California may be the startup hub, but we’re starting with a focus on ‘The Heart of It All’
When we launched last month we got a lot of questions about why we’re not live in California. After all, Vouch is an insurance platform for startups and, as someone jokingly said, “you know, there are a lot of startups in California.”
So why did we choose to launch in Utah and Illinois? And why Colorado, Wisconsin, Oregon, Ohio, Indiana, Michigan, and Pennsylvania? All before California? A lot of people assume we’re avoiding California for regulatory reasons. That’s not really the story, as we’ve found the California regulators to be great to work with.
Rather than focusing on the biggest opportunity, we came at the problem from a different perspective: where is the biggest pain point to be solved? It’s hard enough to build a company without unexpected surprises slowing startups down. However, today’s insurance products aren’t designed for startups and nobody (ourselves included) views the process of buying insurance as a good use of time. This is particularly true in parts of the country where legacy insurance solutions are more focused on main street businesses.
For most startups, their insurance package is a patchwork of old-school carriers that can take weeks of PDFs and confusing emails to get done every year. Even digital brokers are forced to rely heavily on PDFs. Time is every founder’s most valuable resource, and today’s insurance solutions fail to respect that. We have the chance to play a small but important role in eliminating friction for entrepreneurs everywhere, and that mission is personal for me. It also happens to be a much bigger opportunity than the rest of the industry seems to realize.
When I was a kid growing up in Ohio the license plates said, “The Heart of It All.” Some people may roll their eyes, but there’s some important truth to that statement today. My hometown of Columbus is at the heart of a growing wave of venture powerhouses across America. Billion-dollar technology companies are becoming the norm in places like Salt Lake City, Chicago, Columbus, Indianapolis, Portland, Denver, and so many more. One of Vouch’s friends that works with startups in the middle of the country told us their goal is to work with one IPO per year. This year they’ve had eight, and another 18 are coming down the pipeline.
Where these markets thrive is having unique expertise and resources that Silicon Valley lacks. In Utah it all started with the world’s best sales talent. Chicago is a B2B mecca, and in Columbus it’s all about insurance and healthcare. These are some of the most difficult categories to build venture-scale businesses in, and they’re also the categories that most need our help in managing risk. Many business contracts require insurance, and litigation is accelerating across the board. In regulated sectors like Fintech, getting the right insurance is table-stakes (and, from personal experience, incredibly difficult). Every day we meet founders solving some of the world’s most difficult problems, but their insurance options today are anything but world-class.
Beyond providing the best insurance for those building the future, our mission is to help startups manage their most important risks. It’s no longer acceptable to “move fast and break things,” as startups are being held to the same standards as much larger companies. That’s why we’re building tools that connect founders with the expertise they need to build a venture-scale business the right way. It starts with our patent-pending Risk Assessment, which helps new companies lay the right foundation from day one across Team, Product, Legal, and Finance. We launched this tool with our Y Combinator batch this summer, and now founders everywhere can access the same best practices for free. This fall we’re hosting events on these topics across the country.
Silicon Valley will always be at the heart of the global innovation economy, and we’re proud to call both San Francisco and Chicago home because innovation is increasingly everywhere. At Vouch we’re re-designing insurance as it should be, and we’re starting in the heart of it all.
