RHS 130 - John Fohr on Making Compliance Sexy with TrustLayer

Ryan Hanley: Hello everyone and welcome back to the show. Today we have an absolutely tremendous episode for you, and it is with John Fohr, the CEO of TrustLayer. Now, you may have heard TrustLayer's name starting to be tossed around. Definitely one of the players in the InsurTech space from the value-add segment, right? The real value-added services segment. They're doing compliance, they're doing certificate tracking, all kinds of really good stuff. I'm not going to do the platform justice by fully rolling out all the list of features that they do. But what I will say is John is a great guy. This is an awesome, awesome conversation, and I am very excited to expose you guys, if you haven't been already, to TrustLayer.

Now, in full disclosure, they're not a sponsor and we don't use them yet. It's one of those things that is on our 2022 roadmap as we dive deeper into how we're going to add value to all our small business customers. TrustLayer is on that roadmap. We're growing and we're young and rogue, so just not quite ready to roll TrustLayer out. But I'll tell you, completely blown away by this tool. I've gotten the demo after talking to John. It's just something that I'm like, I can see it. And I can see the companies, or the agencies, sorry, that take the time to put a tool like TrustLayer in place. I can see it. I can absolutely see where that value is going to come from. So just excited to expose this tool for you. But I just wanted to let you know that I am not using it, nor are they a sponsor, just so you guys knew kind of where I was coming from. I just think John's a good guy. I had heard him speak before and had wanted to have him on and finally got the chance, and happy I did because this is awesome.

So that all being said, I want to give a quick shout out to the sponsors that make this show possible, and that is Tarmica. Don't call me Tarmica. Tarmica. Tarmica is changing the game in the way we quote and compare commercial insurance. Guys, I've been talking about Tarmica for almost three years now, and there's a reason for that. It is a best in breed commercial comparison rating platform. Just the connection quality, the quality of the quotes, the speed, the questions, how they handle it. I absolutely love Tarmica. They're an enormous part of Rogue Risk. They have been since almost day one of our agency. I haven't even considered leaving. Tarmica is just, it's a best in breed in my opinion. And when you can use and have access to a best in breed tool, you do it. And Tarmica is just, it's that for me.

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The other sponsor I want to give a quick shout out to is Aureus Analytics, who is taking the data game to a whole nother level, sucking all the data in from your different platforms that you have, and then finding out where are their gaps, who's happy, who's not happy, where are their opportunities to upsell, cross-sell your business. Again, Aureus is one of those platforms that maybe you're not ready for it today, but get the demo today. Go get the demo. Understand what the platform is so that in 2022, you can build towards being ready to add a tool like this to your mix so you can take your game to the next level. It's Donna by Aureus Analytics. Donna for agents. Go to Donnaforagents.com. Just Google Donna for agents today and check it out.

All right. On to John Fohr. Here we go.

John Fohr: Ryan, how are you?

Ryan Hanley: I'm good. What's going on? How's life?

John Fohr: Trying to keep the startup afloat. You know the game.

Ryan Hanley: Yeah, strikes and gutters, man. That's the startup life.

John Fohr: That is the deal. That constant tension. Someone asked me a question the other day and I said, I kind of feel like I'm in a biplane flying through the Rocky Mountains. At certain times I'm well above the peaks and life is good, and other times I feel like I could just... at any point, you're not exactly sure where you are, you're kind of hoping there's not a big mountain coming, but you just don't know.

Ryan Hanley: That is a very accurate way of describing it. How long have you been on your entrepreneurial journey?

John Fohr: I officially started the agency on March 9th, but I guess technically March 9th of 2020. But I guess technically I'd say from about 30 seconds after I was fired from my last job, which would be October 6th of 2019.

Ryan Hanley: Oh, man. So you started in the pandemic.

John Fohr: I started seven days before New York State shut down.

Ryan Hanley: Holy shit. Yeah. So basically, from the moment I got fired from my last job, which is a whole story which I won't go into. 8:36 a.m. on a Monday, I think I'm walking. I was a CEO of a fitness brand. I left the insurance industry basically because I had a family member who was sick and I couldn't travel anymore. At the time, I was a CMO for Bold Penguin, and that required me to be on the road every single week. So I had this family member get sick. I had to be home. My wife basically said, I need you home. We got little kids. They would not allow me to continue my current position and not travel. It wasn't part of the job. So I'm kind of separated from them, which whatever. And there's just not a lot of insurance work in the Albany area. I live in upstate New York. Now I could have found a great position post-COVID, but pre-COVID, everyone was still, you gotta be able to show up here. You gotta be here. You gotta be here.

So I tried to figure out the next best thing I could find. And I like to work out a lot. This gym that I'd been working out at, the founder came to me and said, "Hey, we've kind of stagnated a little bit. We're stuck at 2000 members." They had six locations. They're like, "We really want to grow, but I'm a gym guy, not a business guy." So he actually brought me in as the CEO.

Ryan Hanley: Oh really?

John Fohr: Yeah, it was great. I loved it. He kind of kept working on the routines and the gym stuff, and I grew the business. I doubled the size of the business in nine months, which was awesome. At that point, he realized the business was profitable again and growing, didn't need me, and showed up at 8:30 in the morning. I'm in Lululemon workout clothes because as a CEO of a fitness... now everyone's in gym clothes. But back in 2018, being able to wake up every day and put sweats on to go to work was pretty cool.

Ryan Hanley: Was this like a box? Was this like a...

John Fohr: It was a really cool concept. It was strength-based metabolic training. So you were doing strength-based exercise, but at a pace. So you were constantly out of breath and getting that cardiovascular workout that you really need, but you were doing strength-based exercises. It was changing. I was really bought in. I'd seen some people have ridiculous transformations and just overall people being happy and healthy. It was great. But yeah, I'm sitting there in my sweats, 8:30 AM meeting. We have every Monday, just kind of like state of the union. And he showed up in a suit with his attorney. I knew something was wrong.

Ryan Hanley: That's not good.

John Fohr: Yeah. So it was basically from that moment, I figured the universe was telling me it's time to start your own thing. So I did.

Ryan Hanley: Cool, man. Wow. That's incredible. And then you launched in the middle of the pandemic. We launched as well.

John Fohr: Yeah.

Ryan Hanley: I know you launched in February or was it April?

John Fohr: Well, technically we launched like we started the year before. But when we went to the pandemic, we had I think we had four people that were full-time. And I think we just hit 50 yesterday.

Ryan Hanley: That's awesome.

John Fohr: So when it was four people including my co-founder, who's awesome, you're constantly like you know what everyone's doing. You're working like hand in glove. And I don't know about you, but once we hit like 15, 20 people, things change, especially in a remote environment. I don't actually know what's happening to some of these teams anymore. You're not able to check in with everyone every day in the same way you were before when it was a tiny team. And again, everyone's remote. So a lot of the challenges a lot of the startups that really grew during the pandemic.

Ryan Hanley: To me, the pandemic was kind of a proving ground for leadership. I think in general, most white collar jobs basically stayed the same, right? You just work from home. That's a broad stroke. But for the most part, if you were a salesperson, you were still selling. Maybe a little different, but you were selling. I saw the pandemic as a real proving ground for leadership. There were a lot of lazy leaders out in the marketplace who, when you're seeing people every day, when you can walk the floor, it's really easy to keep that level of control and thumb on what's going on. When the pandemic hit and now all of a sudden you're in a remote environment, you're not exactly sure what everyone's doing every minute of the day. Your success is based really on process, culture, having the right people. If this were EOS, kind of like right butt, right seat. To be successful today, you need a much more thoughtful, engaged leadership than you did pre-pandemic. I could be completely wrong, but that has been my take.

John Fohr: No, of course you do. I'm sure there's a lot of crappy middle managers out there that are terrified that their teams don't need them anymore. With some good structure, you can now manage a bigger team or the team can work remote, and they don't need you butting your head in their office every 30 minutes just to make it seem like you're busy.

Ryan Hanley: A lot of times when we run into hiccups or challenges, like every startup, I remind myself and the team that there are a lot of companies that... the last year and a half was a huge road bump for every company really. But the vast majority of those companies existed before the pandemic. There are very few companies that have grown up entirely during the pandemic, especially dealing with all the complexities. If you were a salesperson before, or a customer success person, your job was pretty similar during that. It's just like, well, I go to the office, I do it at home. There's some changes, I didn't have to travel as much, more Zoom or whatever. But more or less, you were trained, the infrastructure you had, everything was kind of similar. But if everything grew up from scratch during the pandemic, we didn't have any of that momentum going into this thing. It was completely starting from scratch.

John Fohr: It's almost like a double scratch. I've described it to people as a double scratch environment where you not only had the fact that you didn't have the momentum, you also were starting during a time when no one wanted to pick up the phone and everyone had all these personal, emotional, and psychological stresses outside of work that they're dealing with. You're trying to build partnerships and connections and hire. I will say though, I'm going to disagree with you a little bit on that. I feel like some people were more willing to pick up the phone. We did this accelerator, Broker Tech Ventures. These guys are awesome. We went through the pandemic. The accelerator was supposed to be in person and these guys pivoted on a dime, made it virtual. It was run by these guys. There's like 14 brokers that got together and M3 and Homes Murphy and a few others convinced all these competitors to work together. They did this really good thing. But we were able to meet with the people whose names are on the side of the building in a lot of cases because the CEOs weren't moving or weren't traveling. In that way, we would have never had as much face time. Granted, it wasn't real face time, it was virtual FaceTime. But it was still way better to actually build direct relationships with 10 plus C-level people at some of the most innovative brokerages in the country. So I thought that part was pretty slick. But all that said, it's also nice to get back on the road a little bit. Did you go to InsurTech Connect?

Ryan Hanley: I didn't. I would like to go next year. We've been in a growth phase. We've been hiring like crazy for us, for where we're at. I didn't want to be away. I've been to InsurTech Connect before, and I think they do a tremendous job. I also know that it can, if mismanaged, be a tremendous boondoggle. I was not prepared to navigate that. I wanted to keep my head in the game. So I skipped that. I skipped a couple of broker events to IOA. Not that I didn't want to be there. You just have to pick. Right now where we're at, I kind of have to be around. Trust me, I get it.

John Fohr: You always have that FOMO though.

Ryan Hanley: One hundred percent. I just thought it was interesting from the first time where I was actually around people again at scale. It's funny how quickly people swing back into it. Hey, what's behind you? What's that? Declaration of Independence?

John Fohr: Oh, get out of here.

Ryan Hanley: So you're the guy who bought it from those crypto guys?

John Fohr: Yes, that's true. Yep, that is.

Ryan Hanley: There's a lot of Bitcoin and ETH invested in that right now.

John Fohr: No, I've had that Declaration of Independence up in every... I've had the Declaration and the American flag, not always that particular one, although a version of the American flag, in every office that I've ever worked in since 2006. It just kind of travels with me wherever I go. It reminds me that sometimes you got to do crazy shit in order to get things done.

Ryan Hanley: I like it. So how are you spending your time right now? What's the biggest pain point you're dealing with?

John Fohr: Just selling insurance really is what it is. We started. I launched this to be a digitized middle market brokerage. Unlike many of the CEOs that fortunately you were able to talk to, none of the CEOs that I was trying to prospect in March of 2020 were picking up the phone.

Ryan Hanley: That's a very good point. We were engaging brokers then, and to your point, the reason the CEOs were available was because their customers probably weren't picking up the phone in the same way.

John Fohr: Yeah. For trying to prospect middle market from scratch, there was nothing. Literally voicemails that said, "Hey, we have no idea when we're going to be back."

Ryan Hanley: For the first three months that Rogue existed, I didn't sell one policy. I had invested all my own money. I'd bootstrapped the agency on purpose because I didn't want to do a raise until I had hit a place where I actually had something to raise against. Since we're not like a high tech play, all the VCs don't really get turned on by that. So I had to pivot. That pivot was from middle market into small business. While middle market businesses had the bankroll and accounts receivable out far enough to weather this storm, small business had to keep operating and they had to be around as much as they could, depending geographically on where they were located. So we pivoted into small business and built a fairly substantial inbound engine for a small business, which is what we do today. The next phase of our business is swinging back around to making that middle market, vertical based digital agency realized.

So essentially, I think you could either let the pandemic beat you or you can beat the pandemic. What it forced us to do was build this really cool base layer of income and prospects. We have 250 to 300 inbound small businesses contacting us, calling us, every month. That acts as the base layer for our business. We've gotten very good, process-driven at working them through. That's awesome. The next phase is starting to build out the middle market verticals that attack that next tier up, sitting below where a Brown and Brown or Gallagher would play, but above your standard local personal lines focused independent agency. We call that Rogue Premier, $25,000 to $250,000. Building that out is where we're at right now. It's a different sales process. There's a little more outbound. You have to get a certain type of producer who can do that. There's some hiring things and all the stuff. We're doing very good. It's just classic issues of we're in a scaled process.

Ryan Hanley: How did you end up at Bold Penguin? That must have been a rocket ship.

John Fohr: I had known Ilia for three years. I knew Mark for four years. I had known them when it didn't even exist, when Mark was still running whatever the company was before that. I had been at TrustedChoice.com. I don't know if you're familiar with them. I built Agency Nation, which was a digital media platform for them. I didn't work really well inside of national association politics. I'm not a real good politician, I found. I don't think that I would make it on the national political scene. So after four years, I kind of worn out my welcome with the national big I. It was time to move on. They were looking for a CMO and it seemed like a good fit.

Ryan Hanley: How much of that did you get?

John Fohr: I think I got most of it.

Ryan Hanley: Okay, cool. So tell me a little bit about TrustLayer. I've heard a lot. I've seen a lot of the press. I've seen the press releases. I follow along. I think you talked to a buddy of mine, David Carruthers, the other day, or at least somebody that I know who was saying some good stuff. I'd love to let everyone listening in at home get a better feel for what you guys are up to and what problem you're solving.

John Fohr: I'm John. I'm one of the two co-founders of a company called TrustLayer. The pain point we're trying to solve is that when two companies are working together, there can be a fair amount of friction. It could be identity information, you got to do KYC stuff. You might have to track licenses. You got a plumber coming onto the job site. Or if you're a broker, you need to have coverage or license stuff. You also need to track insurance. That plumber that's going to go onto a job site, you have to validate that they actually have insurance. If you're a bank and you have borrowers, you need to track that, whether it's auto loans, mortgages, every piece of equipment in the global equipment leasing industry. Time and time again, companies have to track and validate this. And it's all done through paper.

Companies don't want to deal with this. Companies want to focus on their actual business. They don't want to focus on tracking insurance of their subcontractors or their vendors or their suppliers or their tenants. They just want to focus on the actual business. So we have a tool that automates that whole process with the collection and use some fancy OCR and AI tools to be able to extract data from it and really have what's called robotic process automation, RPA, to simply automate that workflow. Instead of me pushing around hundreds of millions of pieces of paper, I'd much rather actually solve this pain point. Because when you get this proof of coverage, you don't actually know if the information's authentic. Unfortunately for our first customer, but good for this story, we learned that out of his 40 vendors, one of his vendors was just committing insurance fraud, just straight up lying about coverage. Unfortunately for our customer, there was a big problem and they had to write a big check.

If we could create a way to have a digital proof of coverage, that would be game changing. Now you could actually allow for real ground truth, not just within the insurance industry, but within the construction industry, within property management, with banking. You can actually validate this information in a more real-time basis. Then you, as their broker, can provide additional consulting services to them if you want, or really assist with this risk management piece. The nice thing is the robots do the vast majority of the work, so you can actually focus on the complex things rather than the admin of pushing papers around. No one really wants to do that, especially you as a broker. You want to be bringing in new customers, retaining your customers, and providing a really good service to them. That's what we're up to. It's a pretty big challenge.

The platform that's in market today automates all the paper-based workflows. We've got a number of pilots and this digital proof of coverage is a very ambitious thing. Thankfully, we don't have to do it alone. We're working with a number of really large carriers and brokers. In the last funding round, as of now, I think we have 24 of the top 100 brokers that actually invested in TrustLayer, as well as a handful of carriers. They've actually invested in TrustLayer. So now we have real buy-in from the industry. Tracking coverage, or just proof of coverage, has been a big pain in the ass for everyone in this space for too long. It's exciting to have the industry get behind you and say, "We think you are the ones that are going to be able to solve this."

Ryan Hanley: That's tremendous. I've seen a bunch of cert tools and different stuff like that. The digital proof of coverage that you're discussing is a much more dynamic and sustainable way to do it. The concept behind our agency, to give you some context, is a term we call "human optimized." Through all the work that I've done in my career, 16 years in the industry now, I've probably had 50,000 conversations with everyone from single person startup local agencies in Western Iowa to the 42nd floor of Travelers and Hartford. What I did in launching Rogue was take a derivation of what worked and what didn't in all those places. What you just described is in essence what we call human optimized: give your people more time to be what they really are, which is value providers, and less time being transactors of nonsensical, zero value add activities. The more of these zero value add activities that you can remove from your people's day, or the reduction in time that you can put... unfortunately, a lot of independent agents look at that as, "Oh my God, I'm losing my value. This is my value." The way we look at it is we're going to be able to touch more customers, spend more time with each customer, and build deeper connections and relationships with our customers, which is ultimately where more revenue comes from. So I absolutely positively love this concept.

[Ryan Hanley addresses the audience directly for a mid-roll sponsorship break.]

Ryan Hanley: What's up guys. Sorry to take you away from the episode, but as you know, we do not run ads on this show. In exchange for that, I need your help. If you're loving this episode, if you enjoy this podcast, whether you're watching on YouTube or you're listening on your favorite podcast platform, I would love for you to subscribe, share, comment if you're on YouTube, leave a rating review if you're on Spotify or Apple iTunes. This helps the show grow. It helps me bring more guests in. We have a tremendous lineup of people coming in, men and women who've done incredible things, sharing their stories around peak performance, leadership, growth, sales, the things that are going to help you grow as a person and grow your business. But they all check out comments, ratings, reviews. They check out all this information before they come on. So as I reach out to more and more people and want to bring them in and share their stories with you, I need your help. Share the show. Subscribe if you're not subscribed. I'd love for you to leave a comment about the show because I read all the comments. Or if you're on Apple or Spotify, leave a rating review of this show. I love you for listening to this show, and I hope you enjoy listening as much as I do creating the show for you. All right, I'm out of here. Peace. Let's get back to the episode.

[Discussion resumes.]

Ryan Hanley: Yeah. Thanks, man.

John Fohr: I think I will say we came out of San Francisco. When I was first, I came at this not from the insurance side, but from feeling the pain. We were investing in a handful of real estate projects and I would see some of these real estate construction projects get delayed. And I would say, "Well, why did the plumber not start today?"

John Fohr: They're like, "Well, the plumber couldn't get access to the job site because he didn't have the right insurance." And you're like, "Okay, well, he can't simply prove that he has insurance?" And then it's like, "Well, don't worry, it'll come tomorrow or the next day." Well, it's all good data away.

Ryan Hanley: Right.

John Fohr: The problem is, if the plumber can't come today and the carpenter's coming tomorrow, he can't put drywall up if the pipes aren't in the walls today. And the carpenter might not be able to come back for like a week from now. So you have these cascading delays that are just bananas. This is happening in 2022, for God's sakes. People are paying for their insurance and they're unable to easily share it with someone else. They want to control the data, but they can't easily share it. That's crazy. As a result, it causes a lot more cascading delays.

Ryan Hanley: Right.

John Fohr: From a broker's perspective, they don't want to focus on admin. They want to focus on the complex tasks where they're really creating value. That's the same thing for that plumber. It's the same thing for every other company that has to buy insurance and use insurance on a day-to-day basis. Pretty much every one of your customers.

Ryan Hanley: Right.

John Fohr: I want to avoid that. When we first started on this journey, I was like, "Oh, we solve that pain point." And then I think every insurtech goes through this brief moment where you think, "The broker does what? That seems so manual. We can totally automate that." Then once you learn a modicum, once you actually realize what a broker does and the complexity and all the stuff a broker has to deal with, you're like, "Holy cow, there's no way we're going to be able to automate the broker." You need a super smart, switched-on professional who knows what they're doing. We just want to automate all the crap away and allow for ground truth for proof of coverage, but then let the broker be focused on the complex tasks, as well as the plumber focus on the complex tasks they have to focus on. Whomever the bank is, focus on their thing.

Ryan Hanley: Yeah.

John Fohr: That's what we're working on. Thankfully, we got really good feedback from the industry. The industry was able to buy into this early on, and we wouldn't be able to do it without the support from our broker partners. It's a good time.

Ryan Hanley: That is the thing that crushes so many insurance technology startups that hit our space. They come in with a beautiful vision, and then they realize that every single carrier does business differently. Every single agency does business differently. Every single agency management system captures data and pushes data differently. There's this wacky thing called download, which uses AL3 technology from 1979, controlled by a monopolistic oligarch who plays favorites openly. It's this wacky, wacky system. And you're like, "Yeah, this is the undercurrent of our entire economy." If it wasn't for insurance, the Empire State Building doesn't stand. New York City doesn't exist. It is the underpinning of the entire economy, yet it is still operated essentially by horse and buggy. And it's done fairly well, which is the crazy part. Things happen. Buildings do get built. New businesses do start. Buyers are financially recouped. That is the hardest thing. How do you manage this? I don't want to say broken, but it obviously is in need of drastic innovation, yet it is also currently incredibly financially successful. So how do you make that business case of, "Yes, your job is tough, and yes, you probably have more people doing things they shouldn't be doing from all these manual processes, but at the same time, you're basically printing cash"? It's hard for me to tell you you're going to make X more if you use this process. That is the weird tightrope you have to walk to get to a place where you really are implemented. It sounds like you're on the right path, but it is a very tough thing to do well.

John Fohr: There's also a clear difference for us. We're an insurtech, but our customers aren't brokers. We work with brokers, but we think about the customer as the end user of the platform. That's the home builder. That's the property manager. That's the financial institution. That's the franchise that has to track its franchisees. That's the end customer for us. The brokers and the carriers, we want to make them money. We've somewhat flipped this on its head. We want to be a profit center for them. We're not talking about just saving costs for them. We want to make revenue for them, which is what we're doing with all of our broker partners. At the same time, what's challenging when you have a multi-party workflow is we have different stakeholders: carriers, brokers, requesters like certificate holders, and end insureds. Every one of those parties has their own objectives. It's not the same.

Ryan Hanley: Right.

John Fohr: When we first launched, for example, we brought a bunch of home builders. They said, "This is great. I've got 50 subcontractors. I've got five different subdivisions. This is a nightmare for me to track. I'm getting audited every year. What a pain in the ass." They liked it, but initially they said, "If you're already going to reach out to my subs and ask them for information, can you get the W-9? I really need the articles of incorporation, passports, driver's licenses." It became COVID forms, OSHA documents, surety bonds. Now we can handle any of these additional documents or workflows as well, because it's important that we provide value for carriers, brokers, risk managers, certificate holders, or what I call them, requesters, as well as that individual plumber. You have to make sure you can add value to each one, or else they don't want to use the platform. It needs to be super streamlined. They're already working inside, let's say for example, construction companies might work inside Procore, or you're already inside QuickBooks. That's why we want to make sure we have the best integration possible with Procore, where you can have as much of your process work within Procore. You're already in QuickBooks, so a seamless relationship with QuickBooks where you can stay in the platform as long as possible and you don't need to bounce out occasionally when setting up TrustLayer. People don't want context switching with all the different tools out there. Making sure we meet the user where they are is vital. I think that's another thing a lot of people don't do. They try to think everyone's going to come to them and they're going to be the epicenter of everything. For us, we're TrustLayer. It's just a layer. We're happy to be that middle layer. If people don't even know that we exist, that's fine, because we can work on just building infrastructure for the insurance industry.

Ryan Hanley: So what is the broker use case? If I were going to use TrustLayer as a broker, what am I doing? Am I getting my clients to sign up for it? How do I use it?

John Fohr: Think about it the same way an accountant might use QuickBooks. I never actually paid for QuickBooks originally. I signed up for a bookkeeper, and she was like, "Okay, well, we'll put you on QuickBooks." So I just paid her, and then she pays for QuickBooks, and she also charges a whole bunch of additional money for providing services for us. That's the same way a lot of brokers are using TrustLayer. They will offer TrustLayer to their customers, and it's substantially discounted for insurance brokers. Then they will have insight into the workflow of their customer tracking all of their subs or suppliers or whoever—ride share drivers, whoever they're working with.

Ryan Hanley: Gotcha.

John Fohr: Now you have clarity into what your customer is doing, so you have a much deeper relationship with them. It's a super sticky relationship. At the same time, you also get a whole bunch of leads. Just imagine that home builder that has that sub that has to get access to the job site today. He would love for you to reach out to that subcontractor and fix the glitch. We see that a lot with our brokers. One, they can make additional revenue. They can get a better relationship with their customer and make it stickier. But two, they can get a whole bunch of leads generated for them. That's how they use it. It's super flexible. We are either revenue neutral or we are revenue positive for the broker. We're trying to help you guys make more revenue, and then we'll take a percentage of that, but that's it.

Ryan Hanley: The cool part—and this is one of the aspects of where I think we have to go as an industry—I think some people will listen to this and, like you said, no one wants to bounce in and out of a million systems. Right now, that is the life of an independent agent or broker. There is literally no singular system that you can use that will allow you to do most of the stuff you even want to do. I don't want to go down the hate spiral of our legacy technologists in this industry, but that being said, if it's a low-touch system that allows you to add additional value to your customers, then it's well worth it. We use a similar concept with the client portal that Zywave has. We use Zywave client portal to offer HR solutions. They have all kinds of safety training, safety manual creations. If you need to get one of those posters up in your office, you can go in and do kind of a Mad Libs version of that poster, then print it out and hang it up. There's all kinds of cool stuff. The struggle we have—and this is kind of where the question comes from—is it's another system that our clients have to log in and out of. So how are you training brokers? How are you recommending brokers get that adoption from their customers? Because everything you've described seems like a home run to me. I literally wrote down, "Reach out to TrustLayer to get a demo" as we were talking here. So that's a good thing. 37 minutes in, you sold me. But we talked about bullshit for the first like 30 minutes.

John Fohr: So it only took you like 16 months.

Ryan Hanley: Yeah. Which is perfect. But my point is, okay, I can see it. I'm bought in. But I've got a lot of tools that people use or don't use. How are you seeing brokers get that adoption that really is meaningful and adds the value you're discussing?

John Fohr: Remember, this isn't value just for you. It's value for your customer. Your customer has to deal with this. When you're going up for renewal, and one thing I think brokers kind of get a sense of, when you're going up for renewal, you're going to market and you're trying to put your customer in the best light, especially in a hard market. TrustLayer is one of those tools where we can easily position your customer so that when you're talking to carriers, this is not just a run-of-the-mill customer. This is a customer that's actually taking a proactive stance with their risk transfer. In that way, it's a value add. We don't need the broker to do a lot of work. I would say the majority of our brokers bring on the customer, and they're there if their customer has a problem, but they're not really doing that much because a lot of the admin is automated. Their customers are kind of handling some of the things. But again, we can automate a lot of it. The broker is there if their customer has a problem. For that, it's a really slick thing. "This guy doesn't have the right coverage. Should I waive this requirement? I've got a broken pipe. Do I really care if the guy's got workers comp? How big is my liability risk?" That's something where the broker can hop in and provide value add, and then pop out where they don't have to do any sort of admin or pushing papers.

Ryan Hanley: Cool.

John Fohr: The other challenge is those are all tools that are insurance focused. Your customer is not focused just on insurance. Insurance is one of the ten things they have to deal with today. Making them have to log into yet another insurance tool gives them loser hair. They want something that can do things other than insurance. That's where even something as small as tracking W-9s or doing surety bonds or all this other kind of stuff comes in. We have one customer that's coming on. They've got 30,000 vendors that they work with, and they need all 30,000 vendors to sign some document and prove they haven't covered something. It's like, "Okay great, now in our platform you can just upload it and get 30,000 signatures." That has nothing to do with insurance. If you don't provide value beyond just insurance, you may be focused on insurance, the carrier's focused on insurance, but that home builder, that franchisor is not just focused on insurance.

Ryan Hanley: It's funny. They run into the same thing too. We can get bounced around all this stuff. That's why the open API structures and the integrations with all these different platforms is really key. This may sound a little out there, but yesterday I was talking to a buddy of mine, and we are convinced that blockchain technology will have a major impact on our industry, but just way longer than it will in other industries. We were doing some brainstorming over—mostly because we're nerdy losers who just think about insurance all the time—but we were brainstorming where we think that type of technology could drastically improve efficiencies in our industry. One of the places we kind of thought of was COIs. Why in the world does a vendor have to request a COI from a contractor, who then sends a request to us, then unless it's perfectly aligned with his current coverage, we then have to send a request to the carrier, wait for the carrier to approve, deny, change, endorse, whatever, then come back, make sure it matches what the customer actually needs, then produce a COI, which we give to the contractor, who then gives it to the vendor? That's the standard process. It's almost laughable just listening to it.

John Fohr: That's right.

Ryan Hanley: What we were brainstorming is imagine if there was just a place that held in real time, at all times, the current situation. In force, not in force, coverage level, whatever. That block holds that at all time. People can just ping that block to say, "This is my insurance block. This block is ABC Contracting." If we need to make changes to this, we have a mechanism to do that, and that block gets changed. Ultimately, this block is ABC Construction, and what's in this block is proof. We don't need to have 16 emails and 47 PDFs to get it. It's what's in this block. There's so many things inside our industry where, whether it's blockchain or whatever, that concept of how is there not databases that are anonymized? Maybe Chubb doesn't want Hartford knowing that they're the one on this policy, but the contractor doesn't care, and nor does the vendor. The vendor just wants a green checkmark or a red X. Are we good or are we not good? To a certain extent, that's kind of what I hear you describing. This is that kind of green checkmark, red X type system where, based on what's in there, your customer can ping their sub and go, "Is it a green check or a red X?" If it's a green check, rock and roll, let's go to town. If it's not, then we need to solve this problem. Because we're fully digital, I track—not in a draconian or micromanaging way—but I do track the time spent fairly closely on different tasks. To me, understanding the time cost of certain tasks and working to either reduce the cost or just remove that cost is a huge win, even if it's small. Because as you scale, those small increments add up. What I hear you describing is not a be-all, end-all solution to every shitty, non-value-add task that exists, but it's a really nice reduction in what's probably a heavy time cost in just about every brokerage that exists in the country.

John Fohr: You talk to almost every broker. Honestly, I'm smiling. You're like, "This whole broker thing, you want to roll it up into TrustLayer, let me know." You're way better than I am at synthesizing and pitching this. This is bananas. But to your point, it touches so many other things. Again, we're dealing with proof of coverage, but really what we're talking about is ground truth. That plumber walks onto the job site. Something's off. You need to make this guy an additional insured or whatever it is. If you have ground truth, then in real time you can kick off some workflow for making someone an additional insured. We're not doing that now, but we could in the future. That'll be some other startup. That's what we want. We want to focus on building that ground truth for the industry.

Ryan Hanley: Right.

John Fohr: You also identified another thing. Travelers doesn't want Chubb to know their business. Of course not. You don't want your competitor down the street to know your customer list. The north star of everything we've done so far has been users control their own data. The way we are building this infrastructure, users actually will retain their data privately, siloed behind their firewall. In a lot of cases, when data is shared, it'll actually be less data than it is now. We have companies that have such little faith in certificates of insurance that they ask for the entire policy.

Ryan Hanley: Yes. Which is a major, major issue.

John Fohr: It's a tremendous amount. But why are they asking for that? They're asking for that because they know the COI has such little value. They don't even know if it's authentic. Our very first customer learned that the hard way. And they don't know if it's still current. Just because you had insurance six months ago doesn't mean you have it today. Just because you had insurance two days ago doesn't mean you have it today. And third, it's a pain in the ass to track all this information. I just had a buddy who caught one of his contracting clients basically Adobe Acrobatting COI forms all over town. It came to him because one of his clients did business with another one of his clients who said, "Hey, can you just check this cert?" And he's like, "Uh..." The good news was the guy did have insurance, but he was forging his cert so he didn't have to ping my agency. We've run into that a lot. Before we launched TrustLayer, when we were still in development, in ideation, I interviewed someone and he was like, "I don't understand the value." I'm like, "Well, isn't it a pain in the ass to get all these documents?" He's like, "Well, no, because I don't know if you're familiar with this program called Adobe Acrobat. It's incredible." I'm like, "Oh, tell me more about this program." He's like, "Yeah, it's incredible. I can just go there and change the date. And if the guy needs to be an additional insured, I can add it down here." I'm like, "Stop. Hold on. I'm going to press record. I want you to repeat everything you just said. You've just broken about 17 financial regulations."

Ryan Hanley: That's funny.

John Fohr: He's going on our homepage. Anyway, we're just trying to do our bit. We want to build this infrastructure layer. We're not a carrier. We're not a broker. We're not competing with our partners. We want to drive as much business as we can back to our broker and carrier partners as possible, and have some fun in the meantime.

Ryan Hanley: That's awesome. I think it's cool. Are you doing anything with blockchain?

John Fohr: Sort of. I don't usually say the B-word.

Ryan Hanley: Make my day. I just love it. I'm so bought in. I just want something in insurance to be blockchain.

John Fohr: When we first launched, it was during the last 2017 mayhem when we were first thinking about this, into 2018. When we first came up with this, we thought part of our infrastructure could be leveraged using DLT, a distributed ledger type of technology. The challenge we found was the double-spend problem, or maybe the double-buy problem. When we would approach somebody and say, "Here's what we're doing," they'd say, "Okay great, we're in. This is a big pain point for me too." Carriers and brokers wanted to get in pretty quickly. But then they would say, "Oh, we're going to use this DLT solution?" They'd say, "Okay, wait a second. What is that? We don't even have APIs or webhooks." It just became this sidetrack of a conversation. It's a very cool technology. There's a lot of really interesting things going on. I think it's possibly one of the best use cases I've ever heard for Web3. I think this is going to evolve in the future, and this probably will be the solution that over time evolves into it. But for the time being, we don't necessarily need it. Part of that is because the use case for if AIG says you have insurance, it's unlikely that AIG is going to lie about that where you then have to go back to it. The more likely scenario is that AIG has some services or systems that don't talk to each other, and getting data out to actually confirm that you have coverage is going to be a bigger problem. Whether it's "we don't have an API, so we're just going to export data and put it somewhere," you don't need blockchain for that. The bigger issue is just how do you have integrations in a more efficient way. Connecting the digital proof of coverage with the legacy workflow is going to be the most important thing.

Ryan Hanley: It's too early. I joke about this with my buddy all the time. We're like, "Let's just form an LLC. We'll call it 'Insurance Blockchain Exploratory Fund.' We'll put blockchain on the first page of the deck. We'll go raise a shit ton of money, and we'll figure out how to make a business in 10 years off of it." The coolest thing about being part of the insurance industry is all you need to know is about this much about tech, and you're officially a technologist. Where this wouldn't get you in the front door in many other industries, here you're changing the world. There's so much opportunity in our space for micro and maybe larger than that innovations. Nothing against what you're doing, but making the COI process is not revolutionary to the entire industry, but it's a drastic improvement and a major pain point. And it sounds like you're starting to address some of these as well. The COI process is just one part. That's not TrustLayer. TrustLayer is creating ground truth for the industry. That to me is stacking up all these different processes in this layer. I love that term "ground truth." I think that's a really important concept for people to grab out of this conversation. If you were to ask most brokers today, "Is the carrier, your agency management system, your CRM, your email, an Excel spreadsheet—what is the system of record for what that client currently has in place?" I think if you asked five people, you'd get five different answers. If you asked 50, you'd get 50 different answers. There is no singular point of truth. If the broker says you have coverage, you have coverage, because that goes back to their E&O. Is that the point of truth? What comes out of your agency management system? Or is your agency management system really just a capture for you, and it's the carrier? And then which system inside the carrier? Actually, the system of record is it what the underwriter tells you? Is it what's actually produced? For me, this singular concept of getting to a place where we'll all agree this is the ground truth is an incredibly important project. I'm super glad that you're taking it on, man.

John Fohr: Thanks, man. I will say we're not doing it alone. We have a whole bunch of really great brokers, great carriers, risk managers that are helping us. If I can make the one plug, if anyone's interested in getting involved, I would love for you to reach out to me directly. This is a big pain point. We need as many brokers supporting us. That means customers. We need folks that are just passionate about this. We're having conversations with carriers about what the right way to do this is. We're talking to the AMSs. We're saying, "What are the policy administration systems? What is the right way for us to really solve this pain point for carriers and brokers?"

Ryan Hanley: And also, like, your customer. Just build a Salesforce integration and let's go around those dirty bastards at the policy management system. They're just going to hose you up. I bet they're like, "Yeah, we love your solution. $50,000 a year and we'll love it even more." I know how that extortion game is played.

John Fohr: No, they're all great people. We love them.

Ryan Hanley: Oh yeah, I love them.

[Both laugh]

Ryan Hanley: No, dude, I think this is great. So to that plug — you've got 12,000 people listening to the show right now. Where do they go? Do they go to trustlayer.io? Are they emailing someone specific?

John Fohr: I want them to email me personally. We'll get in touch with them and put them in touch with whoever the right person is. John, J-O-H-N, at trustlayer.io. Let's build something really big, guys.

Ryan Hanley: Guys, I want to be clear for you listening at home. John and TrustLayer are not a sponsor of the show. I don't want you to think this is a paid plug. These guys came highly recommended to me by a bunch of people. I've done my own research. You heard from the call.

You've heard me for a year now talking about the concept of building a human-optimized agency. While that will be different for every agency, I think this idea of removing valueless transactions from our day-to-day so our people can hone in on where they really add value — solving problems, building relationships, that kind of stuff — this is one of those tools that's going to be part of our tool belt moving forward. It's worth a look.

I highly recommend reaching out to John and getting involved. If COIs are your focus, if you're working with contractors, manufacturers, habitational, home builders, this is going to be a major solve for you. I highly recommend what they're doing. Please reach out.

John, it's been great, man.

John Fohr: Thanks, man. Good seeing you. Cheers.

[End of interview]

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