RHS 082 - Matthew Sutika on Who You Should be Stealing From to Win

Ryan Hanley: In a crude laboratory in the basement of his home... Hello everyone and welcome back to the show. Today we have a dynamic guest for you, a dynamic conversation because today's guest, Matt Sudica, the Chief Insurance Officer for Obie. Many of you may know him from when he was one of the co-founders of Skylight Insurance, now Obie.

Ryan Hanley: Matt has gone from State Farm agent to independent agent, now to InsurTech innovator. Anyone who's played in that many orientations of the insurance universe is going to have some unique opinions and is going to be pushing the envelope in ways that maybe some of us just wouldn't even consider doing. That's exactly what we talk about today.

Ryan Hanley: What are the mindsets? Because not everyone's going to want to have a business like Matt's. But you can certainly learn a lot from his mindset. He actually shares some other companies that we should be following along with in order to—I don't want to say steal—but learn from. Learn from the things that they're doing and apply them to our business in the way that makes the most sense. You're going to love this episode.

Ryan Hanley: Before we get there, I want to give a big shout out to the newest sponsor of the Ryan Hanley Show. It is Premier Strategy Box. This is Mick Hunt's company. These guys are doing some dynamic things in our space. Whether it's sales management, building out automations, operations management, marketing assistance, HR—what Premier Strategy Box does is give you the expertise in the places that you need it in your agency.

Ryan Hanley: Whether it's making sure that your producers are hitting their sales numbers and having someone who can follow up and be a true sales manager if you as a principal can't do that, or you need someone who's going to be with your service staff making sure that they implement your processing procedures the exact way that you want it done, Premier Strategy Box is the solution.

Ryan Hanley: I think the world of Mick. He's been a guest on this show. If you haven't listened to that episode, go back, find it. You're going to love it. Mick is a treasure in our industry. An absolute treasure. Every time I see my phone ring and his name comes up on it, I'll put my wife on hold if Mick's calling. I'm just kidding, Shorty. I would never do that. But maybe I would. I don't know.

Ryan Hanley: Premier Strategy Box. I'm telling you, check it out. Go to mystrategybox.com. mystrategybox.com. Check them out, get to know them, because there are things in your agency that you need help with and Premier Strategy Box is the answer.

Ryan Hanley: All right, let's get on to Matt.

Matt Sudica: Yeah, I get that. I thankfully don't have to worry about that because my wife goes into her office every day. But today we have a contractor upstairs who's redoing a small bathroom. If I walk upstairs, there's mats everywhere, contracting gear, saws, hammers. They just had to come down here and turn off the water, which is in the cubby right behind me.

Matt Sudica: It's one of the things about an office space that I feel like a lot of people who've been in an office for a long time are kind of jaded. They say, "Oh, working at home, I get so much more done." I definitely think that's true to a certain extent, but the pendulum swings both ways. I look at an office right now and I would love to have some office space. It doesn't have to be some big, huge corporate thing, just some space I could go to that was away from my home. A space where I don't have to hear the doorman, the FedEx guy ring the doorbell, every contractor that comes in. Just a space to get away. Half dozen to one, six of the other.

Ryan Hanley: I am 100% with you. I just got us a space. My brothers are at it right now, but we got shut down for IVF. We did our transfer yesterday, which is really great. But starting on December 28th or 25th, we had to go into quarantine—not just COVID quarantine, but just from germs. We literally had to take Z-Packs. I had to come home, and I hate it. I was so productive in that office because mentally I was there. You're there for work.

Ryan Hanley: Right now, already this morning, I've probably made more drinks than I normally would. It feels like college when you're around your dorm room and you have to get to the library, otherwise there's always a shirt to put away or something. I completely agree with you. I'm the same way. I drink way more coffee because I can just make another pot. A scoop and some water and I've got another pot. I drink too much coffee to begin with.

Ryan Hanley: It's not like when you go to an office. I know everyone has a coffee machine at their office, but there's just something different about when you're home. I constantly have a cup of coffee in front of me. I walk upstairs and grab this out of the cupboard, or like you said, this needs to be put away, or the kids left toys out on the floor. You walk past them the third time and you're like, "Screw it, I'm just going to pick them up." That's three or four minutes out of your day. All these little things constantly distracting.

Ryan Hanley: I know all that stuff can happen in an office too, but I'm actually looking at a few inexpensive office spaces. I have a co-working space now, but I'm looking at a few inexpensive spaces right now to move into. I just can't do 24/7 from the house anymore. It's starting to be a hindrance.

Matt Sudica: 100% agree with you.

Ryan Hanley: So let's talk about—now that we've gotten our obligatory small talk and COVID stuff out of the way. We had a bunch of conversations when I first started Rogue, just talking shop and learning more about what Skylight was all about, and a little bit about before you got to Obie and created that thing. You have such an interesting business model and what you're going after. For people who maybe don't necessarily know what your work is all about, break down where you're at and what you're doing.

Matt Sudica: Yeah, it's a good question. We're heavily COVID-impacted as a business. If I can say this without people throwing cake or bananas at me, COVID helped our business in a good way. It focused us. I had Skylight, which was always real estate-based. We did all the home insurance for Century 21. I always described us as: if it's a building or some type of fire structure, that's our business model. We weren't doing workers' comp. We weren't doing the flower shops. We were doing the buildings.

Matt Sudica: Long story short, we had been partnered with Obie for a while, the two founders Aaron and Ryan. They had a platform where owners of property could put their properties on their platform and keep track—almost like a virtual Dropbox, for lack of a better term. The first thought was, "We can provide insurance to our clients." We were doing that for a while. Skylight was working with Obie, and through that they went to YC out in California.

Matt Sudica: Long story short, we all realized there was a big need within the InsurTech space on the commercial end. When I say commercial, to keep it from being too loose of a term, the habitational commercial end. Specifically in the one to one-hundred unit rental space. You have the Hippos and the Lemonades attacking the home insurance. You have the Next and the Embrokers attacking the business space. You have some attacking the E&O. You have Root going auto. We started this venture of looking at how we can be the Hippo, if you will, for the habitational space.

Matt Sudica: Obie ended up purchasing Skylight in April. I came on board to run the insurance end of things. Going forward, we have two pillars. We have our old school brokerage still doing all the apartments and condo associations just like normal. But we're also launching our own product this year. Very similar to Hippo-based. We're starting with one to four units in about four to five states. Very similar roadmap to all the other InsurTech carriers, where people will be able to go on and in seconds or minutes—the engineering team will kill me if I give an exact time right now—but going through the colorful screens, the "insurance made simple" type feel, and getting those instant bindable rentals.

Matt Sudica: We feel that space is so underserved. You have the Travelers and the State Farms and Allstates of the world trying to flip an HO3 to a DP3. Some of the carriers only let you have four or things like that. That's really been our focus. What got us chatting again is we just put out our video of what that user experience will look like. We're hoping to get that from four units up to 200 units over the next six to 24 months, and then go nationwide as far as the states and access.

Ryan Hanley: It's awesome. I have so many questions. I'm trying to figure out where I want to start. I'm going to go back and then we'll work our way into this because I think this is awesome. Century 21 and Obie—these are both bigger partnerships that I think a lot of agents look at and think, "Man, it would be great to partner with a company like X that has access to this similar market," and then they never actually do anything with it. They never actually make the effort to reach out or form that partnership that gets them the scale that really pushes the business to the next level. How do you form a partnership with Century 21? How does that happen? Where does that even come from?

Matt Sudica: I get this question a lot. I think it's spot on. At first, I struggled to answer this question because my answer was just, "This is just me." But I realized that helps no one. I remember chatting with my friends growing up when we were younger, going out to the bars, trying to meet the future Mrs. Right. There was always that concept of, "I'm not going to go ask out the pretty girl at the bar because I bet everybody's asking her out tonight." What ends up happening is no one goes and asks that girl for her number. Everybody else gets asked in the bar.

Matt Sudica: What I've found is that a lot of the low-hanging fruit that people assume is low-hanging—they think it's easier. So they'd rather spend $10,000 a month on internet leads. They'd rather go sweat out at the county fair giving out popsicles. They'd rather try to sponsor a JA class. They throw money at things and think, "I'll get leads." But they never go out. Their neighbor runs a Remax for all of Georgia, and even though they talk to him every day about how his son's baseball team is doing, the fear of asking them and getting rejected on something so large—they just don't do it. They'd rather go ask out all these other ones.

Matt Sudica: For me, find that person. Everyone listening to this probably has that huge lead source that they've always wanted, and go for it. My next thing is: most people—I call them the Bobblehead Boys from IAOA—they talk about this. Don't go in and just blabber about how your grandpa did insurance and how you're going to get that person to like you. Figure out over the course of six months how to get integrated in their life. Don't talk about insurance one dang time. The first time you talk about insurance is when they bring it up.

Matt Sudica: Start being on their social media and interacting. Maybe your kids play baseball together—sit by them and hand them some sunflower seeds. Whatever it is, just get in there. People don't like to do business with people because on Facebook they say, "Oh my God, I've done so much business this year, come get a quote from me." That doesn't attract people in my opinion. But when I see people doing great things in social media or the community, and I become a relationship with them, and then I find out they happen to do insurance, then I'm interested. I throw a lot of the walls and barriers down.

Matt Sudica: You and I have known each other long enough where we can get right to stuff. We still do the formalities at the beginning—how are you doing, complaining about our living situations—but we can get right to business if we want to because we've gotten to know each other. When I first reached out to you, that wasn't the first time we interacted when I finally said, "Hey, let's chat." If your thought was, "Who the heck is this guy? I've never heard of them," it would have been harder to get that yes to meet with you.

Matt Sudica: That's kind of worked for me. I become ingrained. I'd rather spend a lot of my time trying to find the head of the sword or the head of the decisions than what I used to do back in my State Farm captive days. I would try to entertain 5,000 realtors with steak dinners and all this stuff, and they just produce 12 houses a year. You can't scale that. I'm also looking for partnerships that scale.

Ryan Hanley: I think that's the perfect answer. I think that's the hard answer for people to hear because what everyone wants to hear is the magic bullet. Three LinkedIn posts, a voicemail drop, and a phone call, and all of a sudden all your wildest dreams come true. What I've learned over the last year is how much your business and your life can change in a year. When I started this year, I was doing what everyone does—everything I can get. Every nickel and dime, every penny account. "Sure, I'll write that. $32 in commission. Yay, let's go."

Ryan Hanley: Recently, by focusing in on workers' comp in particular, and dialing even deeper into those, and starting to work on these larger relationships, I have one relationship that I just put in my pipeline. If it comes through in this first quarter—it's not a Century 21—but man, it's a game changer for my business. If this hits and these guys say yes and we get a contract and we move forward, that puts me to another level. Then I put another one of those on and you go to another level. Those might take a year at a time, but you do five of those deals—one every year for five years—and five years from now, you're in a completely different place. You're not even in the same stratosphere.

Ryan Hanley: I think that type of thought process is very difficult for a lot of people. What do you think is about you, or how have you been able to develop that type of mentality where it feels like a lot of our peers haven't? That's not a knock on anybody. I think this is something a lot of people strive to. You seem to have developed this thought process. How do you think you got there?

Matt Sudica: You brought up something important. Century 21 is not where I started. I think that'll help your viewers because I listen to a lot of podcasts and I hear them talk about their end result after they've been working for 30 years. It makes me feel bad, like, "Oh my God, I'm not there." I started my State Farm at 22 years old—that's 13 years ago. Century 21 is like my 50th partnership. My first one, I think I did a partnership with a three-year-old girl selling lemonade. I was like, "Hey, how do I sell insurance to your customers?" I started small too.

Matt Sudica: The reason I bring that up is not just to make people feel good. When you establish your bubblegum card, unless you're Bryce Harper, you don't go from high school to the pros. You do Single A, Double A, Triple A, all the way up. Sorry for those who don't like sports, but I do. That's always one of my metaphors.

Ryan Hanley: This is a sports-friendly show. If you're listening to the show and you don't like sports, you've given up a long time ago.

Matt Sudica: There you go. You're building up your bubblegum card. When you start small and build that up, the next one almost—it sounds weird—comes to you. Someone sees what you're doing. With Century 21, I was pitching another person and working on something, and I got connected and someone said, "Hey, you need to talk to the CEO of this." I got pushed into that.

Matt Sudica: To go into your other question: you have to think different. In our industry, unfortunately—and this is my opinion, please do not throw bananas—there's not enough people thinking differently. Our industry is so lucrative. Hanging a shingle and selling policies has been very, very good. People joke about the whole golfing thing with agents. It's somewhat true. Insurance has been very, very good to you and your families if you've been in it for more than five or ten years. If you've made it that long, you're making some money or you've given up.

Matt Sudica: You've got to think different. How I started mine was when I was in State Farm, I went and met with people. I found out everything they were doing, wrote it down, and tried to find the 180-degree version different. Some of the times the 180 was a terrible idea, but what I'll tell you is that if you're going to this big real estate firm or this big car dealership, they've been pitched the same old thing from an insurance person before. If you don't go in there with an idea to change their mind or get them excited, you're not going to get that conversation to go far.

Matt Sudica: I actually tried to pitch Century 21—the CEO of Century 21—this idea I had for Uber for insurance. A crazy, spacey idea. We fell into, "Oh Matt, why don't you just have a brokerage that does our P&C insurance?" Very simple, old school. But I didn't go in there like the old school guy being like, "Hey, I want to write home insurance," because they've been there. They've had those donuts. They've had those pens dropped off before. When I talked to the guy later, he said, "I saw that you had vision for the future of the industry. I thought you were totally crazy, but I knew it was crazy in a good way."

Matt Sudica: That's really what I would bring up. We all probably have these great ideas that sit right back here in the back of our mind. We've been in insurance. But I see too many people afraid to just go for it. You're a prime example. You were doing your thing and you had this little itch to do podcasts and go off on your own, and you did it and it's successful. A lot of people won't.

Ryan Hanley: I wholly agree with you. I've also seen in Rogue—the crazier and bigger... David Carruthers has been a big impact on me. I was talking to him the other day about this idea that I have for Rogue, basically where I want Rogue to go, what I want it to be. He said, "What is your goal for that this year?" I told him, and he said, "You need to put a fucking zero on the end of that." I was like, "What?" He said, "You think in the wrong denominations. The moment you need to think a zero or two on the end. The worst thing that happens is you get half of that, and it's more than what you just told me."

Ryan Hanley: The idea was we've got to open our mind up to more if you want more. There's something to be said for doing a tremendous job in your local community and one by one writing your policies and living that life. That is a great life to live. My wife lives that life. It's a tremendous life. Don't get me wrong. But I think that life is so saturated, it is very difficult to come in fresh today and make that work. If you're working for an established agency that has a brand and clients, you can continue to do that, no problem.

Ryan Hanley: When Rogue really went from "I don't know if this is going to work" to "Maybe I've kind of found something"—which is the way I feel today—was when I went from "I am not going to be successful being a local, one-off policy by policy guy" to "This is going to be something different and bigger." I think we have to be aware of that. I struggle looking at a traditional startup agency today. If you've been established for a long time, I don't know that you necessarily have to make this move. But I agree with you that there is blue ocean for big ideas right now.

Matt Sudica: I think the biggest thing too is say yes to everything and figure it out on the backend. Say yes, and then build it. The interesting thing: I inked the deal with Century 21 before I had actually filed my LLC to start my Skylight brokerage. I didn't even have a brokerage. I didn't have a carrier. I didn't have an account. I was literally in between State Farm and the thing. When we launched the LLC, I already had that agreement. When I was in there talking, it wasn't about what I didn't have. It was just, "I'm going to get this deal done and then I'm going to figure out the rest."

Matt Sudica: It makes sense because if you go get a big partnership and you think you already have what they need built, you're kidding yourself. No one does, because it's a new partnership. A lot of people will spend so much time—if I have to do meetings at all, I hate my day because there's always those people that want to meet 75 times on something instead of just going out and building. If you're going to go to a dealership or whatever it is that you want to partner with, go in and just get the yes. Come to terms that you know are good—how you're going to do business, split business, however it's going to work. Then it's your job to execute and go build it. It's not on them. You'll be a lot more successful that way, in my opinion.

Ryan Hanley: What do you think it is about our industry that it feels like we don't necessarily—well, I don't want to say that because I know a lot of people that have big ideas that feel repressed in sharing those ideas. What is it about our industry that we don't cultivate that? In other spaces, there is a culture that cultivates the next idea. "What's the next thing? How are we going to hit this? How are we going to attack this? How can this be tweaked?" It feels like only until really recently—18 months, maybe 24 months—that there was even... It was almost like we actively tried to repress bigger ideas. The only people that were able to do them were mavericks or exceptions, people who stood outside the establishment. What do you think it is? Because you've obviously bucked it. You've made these deals and you never had that mentality sink into your brain.

Matt Sudica: I don't know how it... I come from a family that all own State Farms and the established, old school, take care of the community brokerage. I think I just wanted to be different. I do see it in the last 12 to 24 months. It got to the point where I was such an outcast, even on the IAOA Facebook group. I would post what I was doing or what I was excited about, and people were coming with their pails of water and their forks to defend. I mentioned Lemonade and people acted like I was stealing their business. To the point where I almost stopped posting for a little bit because I was like, "They're not there."

Matt Sudica: If you're a Game of Thrones fan, it's like winter's coming. You might be where you don't believe that the White Walker of technology is coming, but it's coming and it's going to break down that fricking wall that you've had for 30 or 40 years. You can either jump on the dragon with Jon Snow and go learn a thing, or you're going to be in the battle of your life.

Matt Sudica: The biggest thing people are misunderstanding as we go forward is that embracing technology or embracing new ideas doesn't mean the old stuff needs to be thrown out. It just means you need to tweak it. Most people wouldn't wear their clothes they wore in the 70s. They might wear something similar—they might still wear a polo or a pullover shirt—but they're probably wearing one that doesn't say Fila on it anymore. It says whatever... I'm not a clothes guy. I don't know why I gave that example.

Ryan Hanley: You're talking to the wrong guy. I just wear whatever my wife buys for me. I just find stuff in my closet.

Matt Sudica: We just need to be ready and go for it. A lot of people are going to listen to this and they're not in the same headspace as me. For me, I have issues too. My biggest issue is I can't stop. I always want to keep going. That's not healthy either. All I really want to share with people is just my experiences. I'm hoping that people can just grab some of this, and if anything, just the energy. The energy that I go about things. Whatever you're wanting to do within the industry or your brokerage, just go for it. If that is just doubling your staff or going from typewriters to monitors or whatever you want, just go for it. It might not be starting your own MGA and getting with Century 21 and all that stuff.

Ryan Hanley: Like that might not be for you, but you do have an idea out there of something that you think is crazy. Right? It could be a coffee machine for everybody. Right? And you're going to pay for the coffee. That might be the wildest thing you have. Freaking go for it. Go buy the damn coffee machine, but let yourself go.

Matt Sudica: I agree. I think the word, or the part of that, that is the most applicable is the idea of letting your energy, using that energy. I was part of a mastermind the other day, and one of the individuals said her prospecting idea for the first quarter was to package up—in this case, she was going after contractors—and she was going to put a big box with a hammer in it, like a nice contractor's hammer. And then the owner's face on the box, so they knew you'd open it. And inside would be a note that said, "Let's hammer out your insurance program." That's different. That dude has never received a $30 hammer in a shoebox from an agency before. Is that some sort of crazy technology thing? No. But I think those are the kind of ideas, the kind of outside-the-box—I mean, wow, that's a cliché—but this kind of differential thinking that separates you. It says, "Look, I'm not going to approach the way business has always been done. I'm not going to approach it the same way." Maybe some things are the same, but other things are going to be different. And I think just that idea of bringing energy.

Ryan Hanley: Now, I will say I want to talk to IOA, which I love, but at the same time, I also think there are so many idiots in there. And people who aren't actually idiots, just the things they say online are... I don't know. I feel like there are a lot of people who—oh geez, the things they say and do in that particular group are misrepresentations maybe of who they actually are as people. I remember when you were posting. I remember I called you on the phone and I said, "Dude, don't stop posting." You were getting so much crap, and I called you and I was like, "Dude, don't stop posting." This is stuff that people need to hear. It was particular about the Lemonade thing. And I hate Lemonade as a company in terms of the way they've misrepresented some things. However, as a business person, as a product, if you're serving your customers, they write on standard Accord paper. There's no crazy paper. It's basically the same HO3 you'd get from any of the other major companies. So what's the big deal? It's certainly worth considering. I just have wholly disliked the way their CEO has handled himself and some of the things they've said. But that's beyond the point. My reasoning is that we can't—when you start to do things different, one of the things that is unfortunate about our industry is people seem to attack. And you can't let that shut you down. Anyone who's listening to this, if you haven't approached a new idea because you're worried about what the industry would think or what people would say or how they will react to you taking a stance on something, call me if you need to talk about it. But we can't let ideas, good or bad, not surface because we're afraid of getting trashed on a Facebook group. And that's not to diminish the value of IOA. I'm a huge proponent of the group in general. So let's move on from that topic. I really appreciate all those thoughts.

Ryan Hanley: So I want to get into the Century 21 deal. You form another partnership with OB, and you decide to kind of combine teams, become part of OB as the operating entity. OB buys Skylight, and now you're developing this product. Is it your paper? Lloyd's? As much as you can talk about that. Is it standard? Is it admitted?

Matt Sudica: Yeah, so it'll be admitted. I can't drop the name just yet.

Ryan Hanley: That makes me throw up in my mouth. But it's okay. Share what you're willing to share. It's all good.

Matt Sudica: It's going to be paper. It's going to go down the same lines as Hippo, Lemonade, all that as far as a full-on MGA with the TPA and everything like that. It will be standard. The thing that's unique about it is that I'm able to help because I've had the opportunity to go work with pretty much every named insure-tech carrier. At one point, I had a job offer from all of them. The reason I finally took this one was, one, I really liked the founders and they're good friends, but also the impact you can do. Our paper is going to cover what is really needed in the rental space. If you have a client that does rentals at all, and they are 100% rented all the time, they never need renovations from the time they buy it to the time they sell it—like they don't touch it—please, I'm going to try to steal your clients. I'm joking, but in the rental space, they're always getting renovated. They're always vacant for periods. They always have some builder's risk going on. There's always something. And I'll tell you right now, if you try to tell me that all of your rental properties in your book right now are not in the gray, you're lying to me. You're like, "Well, how long are you renovating? Is it basic renovations or is it cosmetic?" "Oh, I can put that with Travelers because by the time they do the inspection, you'll probably be done and it'll be rented out." Or you get a thing like, it's frustrating. Or if you're doing it really perfectly, you're forcing your client into a three-month, six-month, nine-month builder's risk for their 30 or 60 days of renovations. Then they're paying for that and trying to cancel it, or they're paying way too much. And then you're flipping it to a DP3. If you're doing it the perfect, ideal way, which is not ideal for the client. So our product is going to be one product within that space. You'll be able to, within a click of a button, flip on that it's being renovated, and how much I'm putting in. You'll be able to flip that back off when it's done. You'll be able to flip that it's vacant and then to occupied, but you don't have to change the carrier or change the paper. It's just going to be a change you're doing on the fly—policy changes, form changes.

Ryan Hanley: Which makes sense because with my auto insurance, I can change my liabilities at any time. I can add a driver, remove a driver. I can make all these changes. But in the rental space, they really limit you to changing your deductible and changing your building amount. And then if you actually change the characteristic—which is the most changed thing—the building stays pretty same. The deductible, people want similar deductibles all the time. What changes is what's going on with the tenant and what's going on with the space. So we're trying to build around that. It sounds so simple for all of you guys who are listening. You're all like, "Oh God, this guy thinks he's a rocket scientist. That's pretty easy." And I agree, but no carrier does it right. Or very limited carriers do it. They either want it rented out and occupied and nothing going on, or you basically have the builder's risk type carriers. Very few in the middle. So that's what we're going out to do. There's not a lot of carriers in that space in general anyway. Big marketplace, big opportunity. But also from a direct consumer standpoint and our own brokerage. And then as we open up—because I'm clearly a big proponent that brokers still matter, but brokers need better technology—that's where I stand in the whole big fight between tech and brokers. We're able to probably get into 100% of brokerages around the country because who doesn't right now need a one-to-four, let's just say it stays at that unit, quick rental product that is very flexible and easy that pays good commissions for their clients?

Ryan Hanley: It doesn't require underlying.

Matt Sudica: Right. Exactly. And we'll have the one million, two million GL too, so you're hitting requirements for lenders. It fits a good niche for clients who need more access to some products and also brokerages. It's the one thing that a lot of personal lines or even habitational space brokerages would like to have. Every time I post about it, I get messages like, "Hey, when can I start to sell this?" And that's the same question I would be asking if I saw someone else with this product. Because if I tried to peddle your clients right now a new homeowners carrier, I'm competing with a billion people. No one probably listening to this right now needs another homeowners carrier, unless they're trying to write in Michigan or Florida or something unique. So that's what we have going on.

Ryan Hanley: That's awesome. So OB will be the carrier. And then will Skylight still be writing as a direct-to-consumer?

Matt Sudica: The Skylight name is sunsetting. Everything will be OB. We'll have kind of a combo. Everything will go through our site, the OB site, and based on the characteristics, it'll be the same user experience no matter what you're trying to do in the habitational space. On the back end, you will either qualify for our own MGA product if you're in a certain state and the one-to-four units, and it will give you that instant experience. Or the experience will still be the same, but at the end, it'll go into more of an old school, if you will, still brokerage type field. We're still doing things a little faster and different, of course, than—I hate even using the word "old school brokerage." So that's kind of where it meets. And eventually, as our product has more units and more states, we'll get more instant for people. But the key for us is still giving the same user experience all the way through, regardless. You see this with a lot of companies. Hippo does this. You go through whatever, even outside of insurance, and you either hit their instant product or they say, "Hey, a rep will contact you" because you clearly didn't hit their fast, easy thing. I'm sure this happens on TurboTax for your taxes. You're either an instant return or we need an accountant to look at this. So it's very similar.

Ryan Hanley: That's awesome. So you have one to four today. How do you move to 200? What does that look like?

Matt Sudica: Very similar. If you've studied the past of—I keep using Hippo, so they owe me one because I'm just name-dropping them here. And I don't get paid ten cents. A lot of people think I do. I don't get paid by Hippo for dropping their name. I feel like there's a law now that if you're a celebrity—and I'm not a celebrity—but if you post about a product, you have to be like, "I'm a user." The most money I've gotten from Hippo is I have like 45 of their soft teeth. That's been my biggest compensation. Full disclosure. But anyways, if you followed the Hippo path, they started the same thing. Three, four, five, six states. Writing through the MGA experience. They slowly got a few more states. And then they just recently announced that they actually bought out the carrier. I believe it's Spinnaker or something. I can't remember. It's the same thing Metromile did with Mosaic. So we're probably going to—the paper that we're using is probably a little too large for us to ever purchase them, just as a full disclosure. But we're going to go down the same route. You will hopefully build with that carrier as much as they'll allow us to go state-wise and unit-wise. And then potentially, if need be, we would need to bring in another paper to get more states, more access. But that's just the simple process. Even Lemonade, none of them started in 50 states with all the product lines that you see today. They all started one state, two states. Lemonade was renters only, then they went into home, and then pet insurance. I think now they do... Same with Hippo. I've been around all of them when they were like less than 10 people and watched that journey, or consulted with them, or helped them, or just chatted with them, or was a fan boy of them. And they all kind of went down that same path. So we're going to go something similar. We gotta do good in the first four states with the product that we have. We gotta get it in the consumer's hands. We gotta get our name out there. And if we're writing the premium that looks good to our partner, then I'm sure they'll let us have more and more access. And if we're not, then we got a whole other set of problems.

Ryan Hanley: It all comes back to actuarial. Can you—what's the pricing, what's the risk tolerance, all that kind of stuff. That's always the interesting part for me with all the insure-techs that come out. It's why I'm still not sold on Root. And I'm not rooting against any of them. I'm just not sold that the methodology works yet because I haven't seen the data come back that shows that underwriting method is working. I think in Hippo's case, they seem to have figured out an underwriting model that allows them to be competitively priced with a good product. Not that they're always right everywhere, but they seem to have done the right thing. And that path—we're what, five, six years into Hippo really being hard charging? I'm not exactly sure when they were founded, but I remember it was 2014, 2015 when I first started hearing about them. To think how far they've come, it's tremendous. These are the kind of products that we need. I look at even a carrier like Plymouth Rock here in the Northeast. Nine states. Started as a very traditional carrier, invested in a different methodology for underwriting, and they're dominating. They're dominating in the states that they're in, in terms of how fast they're picking up business. It's been really interesting to watch some of the more traditional carriers react, in particular because we don't have a lot of the more fun carriers come to New York. New York is an awful place to do business. We have authoritarian dictators who run our state and regulate us into submission. So no one really comes in here who already isn't here. But having a Plymouth Rock come in where you can enter an address and click a button and get a rate, and people are like, "Wait, they don't need the credit score?" And they're like, "Nah, they've already underwritten the home." "Well, what about—" "Nope, nope. It's an address, an effective date, name of someone, and you have a home." It's been wild to see how carriers have reacted to just simple UX changes. We're not even talking about actuarial stuff, but just simple UX changes and policy stuff. It's really wild.

Matt Sudica: My thing is for anybody on the fence with insure-tech or technology in general, it's two things for me. Think back and remember the time. Everyone remembers where they were on 9/11. Everybody remembers where they were on this date of X. Remember the first time that Steve Jobs showed you the iPhone with no buttons and how you felt about it, and where that is today? I thought the iPhone was crazy. I will admit to that. And you couldn't get my iPhone from me for anything now. So one, remember that with this technology and these insure-tech carriers, that same thing is going to happen. And then my second thing is, if you're still not a believer and they're your enemy, believe in the phrase "keep your friends close, keep your enemies closer." Dive in. The more you know and the more you can keep an eye on them, the more you can do that as well. So that's my thing when someone's struggling with technology or these insure-tech carriers. I share those two things. Hopefully that helps them with the mindset that I believe is important going forward.

Ryan Hanley: I could not agree with you more. I look at one of the things I said—and just to bring up Lemonade again—one of the things I said about Lemonade three years ago that got me a lot of heat was that when they first came out and they're trashing IAs left and right, saying things like "these people are lying," there was a lot of backlash to them. One of the things I said was, "Yes, I don't appreciate those things, but man, can these guys brand. Holy crap, can they brand." The visuals, the language, the emotion that they pull out. And obviously you hired Dan Ariely. Here's one of the smartest behavioral psychologists from a business context that exists. Man, are they good. And if you're not watching them and you're not paying attention, then you're missing it. You're missing what's making them work. And they're not the only ones. I think you're a hundred percent right. I think the worst case scenario is I'm just going to flip my light on and keep plugging away at the way it's always been done and flip my light off and hope everything works out. That's not going to work because today, Obie can drop into your backyard with some Facebook ads or an email or a referral partner and start taking your clients away from you, just like Hippo can, just like any of these other guys can. Those days of "local" being your defense mechanism are over. You have to be able to play at that level, even if it's on a local basis. I am worried that it is easy to get overwhelmed by this stuff and that we would allow that overwhelm to keep us from actually getting where we want to be.

Matt Sudica: I would 100% agree with you. I like what you said, and it's scary. To be honest with you, I think I might have gotten to the insure-tech space because I was scared of it. I wanted to know more and I wanted to be less fearful. Then I fell in love with it, of course. And now I get to actually live my dream of actually going for it. It's awesome. But I think what's more important than anything is, just like I said, from a simple brokerage of two people all the way on up, we need to think of the other industries and what they're doing. We need to watch them. You brought up Lemonade. They built a brand that happens to be an insurance company. Think about how fast they mobilized when it took State Farm 100 years to get the brand and the recognition that they have. Lemonade did that in less than a decade. Hippo did it faster than that. So stop worrying so much about what they're going to take from you and start trying to take from them. How can you steal how Lemonade acquires clients? How can you steal how Hippo quotes somebody? How can you learn from the best? Right now they are the best in our industry at branding and marketing. I'm still a huge State Farm guy just due to family loyalty, but when I see what Lemonade and Hippo are doing on social media and then I go look at a State Farm post of them trying to still post a picture of a family in a tree from the 1980s, it's just like, "Whoa." It's like someone's still trying to use a monitor with a 12-inch back to it. It doesn't make sense anymore.

Ryan Hanley: It's actually been kind of sad to me that State Farm—their Jake from State Farm, Rodgers, and Pat Mahomes thing—it's almost like they have no idea what their brand is, so they're just latching on to Aaron Rodgers and Pat Mahomes and saying, "Geez, I hope people connect with us over these two." What is State Farm's brand today? Jake from State Farm? Who the heck is he? It's a completely different guy now. Not that that's wrong, but is it the overweight white guy or the in-shape black dude? Or is it Pat Mahomes? What does Pat Mahomes really have to do with insurance other than he's Pat Mahomes? Nothing against influencer marketing, which is cool, and having spokesmen. Spokesmen have worked. But I feel like they don't have a brand today. It's your grandparents still telling the story about how they did it. Or your uncle who joked 10 years ago was funny, but still keeps telling it, thinking people are going to hear it for the 10th time and still laugh like they did the first time.

Matt Sudica: There's influencer marketing, like the Kardashians and different things, but they're actually using the products. It's not believable. Maybe Aaron Rodgers and Mahomes have a State Farm policy, but it just doesn't really correlate. And they're used in this 1980s marketing of "Be Like Mike," Michael Jordan type of just put a celebrity and your logo together. That worked 30 years ago. That's not what's integrating you into it. Plus, it's TV ads and everything like that, and we're all on YouTube TV and Twitter and things. I'm even feeling old, and I'm in my thirties. I talked to my 20-year-old brother and it's like, "Wow, I don't even know." Advertising through video games, everybody's doing Fortnite and stuff. But I'm not one to ever rip on anybody, so that's as far as I'll go. It's just a good example to show that even the biggest and baddest—bigger than number one to combine—could take a page out of what's new and going on. And it's not too late. State Farm's going to buy out Root. They're going to do something eventually. They're too big, probably. Hopefully. They don't want to be left as the person still stuck in their ways and have all these other ones knock them down the list. That's still the same type of challenges. If I was talking to State Farm or a broker, I'd say, "State Farm, have everything you're doing, watch Lemonade. You got more money, people, time, and all that to compete with them. Just do it."

Ryan Hanley: I think you hit on it, man. It's why I spend so much time on the Rogue brand, even though we're small. I think brand is the differentiator. Clients expect you to have good products, good service at a good price. That's what they expect. So who cares if you have that stuff? "Oh, we have a good price." Okay. I have a good price too. "You have a good price." Okay. That's cool. But what is the brand? What does it mean to you? That idea of brand and Lemonade's success is wholly because of their brand. I give them ultimate kudos for that. To recap this conversation, and I just appreciate it, this has been awesome. It's really about allowing our energy to release and think bigger about our business, in whatever way that makes sense, whether we're local or we're trying to be bigger in some way. And to focus on brand and to really dive in and go forward. Dude, I appreciate you. This has been tremendous. Thanks so much for sharing your time, man.

Matt Sudica: Perfect. Thanks for having me. Happy to chat anytime.

Ryan Hanley: Before I let you go, where's the best place for someone to get at you? LinkedIn or what, if someone wants to connect with you?

Matt Sudica: LinkedIn, Facebook, just under Matthew Sudica for both. Probably people who listen to this, those are the two best because it's more peer-to-peer. I'm pretty quick at answering messages and all that kind of stuff. The only thing I will tell you is that if you're sending a request, just put in the note up front, "Hey, I heard you on things," so then I know. I don't know what happened on those two social media platforms, but the friend requests are out of control now. I can't tell someone that I should be connecting with and I just don't know who they are by name. And someone who, as soon as I connect them, I'm going to get one of those messages trying to sell me ad space in Taiwan or an online gym thing. So just put in the note that you're from IOA or you heard me on this podcast or whatever. Then I can accept you and we can start chatting. I'm kind of feared to accept now unless I'm looking at mutual friends. It's wild where that's going. But get me on both of those and we can chat from there. I'm pretty good at getting back to everybody.

Ryan Hanley: Awesome, man. Appreciate you, Matt. Be good.

Matt Sudica: All right. Take care.

[End of interview. The following is a promotional advertisement.]

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