Starting a Life Insurance Marketing Company
Interview with Entrepreneur Aaron Pinkston
Using his experience working with hundreds of insurance agents, Aaron Pinkston built Clarifinancial, an insurance "dating" service.
Aaron Pinkston learned a lot by opening his first business during tough economic times.
Tell me about your current business. What are you doing exactly?
Clarifinancial helps insurance shoppers and agents find each other by letting agents compete. It's like a dating site for life insurance.
Insurance shoppers answer some easy questions about what's important to them, then they review their quotes, and pick their favorite. Only the favorite agent the shopper picked is able to contact them because of the site. We make people feel comfortable by exceeding their expectations about privacy and unbiased competition.
When did you start the business?
I began working on the rough ideas for the business in the summer of 2007 and incorporated in October of 2008. It was a bad time to start fundraising - especially for a startup that was little more than a business plan at the time. So after restructuring the plans and going through a long but budget-conscious development phase, we finally launched one year after incorporating.
What were you doing before this, and is this your first business?
Before starting Clarifinancial, I sold insurance and even supported over 600 insurance agents for a few years, mostly focusing on life insurance. I got to see how many agents operate and I understand their number one problem is finding the right people who want to buy from them. Clarifinancial really stands in the middle and solves the problems of insurance shoppers and agents at the same time.
Besides operating as an independent contractor for some of those years, Clarifinancial is the first business I've started.
Where did you get the startup money?
My wife and I loaned most of the money to the business, although I did have some significant help from family members too. Clarifinancial is a true bootstrapped company. Because of that, I was able to retain complete ownership as well. All my friends and family have been supportive through this process in various ways.
Who are your main competitors? How do you compete against them?
My main competitors are companies like InsureMe and Matrix Direct. Speaking of my competition is a good way of describing how Clarifinancial is different at the core.
Companies like InsureMe collects very basic information about you and sells it along with your contact information to a number of agents. Then those agents call or email you until you give in to the pressure. Companies like Matrix Direct acts as an agent through a handful of insurance companies - almost as if you called one independent agent.
Clarifinancial is the only company that lets all kinds of agents (independent, captive, and semi-captive) submit quotes and compete for you without you in the middle. We make the results easy to compare, and only the one agent you pick as your favorite gets your contact information. People have a great experience because Clarifinancial has the unique combination of being low-pressure and highly competitive.
Not only that, we really are unbiased because we have no interest in which life insurance companies compete for you or which ones you choose. Our list of life insurance companies is theoretically unlimited, and only agents who are licensed with those companies submit quotes. We don't edit which companies you see because it is such a personal choice. Instead, we let your best choices naturally float to the top.
How has your experience in running the business been different from what you expected?
Everything has taken more time than expected. In Getting Real by 37 Signals, the authors talked about how there were a few dimensions that require flexibility when taking your concept to reality. Features, budget, or time. The development team and I definitely made a few cuts on features that won't be noticeable to most people and tabled them for later, but we stuck to the budget. Because I'm bootstrapping the business, I knew if I blew the budget putting it together, I would never be able to introduce this service to enough people.
Is there anything you wish you had done differently?
I wish I stopped working the business plan sooner. The idea was to write a business plan, talk to a bunch of people and try to sell part of your business for enough money to build a big fat company. I don't think that happens very often, or if you could do it without selling your company's soul. After a lot of reflection, I didn't think Clarifinancial was that type of company.
There was a point in early 2009 when I thought, 'why don't I try adjusting this budget down? How lean could I make this?' That's when the current execution took shape. I don't regret learning that lesson, but I wish I had learned it earlier.
What have you done that has been very effective in helping to grow the business?
Get back to me on this in a couple of months. We just launched and are working on advertising and continuing different relationship strategies. From what I can tell right now, because differentiation is so important, accessible advertising won't work as effectively as it might in the future. I expect other communication strategies, like our Charitable Affiliate program where we partner with nonprofits, to be much more effective.
What advice would you give to somebody else who wanted to start a similar business?
Stay open and be ready to adapt and execute. Listening is an important part of Clarifinancial, but I wouldn't have such a great company on my hands in the first place if I hadn't listened along the way. And of course listening does no good unless you have the ability to model changes and make them happen.
All sorts of things came about because I was able to open my ears - things like the way we use the cartoon and even some of the words we use. Clarifinancial is even built to keep capturing certain information, so we can keep making adjustments and improve. It's in the design.
It sounds like you learned a lot founding your first business. Good luck in the future, Aaron!
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