Pitch Please

00:00.00
Jonathan Di Pasquale
Yeah, no so for our customers. It was always important to integrate them into the process. So with our idea without integrating the customers at the start we wouldn't be able to move forward because we needed their backing when we went to the u k. To leverage the insurance product so we were able to go to Uk and say hey we got 3 awesome customers behind us. Let's do this the customers they had the benefit of looking at the product before seeing hey this is going to be the idea but also being included in the conversation of yes, we're going to launch this and we're going to get it going. But we want a direct line with you guys and tell us what's not working what's horrible. What's good What do we need to change. How can we improve it and that thought process behind those initial 3 clients is actually carried to all our clients now. So all 350 of them have. A direct line into our customer success team who goes through answers any questions they have ask for feedback does check-ins and all that is still integrated so a lot of clients will come to us and say oh, it'd be great if you did this change already on the roadmap. What how it's because we have 3 or 4 clients I've already mentioned it. We want you to keep telling us so we can get that in there but it shows that we're growing with our customer base and has led to that client retention of 100 % over the last three years

01:25.64
mike_flywheel
So How do you do that. So if I'm a founder did you have to have like your app ready to go just the idea you know what? I mean because it's not easy to get people to invest. They'll just say oh like why would insurance. This is such a big thing. Why would we risk insurance with you who doesn't even have a business. No reputation right? like that's a. Ah, common things people might hear how did you kind of break through on that for others that might be trying to replicate this.

01:48.33
Jonathan Di Pasquale
Yeah, so we had a different approach where we approached them saying hey we have the same problem I come from the event industry. You know this is hell I know this is hell we think we can fix it. This is our initial idea we have a digital application that we've roughed up and when I say roughed up. A lot of founders are trying to launch a beautiful product to compete with stuff Microsoft and Google are putting out our first application it it was it was like out of myspace or like early Facebook pages. It was real rough but they loved it because they noticed it was scrappy. And when they said oh it'd be great if you changed this box to look this way or modified this we came back the next day and said look yeah we changed it and that created that belief in it and we've kept that mantra throughout this whole growth of this company and the whole idea is to continue that because if they're involved they'll never leave. The product and will just be more and more integrated into their systems.

02:50.75
mike_flywheel
That's special not did it take a lot of doorknocking to get those 3 people to buy in like did you for the first 3 you went to, they're like hey I agree or did you take a bunch of noes to find the first three that were gonna buy in and go on this journey with you.

03:01.83
Jonathan Di Pasquale
Yeah, so we did some research on finding what we thought were going to be our 3 most preferred municipalities to operate with I would say going through them. We We knew we had to get to the risk manager was our primary target. But we had to work our way up because no one no City puts the risk managers information out there to be available and no risk managers going to be answering their phone with some random phone number calling them so we had to build reputation with their event staff wouldn't it be great if we could do this digitally. You guys don't have to record anything. You don't have to check these? Oh yeah, to'd be great. Okay, could you connect this with this person and we built a whole network in these 3 municipalities of internal champions who were all going to risk manager and mean like you gotta look at this and then so when we had the talk with the W risk manager we were already in a favorable light rather than just going in and cold calling them and saying hey they a great idea we had. Hey we have a great idea and a room front of people that they work with every day saying this is a great idea.

04:03.33
mike_flywheel
So you built up advocates I love that approach and I think I like that we got granular in this because I've talked about it in different ways with different people. But I think how you actually operationalize that is is pretty special. So yeah I think you said 350 customers know.

04:20.62
Jonathan Di Pasquale
So yeah, we have 350 municipalities on our public business. So that's all our government style business we have um about 30 different school boards across Canada on top of that as well as over 150 private um businesses. So that's things as unique as the ymca um, and things such as broad as the united churches of Canada which have 2 ah 2500 locations so we're facilitated across broader groups. Um, and we've been growing quite rapidly. We don't actually have a sales team here. Um.

04:47.10
mike_flywheel
Wow.

04:57.16
Jonathan Di Pasquale
We've been lucky enough to be passed around with word of mouth and it's because of that focus of taking that client relationship and still applying it. It worked in the early stages to get our product going, but it's working as our biggest sales tool now.

04:59.40
mike_flywheel
Wow.

05:10.45
mike_flywheel
And so how how does that I guess obviously in B Two B that that helps a lot if you're doing B to C If you're trying to get individuals to do risk policies through you rather than through the venues that would be much Harder. So I Love this B to B approach. It helps you scale. So How big is your team and what does the team work on then since you do have a product led sales funnel if you will and so where have you devoted devoted time and energy and resources to continue to keep this growing.

05:38.36
Jonathan Di Pasquale
Yeah, no, absolutely so our team now is 10 people and to be transparent with you guys. We're actually actively growing and probably around April may will be around 16 people but our focus has been around building our customer success team and our development team. So the primary focus is let's get our software now that we started with that was scrappy and rough is improved so much and our clients have been involved in that improvement to just keep growing with the clients and the other part of it is that success team that's supporting my clients building that good. Will so when a new client comes in instead of them going to a salesperson who has to try to close them a client's coming in and they're saying we want this awesome? Well, let's get you onboarded with our customer success team right? So we've taken a little bit of a less traditional approach now we have that luxury. Because we're helping the brokers and haven't tried to push and cut them out and we will never push to cut out the brokers because they operate as our external sales team or lifting work from them. They're making some commission on it. It's easy for them and it makes sense. They have the relationships that are 4020 years old with these venues. They're going to say you know what? this is a great solution and they get to put their logo on it and it costs them. Nothing.

06:57.75
mike_flywheel
I love that and so what is like the year you know you're growing customer success. What is the year ahead look like then for you, you seems like you've got a very good widespread of of venues and establishments you're working with which gets you massive skill of customers at the end. I guess it kind of both your customers indirectly? Um, so what's like the next year ahead looking like for for you and is this only available in Canada today. It sounds like yeah.

07:24.61
Jonathan Di Pasquale
Yeah, so our primary growth. Um over the last year has been focused around Canada so we're available in every province every territory now. Um that anyone can use us last year Twenty Twenty three really strong year for us. Um, we've been lucky enough that the company has been bootstrapped to this point. Um, but we came out of it with a just shy of $2000000 in revenue which was really great and now we're going into 2024 with our goal to sort of get closer to that 8 to $ 10000000 Mark um, our primary focus is still service the clients because if we service the users and the clients. The venues are always going to be happy and the brokers are going to be happy. They're working as our sales team.

08:06.64
mike_flywheel
It brings up a good point that I forgot to ask 2000008 to 10000000 revenue where do you guys make your money.

08:16.17
Jonathan Di Pasquale
Um, yeah, so right now in our current existence we charge. What is a service fee so we don't actually charge our clients for utilizing our product. We give it to them for free part of the reason for that was to allow us to get into the municipal space a lot quicker. Ah, municipality. The second you have to charge them to any money for something. It's going to council. We don't have 8 to twelve months to wait for a municipality adopts something. But if you give them something for free people are a heck a lot more willing to try it. So our product is free for the municipalities. It's free for the brokers. We actually make our money on the transactions of the individual users purchasing the insurance. So after we present them the best price the appropriate coverage we get a small fee of that sort of like a sale earned now we're developing the company to go further down that route and be deeper involved in the insurance process. And now that'll allow us to retain a larger fee as we go.

09:11.33
mike_flywheel
That makes sense. Okay, so it's a small fee that gets passed along. But I mean from the end User. It's convenience Hey here's the insurance path that we set out. It's going to be the quickest and easiest and least painful thing for you to do to run your event here. It's sort of a win-win and that fee seems probably. I Don't know I guess it does the fee range. Okay, so.

09:30.20
Jonathan Di Pasquale
This fee is a percentage take on it. So basically we're looking at about 30% of the cost is our fee. The nice thing about that though is we're comparing it to your gain insurance in 5 minutes and you know it's validated and it's good and it's filed with the menu.

09:37.97
mike_flywheel
Okay.

09:47.53
mike_flywheel
Um, yeah.

09:49.74
Jonathan Di Pasquale
Versus 52 hours of people just working away at it and it maybe not meeting the final goal. So the fee that we command on $9 is just ah, additional to $3 at the of a day.

09:51.60
mike_flywheel
Yeah.

10:03.46
mike_flywheel
Yeah, yeah, well worth the time right? It's not even worth me spending extra like 10 minutes on this problem so you've you've won me over um you know you dealt with the the covid pivot which is which is challenging right? like no events and then you're trickling out events.

10:11.94
Jonathan Di Pasquale
Um.

10:20.48
mike_flywheel
Um, was that sort of the most challenging moment of like your your growth to where you where you are now or is there something else that's sort of like a moment of pause and reflection where you're like hey if you're going through this journey watch out for this because it can it can bite you and and so. Only something you'll learn once you're going through it or if someone smart like you tells them.

10:41.41
Jonathan Di Pasquale
Yeah, no, we've there's been lots of moments of reflection and journey throughout it. Covid definitely was our biggest learning I think during that time there was days where we looked at the business and we opened for a week basically government said everything's good. We're open for a week and then next week it was closed and all the money we made we were now refunding and we weren't holding it because we would still go with the promises of the customers. First they're most important as long as they're happy the business looks in a good light so we'd refund people in full. So now we're hitting all those.

11:03.82
mike_flywheel

11:17.99
mike_flywheel
That's a good learning actually.

11:19.79
Jonathan Di Pasquale
All those credit card fees we were absorbing them and they were hitting us hard but it was worth it in the end to keep that customer loyalty because the second something opened. We get a boom a business right? and so that allowed us when 2023 hit and people were like you know what? this is not a covid year anymore. We were watching our revenue numbers. We're doing more than we did all of covid in a month which was great but it was definitely the hardest for the team over covid we weed down our team. We reduced everything and it was pretty much there was 3 of us left and it's like everyone wear a hat. I'm not making money. You're not making money but like if we were in the workspace anyways I was in events I would have been laid off so I was like at least I'm being productive right? So it was sort of taking that risk and initially really doubling down on it. Um, and covid made our team stronger and it made us.

12:04.33
mike_flywheel
Um, yeah.

12:16.78
Jonathan Di Pasquale
Scrappy I Don't think we have a culture here of like a dollar spent. Why was it spent right because we had to justify that during Covid Now we have a little bit more dollars to spend which is great. Um, and it makes it look attractive to investors right now in this time period where they see a startup go through covid.

12:29.47
mike_flywheel
That's great.

12:34.41
mike_flywheel
Yeah.

12:36.40
Jonathan Di Pasquale
We're very money conscious. Um, we have a very very small burn Rate. We're actually profitable but um, even when we weren't profitable. Our burn rate was kept to a minimum and even our team's costs right? now are kept to a minimum and that's reflected when an investor really digs into our books are like. Well, you're running this business at only this cost like it's pretty impressive and I think that thing was the best pull we got from Covid may cost me some hair but it was It was definitely worth it. Yeah.

12:58.64
mike_flywheel
Yeah, yeah.

13:09.87
mike_flywheel
Still good. You hurt your head hairs got got a lot left on it more than mine. So ah, when you think about like that that journey you must have had a bunch of people you've talked to you've made it past I think you met made past the five year markdown right? if my math's doing doing mathing right.

13:14.26
Jonathan Di Pasquale
It's improved.

13:26.31
Jonathan Di Pasquale
We've we've math passed the 5 year Mark 2 of them were covid though.

13:27.59
mike_flywheel
Okay, that's a huge year one and your but dude getting past year one and getting past year five and putting covid in that mix is a huge milestone and accomplishment right? and so do attribute a lot of that to being focused on. Not. Conflating getting users or numbers but truly focusing on business principles of let's be profitable. Let's drive value that people are willing to pay for and stay focused on that because if we have that we have a healthy business that people can continue to invest in and grow.

13:56.28
Jonathan Di Pasquale
And that's spot on right? We went with the properties of let's build a business. Not a startup we we're startup. Yes, we fit that classification but we went in with the headspace if we build a business that generates revenue. The startup Lifestyle is a hell a lot easier if you do it that way.

14:12.82
mike_flywheel
Yeah, yeah.

14:14.96
Jonathan Di Pasquale
And a lot of people forget about that they think idea now I got to get some people give me some money cool I got a cool million I'm going to spend that really quick and get us as many users as possible. But if you were to dedicate that to profitability. You wouldn't need to raise again right? and so we went in with that mentality and that's what set us apart from. Our competitors during covid or at the start of covid we went into this market and there was about 12 competitors with us coming out of covid. It's us and 1 other competitor that exists now in the space right? And that's for us in North Ah North america there is other competitors that exist in Europe.

14:44.36
mike_flywheel
Wow.

14:50.14
mike_flywheel
Yeah.

14:53.93
Jonathan Di Pasquale
But that that allowed us to sort of take a different approach and I encourage it now with startups the funding landscape has changed so much from 2021 even 22 that it's not about get your initial customer. Get some money. Grow that business as quick as possible feces, family offices angels they're looking for a business that they can say okay, they have a good foundation I apply a million dollars they're going to make maybe it's one point one million dollars there's money coming in. That's healthy. And that's the time we're in right now and that's what's led to our success.

15:33.66
mike_flywheel
So what's been like the best advice you've gotten on that journey so far from from others is there anything that's sort of stuck with you where you're like this this is a memorable thing that someone told me and it's going to stick with me for time and others should know it too.

15:49.20
Jonathan Di Pasquale
Yeah I think the biggest thing that's stuck with us over this time. Um is when we're considering fundraising and taking the approach of what if you first became a profitable business or at least a business generating income. And then instead of doing a big announcement of say hey today is today we raise money is going with the approach of you know what? let's go talk to some family offices. Let's talk to some Vcs There's nothing wrong with going in there and saying we're not raising right now but we're just looking for the right partners. So when we get to that point to announce that raise. Who who can we look to and by doing it that way one a Vc and a family office is gonna love you because you're coming in there and you're doing what someone doesn't normally do it is' not asked for money. They're gonna be like whoa that's different. Um, but it exactly but there. Ah.

16:38.55
mike_flywheel
You're seeding the seed round.

16:43.19
Jonathan Di Pasquale
They see it and they're like okay, you're actually looking for some insights and it's a bit of a different approach and that allows you to sort of preflow around before you make that big announcement because when you make that big announcement now and people see all that rounds open for two three months six months start asking why versus if you said oh no, we're not raising right now and you preload a lot of your round and then that round's open around was open for two weeks people are like well what did we miss right? and they're very keen to get in line for anything else that you need you got to deris the business.

17:13.72
mike_flywheel
The irony of derisking instant risk Coverageverge is all about de-risking I Love it.

17:21.68
Jonathan Di Pasquale
But that's what startups are about right now I think we've shifted into that different focus of now. It's all about how you can de-risk your startup quickest versus get as many initial customers or users as possible if you can show a Vc or an angel you've de-risked all these elements. It's far more attractive right now.

17:44.20
mike_flywheel
That's sage advice on the on the point of advice I mean as we come to to tail end here. Is there any other advice that you think others should be thinking about or listening to um as they embark on maybe their own adventure. Maybe they're a founder in a startup right now and need to hear something or a perspective. Or maybe people are thinking of making the jump like you did from a ah company into their own world of startup life.

18:07.18
Jonathan Di Pasquale
If you're yeah, absolutely no. But like if you're a founder and you're thinking about making that well prefounder. But you're thinking about making that jump and have that product. There is no shame in working your current job and starting your project I did for 2 years right? Um, didn't jump out of what I was doing until October Twenty Nineteen we started this in 2017 so I still worked a full time job I had that support system and I did this at night and built the foundation. There's nothing wrong with that that side hustle mentality hey if you can make it your main hustle. Awesome! And then I think the other big thing is people are so afraid to tap into the networks we have around us the canadian network for startups is actually really strong. It's a small community but they're strong and they're very keen to uplift other founders. So get involved. Don't be afraid to go to something and just listen take it in and then go and introduce yourself. You don't have to introduce yourself and say hey this is my startup and introduce yourself hi I'm johnvan I'm just super interested in what Mike's doing and I want to learn more mike's going to be keen to tell me everything he's doing. And I can't wait to hear it and you're integrating yourself into the small but healthy canadian community around that.

19:24.35
mike_flywheel
I like that bit of around networking and the the side hustle because I think like the funny thing is it doesn't mean you're not good at your job. You can be put like I think it's just like don't rob your job of time. Go put in the one hundred hundred and ten percent effort you do but like people have hobbies right? Whether that's like. Crafts or photography or video gaming I think you're just replacing a hobby with a hobby that is a business and maybe there'll be a tipping point. Maybe there won't but you're you're exploring something and you're being curious about it. So I think think's good advice because people always kind of overthink that a little bit and you know this is a bit taboo. Especially depending where you work. But you know you're not on the clock 40 hours 24 hours a day every day of the week seven days like you can still do an amazing job at your job and deliver over deliver. Um, but you've got evenings. You've got weekends especially in something like this and you could augment with people and people then maybe will working in it full time that type of stuff. So um, you're not the first person to talk about it I think you're the first person to like overtly hit the nail on the head and you know land that point that I think sometimes people need to hear is like how do you go do that um. And and it's cool that you just kind of said it not everyone does I love that? Um, so if people what if I know more I mean it sounds like instant risk coverage is more for venues municipalities companies. But maybe I don't know who's who's going to be listening wide audience where should they go.

20:51.95
mike_flywheel
Ah, to find out more and we'll put it in the description but where should people go to find out more and is there anything that like you and the team collectively need as help if there's someone listening whether it's hey you need more brokers. You need more staff I don't know but just throw it out there. We'll see what happens when we throw it out to the world.

21:05.92
Jonathan Di Pasquale
Absolutely no, if you want to learn more about Instagram's coverage honestly you can check out our Linkedin or if you want to just get a little bit more details of sort of my journey and our team's journey all of us just feel free to reach out to us. Over Linkedin and anyone will be happy from our team to connect and share sort of what they're doing and give you a little bit of an outline The biggest thing that we're looking for now. Um is team members so we're growing rapidly. We're looking for new team members. If you have a venue and you you want some support with that insurance stuff. That you've been looking at those Cis coming in and you're like oh god this is horrible. Just let us know well were you happy to jump in and see where we can help be and we don't charge you anything right? at that of the day. But yeah, no, we're actively looking to build our team but we want to be more and more involved in the canadian startup ecosystem.

21:55.36
mike_flywheel
I Love that I mean it is It was a premise of what what brought this this pitch please podcast to life What types of roles Are you looking for? if if people are kind of listening and interested in working working alongside you.

21:58.26
Jonathan Di Pasquale

22:06.45
Jonathan Di Pasquale
Yeah, so our biggest buildups right now are focused in our developer roles. But also our customer success roles. So we're building a lot of people that are going to be early stage customer facing. They've come in. They've adopted the product and. I like those roles more so than the development roles because you actually get to learn and understand the product and understand the client's growth pains and then have a say in our product development and it's led a lot of our customer success team to actually become more and more senior at hiracy really quick. So those are the roles that I'm really keen to even get young founders in that maybe haven't launched their own thing but want to get sort of their feet wet and see the experience and then you know what after a year or two years they want to jump and do their own thing. They have the full support of iracy behind them because we want to see people grow. Not everyone's meant to be in a role forever right? You always want to see those people grow whether they're internally or they're growing into their own new thing. Heck you may create an application that we may need and that's super awesome and we want to see stuff like that.

23:10.90
mike_flywheel
So I love it John and thank you so much for joining us today I think I learned a ton not just about the insurance industry but even just like the journey of a first couple customers to path to profitability to how you build out your Mvp tons of great knowledge in this episode. Ah, hope everyone that tuned in loved it too. Make sure to catch us on the next episode. Thanks again. Jonathan Thanks.

23:30.74
Jonathan Di Pasquale
Cheers Mike thank you so much.