fledged HR, full-fledged IT, everything you would imagine with a large corporation, Fortune 50 type company. For me coming in here, I was immediately struck by the difference in scale. But what surprised me in a good way was that actually the systems that were established here are legit, at least in this agency, legit business operational systems. I get here, everything works. It's functional. I'm mapping to network drives. I'm mapping to printers. I've got an extension, all my email and my Slack and everything is going and it's all set up to go. I'm like, wow, I figured this would be much more hacky because we're on such a smaller scale here, but no, it's not.
--:-- David Davis: I was pleasantly surprised when I started looking at the P&Ls because I'm like, hey, this business is running well. These profits are rad. The revenue here is good. The modeling is good. We're not on a thousand lines of credit. Holy cow, this company is running in a profitable way. I did my research before I joined. I didn't want to join, but I was surprised to see how much diligence, structure, and goodness can be in the entrepreneurial space. My impression having never been there before was that I was going to walk in and it was going to be like the blind leading the blind. It was going to be like a mess. It really wasn't like that at all. A lot of my first impressions were positive ones.
--:-- David Davis: But I can flip that around. On the other side of that coin, there is an utter lack of process in some regards. We've got people out here who are selling policies and they're doing an awesome job and they're kicking butt, but I don't think a single one of them uses our systems in the same way. They're effective, each in their own right. None of them are using our systems in the same way, which for me as a tech guy who's trying to do wonderful stuff with our technology and data is like a nightmare. Getting down to the nitty gritty of it, one person puts their reminder to do a task in a field called notes and the other one puts it in a field called tasks and another one puts it in a field called extra. Nobody's doing the same thing. Nobody has a system. They're all closing. They're all producing. They're all hitting numbers. They're all doing it different ways.
--:-- David Davis: Coming from that big corporate space, I was a very big stickler on process and procedure. Let's have a standard way to do things. Let's keep our data in order. Let's keep our information in order. If I had to send a book in a spaceship with a colony of people who are going to Mars and when they got to Mars they could start an independent agency, what would I put in that book? That's how I want my agency to run. Those were sort of my first impressions. There's a lot of good and a lot of, oof, man, we could do better in some of these places.
--:-- Ryan Hanley: Just for the audience's context, name of the agency, size, years in business, just some back of the baseball card stats.
--:-- David Davis: The agency was started 14 years ago by our owner and president now, his father. It's perpetuated to Doug who is our president and CEO. The agency is called Fudge Insurance, last name Fudge, so family name. We get a lot of good comments from that one at trade shows. We have about 15 people on staff today. Not all of those are front of the house producing people. We're mostly a personal shop. Most of our stuff is personal. We're on a big push right now to grow the commercial side of our business. We do a little life. So it's kind of the profile of the business. You're hearing my voice get a little softer there because as a technical guy, I'm still learning some of the insurance stuff and how to give you the baseball card stats. But that's us in a nutshell.
--:-- Ryan Hanley: No, I think it's good. That seemed like a perfectly reasonable job to me. I don't think you should give yourself a hard time for that. You said that you're thinking about moving into the commercial line side. Why, first, and what does that look like moving into the commercial line?
--:-- David Davis: That's a great question. We've always had commercial writers with us and we've always done some amount of commercial business. But we've actually had a lot of turnover in that space. This is before my time, but we've had enough turnover in that space that that side of the business really hasn't taken off. There's revenue there and it's not anything that I would throw away, but it's not a super representative piece of our revenue if I say it that way. We recently were able to acquire some commercial agents who I think we all think are top notch. We actually have the talent. I listened to your podcast with Billy Williams, and you guys talked a lot about, do you pursue carriers? Do you pursue business and then pursue carriers? It was sort of this chicken and egg. How do you define what you're going to go after? Right or wrong in this case, what I'm telling you is that we have a book of business now. We think we have a lot of opportunities to cross sell additional commercial business in addition to that book, but we just didn't have the staffing, the consistent staffing to be able to go execute on that stuff until now. One of the things we've chosen as sort of a growth vector for this year is, hey, we've got this really competent staff who's now on board. Let's just give them carte blanche to go out and market, to go cross-sell, to go do good work. We really think we have opportunity to grow there.
--:-- Ryan Hanley: As a technology guy, what are your thoughts around the... I believe that insurance is still an incredibly human business. You come in from it, and I'm not saying that because you're technology focused, you don't believe that, but that would be someone's instinct.
--:-- David Davis: Actually, I just saw someone shared something the other day. Andrea Strange from InsurTech and Horowitz came out with this video that kind of, I don't want to say went viral, but in nerdy land it went viral around insurance about talking about how insurance layered into other products and that it's an afterthought thing that does have a lot of revenue attached. Everyone should be finding ways to bake it into their product. My comment on the video was like, if only insurance was that easy to sell, and to keep and make profitable. Yes, I love the idea of everyone hates insurance, so we just bake your homeowner's insurance into the next time you buy a dishwasher and it's all good. The deeper I've gotten into this business over the last 15 years, the more I've come back to, I still don't see how you profitably, long-term profitability is separated from humans. I don't know how you do that yet. I'm interested, you coming in, looking at that, where are your thoughts? Where do you stand?
--:-- David Davis: Yeah. So in short, I agree with you a hundred percent. And this is not because now I work at an independent agency and I'm sort of like attached to it in any way.
--:-- David Davis: I think if you look at the doom and gloom in the IA space, a lot of IA owners are resistant to what we typically call insure tech stuff, or carriers continuing to develop their direct channels and disintermediating independent agents. I think there's a lot of fear there, a lot of misunderstanding. I also think there's a lack of empathy from the independent agency side for the carriers' situations. You may think I'm sacrilegious for that, but there is a lack of empathy.
--:-- David Davis: Honestly, if there was a little more trust between the primary entities in the ecosystem, we may be able to move faster. Let me explain what I mean. I don't think the carriers are out here trying to undo the independent or captive agent channel because they just don't like us and they're hell-bent for profits. These guys have to make a buck too. People think, "Carriers have tons of money." Yeah, they have tons of money to underwrite their business, but that doesn't mean they don't have challenges.
--:-- David Davis: Let me answer your question real quick. There are probably some very low complexity, simple types of business that are ripe and fit for personless transactions. Some type of insurance policy objects or policies that can be done effectively on your phone quickly without human interaction. Equipment breakdown insurance, exactly. There are a couple of lines of business that are natural fits for that. I don't want to pay a middleman to help me sell a policy that I can do on a phone.
--:-- David Davis: But for personal policies and particularly complex commercial policies? No way. It is a people business. You'll continue to see people push direct options for stuff, but I really don't think that in the long run, those things sold direct without human intervention are going to have the kind of loss ratios or other statistics that make them long-term viable. That's just my prediction.
--:-- Ryan Hanley: There's so much there that I love. We are of the same mind here. One of the things that's been interesting about my own career is I was in insurance for eight years, then I went into the media technology consulting world for five years. I got to spend a lot of time with carriers. The West Bends, the Acuities, the Westfields, the Centrals. I have an affinity for super regional mutual companies. I just love the way they operate. This is nothing against the big nationals. I've had experiences with Safeco and Liberty, so I'm not knocking anybody. But I have this affinity for these types of models.
--:-- Ryan Hanley: When people bang on carriers, they look at Travelers. Travelers has an identity crisis. They're looking at thin margins. People say, "They're Dow Jones Industrial Average, what are you talking about?" But when you actually look after underwriting, after reserves, after everything else, their margins are pretty thin.
--:-- David Davis: Absolutely. And they're competing against these mega companies. The problem for a company like Travelers—and I think things Travelers does radiate through the whole industry, so this isn't a knock—is they have one foot squarely in the IA bucket. Matt Wood, an incredible agent who's become a buddy of mine, made a comment the other day about Travelers having this new flat fee auto insurance policy. I agree with the general community that this is a path we do not want to take as an industry.
--:-- David Davis: That being said, Matt's comment was, "Yes, this flat fee thing is scary as hell, but look at the way Travelers handles profit sharing and contingencies and bonuses. They have one of the best programs on that side of the house. Look at your total compensation versus just commission." My point is not whether Matt is right or other people are right. My point is that too often, IAs take this stance of "they're our enemy." They're out to rip from us. That is simply not the case. There are no executives that deal with IAs who are going, "We just want to take them out of the equation." Yes, Allstate, Nationwide, and Travelers make some decisions that are not always in our best interest. But—
--:-- Ryan Hanley: To your point—and I'm sorry to speak over you—I was having a conversation with one of my buddies from Westfield a few weeks ago, which may have been over some bourbon. We were talking about how if we're inside a carrier doing due diligence to understand how to move our carrier forward profitably, we would be remiss not to be looking at direct options as part of that puzzle. I've been saying for years, every carrier should have some small direct channel just to understand what everyone else is going through. Just for channel knowledge. To say, "Hey IA, I get that this is tough. We're doing a little bit of it here, and man, it's tough."
--:-- Ryan Hanley: I was talking to a carrier one day, and I said, "I would love it if a carrier said, 'We're going to have channel knowledge in marketing and sales. We're going to run direct to consumer, write that business, and then pass service off to the closest local agent who hits a certain quality standard.'" Now they're not competing. The agent is getting free business in the door, but the carrier is getting channel knowledge and building brand value. That's a really interesting idea. The problem is that there are too many sticks in the mud who are so old school that they see that as a gateway.
--:-- David Davis: Yeah, right.
--:-- Ryan Hanley: But that goes back to your original point. It's a lack of trust, empathy, and understanding between agent and carrier. They believe that if they give the carriers an inch, they will go all the way to cutting them out. I could list a hundred carriers right now that have zero intention of ever doing that. They trust their agent partners and love them to death. And frankly, I've put up with a lot of bullshit from them that I probably shouldn't have had to deal with.
--:-- David Davis: Yep. It's actually really good to hear you be passionate about this. A lot of times, and again, I'm brand new here, so when I say a lot of times I mean over the past six months as I've talked to other agency owners, what I find is that people are concerned with their shop. Everything that's happening inside their agency. They're caring about their customers, selling policies, and doing a great job. But they're in that agency bubble with blinders on. They don't have a lot of appreciation for how the ecosystem works beyond them.
--:-- David Davis: Maybe this isn't something everybody needs to have, but I am willing to bet that the most successful independent agencies are the ones who understand the ecosystem and the channel. We all read statistics from AM Best and figure out how much is direct, how much is independent, how much is captive. But to understand—one of the first things I wanted to do when I got into this job was visualize what the sales channel looks like. Who are the retail people? Who are the consumers? Who are the middle people? What are the carriers doing back to reinsurance? How do people communicate? Who relies on whom for what? Where are the pain points between the different players?
--:-- David Davis: I'm not saying everybody needs that knowledge, but I bet the most successful agencies do.
--:-- Ryan Hanley: One of the things that was very difficult for me when I first got on the national scene—I have a hard time not being 110% in and passionate about whatever I'm involved with. I can't help it. Even my last job, which wasn't in the insurance industry, I had very little passion for the space. But once I was there, I couldn't be anything but bought in. So when I got on the national scene, it was very difficult for me to understand why everyone wasn't looking at these global issues as big things.
--:-- Ryan Hanley: It took me a long time to say to myself, "You know what? This guy just wants to run a business and coach his kids' Little League team and go to church and have a good relationship with his spouse and maybe do some fun vacations. That's all he wants." There's nothing wrong with that. But for people like me and you, I can't help but think that way. Sometimes I have to rein it in. It goes back to what you said earlier. You said you'd like to know how things work. You want to know how your business works, even outside the scope of your walls.
--:-- Ryan Hanley: To that guy who wants to go to church, coach his kids' Little League team, and do his business—more power to you, dude. That's awesome. I bet that guy's going to be mad successful. I'm not picking on that model at all. In fact, maybe I should have a little more of that model. Maybe that person's got it figured out and we're screwing up here.
--:-- Ryan Hanley: My wife said this to me the other day. She goes, "Why can't you just do the thing? Why do you always have to be involved?" And I'm like, "If I had an answer for that, I don't know if I want to answer that."
--:-- Ryan Hanley: Let's shift gears a little bit. I'm interested in what's got you excited. You come into the space, you dig in, you realize, "Oh shit, I can get on the network and the internet works and the phones work." The basics are there. A lot of people have beat up the things that maybe don't work as well as we like, but where are you coming from where you're like, "Oh man, I can fill this gap. We can really push here"? What's got you kind of jacked up?
--:-- David Davis: That's a good question. One of the things I'm proudest of that we did at my old job at Intel is that we were responsible for enabling and supporting the design phase for large data center installations. To put that in more understandable terms, we worked with the Googles, the Amazons, the Facebooks, the Apples, the Twitters of the world who were installing large-scale data centers. We would help them build the machines, test them, deploy them. And if those machines caught on fire, we would go help put them out.
--:-- David Davis: We had to develop a system that would allow us to support the customers, track their issues, and manage the human interaction. We had a lot of customers with a lot of really big problems, and we wanted to make sure we were taking care of them, keeping them satisfied, solving issues, and moving everything forward. We worked on a system that would allow the 650 people doing this work to be in touch with customers, track their work, follow up, and do the general things that make for good support and service.
--:-- David Davis: We developed a piece of software—a mix between a CRM and a ticketing system. Once we had that in place, we were able to gather all kinds of cool statistics to tweak our business and do better.
--:-- David Davis: When I came here, I watched how the agency runs their business day to day. We have a system, as do most people in this business and in the IA space. I'll be honest with you—there are no systems here. Well, there perhaps will be a system one day, even if it's just a Rolodex. I'm not trying to be negative. We're profitable, and whatever system we have cobbled together is working. But I think we're successful in spite of our technology. I like to say that a lot.
--:-- David Davis: It's not just about getting a better system. That's one piece. But what you get in terms of insights once you have better systems and processes—that's the really important piece. It can allow you to do things as simple as load balance your work effort. It can allow you to optimize the levels of care for particularly needy situations, times of year, accounts. We sort of do this intuitively, this juggling thing. But as human beings, once it gets beyond a certain number of balls in the air, we're really not doing as good a job as we could. You need help to categorize, visualize, and share the load.
--:-- David Davis: As nerdy as that sounds, that's the kind of thing I'm actually excited about coming into this agency and helping do. These guys are already kicking butt. I think if we could have a little more insight—not me as a manager looking down on other people, but collectively—into the workload and where we're successful, I think we could unlock all kinds of extra good stuff.
--:-- Ryan Hanley: Talk to me a little bit about the idea of load balancing. I think I understand what you're saying. I also think from other conversations anecdotally that this is one of the more important concepts in our space today. I just want to understand.
--:-- David Davis: I'm using a network or computer term. In any big data center, when you have a bunch of traffic going through one particular node or processor, there are software-based schemes that allow you to balance that load across multiple resources so they're not bottlenecked by a particular resource. We can apply the same thinking to human beings.
--:-- David Davis: If Agent Mary or CSR Mary has an outstanding queue of work that's deeper than the average time per piece of work is going to give her an eight-hour day to do, we have been overloaded or congested on that particular CSR. Can we be smart about how we load balance that work onto other CSRs or other places in the agency so we don't end up backlogged through a particular resource?
--:-- David Davis: It can also be instructive in hiring decisions. If we consistently find ourselves backlogged through our single commercial agent—which is a great problem to have—perhaps it's time to go out and seek an additional commercial agent.
--:-- David Davis: What I would really like to do, the way we saw it in the previous industry, is have a number of outstanding issues and have dashboards and statistics that we collectively could look at—not a manager thing, but an everybody thing. You could go in and reassign work. Of course, there are nuances. Sometimes there's a personal aspect that doesn't lend itself to switching midstream. But when there is work that's easily compartmentalized and shuffled within different facilities in the agency, that's the kind of stuff I'm talking about.
--:-- David Davis: I'll give you a real example. We had all but two of our personal agents out for various reasons a couple of weeks ago. We found ourselves stuck because there was a bunch of stuff that needed to get done before they had to take off—not their fault—and a bunch of new stuff coming in. The other agents already had their own workload. All of a sudden, there's more work than people to do it. If we had been able to anticipate the week before that we would be down to staff the next week, we could have load balanced a little bit better and gotten it kicked out so we wouldn't pinch ourselves. It sounds very tactical, but it's real. It allows us to keep up with our customers.
--:-- Ryan Hanley: Most agents, a common practice among agents or CSRs, is the alphabet method. "Hey Tammy, you have A through F. You have G through..." There is no science to that at all. Chopping the alphabet up into thirds and distributing them on your three CSRs does not mean Tammy Sue could be there till 10 o'clock at night while John could have an hour's worth of work.
--:-- Ryan Hanley: This is a big mission of mine in terms of messaging I want to put out into the world—the idea of expectation. I think there is this false concept that if they don't talk to Tammy Sue every time they call, that person is going to be upset because they have a relationship with Tammy Sue. I think that is horse crap. If you set the expectation that Tammy Sue is your personal servant and she's going to answer every one of your phone calls and drop everything at a dime, yes, that's true. But if you say, "We have a team of people. Tammy Sue's your primary, but if it's not Tammy Sue, it'll be John or Kevin," that's cool. Then we have a team of people that can help you.
--:-- Ryan Hanley: This methodology that the only thing that determines personal touch or good service is this old world relationship where I just—it is holding us back so much.
--:-- David Davis: I agree, but here's the deal. If you're not consistent—and I don't mean consistently good, but if you're not consistent in how you're handling folks—then it makes it much more difficult to have fungible resources. If their Tammy Sue experience is always per their expectations, but their experience with Jane is per their expectations but different—just a different stylistic approach—they're going to call the one they're most comfortable with. But if you've got processes, procedures, and standards, and the experience is pretty uniform across your people, then it won't be a big deal to transfer between people.
--:-- Ryan Hanley: Dude, this is why I'm going full service center. That's why Road Risk is a service center. My business is going to be commercial and basically preferred slash high net worth personal. That's it. But predominantly, I'm a commercial lines agency. If I write a package with whoever, their team back at that headquarters or wherever the call center is—they are the best people. The other thing is setting expectations up front. Here's exactly why I'm doing it.
--:-- Ryan Hanley: I know that if Cindy Hurlis at Central Insurance is managing her team of 35 customer care individuals, I trust her to make sure that experience is uniform and high quality. I trust her a lot more than I trust myself with a low-balance CSR behind me.
--:-- David Davis: I hear you. Not everyone has to go service center, but that's actually a really good point. That's a big benefit you can get by doing the model that you're doing. Instead of having to invent or instill that in staff.
--:-- Ryan Hanley: Back to your point of trust and empathy. I have decided—and I've said this a thousand times—I feel blessed that I've been able to filter and build constructs and ideas from having a thousand conversations like the one we're having now. I have notebooks, crazy ass notebooks. I'm literally writing for articles off of things that you're saying. I have all these crazy ass notebooks with notes filled with all these ideas.
--:-- Ryan Hanley: One of the things I believe is that there are certain carriers in particular that I just trust. I just trust that they're trying to do the best thing. I just got my Hanover appointment in today.
--:-- David Davis: Sweet. You're a Hanover appointed insurance agent. Congrats, man. That's fantastic.
--:-- Ryan Hanley: You want to know why? Because I trust Dick Levy, Steve Sibeli who's my local guy, and every other person I've met there. I trust that they have the best interest of my clients and mine. When I chose to pursue them as a direct appointment, it was for that reason. I'm not going into this relationship assuming they're going to be perfect. If I had Kevin behind me as the CSR, Kevin wouldn't be perfect either.
--:-- David Davis: Exactly.
--:-- Ryan Hanley: There's this weird thing with service centers. Everyone tries Safeco's call center. Some people end up going, "Oh, it's no good." And I'm like, "Okay, why is it no good?" "Well, someone called for a car change and the car change didn't happen until the next day." I can understand you're upset about that. How many times does that happen with your own people? Do you post about it in the IAOA group? Just because they made a mistake doesn't mean you shouldn't address it, but somehow we are holding carrier service centers to a standard we would never hold our own people to in a million years.
--:-- David Davis: I totally agree. Totally agree.
--:-- Ryan Hanley: Okay, so you're excited about load balancing, which I just like saying the word. That sounds like the worst thing I could possibly be excited about. I'm excited about spring training starting. I'm excited about chicken wings on a Friday night. But sure, load balancing too.
--:-- David Davis: [Laughs] You had to know when you said load balancing. It's too good.
--:-- Ryan Hanley: I want to be respectful of your time. We have a few minutes left. But I would be completely remiss in not doing my job as an interviewer if I did not bring up your relationship with Neon and the Neon Project and Be Atomic. Tell us a little bit about it. Many people have heard of Neon. Some have an idea of what it is. Some have no idea. What about it excites you? What interests you? What intrigues you?
--:-- David Davis: I'll start with the softball answer. We talked a lot on this interview about how important it is to connect with a person on a personal level, to feel like you could hang out with them and you get along with them. I had many of those moments with the crew over at Neon and Be Atomic. There is motivation in and of itself just within those connections. But that's not necessarily why you would enter into a business relationship.
--:-- David Davis: The real meaty answer is that I believe in the vision. It fits right with the idea I explained earlier about the system we worked so hard on back when I was in the other industry doing customer support and service. There is that similar vein of desire to upgrade the way agencies are managing their relationships—relationships with their customers, relationships with their carriers, relationships with other agencies.
--:-- David Davis: The vision is very attractive to me. It is an audacious, big-eyed vision. I not only wanted to be a part of it to reap the benefits, but I wanted to be a part of it because I actually think we have something to bring to help build the best product and help deliver on the vision.
--:-- David Davis: It's the system we can move to that will help us unlock some of those efficiencies I talked about earlier. Knowing things about how we're executing our business, having insights into the way we execute, the way our people are servicing our customers, the way we're interacting with carriers. And most importantly, insights that help us tweak our business to make it better for our customers, more profitable for us, more effective for our workers. All that good stuff.
--:-- Ryan Hanley: What I think is interesting—and even if people get lost in the details of Neon—what continues to intrigue me about Neon, beyond what you first said about Seth and Sydney being two of the people you dig not just in insurance but in the world, is that each new person who I have respect for—and I have respect for you and your opinion—who comes into it, their gut is telling them there's a there there.
--:-- Ryan Hanley: It's not just homers trying to make a profit. It's not just crazy-eyed visionaries like Seth. This is people from all different walks of life. In this case, someone who's done real deal, hardcore international technology work is walking in and in their gut telling them there's a there there. That's special. I think it's why this project needs to continue to be nurtured. Not everyone's going to be a part of it, but that doesn't mean you can't support it even if you're not.
--:-- David Davis: Absolutely. And let's be perfectly honest—and Seth, if you're listening, this is not a dig—a project of this visionary status, when you launch it on day one, it's not going to be for everybody.
--:-- David Davis: It's just not, it's not going to work. I mean, not everyone went out and bought the iPhone on day one because they realized it was going to be the next best thing and it was going to take over everything. I'm not trying to make a comparison there. I'm just saying that when you launch a new startup technology, a new piece of cool technology, it takes a while. You have to hit that tipping point, and there will be changes and growing pains and all kinds of stuff that go along with that.
--:-- David Davis: But like I said, the vision is solid. Based on my experience from other industries and watching what they've done as they moved to cloud scale economy or moved into data warehousing and data analysis, the vision is solid. I'm confident in that.
--:-- Ryan Hanley: Well, my man, this has been a tremendous hour of my life. I enjoyed this. I think it's so intriguing to me when I can meet someone who comes from a very different place. Your background is very different from mine. Somehow we both found our way into this space, and yet philosophically and from a virtue perspective, we share a lot of things in common. I'm glad that we've had a chance to get to know each other a little better. I'm glad we could share some of your story.
--:-- David Davis: Absolutely. Yeah, me too, man. With the industry as a whole. And man, I can't wait to see what you start to build. I think really cool things are starting to drip out of Fudge.
--:-- Ryan Hanley: Cool stuff is happening. Drip out of Fudge. I'm going to put that on a T-shirt maybe. "Cool things starting to drip out of Fudge." I like that. Dude, I do think people are going to be watching. So thank you so much for your time.
--:-- David Davis: Thanks, Ryan. I appreciate it.
--:-- Ryan Hanley: Yeah. All right, brother. Take care.
--:-- David Davis: Thank you.
--:-- Ryan Hanley: We'll be right back.
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