An exclusive Tech Tribune Q&A with Kevin Mackey (co-founder) of Coterie Insurance, which was honored in our:
Tell us the origin story of Coterie – what problem were you trying to solve and why?
Coterie has always been solving the problem of distributing insurance policies, from rate to bind, through partnerships where our business policyholders already are. This was the idea that David McFarland, co-founder and CEO, pitched to me in our first meeting and it has continued to be what we have been building with our team since.
This approach changes the economics and understanding of small business insurance. For agents, it means they can quote and bind a policy in seconds, rather than days or weeks as it takes in most cases. This now makes writing small business insurance profitable (used to be a loss leader for agents). For policyholders, it is our hope we can use the process of purchasing insurance to educate our customers on what they just purchased. Often business owners don’t understand the insurance they purchased, but for us, it is mirroring their data back to them in the form of a rate.
When we combine data and effective placement of insurance, we believe it is a winning strategy for all parties, which will ultimately lead to significant market share in a space that has a $30 billion dollar TAM (total addressable market).
What was the biggest hurdle you encountered in your journey?
Coterie has encountered many hurdles, but a lot of them were not super unique to us. For example, everyone had to survive the pandemic. Everyone had to learn to develop their culture and business remotely. Many in tech heard from investors that they needed to focus on unit economics and burn reduction, immediately. While not easy, we got through those challenges like everyone else was forced to.
On a more specific level, however, we have had to learn how to scale our culture, one of our most important assets, in a digital and remote environment while going through a hypergrowth phase at the company. Between August 2020 and March 2022, we grew from 20ish employees to over 160 at our largest point. It was our aim to make every employee feel part of the culture, which is hard, especially when the economic environment changed and we went through a reduction in force. It meant we had to rebuild the trust we had worked so hard to establish in our business. It’s not easy to get that trust back, but I believe we have worked hard and intentionally to ensure culturally we are on the right path with our team, which ultimately drives performance. This business is tough (all businesses are), so the founders have always aimed to lean into culture as a means of getting through hard things, together. When that gets tested, your morals and vision get tested as founders, and I think we responded well to that challenge and maintained authenticity to who we are, what we believe, and what we are building.
What does the future hold for Coterie?
Coterie has had an amazing journey in our first five years. We have raised capital, grown a great team, built a product, and served our customers with the spirit of our core values. We are proud of what we have done, but we don’t expect to stop anytime soon. We have a lot more work to do to deliver speed, simplicity, and service to the small business space.
More specifically, we are building a tremendous customer database and innovative technology to change the experience of how business insurance is rated, purchased, and used. Over time, that will shift how business insurance is understood by our policyholders and sold by our agents, which we believe will offer a succession plan for the industry – we believe we can change the perception of selling insurance. In the future, our insurance engine will allow those with a network and influence to sell insurance as a passive income stream. That might sound crazy now, but we are preparing to build our insurance company for decades, hopefully growing up and serving a new generation of entrepreneurs for years as they start multiple businesses.
What are your thoughts on the local tech startup scene in Cincinnati?
Cincinnati’s tech startup scene is near to my heart. I spent three years working at Cintrifuse and was also President of the Greater Cincinnati Venture Association for two years. We have so many talented and visionary people in our city, all of whom are helping make the ecosystem stronger. That selflessness makes it easy for those outside the city to get engrained in it quickly. That’s what I saw with our co-founder, David. He quickly met a lot of people in the ecosystem because of the generosity of introductions and connections this city has in spades.
Additionally, it was a great place for us to start Coterie because our Angel funders were former industry executives. They deeply knew the problem we are solving, and therefore the investment opportunity was something they wanted to jump on quickly. We also had support from our corporations and other ecosystem drivers like Cintrifuse as we built our business, grew into new offices, promoted our product, and hired local staff.
All of these factors, plus a generally low cost of living and a family-friendly environment, made Cincinnati an ideal place for us to start Coterie.
What’s your best advice for aspiring entrepreneurs?
There’s a lot of great advice out there for founders and entrepreneurs so read up and educate yourself on multiple people’s opinions, but ultimately make your vision yours. That said, here are three specific thoughts that can help you as you are getting started building and scaling your business:
- Prepare and strategize, but don’t spend too much time with your head down. I suggest running a “100 meetings in 100 days” campaign as you are starting to get into the market. It will force you to speak with a lot of people about what you are doing. In those meetings, you will learn so much. You don’t need to predict what you will learn or what people might say, but that’s why you have a lot of meetings. Over time, you will pick up on trends and hear consistencies that will reveal what the market thinks of you and your product. Then you can invest in building.
- With investors, sell a vision but quickly be able to speak about the business opportunity in the same conversation(s). It is important to project the necessary purpose of your business in the world, but if it isn’t a thoughtful business, it will be difficult to get investors to be confident in putting money into your company.
- You may be right about the ultimate place your company lands, but you’ll probably be wrong about the journey to get there. And that’s OK! Sometimes our products, companies, and teams are better because we figured out a better and different way of doing things. Be confident in your vision and passion, but let the market tell you if you are right about it!