Sean Harper and Lucas Ward On Raising Over $60 Million To Change How Homeowners Get Insured

Sean Haper and Lucas Ward are the cofounders of Kin Insurance which fixes home insurance through intuitive tech, affordable pricing, and world-class customer service. The company has raised so far over $60 million from investors such as 500 Startups, Omydiar Network, August Capital, Chicago Ventures and Commerce Ventures to name a few. 

In this episode you will learn:

• The importance of embracing failure
• Why it’s easier to go bigger than thinking small 
• Why financial services is such a great space for tech entrepreneurs
• The huge problem with enterprise sales startups

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About Sean Harper:

Sean Harper is the CEO and co-founder of Kin Insurance, an insurtech startup and licensed insurance carrier that leverages technology to simplify homeowners insurance.

Previously, Sean Harper founded FeeFighters, a payments company later bought by Groupon, and TSS-Radio, an e-commerce company that became an Inc. 500 fastest-growing business.

Before becoming an entrepreneur, Sean Harper was a consultant at the Boston Consulting Group and an investor at Longworth Venture Partners.

Sean Harper earned his AB and MBA at the University of Chicago.  

About Lucas Ward:

Lucas Ward is the co-founder and CTO of Kin Insurance.

Previously, as CTO of Fundspire, Lucas Ward created a disruptive and innovative product in the financial industry from the ground up.

Lucas Ward’s efforts to define infrastructure in the Amazon AWS cloud and write batch jobs and Javascript code culminated in the successful acquisition of Fundspire.

During seven years of consulting for Accenture and ThoughtWorks, Lucas Ward helped large corporations in finance, insurance, aviation, pharmaceutical, telecommunications, and logistics; federal, state, and local governments; and various startups improve the way they use technology.

Lucas Ward‘s areas of focus include open source, programming practices optimization, architecture design and maintenance, and agile methodologies.

Lucas Ward also co-led the creation of Spring Batch, the first and only open-source batch processing framework, which is part of the celebrated Spring portfolio.

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FULL TRANSCRIPTION OF THE INTERVIEW:

Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have two co-founders, some very, very interesting profiles, very interesting track records, and backgrounds. Definitely, we’re going to be learning about markets that are heavily regulated. We’re going to learn about home insurance, tech, building, and scaling companies, and you name it. So without further ado, I’d like to welcome our guests today, Sean Harper and also Lucas Ward. Welcome to the show.

Sean Harper: Thank you. Thanks for having us.

Lucas Ward: Thanks for having us.

Alejandro: So why don’t we do a little bit of walk through memory lane, guys, to get to know you. Why don’t we start with Lucas? So, Lucas, I know that you were born and raised in rural Missouri. How was life there?

Lucas Ward: Not as exciting as it is in Chicago.

Alejandro: Why is that?

Lucas Ward: We had our one stoplight and a Burger King, so I guess if that’s your definition of exciting. The biggest town over, you’ve got to drive into. I graduated with 60 people in my high school. I probably switched middle schools and high schools seven times. I probably went to all of them in similar-sized towns. So I think in a lot of ways that’s probably what drop me to computers and the internet in the first place was a connection with the wider world even if it was on dialup.

Alejandro: So why don’t we talk about that for a bit, Lucas. Tell us about how you started to develop this love for computers.

Lucas Ward: I remember being bought a computer from Walmart. I don’t even know what it was. It was very, very crappy. My parents have never been very good about computers, so somehow, I ended up figuring it out and was the one. I think almost all of that started from wanting to play games doing some troubleshooting as well, where you were trying to get the games playing, you couldn’t figure it out. Back then, it was a DOS prompt, so you had to get everything in and type into a DOS prompt. So I was used to working outside of a Windowed environment for a long time. We didn’t have a lot of money, so I started learning how to put computers together and build them because that was the cheapest way to do it. I got salvage parts, and I found people to give things away, so I learned how to build computers from there. Funny enough, I think the high school I graduated from, there was a class which was me fixing the school’s computers. I got an A. Yeah. I’d just run around and fix computers in school. I told you the state of the schools I was at, so it’s still a good learning experience.

Alejandro: Very cool, and then you went and got your computer science degree from Missouri State University, and you went to Corporate America and open source. You started to develop that learning, that exposure to open source with Accenture. Tell us about this.

Lucas Ward: Yeah. It was definitely a big shock for me. I’d never been on a plane before. Then I joined Accenture and started living in them. I got a great opportunity. Accenture, at the time, was working on a lot of big batch processing systems, so these things you’re processing millions if not billions of records at a time. They were rebuilding the frameworks. Nobody had ever built something like a batch processing framework, but Accenture built them internally. So I ended up getting pulled into that and creating a version. What we wanted was, at the time, Accenture was getting good luck from using these external frameworks. I think Struts is a good example in the Java world. That was creating a lot of continuity between client sites. So Accenture liked it because you could switch resources around, and they need a framework. They got to the point where they stopped viewing internal frameworks as some kind of competitive advantage and realized there was a cost. So they were pushing it, and I was at the forefront of pushing open source, which was all happening along with outsourcing in the early 2000s. I wrote the first version of that. I worked with the people at SpringSource, which later was bought by VMware. We put that version out. I was working with a lot of clients, probably 20 or 30. Everyone’s from the state of Illinois, California, the City of New York, to Chase. I even worked in Europe, which was really fun for me in my early to mid-20s. It gave me a big, broad overview of a lot of these things before moving on.

Alejandro: So, obviously, you were doing a bit of corporate here. I’m just wondering. What was that first exposure to startups because you did ThoughtWorks, Fundspire, and then Rippleshot. What was the first moment when you finally said, “Oh, wow. Look at startups, what they’re like. This is really cool.”

Lucas Ward: It was probably SpringSource if I think about it. The funny thing is, I hadn’t thought about that before. But, yeah. The SpringSource was my first one. I remember going to their offices. It was in Southern England. There were eight people in the office. I think that was my first startup experience because everything else was very big corporate up until then.

Alejandro: Yeah. Sean, why don’t we go through your background a bit here. Obviously, as well, a little bit geeky in terms of love for computers and all of this. You started programming quite early. How early?

Sean Harper: It was probably 11 or 12 when I first started to program. Part of it was I just wanted to make things, and part of it was my parents. I had an aunt who worked for a tech company and had made a lot of money off of it. My dad was like, “You should do this. This is a great career.” He’s pretty geeky, too. So they encouraged me. At the time, it was crazy. You couldn’t look things up on the internet, so it made programming a lot harder because you’d have to go buy a book and look up how to do something. I got into that, and I really liked it. I’ve always liked making things, and the fastest way to make something cool is on the screen. That got me into the business stuff, too, because if you’re making something, the next thing you want to do is get people to use it. Then you have to figure out: how do I promote this? How do I figure out what it is that people want? How do I charge them money for it, and how does this all work? It was through programming that I got into business stuff.

Alejandro: Got it. And with your background and track record, you are what I would call in the positive and good sense a very dangerous entrepreneur. The reason why I say this is, Sean, is because you’ve had experience in consulting. You’ve had experience also on the investment side on a venture capital firm, so not only are you able to really understand how to resolve problems and grab big problems and then break them into smaller problems, but now, you’re also able to identify patterns of what makes companies successful. So can you tell us about these two experiences and what you learned from them?

Sean Harper: Yeah. In my first business, I started as a side gig when I was working at a VC firm. From that, the biggest thing I learned was that you actually can start something out of nothing and have it turn into something. I had started this business with a friend, and we pivoted twice. It started with a product that nobody wanted, and we iterated our way into a profitable business. I think that taught me that it’s okay to take a leap. You don’t need to be 100% sure about something. You can actually just get out there and start selling something and pivot off of that. It gave me a lot of confidence. Then my second business, when I started, it was a payment processing business. I had been running this e-commerce business, which was my first one, TSS-Radio. I started FeeFighters out of a frustration that there were not very good online payment options at the time. This was in 2005, I guess. PayPal was stagnant. Stripe didn’t exist yet. Square didn’t exist yet. So I’d been struggling with these legacy payment guys. I knew from my time at BCG — this is the other cool thing about consulting is, you learn how things should work. I’m sitting there looking at this like, “Oh, my gosh. Big companies pay 2% for their payment processing. Why am I paying 5% as a smaller company?” It turns out there are a lot of reasons, but they’re all ones that are easily surmountable if you have the right tech and the right business model. With FeeFighters, I learned two things. A good pattern for us as techy guys is to go after financial services because there’s no physical thing. Everything at a bank, everything at an insurance company, everything at a stock brokerage is done online, on the computer. You’re really just pushing data around, but you’re getting paid way more to push that data around than you are in most businesses. From that, I always wanted to do more financial services stuff. The other thing that I learned was that the problems that I had seen at the big companies when I was a consultant were really good hunting ground for starting into startup. That’s been true. A lot of investment thesis for Kin came out of work that I did at BCG working for a big insurance company. 

Alejandro: You got FeeFighters acquired by Groupon, so this is a great opportunity to see the full cycle of a business. When you were there, perhaps doing the vesting and resting at Groupon, some people don’t rest as much as others, but when you were doing the vesting and resting and reflecting on the journey, what was that big takeaway?

Sean Harper: You know, I didn’t really rest and vest at Groupon because Groupon, when they bought us, was still a startup, too. They had just gone public, and they had all kinds of problems to solve there. As a problem-solver, I saw all these problems as opportunities. So I did a bunch of stuff that was outside of the business that they acquired at Groupon, especially automating the onboarding and unwriting of merchants to the Groupon platform. That was a cool experience because I got to know what it’s like to work at a real tech company. Everything that I had done before was VC is VC. Doing these little startups, you only know what you do, and you don’t know what Best Practices are. But at Groupon, they had a lot of people who were from Amazon. They had a lot of people that were from other big tech companies. It was a good education for me. I learned like, what is a product manager at a big company actually do? It turns out there is a lot of stuff they do that is of value that I had never done before. So, I learned a lot.

Alejandro: Lucas, why don’t you tell us about that day where you met Sean?

Lucas Ward: It was at a coffee shop that Sean worked out of almost exclusively at that point.

Sean Harper: I loved that coffee shop.

Lucas Ward: Yeah. It was also next door to this Middle Eastern restaurant, both of which have closed down now. I remember I was at an inflection point in my career, having done a couple of startups. I was thinking about where I want my future to go. I think it’s one of those things, I look back now, and came in as brutally honest like, “I don’t know. I’ve taken some singles of doubles. I really just feel like I want to take a big swing.” I think that was a lot of the impetus for it. Sean was telling me about the thing he was involved with at the time, and I remember simply saying, “I think that’s dumb.” What shows you to Sean’s both persistence and selling ability, he convinced me to join even though I immediately thought it was dumb. It turned out I was right.

Sean Harper: You were right.

Lucas Ward: But, he’s a convincing dude.

Alejandro: Got it. So then, Sean, tell us how you guys incubated the idea of Kin Insurance, and then what was that process of bringing it to life?

Sean Harper: I’d been looking for something that fit this pattern of a financial product that hadn’t been streamlined yet. Like I said earlier, if you look at what’s really happening in your insurance company or bank, it’s basically software. They just aren’t very good in software. Lucas and I were working on this turnaround gig and kicking a bunch of ideas around. I remember we would take walks and like, “Hey, what about this? What about that?” Then we’d go and research. And it was fun. Around that time, I think we both bought our first houses. Because that’s what you do when you’re in your mid-thirties, and I remember being so shocked by how anachronistic the house-buying process was. I said, “There’s got to be something there? Why is it so archaic? All this paperwork, this negotiation, you have to do all this stuff, and it’s all managed on spreadsheets and emails. It’s really inefficient. It shouldn’t be this way.” We wanted to pick a piece of that off, and I was like, “Well, you know what’s really surprisingly frustrating was just getting insurance for this house.” Like a lot of people, I was about to close on the mortgage, and the mortgage guy goes, “Oh, yeah. You know you need insurance for this house.” I was like, “Really?” He was like, “Yeah. You know the close on the mortgage, you need insurance.” I was like, “Okay, cool.” “So, you should call your insurance agent.” I was like, “What? My what? Do you mean like GEICO? I guess I could call GEICO.” Who has an insurance agent anymore? It’s not really a thing for people our age. So I did. I went to GEICO’s website, where I had my auto insurance, and I tried to buy home insurance by them. It was crazy and frustrating because they basically sent me offsite to some Liberty Mutual site where they asked me all these questions about a home that I didn’t even live in yet. I’m like, “You’re asking me what kind of shingles are on the roof of this home. First of all, I don’t know. Second of all, I’m scared of heights, so I’m not going to climb up there and look at it.” It was so frustrating. The one thing I actually did have a question about was whether this giant tree in my yard was covered, and there was no way to get an answer to that. So, I think that was when we started thinking about homeowner’s insurance. We’re very deliberate and practical guys, so we laid out a plan of, “What are the things we need to prove to ourselves before we think this is a good enough business that we should invest our time in it?” The first thing was, we thought it might be possible to eliminate that whole question-asking signup thing and make you able to insure your home with one click. We thought that would be possible because if you search for your address online, you see all this data about your home. So the first iteration of that was us sitting around in a conference room trying out new APIs and saying, “If you give me an address, can I piece this together that I know enough about you home to insure it? At the end of a few weeks, we were like, “Yeah, there is a lot of data out there. This all kind of works.” The second question we had was, “Well, we don’t want to build a bunch of software if we don’t think we can get customers. So we built this really basic MVP, which is a bit of a wrapper around a retail insurance agency. 

Alejandro: Got it, and both of you, in that sense, Sean, you both have engineering backgrounds. So Lucas, how did you guys divide and conquer? Then, also, how did you go about building a team?

Lucas Ward: I think in the early days, I was doing most of the coding. We did everything in Rails. Sean was doing, initially, product, tech. I remember in the first version you did that who ad-libs thing.

Sean Harper: Yeah.

Alejandro: 

Lucas Ward: You were filling that out. So we divided it that way. That was, I think, the way we were used to working. That’s the way we’d been working previously. We were doing it that way. What I think Sean probably glossed over is we actually went out and bought a retail insurance agency. I need to go back to the singular thing you can think about as an entrepreneur is that there are a lot of these things that you can just do it. I think what hangs up a lot of people from starting businesses is pretty much that single thing like, “No, you just go and do it.” So the starting point was that. We found one and were able to purchase it, and we were able to layer this on because one of the questions people ask is like, “Are we actually able to make this better without going too deep in?” I remember not long after doing that the quote time was what? Thirty minutes? After Larry and the tech, it went down to five minutes. 

Sean Harper: Yeah. It took Lucas like two weeks to make the thing six times as efficient as it was before.

Lucas Ward: Yeah. That was just me and were still part-time, and I think that’s naturally where things have progressed since there is, very quickly there was a lot of these external things because the thing about going into an industry like home insurance, which you’re sort of the first wave of innovation. There are all of these things that exist in many other spaces that help enable startups just don’t exist. So there have been a lot of things externally that have had to be pieced together to even allow us to do the things we need to do to sell anything. I think that’s how some of the beginnings of Sean and my working relationship to date started to form.

Alejandro: It’s interesting what Sean was mentioning earlier when purchasing the house and dealing with an archaic process where you had to call your insurance broker. Obviously, that was probably the case because it’s very hard to innovate in markets that are heavily regulated. So the nature here is that not only are you guys dealing with the uncertainty of building a company from nothing, but then also with the uncertainty of making sure that you are compliant with the regulatory frameworks that you have in front of you. So, Sean, how did you go about reducing that steep learning curve as well on the compliance side?

Sean Harper: We decided to go out and do it. So we found out quickly that it’s very easy to get licensed to sell insurance, which is what the initial business model was. So Lucas and I went and got a license as insurance agents. We took a class and took a test, and it’s not hard. Then we had to figure out, “What’s the next step? We can’t innovate the way that we want to do if we’re just wrapping somebody else’s insurance product. There’s all this innovation that we want to do, and we want to run everything through our own core system. We knew from the start that we didn’t want to be selling tech to insurance companies —

Lucas Ward: Absolutely.

Sean Harper: It’s just that the adoption cycle that is, so what? The reason why that industry is so messed up right now is that it takes a big insurance company like a decade to shift their tech, and that’s if they’re dedicated to it. We didn’t want to have to wait five years to have somebody buy our software.

Lucas Ward: I remember very distinctly, Sean and I had two rules when we were going forward for this business. Anything that we were doing had to get big, and we had to be able to do it fast. I think anything with a big enterprise sales cycle fails the second check every time.

Alejandro: Got it. To follow-up on that, Lucas, what ended up being the business model?

Read More: Jason Guss On Raising $100 Million To Empower The $14 Billion Powersports Market

Lucas Ward: With those in mind, we were looking at the insurance industry. The reason home insurance stood out is, one, it’s a very big market. It’s 100 billion dollars and rising. The other thing about it is that it’s 94% sold through agents. So as entrepreneurs, when you see something that has a big manual process, you think, “Wow. I could probably automate that.” The other interesting thing that I think shocked us from the very beginning and got us interested is that agents make up about 15-20% of the cost structure. It’s not even like a [0:22:33] thing. They get that year-on-year.

Sean Harper: Yeah, but it’s actually worse than that because a homeowner’s insurance company, they spend 70% of their money paying out claims. Then the 30% is like a real cost structure. Of that 30%, between 15 and 20 is getting paid out to the agent. So it’s actually like half of the real cost structure. It’s a huge part of it is getting paid to these tiny operations, like two or three-men operations and strip malls all over the country. There are more insurance agencies than there are fast food restaurants, which to me, is insane because I eat fast food once a day, not necessarily McDonald’s, but like maybe Chipotle or something, and I’ve never, ever been inside of an insurance agency. And I think it’s true of most people. In fact, if you go stand outside of an insurance agency, you won’t see anyone going in and out. They’re all doing business over the phone and email anyway. So we wanted to rebuild the entire industry, like the whole stack. The natural thing that we gravitated to was, “Hey, we want to start an insurance company.” So we looked into that, and we were like, “Oh! This is really hard,” because — maybe getting a license as an insurance agent is really easy. Getting licensed as an insurance company can take years, and also, tens of millions of dollars, if not more just sitting there in the bank you can’t spend, to make sure that you have the credit rating to get regulatory approval.

Alejandro: Yeah.

Sean Harper: So we found an intermediate point, and that’s what we did next was, we became this thing called an MGA, which is a virtual insurance company where you run the whole operation, or at least most of the operations of the insurance company, but you borrow or rent a license from another company. That’s what we did for the next two years. It was a good business model because it was easy — not easy, but it was easier than starting an insurance company at the time.

Lucas Ward: A lot of these things, I think Sean and I were surprised because we came from regulated environments. We’re really used to that, and some of the things, especially in payments, are extremely tightly regulated, and we expected insurance to be just as tight. Because it’s regulated at the state level, it’s very different. I think this is how we ended up focusing on finding the states with the good opportunities for us and working on them because if you want to be able to be in the entire U.S., you have 50 states, 50 different regulators to go through. That’s challenging.

Alejandro: Yeah, and to think as big as you guys were thinking, and are thinking, that requires some capital. So, Sean, how did you guys go about fundraising?

Sean Harper: We raised the first round, which was at the beginning. This was when we were just doing the first version of the software. That didn’t take that much money. We wanted enough money to hire a couple of other guys to work on this with us. So we were able to go out and raise almost 800k from people we knew. It was other entrepreneurs, and it was people we had worked with before, and that was an easy round because they trusted us. We didn’t know exactly what we were doing, but they knew we were smart guys who had a good track record, that we’re going after a big opportunity, and that was enough. A year later, we were just launching the first real version of the product, and that was the MGA version of the product. That was tougher because, for the first time, we had to raise money. Our friends didn’t have enough money for that round. We were trying to raise 3 million dollars, and we had to ask strangers for money. That’s always a lot harder, especially because we hadn’t launched this product yet. It was expensive to build it. We had to build all of this tech. We had to negotiate this complicated agreement with this other insurance company, and it was hard and expensive. But, fortunately, we brute-forced our way through it, and we found some investors who believed in it who were folks that our first investors had introduced us to. That was great. The value of our first group of our super-tight friendly investors added was not just their money, but it was also their connections. They helped us raise the next round. From there, it’s been a bit easier because when you have a business that’s going and has metrics and if you’re growing and start showing the progress that you should, it makes things a bit easier. So the next round was our Series A, and that was much bigger. It was 12 million dollars. We raised it from a VC with a rally good reputation. That was actually an easy round. We had a bunch of term sheets. We got them quickly. Then it seems like we had one easy round, and then one hard round because shortly after there, we decided if we didn’t like this whole insurance company thing. It was too inefficient. It was too slow. We hated having our fate rest in the hands of somebody else. That was very uncomfortable for us. Then we set out to raise a much larger round to actually fund the business. But also, to have that big pile of money, I talked about, to get our own insurance license. That was harder because the kind of investors we’d been raising from were these tech VCs. They were excited about the business, but what they were not excited about was having 35 billion dollars just sitting in the bank doing nothing for regulatory requirements. So we had to go out and meet a whole new type of investor. So we ultimately ended up raising that regulator capital, not from VCs, but from a reinsurance fund and from a life insurance company. We didn’t know anyone in that space, so that round took a year to raise because it was folks that we didn’t know. We had to network our way into the space and explain to them what we were doing.

Alejandro: When it takes that long, it’s a tough battle, as well as emotionally. This reminded me. Can you guys share perhaps, Lucas, and maybe Sean after, a moment that has been difficult, and perhaps it was like a breakdown, or it was a natural breakdown that led to a breakthrough?

Lucas Ward: I think the moment Sean’s talking about — I would say deciding to be a carrier was one of those chips-all-in moments. That’s the way that I describe it a lot because it was a bet we were making, and I think Sean and I have had two or three of those different inflection points where we’ve said, “Let’s just do it.” We knew there was some risk involved, but we knew to do the vision that we wanted to do, that that was what was going to happen. I think that year, there was the least overlap between Sean and me. Like Sean described, that was really, really hard. Credit to Sean, because he did most of the work on it with a lot of other people on the team, where I was working internally because we had to all the sudden be a complete insurance company. We had to have all of our tech systems; all of our people had to be lined up such that it would be terrible for Sean to get the money we don’t actually have a business that can actually operate as an insurance company. So we had zero overlap between the two of us. Luckily, Sean and I have always tended to be on the same page without having to talk too much about it, but that was a really, really trying, and defining year for us. Ultimately, we got there, and we got over it, but it was very challenging.

Alejandro: To follow-up on this, Sean, a moment that it felt like you guys were really turning the corner, and you felt you were onto something big.

Sean Harper: Yeah. One that I’m thinking of is — this is like four months after we had launched the first MGA version of the product. We knew we were going to grow fast on a percentage basis in those first months. Then we just kept doubling every month, and it was like, “Did we just double again? It’s crazy. Can we possibly do that again next month?” Sure enough, we did. We were growing so fast, and we were hiring like a new person every day, and it was like, “Wow! We’re really onto something. People really want what we’re selling.” That was exciting because I’m always worried — am I building this for no reason? Is there not going to be a market there, especially with things like this that are pretty hard to build? That was exciting. That was cool.

Alejandro: Very cool. Lucas, how big is the operation today or the business. Perhaps you can tell us about the number of employees or whatever you think would paint the picture of Kin for the folks that are listening.

Lucas Ward: We’re into the hundreds of employees now. We have a decent-sized dev team. Maybe we’re all together. Because we’re a direct-carrier, we actually have an ops organization, which was interesting for us. I’ve had some people that were on the phone with customers, but I don’t think for this size, we have a lot of those people and have our own call center at scale, which is interesting and pretty cool, especially being able to walk by and hear them talking to customers. Sean and I both, at times, will sit over there and listen to those things. I think now we actually have a lot of the pieces. We have insurance people working here, which I think is an interesting thing that we’ve done. 

Sean Harper: Like actuaries.

Lucas Ward: Actuaries. Sometimes, I think it’s like, “We’re an actual insurance company. We have all the things.”

Sean Harper: Appliance claims.

Lucas Ward: Yeah. All across the board. There are definitely times when you’re having done this from literally just Sean and me in a coffee shop. To hear, you’re in your office, you’re looking around, and you’re like, “Oh! There are hundreds of people here.”

Alejandro: That’s amazing. Sean, when you have hundreds of people, you need to make sure that you guys are embracing culture at the same time because when you’re growing fast, it’s very easy for things to fall apart when it comes to culture. People are everything because, with no people, there’s nothing. There are no numbers. There are no results. There’s nothing. So, how do you guys go about culture, Sean?

Sean Harper: We’re working on it. It’s actually more of a Lucas question than a Sean question.

Alejandro: All right. Go head, Lucas.

Lucas Ward: I think it’s as we build up people. I think the one thing is that you have to think about culture because if you don’t, one will develop, and it will probably won’t be a good one. So one of the things Sean and I did earlier, where I think Sean was more involved with culture, was — we always had the joke that we had four company values. One of them was, run through laws, and really, that was a bias for action because we had seen this before where people weren’t doing a thing because they were afraid they might do the wrong thing. We’d say basically, “Ask forgiveness, not permission.” The second one was, be chilled. I think anybody who’s done at least one startup will tell you how much it’s like — there are a lot of things going on, and people are going to make mistakes, and you’re going to have things thrown at you. Everybody just needs to be cool, because if you don’t, and you get really angry, it’s not good. Also, I think Sean and I have always had this cultural thing about we shouldn’t be doing anything that you can’t do for a long time. I think I’ve described it to some people recently to a group of college students. That doing a startup is like a marathon like being chased by a tiger that’s on fire. It’s very tempting, and I know I’ve fallen in this in the past. It’s like, “Oh, we’ve got to get this next fundraising thing, or we’re just going to kill ourselves.” The thing is that to get that new fundraising thing, you’re expected to take that money, do a bunch of things. You really have to just keep yourself at whatever level you can maintain. The other two values that we had, which we forgot, which is the third value that if something is not providing value anymore, don’t keep it around. One of the challenges, when you’re growing a business, is that you have to become a new company roughly at every fundraise. Now, we’re building a Series B company before building Series A, and those are very different things. Some of the people you hire are different, and some of the concerns are different. So just because we do it this way or have done it this way doesn’t mean we should continue to do it that way.

Alejandro: Not only do you become a new company, you also become a new executive. You can’t lead a company the same way when you are at a seed stage than when you are probably at a Series B or a Series C. So how do you transform yourself, and you’re able to keep up with the growth of the business, as well, Sean?

Sean Harper: One big thing that we’ve done that’s helped is we want the person who has the most information to make the decision. So we always push decisions down to the lowest level because the reality is, there is nothing, there is not a single thing — maybe there are a couple, but there aren’t very many things at Kin that I know more about or Lucas knows more about than somebody else. There’s always an expert of something. So I think a lot of founders stumble when they get to a certain size, and they can’t be involved in every decision. We don’t want to be that way. I don’t want to be the [0:36:48], and I don’t want people to wonder like, “Oh, what would Sean think?” I’d rather have them look at the data, make a decision, and if they need help, then we’re there to help them. Our job as leaders is more one of unblocking people and making sure that we have the right people working on the right things than getting involved in the day-to-day. I’ve found that to be helpful as we scale. It’s only becoming more and more helpful. And also, the employees really like it because it gives them autonomy, and they don’t need to worry about somebody micromanaging them by looking over their shoulders.

Alejandro: Yeah.

Lucas Ward: Also, Sean and I hate managing. We haven’t had a lot of the troubles of the delegation versus management thing because we’ve always just hated managing. So we’re always looking to hand something like that off and to focus on the bigger thing.

Sean Harper: You could have had a nice virtual cycle there where if you hire people that can handle their own business, then you don’t need to manage them. And if you’re not micromanaging them, then you attract that kind of people that want to just get things done and not have somebody —

Alejandro: So, basically, hiring leaders rather than followers.

Sean Harper: That’s a really good way to put it. Yeah, I think so.

Alejandro: Love it. So one question that I typically ask the folks that come on the show is, knowing what you guys know now — the ride with Kin is incredible and what you guys have been able to accomplish and all of these different milestones that you have achieved. Now, looking back in time, and we’ll start with Lucas. And Sean, you can go ahead with your thoughts on this. Lucas, if you had the opportunity to have a chat with your younger self, what would be that one piece of business advice that you would give yourself before launching a business and why?

Lucas Ward: Well, that’s a really interesting question. It’s funny. I think where my brain first goes, and you think about things is, one of the things that I’ve learned the most is probably how not to get hung up in the past. You think about some of the things. You think about if you were to tell your younger self something. I’ve thought about this before. How would I explain this thing to my younger self? I think knowing my younger self, I know he flat-out wouldn’t have listened.

[Laughter]

Lucas Ward: So, you think about it, and you think about this, how important the experience is. If there’s anything that I guess I’ve learned is how important failing is. You’ve just got to go and do the thing, you’ve got to fail, and you’ve got to be okay with failure. You have to say like, “I failed at this, but I’m not a failure.” You have to be able to control your emotions enough to not get so hung up at that, that you can look objectively at the failure and be able to improve from it. Because if you’re so worried about whether you’re going to fail or not or whether this is going to work, you’re going to end up not doing anything. 

Alejandro: That’s very, very powerful, Lucas. So, Sean, what would you say?

Sean Harper: I think I would tell my younger self to go beg and go faster. It always seems easier for me to do the practical, small thing. But the problem is, when you’re doing that, you don’t have the grand vision, and you’re not trying to do something that’s transformative. It’s actually harder to attract resources. It’s harder to attract money to that. It’s harder to attract people to that. It’s harder to attract attention and press. So I wish I had started going after bigger things earlier in life because in some ways, going after the bigger thing is actually easier. It’s so much easier to get resources for it, and it’s sure a lot more fun.

Alejandro: Got it. Guys, for the folks that are listening, what is the best way for them to reach out and say hi. Maybe there’s a customer or a website, or maybe you guys want to share your social media handles. We’ll start with you, Sean.

Sean Harper: We’re on Twitter at @kinsured. You can always hit us up on the website, which is kin.com.

Alejandro: Great, and do you guys have any other social media? Do you guys use any of that stuff?

Lucas Ward: We have them. I remember a time when I had the time to use them. That hasn’t been for a while.

[Laughter]

Alejandro: All right. So probably better to just avoid that, then, for the folks that are listening. I want to say, guys, that it has been a pleasure to have you both, and thank you so, so much for being on the DealMakers show, Lucas and Sean.

Lucas Ward: Thank you. Thank you for having us.

Sean Harper: Thank you. 

 

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