“COVID-19 has changed the landscape dramatically for the insurance industry. If most purchases continue to be made online, and the insurance and warranty industry is run by incumbents, then the industry is going to halve in size.”

Brandon Gell, 26, is the co-founder of Clyde, an insurtech startup that offers point-of-sale product warranties. Brandon is an extremely young founder in an age-old industry, having started Clyde at the age of 22. He saw a glaring problem with product warranties and he went out to solve it. Now, Clyde has $14m in the bank, recently raising a Series A from Spark Capital in May. 

The COVID-19 pandemic is pushing shoppers online, and Clyde has the system in place to help those consumers better protect their purchases. For an industry known for operating slowly, Clyde is a nimble startup ready to take on the demand. 

In this interview:

• How seeing and solving one problem can lead to massive returns and industry influence
• How perfectionism can kill an MVP and startup before it begins
• The importance of an established market for new products and delivery systems
• The effect of the pandemic on the insurance industry and commerce at large
• Clyde’s philosophy on cultural differences between employees
• The importance of research before a launch
• Speed and creativity being the defining factor for success in a new era

What is Clyde?

Today, Clyde is an extended warranty platform and fully-licensed insurance administrator that partners with top insurance companies to provide product warranties. Being an administrator, we adjudicate and resolve claims, and own the customer experience. We work with merchants to sell contracts to their end consumers by fully leveraging our platform. We’re also a full suite of technical products for integrating merchants and customers and tools for claims and adjudications. We’re backed by a number of highly-rated insurance companies such as Asurion. 

How would you describe your product suite?

On the insurance side, we have two top-level products. One is our platform, and the other is insurance products in every single category. We have some of the strongest pricing in the industry thanks to our partnerships. We administrate our insurance products. On the product side, it’s really a suite of four different tools to serve different users.

The first user is us, Clyde. We have an internal tool for onboarding and integrating merchants in a scalable fashion. One incumbent who I won’t name takes an average of 3-6 months and tens of thousands of dollars to get a partner live. This product’s goal is to help us launch new businesses every single day. This tool also manages our operations and optimizes our business.

The second user is the merchant. We have a product that helps them manage their program. It contains analytics, controls, and customer success tools. We can also enable our merchants to be the point of contact for claims if they want. For example, we’re running a program with Barnes and Noble, where they use our API to adjudicate, but they’re the point of contact for the customer. 

The third user is the end customer. They interact with one product before they buy a contract. This is basically a piece of javascript that lives on the merchant’s website, responsible for a lot of different functions. It performs very well for opening contracts. 

The final product is the one customers interact with once they’ve bought a contract. They use it to manage their contract, make claims, and get their claim adjudicated and resolved.

How did Clyde get started?

I come from a design background. I studied architecture at Middlebury College in Vermont. Ultimately, I wanted to study industrial design, but they didn’t have that, and architecture was the closest thing they offered. That also led me down the road of product and graphic design, which I gravitated toward. I graduated but didn’t want to be an architect, because I thought that was too much of a pigeonhole. I knew I wanted to build stuff, but I didn’t know what. I built a house, I renovated a school bus, and I built an app, but I wasn’t sure what I wanted to specialize in. So I became a Venture For America Fellow for a time, back when Andrew Yang was still a part of it. 

From there I moved to Columbus, Ohio, to work for a small startup of 4 people. There I learned a ton about organizational leadership, focus, and the balance between a product-focused approach and a sales-focused approach. I learned a lot about what not to do in business as well. About six months into the startup, it became part of my job to figure out how to sell the startup’s product. I learned a ton about e-commerce, Shopify, Stripe, and Affirm. I had great experiences with all three of them. Then I tried to find a partnership with an insurance company so that I could offer insurance on the product as an upsell. 

As a merchant, I had so much difficulty partnering with insurance companies. At first, I couldn’t find anyone to work with, even though I called and emailed anyone I could find. I searched all over LinkedIn for anyone at an insurance company with “sales” in their title and couldn’t get a conversation started. I finally got in with a small, local insurance company and was appalled at the quality of their product and customer support. The final straw came when I saw that it was going to push my operational burden through the roof just to integrate with them. They had an awkward system in place to integrate with new merchants. I didn’t even know if it was going to work. This experience was the seed that led to the founding of Clyde.

When we launched, we set out to solve one problem: Let’s enable merchants to have the best-performing program they possibly can. Our original mission was to help merchants work with insurance companies, regardless of the scale of the merchant. We were the first company to work with electric scooters. Boosted Boards partnered with us when one of their products launched, and we went to every insurance company and found one willing to take that risk. We had signed non-exclusive agreements with basically every insurance company administrator in the industry.  With these agreements, we could shop around and find an insurance administrator that would take Boosted Boards on. Since then, we’ve consolidated our partners and expanded our toolset to solve problems for insurance administrators and end customers as well. Now, we don’t generally need any outside administrators for new products.

Part of the reason we expanded into customer experience was so that we could make sure the merchants had the best possible experience with us. When we set merchants up with insurance administrators, and the end customers had a bad experience with the administrator, the merchants would get upset with us. So in order to scale, we started to expand in order to own the full customer experience and make more merchants happy. 

Was there ever a moment when it all clicked and you knew you had the conviction to solve it? 

I was 22. I started noodling around with this idea to help merchants have the best experience with insurance administrators. For three months, I went to the same cafe for a few hours every day after work. I just went online, reading, and researching business plans. I had no idea what I was doing. I built a website for basically no reason. I talked to a ton of people to validate whether this idea could work, and see if those conversations could even lead to early customers. After three months, I was basically nowhere.

Then I went to Bonnaroo with ten friends. I bought a canopy tent from Walmart and the person checking me out asked if I wanted to buy a SquareTrade plan for it for $5, and I said sure. Without even thinking about it, I threw away the receipt for the contract as I walked out. I realized that the experience for Walmart and for me could be a lot better, and that was when I saw the opportunity.

What did you learn in the first six months and how did it influence where Clyde is now?

We were really fortunate in that the model was already built for us, to a degree. We had a concept that we knew was going to work. There were a ton of successful incumbents when we began, and it told us that product insurance works. We didn’t need to validate that. We just needed to develop a better way to get it into the customer’s hands. For us, we built a product that could be scalable from day one and then focused on who we went after. We haven’t had to tweak our product very much from the beginning.

What we learned about the most was how to scale, and how to sell. We were really lucky in one sense to not have to worry much about product development because of the established market. We learned far more about sales, how to turn one customer into ten customers, things like that.

What would you tell 22-year-old Brandon?

Your product doesn’t have to be perfect before your first launch. You’re better off getting it into people’s hands and getting feedback in order to improve. Sort of like “selling ahead of yourself.” We have four founders, all of whom are very product-focused people. We all want to sell something amazing. I would tell myself to take what I thought my MVP should be, cut it in half, and go with that at first. 

How does it feel to be a young founder in an older, established industry?

Last year I was named a top insurtech CEO and got invited to a photoshoot, and all of the other CEOs there were at least 20 years older than me. That felt surreal. I recently got chosen to be a speaker at Insurtech Connect on “Insurance in the Age of Ecommerce,” and was again by far the youngest person they filmed. I felt that. On a day-to-day basis, I don’t feel it as much because I’m not generally interacting with other founders in insurtech. But feeling so young has led me to surround myself with people who have more experience and expertise than I do. I want to hire people who have way more expertise than I do and learn from them.

Speaking of surrounding yourself with the right people, who else from the insurance world has been influential for you on this journey?

Yeah, one of them we hired. Her name is Kelly Hall. I knew her for around a year and a half before the hire. From the moment I met her, I thought she was going to be a great person to run a side of our business. In the insurance world, there’s a man called Michael Frosch, that everybody who reads this who knows the world of insurance will know. Outside of the insurance world though, I’ve had other mentors. One is an investor named Hooman Radfar, who has turned into a close friend and confidant. I’ve bounced ideas off of him. One person who I’d love to learn from is Michelle Obama. I just watched Becoming and I highly recommend it. Her whole thing is that everybody has a story, and I totally agree with that. Another guy early on who was important for my confidence and for answering questions is named Dylan Richard, who founded Modest, Inc., acquired by PayPal, and worked on the Obama campaign.

Have you ever hired somebody from a legacy insurance company?

Yes, we have. It tends to lead to a culture clash, but that doesn’t have to be a bad thing. The biggest difference in culture between a startup and an established business is that startups can move very, very fast. That’s what makes them so capable and so dangerous. Hires from legacy companies bring cultural differences, and we learn to respect cultural differences and learn from each other. You learn to value people’s differences in their experience and the way that they think. The knowledge that somebody brings to the table is so valuable that we are willing to work through cultural differences and find a happy medium.

How has the pandemic created tailwinds and headwinds for Clyde?

When COVID hit, and the world shut down, we went remote. From a work perspective, it’s been a pretty seamless transition. We are producing at a very high rate. From a pipeline perspective, for the first month or two, our pipeline stopped moving. Nobody got added, and nobody moved forward. Some of the companies in our pipeline closed down. Some of our current clients closed down. For all of the merchants that were still around, we saw a massive increase in the number of orders, and the proportion of people who purchased contracts almost doubled. Way more people were buying contracts once the pandemic hit. One reason for that I think is global uncertainty, which will eventually go away. But the growth in contracts has sustained. I think the reason for that is because people had to start buying everything online, which increased the average cost of a cart. Now instead of thinking about the cost of an insurance contract on top of the cost of an item, they’re thinking about the cost of the contract on top of the cost of their whole cart. Therefore it’s an easier decision to make.

This has changed the landscape dramatically for the insurance industry. If most purchases continue to happen online, and the insurance and warranty industry is run by incumbents, then the industry is going to halve in size. Most incumbents’ programs sell terribly online. Whereas Clyde performs 4x better online than most incumbents, to the point where now we’re only slightly worse than in-person sales. So overall, that shift has been great for us, and we’re starting to see our pipeline flow again and grow.

How does uncertainty affect program sales, even when some people have a tighter budget?

Now that most people are buying online, they’re buying things online that they would have typically bought in-store. Most people who insure a $500 product when they buy in-store are going to insure the same product when they buy online. And more big purchases are happening online. There’s also a chance that those who didn’t normally buy warranties are now spending money on them. Since online is the only outlet, we could see double the number of people buying warranties.

What are you investing in right now?

We’re investing in scalability. This means we’re investing in our success team, our implementation team, and our products. Our sales team is doing well and we’ll reinvest in that next year. If I had to give it a theme, we’re preparing for scale and continuing down the path that we’re already on.

Is there a company, person, or type of product that you dream of partnering with?

We would love to partner with PayPal and Munich Re. Really anybody who interacts with a consumer in a financial way is an awesome partner for Clyde. This means any credit card company too. Munich Re is a good example of a partner because they are willing to get creative to capture market share and build special products. Clyde is so well-positioned to deliver products directly into a consumer’s hands through our merchant partnerships. We have a lot of ideas and partners who want to enable that, but Munich Re has shown that they’re in a position to move quickly. IKEA is another example of this because of its creativity and how our products could integrate.