How an insurance adjuster got out of the cubicle and modernized an industry

Today’s guest is unusual. He worked at AAA for nearly a decade.

How does a guy who worked in insurance go on to be an entrepreneur. He’s bootstrapped a profitable business. I want to find out how.

Ernie Bray is the founder of AutocClaims Direct, delivers a virtual claims workflow technology that flexes to an auto insurer’s specific business needs. 

I’ll explain what that means in the interview.

Ernie Bray

Ernie Bray

AutoClaims Direct

Ernie Bray is the founder of AutocClaims Direct, delivers a virtual claims workflow technology that flexes to an auto insurer’s specific business needs. 


Full Interview Transcript

Andrew: Hey, everyone. My name is Andrew Warner. I’m the founder of, where I interview entrepreneurs about how they built their businesses, and today’s guest is kind of unusual in that . . . I always ask my assistant to put together a background on the guest and I’m looking at someone whose background shows 1995 to 2003 insurance professional at AAA, and then 2003 to present he’s a founder. How does a guy who worked at AAA go on to become an entrepreneur and bootstrap a profitable business? That’s the question that I want to find out the answer to in this interview.

The name of the entrepreneur is Ernie Bray. He runs AutoClaims Direct. Here’s what AutoClaims Direct does. I’ve never been in a car accident. Ernie hasn’t either. But if I were to get into an auto accident, I think what I would do is I would call my insurance company, and my understanding is the insurance company might tell me to wait, and then they would send an appraiser over to the house to look at what happened to my car. And then I would wait a little bit more, and then maybe at some point in the end I would get my money.

What Ernie’s software allows me to do is just get a link from my insurance company that fires up a website that I can use to take a picture of the accident, answer some questions, and automatically send that data directly to my insurance company, which speeds up the process and gives me a much more mobile, modern experience. If I prefer, I can also go into an appraiser . . . find an appraiser from their network that I prefer and use them, or I can use one of the auto shops that . . . actually I could even use my own auto shop, right? Is that . . .

Ernie: That’s correct. You got it.

Andrew: Right? And you would take all that data and send it using electronics, computers, software, not paperwork, not manila folders, not Polaroids, all the way over to the insurance company and help speed things along. That’s the idea behind AutoClaims Direct.

This interview is sponsored by two great companies. The first will help you send out smart email marketing. I’ll tell you later what that means. It’s called Active Campaign. And the second sponsor will help you host your website right. It’s called HostGator, but I’ll tell you more about those companies later.

First, Ernie, welcome.

Ernie: Hey. Glad to be on, Andrew. Appreciate it.

Andrew: Let me hit you right away with a revenue question. What are you guys bringing in annually? Let’s look back at 2017. What was the revenue?

Ernie: Okay. We’re at $17 million.

Andrew: 17 million?

Ernie: Yeah.

Andrew: No outside funding at all?

Ernie: No outside funding.

Andrew: Not even, like, a friend or a family member who kicked in a $100,000?

Ernie: Nope. We bootstrapped it from the beginning. [inaudible 00:02:33]

Andrew: How profitable are you guys?

Ernie: Oh, we’re doing great. I mean, we’re very profitable. Every year we’ve been continuing to . . . I mean, every year 15 years of profitability. It’s insane.

Andrew: And you’re taking the money off the table sometimes into your own personal account.

Ernie: No. Actually we reinvest in the company. I keep reinvesting because I see big growth. There’s a lot of opportunity in this sector right now, and my whole mindset has been just grow, grow, grow and continue to reinvest in the company.

Andrew: Speaking of mindset, the reason why I’m seeing a guy who worked at AAA who then becomes an entrepreneur is you came from a background where entrepreneurship wasn’t an option. What did your parents say? What did your parents do and what was their approach to entrepreneurship?

Ernie: Well, I mean, you go back in my background, I was raised in a family of teachers. My grandmother, she taught in a one-room schoolhouse. My uncle, my dad, my aunt. I was just brought up with education that’s where I was reared in. That was it. Get good grades, go to school, go to college, get a degree, go find a job and then work there. And it’s kind of that mindset . . . I don’t know, you know the mindset of, “Go there. You’re going to work forever and get a retirement and move on.

I thought about being a teacher. I kind of had that mindset. I was a basketball player. So I played college basketball. My summers were really around . . . Heck, I used to work for Magic Johnson’s camp. Used to work with Magic Johnson, Reggie Miller. All those guys were at these summer camps. That’s my job as a . . . I was a counselor, yeah. So I was all really just focused on basketball. Basketball, school, and that was it. But I really never had any . . . you know, it wasn’t talked about, building a business. No, we didn’t . . . I had no idea. So I did that route, went there, went to college, graduated.

Andrew: So that’s how you ended up as an insurance professional.

Ernie: Yeah, I didn’t know what to do . . . [inaudible 00:04:16]

Andrew: And when you’re looking around as this insurance professional you told me before we started about Polaroids. Tell me about the process back in the late ’90s early 2000s. This is after Amazon had already showed that you can sell books online. This is after we knew that we can go and find the right restaurant by searching for it. You meanwhile were working at these companies. And it wasn’t just at AAA. It was also Progressive. It was also Access Insurance Company. Tell me what did you see with all this paperwork being done?

Ernie: So I got in the job. And you’re in their cubicle. You’re being trained as an adjuster, and you start to see . . . you look behind and see manila folders, hundreds, literally 250 to 300 assigned to each adjuster. You would see an era where you’re going out taking Polaroid pictures of vehicles that are damaged. You’re literally taking scotch tape and taping them to a little photo template. You’re taking 35 millimeters to back the damage up and have those developed at a later date. Put them in a little plastic bag, staple them to a file, and then . . . some of us handwriting out what’s damaged to a car, taking in some manuals . . . This is right before they start even having systems out there that could actually write estimates, you were taking manuals and literally transferring them over and adding up repair cost and giving it to a vehicle owner to have them take to a shop and give them a check to have their car fixed.

I was sitting in here and I’m a computer guy. I mean, I was using Macs back when there was the Apple IIe coding BASIC. And so I’m in here at these companies looking . . . everything is so antiquated I’m like, “Wait a minute. This is just . . . this is not a fun job.” And I just started not really liking what I was doing. I was, like, I’m in a cubicle but I had that drive inside that go, “You know, something is just not right.” Like you said before, I was never an entrepreneur. Nobody’s ever told me about it, so I’m like, “I don’t like this. There’s a lack of efficiency in here.” You go to management. Management would be like, “Oh, that’s just the way we do it. We do that for year after year after year.” And I’m sitting here going, “Wait a minute. Something is just not right.”

Andrew: You know what? By the way, I was googling as we were talking to get a sense of when the Electronic Signatures Act was enacted, I guess is the word. This is June 30th, 2000. That’s when President Clinton said that people could sign documents online. So if the government had come around to the idea that people could sign contracts and agreements online and their digital signature is valid, it is surprising actually that a few years later you were still in the paper, manila, “This is the way we’re doing it,” world. And so you envisioned something. What did you envision as the solution that you could come up with 2003 technology?

Ernie: Well, at the time . . . And my story really kind of goes to . . . I’ll talk about some of my other efforts in entrepreneurship during this time. So during this time, I wasn’t in a vacuum. I was starting to try other entrepreneurial ideas, many that didn’t really pan out. So I wasn’t just planning to stay in the industry.

Andrew: For example give me an example of something that you worked on.

Ernie: Well okay, so let me give you an example. My brother is really into country music, so he started 1996 one of the first online country music magazines and we were actually. This is sort of our first entrepreneurial thing. My brother and I said, “Okay, let’s . . . ” He likes the concerts, he wants to go. So we actually talked to the record labels, got permission to play like small snippets and we got albums sent to us where we did reviews. We actually got tickets to concerts, interviewed Garth Brooks and people like that.

And for [inaudible 00:07:38] having just been out of high school for a year and then a year later he and I starting this “business”, and I don’t . . . you know, we didn’t really know how to monetize. That was the thing, hey, but we were selling some shirts, we were selling concert photographs. We were just trying to figure it out on our own. This was when I was working at the insurance company. So I said, “Oh let’s try to start this business.” We tried to get it going. We did for two or three years and then we kind of shuttered that. Then next thing I was doing during my insurance time . . .

Andrew: This is . . . by the way, it’s called Kicking Country, am I right?

Ernie: You got it. Yeah, exactly.

Andrew: Which is a hard thing to google because apparently that’s a popular name for radio stations.

Ernie: They took it over. Yeah.

Andrew: So I see, like, 103 KKCN is called Kicking Country. 925 is called Kicking Country in Charleston, South Carolina. But basically what we’re talking about at that point is a blog, and you couldn’t monetize a blog. I get it. That’s an early entrepreneurial effort but it’s not a really big one yet. Okay.

Ernie: Exactly, so then I said, “Okay, what do I want to do next?” Okay, then I said, “Well, let’s try maybe some online fitness coaching.” So I started to play around with the idea of launching that. It didn’t really pan out. Then I said, “Okay, maybe I want to try real estate.” So I went in and got a real estate license, tried to sell real estate, sold about four houses, and really didn’t have passion for it. I was just like I was just trying to find a way out of the insurance industry.

Andrew: I see. Somewhere out of the manila world that you are in, right. But still, even though Bill Clinton signed that act that said that people could actually signed contracts online doesn’t mean that the technology was at the point where somebody can go and take a picture of their car. I mean, back then they’d have to take their laptop which probably didn’t have a webcam attached to it and then they’d have to find . . . So that didn’t exist. Give me a vision. First version, what did you imagine you could put together 2003?

Ernie: I said, “Okay, why can’t this whole process be digitized, at least some way we’re using digital images being sent back and forth to the insurance company? Why can’t we . . .

Andrew: From the individual?

Ernie: Yeah. Why can’t we even get them to take their photographs and we get the email and email and have it stored.

Andrew: But how would they even get a picture back then?

Ernie: Like, in 2003, you can take a camera . . . you can just take your own digital camera and upload it, put it on your computer and then send it [inaudible 00:09:43].

Andrew: So you’re saying look. They’re going to take a digital camera. Those old Canons that used to sell for $100 to $200 bucks that some people have at that point. You say, “Look, why can’t someone just go and take a picture. We’re not talking about the whole market here. But there’s some subset of the market that already has digital cameras. We can go after them.” That’s what you’re envisioning?

Ernie: Right. And not even just the vehicle owners themselves, event he appraisers in the field. Why not just have those digital images sent back and forth versus using 35 millimeter and Polaroids. And I remember when we were . . . And we’ll talk about when we first launched the company. We actually went in to some insurance companies and they go, “We don’t even use email.” And I’m like, “Wait a minute. We couldn’t even send you a digital image.” They’re like, “No, we have to have everything . . . send it to FedEx, print it out.” And that was really 2003, and we were like, “Wow.”

Andrew: So even if you could get the consumer to use the technology and go faster they still would insist on slowing it down by getting FedEx or faxes. Okay. Were you thinking the insurance adjusters who you’re going to go after? Were you thinking the customer who got into an accident or you were thinking everything?

Ernie: The whole process.

Andrew: I see.

Ernie: Sitting in that cubicle, seeing how paper-intensive the process was for all these years, I was just like, “Well, there’s got to be a way if you could digitally get the [images 00:10:53] over, you get that estimate done in hours, even the person going out doing the appraisals, even the field appraisers that could do it, the whole process could be sped up versus waiting for mail to go along and waiting . . . ”

Andrew: What’s the advantage of having it be sped up for the insurance . . . And let me tell you why. A friend of mine is actually selling chatbots to major brands, and I thought it would be a no-brainer, go in there and show them the numbers how you can actually increase conversions. He said shockingly if you show them numbers for conversions, they don’t want to work with you because then they’re on the hook internally because you’re not selling to the whole company you’re selling to an individual, then that individual is on the hook internally to maintain those numbers and they don’t want to deal with you. So it’s strange, but I feel like the insurance company would actually be in a better position if they didn’t process faster. So was there a pain point that you were solving for the insurance company?

Ernie: Yeah, it is speed. So the issue is J.D. Power, they do reports every year on customer satisfaction of people who have insurance policies, and it’s always around speeding up the process, because every time when somebody’s vehicle is out of commission if you get in an auto accident, it’s a very cumbersome process. It’s stressful. I mean, you get in an accident you’re stressed out, you might’ve got hit from behind, let’s say you got some minor injury, your neck’s hurt. Now your car is out of commission. You need to commute to work. You need to pick up your kids, your family, whatever. Now your car has to go to a body shop.

Then what am I going to do? Do I get a rental car? How do I get a car? How do I get transportation? All these questions start to come up and then the longer a claim takes the higher level there’s dissatisfaction. A customer is like, “When is my car going to be fixed?” So the quicker you can get that person photos, estimate, repair cost even if it’s just initial because a lot of times when you go to the shop they’re going to find more when they take it apart, but if you can get that process moving quicker that person knows, “Okay, my car is going to be dropped off on Thursday. The shop is going to work on it. It will be picked up by next Wednesday. I only need the rental car for a week and now I can get my life back and going.”

Andrew: So the money that they’re making by dragging their heels isn’t worth the negative feedback that they’re going to get from their customers.

Ernie: It’s all about customer service.

Andrew: Okay, all right. So you saw the opportunity here. I don’t know though how a guy who basically created a blog before blogging was a thing so it’s still impressive, before WordPress existed, but I still don’t understand how a guy with your experience can create a site that would instill confidence in the insurance business. Who created the software?

Ernie: Well, we had two business partners and my wife. So we had four people who started the company, my wife and two other business partners. We started the company. I had one guy who was all into development. I had one person handle sales.

Andrew: I’m getting a sense this guy is not with the company anymore.

Ernie: No, no longer with the company.

Andrew: He’s not? Okay.

Ernie: No longer with the company.

Andrew: So you partnered up with him? Or what was the deal with him?

Ernie: Yeah, we partnered up with him and another person that I had met through a person I had worked for when I was at Progressive. It was a sister-in-law of a friend that I had. She was into sales. She was a salesperson. She had no experience in the industry, just very little. Now she’s our top person. After working for 15 years, she knows the business inside and out. But we were really, truly so new with the part we were just didn’t even know what the heck we were doing. I mean, one person develops the software. I dictated how it needs to be built because I saw how things need to be done. We built the software. One person started doing sales. My wife and I did the customer service. I did the sort of the quality control and the whole managing the whole process of it.

Andrew: What was the software? Was it just forms, a series of forms at the time?

Ernie: What it was is a workflow platform. So it actually enabled an insurance company to have their claims come over, they could track their adjusters log-in to the software, they could see where everything is in real-time. Then it connects the whole network of independent appraisers in all the vendor networks that we have, and then it also connects all the data to the insurance company so they could see cycle-time, what the average repair cost of these cars are, where they’re having accidents. I mean, you can start to say, “Wow, we’re getting a lot of accidents in downtown Los Angeles versus less in Riverside or more in San Francisco.” They can start to use it. And so what happened is when we started presenting the data to the carriers, when we’d have meetings, they would say, “Wait a minute. You have all this data? You can actually show us where we’re having trends? Trending reports? This is . . . ”

Andrew: It was basically project management for the auto industry, something that allowed them to manage their interaction with customers. We’re not yet talking about a website where a consumer can go and upload their photos. I see. How did you know that was the right thing to start off with?

Ernie: Well, because to break into the market you had to have that first break in. We led with services. So we led with our service offerings, and there were bigger competitors in the market. There’s a few billion-dollar companies that have a version of workflow platform.

Andrew: At the time?

Ernie: Yeah, when we at the time. They’re still around, but what we did is we said, “Okay, we know we’re going to build something that’s a lot smoother, a lot easier to manage, but we would lead with services.” So we’d say, “Hey, you know what, we can handle all of your services with our nationwide network.”

Andrew: What do you mean by services?

Ernie: Services is somebody going out taking photographs, your field appraiser, like the actual [vendor 00:16:01]

Andrew: I see. And insurance companies will work with multiple companies on this. They’ll give you a shot, am I right?

Ernie: Yeah.

Andrew: Because you know exclusivity and the network of appraisers is you calling up a bunch of appraisers who are working with the insurance companies already and saying to them “Will you work with me?” And they say, “I don’t care. Are you going to pay me? Is it going to be the same process?” Am I thinking right, or am I oversimplifying?

Ernie: You’re right. You’re just another vendor in the game. Exactly, so you have to get your feet wet. So we would go out and we would literally pound the pavement. I remember my first client we had in this one company. I went in by myself, did a pitch and they said, “Fine. We’ll give you a shot. We’re going to give you a claim in Mammoth Lakes.” And I mean, there’s, like, nobody really living in Mammoth Lakes that knows an expert on writing an auto-damage appraisal. So they gave me the most difficult claim. We scrambled. We found somebody to do it. We got it done. Okay, fine. That opened the door to a little bit more.

Andrew: They start off with a single claim. They say, “Look, there’s an accident over here at this city.” And you didn’t have someone in a network. It doesn’t sound like you had a network. You went to the Yellow Pages, Google, you start searching, whatever it is it takes, you find a person, you tell him you have to work with us. At that point you have the software to tell them you have to use my software.

Ernie: No, we actually had to help him . . . Well, they would use it, but you’d had to guide him through because we didn’t have a reputation at the time. He’s like, “Hey, I work for four or five other companies. Why do I even . . . Oh fine, I’ll take your claim. I’ll do it.” And then they would do it because they got paid for it, but they would do it and we’d help them through it. But then catering and getting these people to start using the system, even the vendor networks, was hard at first.

Andrew: You’d have to get this person who you’re paying to use your software, which is buggy so you would teach your software . . . I mean, I don’t know how buggy it is. All new software is buggy, but it’s new. You teach it to him. I see, and then the advantage of doing that is you also get to see the problems that he has with it and you get to understand how you can make it better for people like him.

Ernie: You’re hitting exactly on it the head. So what would happen over time is even the vendor networks would say, “Wow, your system is easier to use than all the other companies I have to work for.” And in fact most of the companies at the time said, “Well, I just email my assignments in.” And so what we started to find out what was going on is the independent appraisal companies in the industry were using dispatch method of just they would email out assignments to people, and then they would wait for the emails to come back. There was no way to track them unless you just track them in email. So our system . . .

Andrew: So when you mean track them. What is there to track? Did the person go and schedule an appointment? Did the person go the appointment? Did the person upload? That’s the thing.

Ernie: Every aspect of it. Have you made contact with the owner? When are you going to see the car? And all these massive emails would be coming back. So when our system just enabled them to just simply put a note in, set appointments, track everything, it made their life . . . So all of a sudden other appraisers would talk about it, “Hey, you should be in the ACD AutoClaims Direct network.” You should be in the network. Then our network started to grow. People would be calling us. Then . . .

Andrew: Got it. But you’re basically taking on the kind of job that any Tom, Dick, and Harry with a computer could take on. You’re making phone calls, researching, finding people. You’re basically providing the same service, but your margins are smaller because you also have to invest in software at the time. But if your software gets to the place where it’s so good that it makes things more efficient, then you’re going to get more business, you’re going to get more people who are willing to work with you as appraisers, and you’re going to speed up the process which will save you money. Am I right about that?

Ernie: You’re right on.

Andrew: This is a really smart model.

Ernie: So that’s what happened. So as we were building the network, then we had the insurance companies, like we were talking before how you’re trying to just go get that one claim. You’re in there. You’re doing a presentation. We’ll give you a shot. We’ll give you two claims here, and then what we started to find out as we started getting some of the worst clients in the industry, some of the worst insurance companies because nobody else wanted them. You’re going to get some of the bad clients, but you’re just desperate to take on the work at first. That was one of the first things we learned, you know?

Andrew: You know, let’s come back in a moment and say what makes them the worst. Why are they the worst clients? I want to understand how you put together this model, because this is the kind of model that when you think about it on a spreadsheet, it kind of makes sense, but you don’t seem to me like a spreadsheet jockey, and I’m wondering how you came up with the business model for it and I have a few other follow-up questions about how you got those early customers.

But first, I’ve got to tell you and everyone else about this software called Active Campaign for marketing automation. Do you guys do any marketing automation via email?

Ernie: Oh yeah, we do.

Andrew: What’s one system that you’re especially proud of having built out?

Ernie: You mean companies we used or just . . . ?

Andrew: I’ll give you an example. Here’s one of the marketing automation customer journeys that we created. When someone comes to my site, we know whether that person is interested in learning how to increase sales or how to start a company or how to hire, etc., and then based on that we can send them an email recommending an interview that says, “Here’s one that’s going to help you hire. Here’s an email that can help you start your company.” And the only reason we could do that is because we tag you. When you check in an interview, we always know forever and ever what the first interview is that brought in the door, and that then starts a series of emails where, based on what you click, we tag you as being in a certain place with a certain need, and then we can take care of you. Did you build anything like that for yourselves?

Ernie: We built some small automated tools that for insurance companies, yes.

Andrew: Okay. Is there one that you can talk about here that you’re proud of?

Ernie: It’s nothing really that exciting. A lot of it is just basic marketing, continuing giving updates of data and reporting. That’s one of the major things that we do is giving carriers automated updates, and that’s something they really want. It’s more about data. It’s not necessarily marketing.

Andrew: You know what, in our space what I used to think is there’s going to be one thing that’s going to create a huge impact. What I found instead is that that was a mistaken way of thinking about marketing for me. There’s not ever . . . Well, not ever. There’s rarely this one big things that are going to have a big impact, but there are a lot of little tweaks that you can make that will, in general, not only create a big impact but also create a wall that keeps you ahead of your competition and keeps them out of your space.

And the tweaks are things like what if the second email we send people introduces Andrew as opposed to introducing the site. Maybe people need to know who Andrew is as a way of trusting the site. What if the first thing we do is we send you an email asking you to buy, and then we wait . . . and I’m going to be open with everyone, we wait one hour. If you don’t buy within the hour, we know you’re not going to buy that thing that we offered you right away, and we come back and say here’s a free gift. Here’s the thing that you asked to pay for. We gave you an hour. You didn’t buy it. We come back and say, “Hey, you know what? Here’s a free gift.” What we’ve discovered was that first of all people who don’t buy within an hour aren’t going to buy within a day. They’re probably just not ready to buy, and we put them off by promoting a sale to them.

Number two, if we first say, “Hey, this interview you wanted is for sale.” And then we come back an hour later and we give it to you for free, then there’s some goodwill. We’ve shown you that these interviews aren’t some freebies that you could find online. It’s actually exclusive content and we’re giving it to you for free, which creates a nice relationship, and a lot of people hit reply and say thank you on that. Those little tweaks you can’t do using standard, dopey email software which is all based about the email newsletter.

All email systems for a long time were based on a company saying, “I have something to send out. I’m going to do,” and this phrase always pisses me off, “an email blast.” No, no blasting. Target the right people with the right message. In fact, not even target, let your software automatically know what people need and send it out and give your team something to tweak on a week-by-week basis. We would get together every single week, I have notes from these meetings, to try to tweak our onboarding process so that the person who comes in to Mixergy for the first time, never heard of us, gets an onboarding experience that tells them who we’re about, and the way to do that is email automation.

Up until recently I got to tell you, Aaron . . . Ernie. Up until recently, Ernie, email automation was a pain in the butt. Very expensive software that was only managed by people who were certified professionals of whatever company. It takes forever to put together, and if the person leaves or you fired the company that set it up, you’re out of luck. You have to start fresh because it’s such a complicated thing.

Active Campaign said we’re going to make this so simple that anyone can manage it and so inexpensive that there’s no reason why even someone who’s using the cheap old email blast software or newsletter software shouldn’t be signing up for it and that is why they’ve been here advertising on Mixergy. They want to get the word about it and the reason they keep buying ads here is because this is working. People are signing up. They’re sticking with it. They’re getting results and so they continue to up their accounts with Active Campaign.

If anyone out there is listening to me you guys have to check out Active Campaign, not just, but the URL that frankly gives me credit so I can earn a little bit of money from the ads here, and number two that will give you, in turn, guys, your second month free, a free-trial so you can start it right away, two free one-on-one sessions so you don’t just end up with this software and say, “Andrew told me it could do something, but I don’t have time for it.” No, one session where they show you exactly how you can use it for your business, a second follow-up session where you can come back in and say, “Well, here are the issues that I had with it.” They’re going to give you that, and they’re also going to migrate you for free if you’re with one of those dopey email services that I mentioned. Do not be embarrassed. They will migrate you for free. Here’s the special URL,

That was a great a read. That wasn’t even a read. I don’t read ads.

Ernie: You’re great man. So right off the top.

Andrew: The one problem with me not . . . There are two problems with me not reading ads. Number one is quality control. Sometimes I suck at the ad and I have to be open about it. And number two, sometimes I’ll say things that a sponsor is insulted by, and thankfully they say, “All right, Andrew, we can make it work.” Like I accidentally called one of my sponsors by a dead company’s name.

Ernie: Oh my gosh.

Andrew: They were a little hurt by that. We made right. We made right. But I think that it adds a lot more credibility and interest to the interview.

Let’s go into worst clients. What makes a client so bad? You just go and take a picture of someone’s car and move on?

Ernie: I know it sounds so simple doesn’t it? It still sounds simple.

Andrew: Yeah, I could do it right now.

Ernie: I mean, the problem is you’re in an industry where there’s people that are difficult to deal with. And sometimes a lot of claims managers are in . . . there’s a lot of people in positions . . . and this is one of the things that got me grumpy when I was working for the insurance company. That’s why I kind of hated my job. There was a lot of people who were not process-oriented or even knew how to deal with people very well who were promoted to management positions. So you would have all these, in my opinion, just unqualified people being promoted in these positions.

So when we were on the flip side as a vendor or to these insurance companies, we had to deal with the people who were very difficult. They would make every claim a problem. When I say a problem, like criticizing why cycle times were slow, not using common sense, and they were just difficult to deal with. And so what happened is all of our competitors in the service side, they knew not to even touch these clients. So that was our entry into the business is sometimes when you start out you have to kind of take anything . . . you know, whatever you can get, but that was a big lesson I learned after a while is sometimes you got to fire people, even when you can’t afford to.

Andrew: So even though money was coming in the door, they just weren’t worth the effort.

Ernie: They weren’t worth the effort. They were not worth the effort.

Andrew: My entrepreneurship professor at NYU, Craig Boyce, the best professor that I had there, told me that when his firm was hired to work with one of the big phone companies, they intentionally found a bucket of bad customers and they started seeding it to a competitor. The competitor saw a big, big traction in that space, and they knew it was college students, and they knew that the competitor was going to struggle and, as a result, financially get hurt. I see. So that’s essentially what was happening to you. Did it help at all that you were stuck into this? Did it help that you at least had some customers or was it nothing but bad?

Ernie: So what it did was it gave us that credibility to at least get some business coming in. So we had some money coming in the door. We were able to build some credibility with some of our data, and just being in the business and actually learning some of the things as we were going, we just kept pitching. We kept going to other clients. But then we would start to learn about what these difficult clients were so when we pitched to clients that were actually potentially good, they were really amazed with what we were doing, so it made it a lot easier. So then once we started to get some better clients on and we were starting to do better, I had to make a decision.

We were making good revenue from this client, but I, one day, I just said to myself, “You know what, we are taking so much time.” It felt like 50% to 60% of our time was focused on this one client where we were actually hurting ourselves. There is still so much business out there that you have to take that one step back so you can take two steps forward and without no business training and anything at all, so you know what? We got to make the decision to fire them. Just common sense. Get rid of them so we can devote all of our energies into new business development. And that was probably the first decision that I made that was kind of hard but actually paid off big, and I’m like wow, we actually grew bigger because of that.

Andrew: Yeah. Counterintuitive, but I could see how that makes sense in retrospect. All right, and still you had to go on and get customers. How did you get customers?

Ernie: See this business . . . traditional marketing, if you’re just going to go market, it doesn’t work. This is a relationship business. This is a business where claims managers, vice-president of claims . . . It’s a big industry, but it’s small so you have to go literally all to the conferences, go to every major conference there is. You have to go get appointments. Go in there and pitch it right to them and to some of the even the lowest tiers . . .

Andrew: In their office.

Ernie: In their office, in the boardroom.

Andrew: So you’re working like mad. I picture you like Bud Fox from the movie “Wall Street” calling all the time until you get into the office of the guy who’s getting desired.

Ernie: That’s what you’re doing. You’re [inaudible 00:29:12]

Andrew: Is it always a guy by the way? I keep saying guy.

Ernie: In our sales?

Andrew: No, no, like, the people you’re pitching to. It seems like it’s a very old boys club type of environment.

Ernie: It used to be. It’s actually changing now. It’s actually changing now. What’s great is that there’s a lot of millennials and there’s a lot of people even my age that are not coming into the management positions there where they love . . . they grew up with technology. They love that you can go pitch them this, and they see it, they’re like, “Yeah, this makes total sense. Why would I not want to have my staff live in real time having a modern experience versus using all this old technology?” It’s becoming easier.

Andrew: But in the beginning it wasn’t like that. In the beginning, it was you talking to people who didn’t have computer experience, who maybe even didn’t have a computer on their desks, and you were pitching to them one at a time, calling up, sending the postcards that you were famous for sending out. Were these handwritten postcards, or did you use a service?

Ernie: We used a service at the time, and I would write handwritten notes sometimes on the back of them, yep.

Andrew: I got a note here from my producer who talked to you. You said there was a guy you went and talked to. This person pulled out a folder with three years of postcards that you sent them in marketing material and said, “I’ve been hearing from you guys for three years. All right, I’m ready to listen.”

Ernie: Yep, and I remember we were filling out these postcards over and over every three months whatever, every month. And then I went in there with my head of sales, one of my co-founders, and the guy literally pulled out the folder and I saw all the stuff we’ve been sending for three years and because you had to think . . . you had to think analogue. I got to mail out things to these people because they’re not going to read an email. They’re not going to go online. They’re not going to see any technology. But this guy collected them all and you never know, I’m a big believer, you never know when that right time is going to hit. And I don’t know. What’s the saying, like, you got to hit somebody seven times before they even remember your name or whatever, those kind of . . .

Andrew: I feel like there’s no science behind that, but it’s sales people saying it to each other to just remember keep going, keep going, keep . . .

Ernie: Yeah, it might just be . . . yeah.

Andrew: You also said to the producer this was a real struggle. I don’t see the struggle. I’m looking at you. You’re a guy who had an idea. You’re making phone calls. You got customers. You were bringing in sales. You were bringing in revenue. You are not flush, but I don’t see the struggle. Where’s the struggle in these days?

Ernie: I think the struggle at the time those days was getting people to even take the meetings with you. I mean, I . . .

Andrew: But that’s part of a sale . . . Did you take it personally? Was there a time when you said, “These people don’t like me”? Tell me about that. Let’s get personal. Let’s get real here.

Ernie: Yeah, yeah. I mean, I’m a very competitive person coming back from my sports background playing basketball. I’m hyper competitive, and I’m a person who takes and lives . . . I mean, anybody that knows me in my company or anybody that knows me, high energy I take it personal. When somebody says that we messed up or even a client today says we messed up, I have a hard time not taking it personal and digging in and finding what . . . Hey, this is our reputation on the line. So when I’m presenting something and then pitching something that’s really good and you’re being told, “No,” or you’re being told, “We’ll think about it,” or, “You know what, man, whatever,” I take it personal, but I think in some ways I enjoy that. I enjoy that fight. To me, this is . . .

Andrew: You like that they’re pushing you because you want to show them that you’re better than the . . .

Ernie: Exactly.

Andrew: You know what it is for me? I admire so many entrepreneurs who’ve built billion dollar businesses. Everything that I do to start off always seems like nothing in comparison, and then not only is it nothing in comparison, but now I’m being rejected or not even listened to, so I’m doing nothing in comparison to what I’m imagining I want to do and I’m being rejected and that makes me feel like both, “Who are these people to reject me? Don’t they know how great I am?” And at the same time, “What the hell am I doing with this petty little thing?”

And so that’s the head game that I’m going through, and I deal with it because I also focus on you have to fight back. You have to keep going. I have all these stories of entrepreneurs I admire who fought through it, but I have both sides and I have to deal with it. Tell me yours. When you’re feeling at your lowest, what’s going on in your head? Let’s get open here.

Ernie: So I’m the kind of person that . . . I remember when we had sold our house. So what we did is we started the company. I sold my house. Lived off for basically the first year and a half taking no pay. My wife and I, we just didn’t take a salary. So we had enough money when we sold. We moved to Arizona at the time and had a smaller house, less cost of living. And I just remember when I would be stressed in the middle of the night wondering how am I going to, you know . . . How are we going to live? How are we going to make this work? How are we going to do all these different things? I would just get up and work. Drive myself.

Because when you’re in startup, there’s always something you can do to move your company forward, whether it’s writing articles, trying to get thought leadership out there, whether it’s marketing material. Any time I got down, I said to myself, “What am I going to do to work harder? What am I going to do to add value so I can get one step up in the competition?” It kind of goes back to sort of that. You’ve heard sports athletes say it. My dad used to tell me, “Hey, if you’re sitting on the couch watching TV relaxed and somebody else is out there on the court practicing, they’re working harder to beat you when it’s game time.” And so I take kind of that kind of competitive mindset to, “Okay. If our competitors are going to be relaxing, I’m going to be working two times as hard. I’m going to work 10x as . . .” You know?

Andrew: You know what? I’m like that too, and I’m worried because everyone tells me that you’re going to burn out or you can’t continue like that. I see you’re continuing like this. Did you have a period there where you couldn’t keep going, where you just hit some kind of a wall?

Ernie: I think it’s in my personality. It’s in my genes probably.

Andrew: Are you the one who sent us . . . Be open. Are you the one who honestly personally sent an email in to my team to pitch you on being here, or was it an assistant using your name?

Ernie: No, it was me.

Andrew: Yeah, what is this? You know you could just have an assistant go in and say, “Here are the numbers and here’s the revenue. Would you have my boss on?” There’s cache in that. I couldn’t believe you would send it in yourself.

Ernie: I think the thing is I want to tell my story because I think it can inspire others out there. There’s a lot of people I think that could be inspired . . .

Andrew: Yeah, but it’s also good content marketing. You have some of the best SEO out there, and I’ll tell you why. When I google people, I could go to the first page and see negative stuff. I go to second and third page I can’t do with you because you mastered the whole freaking thing, right? First of all, the top results are your social profiles. Then there is Glassdoor, which you guys are ranking high for, and there’s positive . . . This is part of it. You also are on IdeaMensch and this and . . . . Yes, you want to give back, but also you’re a smart marketer who is not relenting frankly. Can you relax? Are you the kind of person who can go off on a beach, go on a bike ride, play basketball and forget about it all?

Ernie: Honestly, you want the real truth? I have a hard time with that.

Andrew: You do?

Ernie: I got my brother is telling me I got to relax more. He’s saying, “You know what? You got to enjoy life.” I agree. I have passions to relax, go out and shoot baskets. I do that, but it’s hard for me to turn it off sometimes because . . . I don’t know. When you’re passionate about something and you enjoy what you’ve built and you want to keep it going, it’s kind of like I kind of feel like if you’re pushing . . . it’s like almost pushing a boulder uphill. If you’re not keep pushing, it’s going to roll back on top of you, so you got to keep that momentum.

Andrew: And you’re married to somebody who’s in the business, so you don’t even get a break from that. Last night I could say to Olivia, “You know what? I had a hard day. I don’t want to talk about it. Tell me about this letter that you wrote for your work.”

Ernie: Yeah, she was just talking about my breakfast today. I had breakfast today. My wife and I were talking. Next thing I know we’re talking about a client that we had a meeting with and we’re having a meeting with later on the phone. Next thing it turns into business so . . . My kids, my two boys, they pretty much vicariously they know all about business too. They’re hearing me talk about it all the time, so it’s like they kind of live it as well.

My 11-year old right now, he wants to find a way to start a business. He says, “Hey, I want to start selling some of my art online. I want to start this.” He’s in coding this thing called Roblox. So he’s coding, he’s doing design on Adobe. He’s already [inaudible 00:36:59]. I want to start my business. Can I create my own account so I can put my own money in it? I’m like, “Well, okay. All right.”

Andrew: You know what? I was going to say. I feel like on a marriage it’s got to be rough, but for kids it’s got to be great, because how many kids are living that “Wonder Years” life where the kid in the “Wonder Years” didn’t even know . . . Arnold didn’t even know what his dad did for a living or was it an old Woody Allen movie. Most kids don’t know what their parents do. They don’t know what their friends do. But as an entrepreneur, if you’re bringing home, you’re talking about it, they get a sense of business from so many different angles even if they never become entrepreneurs and they work for someone to know what the boss is thinking is a way to work with the boss that most people don’t have. All right, I get it. Is this prying a little too much? You seem comfortable with it.

Ernie: No, I’m fine with it, yeah.

Andrew: I’m happy with these questions. I’m glad that you’re open about this stuff. The only thing I wish is that you would’ve cried. I’ve never had a single person crying on here and I get so open with people.

Ernie: No, I can’t cry about it.

Andrew: No, I think it’s my intensity. If your therapist asked you these questions with a little less intensity, maybe you start to tear up, but if Andrew is pounding away with this aggressiveness, there’s no crying.

Ernie: Yeah, fire away. Yeah.

Andrew: You still play basketball?

Ernie: Yes, I do. I don’t play any leagues. I just go out and shoot at my court at my house, and yeah, I’m a three-point shooter. That’s my specialty.

Andrew: That’s impressive. That’s got to impress the kids.

Ernie: Yeah.

Andrew: The producer told me that you’ve got a photo of your lowest point. Something to do with court. And we’ll get into the balance and the high because we didn’t get into that yet. Why don’t we just say one more thing about that? What is this photo that you have that maybe we can post on our site? What happened during that time?

Ernie: Well, it’s a photo of me during a mediation. When there was a lawsuit that I don’t want to discuss about, but there’s a lawsuit, frivolous. And as a business owner, you never expect to have a lawsuit against you, and I didn’t know how to handle it at the time, but it was stressful for me personally. And the funny thing about this photograph is my brother took it because I like to sort of memorialize some of the things that go on in my growth of the business, because you look back on those things and reflect. And he snapped this photograph. I had my head down laying on a table, and I had a 104 temperature. I had pneumonia and I was at a mediation. I shouldn’t even have gone.

I ended up going to the doctor later that day and getting a shot for . . . give me antibiotic or something immediately and then give me a prescription, but I was so down, depressed, and sick. It was the lowest I ever felt wondering, “Gosh, how do businesses survive this? How do you go through this kind of stress,” because you know what? Nobody trains you . . . Everybody talks about business, all about the fun stuff, getting clients, going . . . because even when we talked about getting clients and how stressful it is having to pitch, that’s stressful, but when you have things going on like that that you don’t really understand that are really frankly frivolous, it stresses you out and you don’t know how to handle it. So to me, that was a focal point about the lowest I’ve ever been in business and then now seeing how we rose up and basically since that time we doubled the size of the company, and it’s like wow.

Andrew: This is since 2011.

Ernie: 2012 actually.

Andrew: Yeah, I see the court case from December 2011. I’m not going to mention the name, because I could see it’s going to bum you out, and also I don’t see any value in talking about it. But I do see value in seeing where you were at the time. And again, at the point are you the kind of person who says, “Look, I’m not feeling well. I’m going to court. I’m doing it because I’m not going to cede an inch of my life and give up at any point and then also going home and working.”

Ernie: Yeah, that day I didn’t go work.

Andrew: But at that period, was there a mantra in your head that allowed you to keep on going? For me, the last year, 2017, was especially a tough one, and the mantra that I gave to myself was, “Not an inch.” Like, I’m not going to give up a single inch, because when you are in that place of close to burnout, everything feels like such a small thing, just let it go, and I can’t let go of a single inch or else the whole thing falls apart. What was your fuel? What was your mantra?

Ernie: It was I wasn’t going to give up everything I had built and let that take me down. And I think the biggest thing keeping your focus during balancing different things like this was very hard. That was the hardest year I probably ever went through, but it actually . . . that scar tissue I’ve built during that made me even stronger. And so now when I can look back on it, I can say and kind of laugh at it in a way and say, “You know something. I got through that. You can get through anything.” And then when you put it in perspective, life is short enough as it is, and I’ve been trying to get to the mindset . . . it’s like, “Who cares? Move on and let go.”

A person like yourself and myself, who are very intense, it’s hard. You don’t want to give an inch. You don’t want to do that, so . . . But once I got through that I learned and I was able to rebound, and during that time I had to keep going full bore. We had to keep growing the company. So that was just a test for me, and I look at it as a test how to balance stress and still keep the company going.

Andrew: All right. I got to talk about my second sponsor. This is one for you son. Speaking of entrepreneurship, it’s called HostGator. It’s this hosting company that’s been around forever that actually just works and here’s why I like this for your son. Level two plan that I’m about to talk about comes with unlimited domains. This is a guy, your son, who’s got infinite idea possibilities. He shouldn’t have to say, “You know what. Every time I come up with another side. Every time I fire it up it’s another monthly fee to maintain it. Who knows if it’s going to be worth it?” He should just have a plan where he has it and frankly every kid should have this.

Frankly, the new Bar Mitzvah is you turn 13 and you don’t get a Bar Mitzvah, instead you turn 13 and every boy and girl in the country should get a HostGator baby plan to just go and infinitely try as many as ideas as possible, because that’s the Bar Mitzvah that keeps on giving as opposed to one day where your relatives give you money. That’s the future.

Here’s the reason why I like this for kids and also for adults. One plan, unlimited domains, any idea that you have you just go and fire up another website and you see if it works, and if it works great. If it doesn’t, you can close it. In fact, I’m hesitating to even say close it. You don’t even have to close it because they’re not going to charge you any extra.

Mixergy started that way. Mixergy used to be an invitation site and then one day I said, “You know what? How about a blog?” So I just go and create a blog and I start writing about the events the people are hosting on my invitation site. And I said, “How about a podcast?” Now if I had to pay for every one of these ideas to host it, to keep it going even after it failed, oh, to keep it going after it failed and keep paying. That would’ve been miserable. It would’ve kept me from trying, but because I had unlimited I can get as many domains and as many ideas out there as I want.

So I’m going to make two offers here. One offer to you, to your son, I will personally if he wants it, you’d let him know and I will personally pay for his baby plan, which will give him unlimited domains. I would love to do it just because I feel like in 10, 20 years he’s going to say, “And then this guy Andrew . . .” Think of the credibility that comes from that. Part of his story . . . he’ll be interviewed somewhere about how he started this virtual reality business that is where people are living and some interviewer will say, “How did you get your start,” and he goes, “Well, some guy got me this baby plan. His name is Andrew something, Andrew Warner.” Then I’ll be memorialized. I would love it. So really take me up on it. It’s coming out of my pocket, but frankly how much money is it? I’ve literally spent less taking out Mixergy fans and interviews for drinks than I will pay for a year of hosting for your son.

For everyone else out there, who is not a family member of Ernie’s, take the money out, go get yourself a hosting plan that actually works. They have un-metered disk space, un-metered bandwidth, unlimited email addresses, 24/7 tech support. I’ll be honest with you guys, their tech support . . . Ernie, since your son is going to experience this, their tech support used to be like that. It’s slower. It’s like that, slower. But they still have it, and anyone out there who’s not happy with it, 45-day money back guarantee.

So go check it out at this special URL where you get this price and all that I just said I’m going to be grateful for you guys for using that URL because I get credit and Sachit Gupta, who’s been talking to them and selling all these ads who keeps putting his name on the line saying, “Don’t worry. These ads will work on Mixergy.” He’s going to be especially grateful that you guys used the URL, All right, take me up on it. I would love . . .

Ernie: I will.

Andrew: All right, good. Let’s continue. Now, you are in the space where you’re basically doing services, but the software is the future. The software is why I have you on here today. How did you improve the software? What was your feedback loop? What was your process for iterating?

Ernie: So as we kept going and we had gone through that startup phase and we started to get credibility, we started to see the need . . . there was times we would run across claims where we didn’t really have anybody to go out there. You’d get a claim that would come in the system to be dispatched out, and by the way, we have automated algorithms built in that just sends, it just auto dispatches out the network appraisers. And you’d get situations where it’d be Montana, it’d be North Dakota, it’d be Washington. And you would get these claims that there’s nobody there. I mean it’s 350 miles one way for some person to drive out there, and so we would say, “You know, what could we do?”

And the owner would say, “Well, I have a camera. Can I just take my own photographs?” We called the insurance companies. They say, “Nope, we want to send somebody.” So, “Wait. You want me to have somebody drive 350 miles one way and 350 miles back to do photos and write an estimate?” And they go, “Yep, we do.” “Okay. That’s going to cost you a lot of money?” And they just would pay.

Andrew: And they would pay it?

Ernie: They would pay it. They would pay . . . I don’t know, $700, $800, depends wherever the cost was for the person to go out there to drive that way. And so we said, “Well why don’t we just try it?” So we would start to keep telling people, telling the insurance company, “Why not we just try photos?” And so we had some people who said, “Okay. Sure. Okay, go ahead and do it.” Then we made it work. And we’re saying, “Wait, wait. We could charge you a lot less, turn it around faster and save a lot of expenses and just simply use the photos.”

And then we said, “You know, why don’t we start to move toward a solution where we could just do that in our sector, just have a mobile solution.” So we decided to build out that mobile solution where it’s just mobile web, because people don’t . . . for some reason in our business one time apps don’t really work. People don’t like it. They’re annoyed with it. So we devised a mobile web solution where the person just goes on, you’d send him a link, boom, they take the photographs and literally live, in real time just uploads to our system, and it works. So we got that working.

Andrew: How did you get the insurance companies to okay that?

Ernie: We would go present it to them. We would say, “Hey, let’s test it out.” And they were very reluctant at first, and still to these days even data shows you only get about 15% participation of all your customers to do it because just the tentativeness. A lot of people sometimes get nervous. They are all like, “Hey, maybe I don’t know if I could get the photographs right? Am I going to get an accurate estimate?”

Andrew: Right. I would worry about that.

Ernie: And it’s not for everything. And so I write white papers on this. I write articles. It’s a niche product. It’s only for those smaller claims where you don’t have a lot of heavy damage, because if it’s heavy damage, you want to have your shop look at it. You want to have it torn apart. You want it done right. But for a door dang or a scratch, it’s very easy. You could turn those things around fast.

So they whole premise was why don’t we add that as a technology solution within our platform so now you have the easy claims can go to the self-service, the regular claims could go to somebody in the field. They have their shop they can go to that they choose or the insurance company has as a direct repair shop, and now you have this solution that kind of flecks back and forth to their business needs. So you’re now meeting every type of customer. You’re now able to optimize your claims instead of just doing one thing one way.

Andrew: So this is the sexy part of your business. Any customer can take a picture of their car and speed things up. That’s why I led with it in the intro, right? I know sexy, so I go with it. This is sexy in the business world. But that’s not the heart of your revenue then. What’s the biggest product? The one that’s driving all this $17 million in revenue or the majority of it?

Ernie: It’s our auto-link . . . the platform. It’s the platform. It’s the workflow.

Andrew: The platform that allows insurance companies to manage the . . .

Ernie: Everything.

Andrew: . . . the whole thing. I see. I feel like every space has something like this.

Ernie: They do.

Andrew: Software that manages the process of doing what they do, like hiring, right? We signed up with Workable because I want to hire someone. I know there are several steps to hiring someone. All they do is manage it for us so that I don’t neglect someone in the hiring process. That’s the kind of thing that you’re doing step by step.

Ernie: Wait till you get to talk about where artificial intelligence or machine learning or whatever people want to call it.

Andrew: I do have a note on that, but that’s what’s coming up next. That’s not what it is today, right?

Ernie: Right. There’s the beginnings of that.

Andrew: In their day, it’s mostly you going out. Is it still you guys pitching one at a time insurance companies?

Ernie: Well, we actually now get a lot more inbound because of the credibility we have out there. Last year we were mentioned or we were actually . . . There’s a group called the ITA group. They’re an independent analyst group in the industry, and they did some analysis. They did interviews and they researched and they named us as the best in process expedition in this industry, which means I guess we were named as one of the best solutions that expedites the whole claims process. So that gave us I think a lot of credibility out there, third-party validation where a lot of people started calling in even more than ever, but just even before that, even years before that, just as you build a reputation, a lot of word of mouth, a lot of these insurance vice president of claims.

Andrew: Oh, we just lost you and I got so much to ask.

Ernie: Or inbound . . .

Andrew: Oh, there we go. We lost you there for a second. So how many insurance companies are there? I’m on this J.D. Power website that . . . do you still see me and hear me?

Ernie: Oh yeah, I see you.

Andrew: They’re not that many. I’m on the site I clicked on earlier when you were telling me about J.D. Power’s assessment.

Ernie: Yeah, those are just the top ones. Those are just the top, like, 50 or 25.

Andrew: But how many in the country? We’re talking about 50, a 100?

Ernie: 700.

Andrew: Oh, 700 auto insurance companies?

Ernie: Yeah, 700 different companies out there.

Andrew: And so the max number of customers that you could have is 700, or do each individual states have their own office and they own the site?

Ernie: They all have different offices and regional offices, and then also on top of that you have fleet companies, fleet and travel like trucking companies, transportation companies. All those . . .

Andrew: A transportation company would self-insure, but they would still want somebody to take a picture of the issue when a driver got into . . .

Ernie: Right. Maybe one of their drivers loses control and hits four other cars, so they need to . . . we handle all the cars that or vehicles or trucks or whatever somebody hit, so yeah. Yeah, exactly. Trucking companies . . .

Andrew: I didn’t realize it was such a big industry. Okay. Let’s talk about the future which is AI, machine learning. What is machine learning going to be doing for you? You’re not a guy going out for venture funding. Why do you need to throw around these words? You probably are doing it because you actually have the technology, huh?

Ernie: Well, here’s where it’s going. Computer vision is probably a better term of where things are really going because with computer vision . . . You have to understand we processed millions and millions of photographs, so analyzing historical damages, how those losses turned out, determining what a picture looks like and say, “Okay, that’s left front impact with that much severity. Here’s your approximate cost.” Or, “This car is a total loss.” By just literally nobody even looking at it giving it a quick initial assessment. There’s a lot of opportunity in the computer vision aspect of this, just going through millions and millions of photographs where it can automate a lot of this quality control process that insurance carriers do on their end.

See, a lot of insurance companies they have their own staff of people that sit there literally, even though we automate this process, they still have people sitting behind a computer looking at every photograph and reviewing it before they authorize sometimes their adjusters to pay the claim. So they sit here and go through, “Oh, is this repairable? Was it not repairable?”

But if you can run computer vision through that and eliminate that, now you’ve optimized efficiency at the insurance company. So I see a lot of opportunity in that area, and also with areas . . . some of the process with the vehicle owners can be automated as well, even initial contact, responses for appointments, just things like that, but the computer vision is what I’m really excited about. That’s where I think there’s going to be huge progress.

Andrew: Are you thinking of raising money at all?

Ernie: I’m not sure. I mean, I probably if you look at my inbox, I probably met with over a 100 different private equity, growth equity VCs. I’ve met with a ton. I mean, I’m literally, in a way, I’m pitching them without even realizing because I go in there with confidence because we don’t need the money. When you don’t need money, it’s a lot easier because I’m really looking for the right partner. If I found the right partner that could help execute the vision that I have, I’m not opposed to it.

But I always tell people when you’re building the company, if you don’t need the money, don’t go out there and feel like you have to raise money just to be cool or to get some press. You have to really focus on . . . eyes on building the great product, the great service, whatever it is, and then over time if you need the money or there is a right partner, then entertain it, but not living your whole life to just raise.

Andrew: You know earlier I dismissed this whole court thing really fast and then I looked into it as we’re talking. There was a lawsuit brought on by your co-founder, the guy who’s not there. It was dismissed. I won’t get into it, but that’s what it was, right?

Ernie: You know what? I’d rather not talk about that. Can’t talk about that.

Andrew: And apparently he’s a guy who’s, like, kind of connected in the tech scene. Where in the world are you? What country or city . . . I mean, what state are you in?

Ernie: Oh, I’m in California.

Andrew: California, right. So he’s very connected in your state, in your city, wow. Look at that. I’m seeing in your eyes. Now you’re going to cry if you guys ever reconciled.

Ernie: No, I’d rather not talk about that right now.

Andrew: All right. This company has grown a lot. 2017 you said . . . 2017 was $17 million dollars. The year before that was how much?

Ernie: Oh, I think we were like 13, around 13.

Andrew: So constant, constant growth. So I’m going to take this very seriously from you. We asked you in the pre-interview what book you’d recommend the audience read, and obviously there are a lot of books that you’ve read and that you might recommend, but the one that you picked was . . . do you remember what it was?

Ernie: “The One Minute Manager Meets the Monkey”

Andrew: This is a book that Tony Robbins used to interview the author about, like 10, 20 years ago. Hadn’t heard the title in a long time. Tell me why that’s a book that you’d recommend from Ken Blanchard. Why would you recommend that book?

Ernie: Yeah, I was given this book by . . . a person just gave it to me and say this is a good management book to read because I didn’t have any real experience managing anybody, so I read the book and I started to realize that as we grew the company, we obviously had a lot more employees now. I was kind of a manager who would take everybody’s problems. I would take every monkey on my back, and somebody would come to me and when I read the book, it just basically opened my eyes, because the whole premise is that you’re taking on other people’s problems and you basically become almost their employee. Yeah, you’re like, “Wait, I’m working for my whole staff.”

Andrew: This is what’s happening to me. Yes, I was asking about it because I wanted to walk down memory lane, but this is exactly what’s happening to me because I could do it. I could always feel like yes I could do it all.

Ernie: Yeah.

Andrew: Okay, so you take . . . They come to you with a problem, you try to help them, they can’t fully understand. You go, “Hang on, I can do it. I can take it on.” And partially for me it’s I want to show you that I’m still here. That I’m not just telling you what to do like an annoying boss or a warden at a prison, right? Not annoying boss and so how do I get passes? What did you learn from the book that you can pass on to me and anyone else listening?

Ernie: I think the biggest thing is you have to learn how to delegate efficiently and stand firm is my opinion.

Andrew: How do you do that?

Ernie: Well, it’s tough. It’s really tough because I’m a doer, and I’m a believer . . . like, my problem is I jump in too much. I jump in to help people and end up doing their job. So it’s tough. If you’re the kind of personality like myself, you want to solve the problem and just you figure sometimes it’s easier just to get it done, because you know it better, and you just jump in and try to solve it, but it doesn’t benefit the person.

Now they’ve become sort of a learned helplessness in a way when you think about it. They’re always coming to you for every question. They go, “Can I do this? Ernie, can I do that? Hey, Ernie, can I . . . ?” You know, and then pretty soon. I have stack of work that I have to do, and it actually, I mean, not even, gosh, a year or two ago I was at home on a weekend. My wife is saying, “What are you doing? The kids want to go outside with you. They want to go play. Let’s go swimming.” And I’m sitting here in hot summer day, can’t go in the pool because I got a stack of work that I’m doing that my [inaudible 00:57:17] “Ernie, can you do this, this and this?” I should’ve delegated.

And I said to myself, “What am I doing here?” And even though I’ve read the book, I still let myself backslide into doing that. I’m like okay. And then I picked it up the other before this interview, before I had the call with the producer. I was like, “You know what, let me scan through that again,” and I’m like, “Gosh, I’m falling back in that trap.”

So I think as a leader, CEO, manager, whatever you are, you have to constantly remind yourself if you’re taking on the task of the employees, and I’m a big believer though that you’ve got to be able to step in and do the work too at some times and help people out. You can’t just delegate everything. But if you find yourself being the person who’s always stepping in and doing their job, then you’re going to overwhelm yourself, not be efficient, and you’re not even going to get your own work you got to do done yourself.

Andrew: I was going to get it right now while we’re talking for the Kindle. It doesn’t exist for the Kindle. It exists in audiotape. That’s how digital they get.

Ernie: It’s funny you said Tony Robbins too. A fun little side port is when I was back in . . . like, right before I got into insurance, right when I got into insurance actually, my first year in the business, I listened to . . . What was it that got me inspired? Tony Robbins was it “Personal Power Two” the DVD set. That was one of the things I used to listen to in my DVD player in my car as I was driving.

Andrew: Did you do the assignments at the end of every.

Ernie: I didn’t do the . . . No, I didn’t do . . .

Andrew: I would get too hung up on getting all the assignments done, and I never finished all the assignments from all the books, from all the CDs, but it was still . . . because he’s good at telling stories that have a point that sticks with you.

Ernie: Yep, and so that was a very inspirational at the time to me. And I think it plays a part in some of my motivation of you really getting out there and taking action, because he’s all about taking action and that’s what . . .

Andrew: A 1% a day improvement builds on itself. It doesn’t equal 365% over the year because of compound interest. Lots of things like that. And then he tells stories that connect with stuff. You know what? No, “One Minute Manager” available for Kindle. “One Minute Manager” ugh. You know what I’m going to do? I’m going to have to actually go old school. I’m going to have to get the paper version of this book, which I then will digitize because I can’t deal with paper and because I’m now learning to be cheap, I’m going to get the used version for . . . what is this? Oh, a buck, no. There’s a used version for a penny.

Ernie: Wow, that’s crazy.

Andrew: And then I take it. I have the FedEx store, the old Kinko’s, chop the spine off. A snap scan sitting here at my desk, I’m going to scan it in and I’m going to read it on my Kindle, or actually on my iPad Mini. It’s a great recommendation. This is exactly the issue I’m dealing with right now.

All right, this has been a really good interview, Ernie, except for one thing, and my sense was that when I was asking you about the co-founder that . . . I was looking at your eyes. I could tell. That’s why I like to do video, even though most people listening on audio. I can see when I press too much and I could back off and I could see where I pressed too much and the person is saying, “Go. I like this. We’re getting real here.”

All right. Where can people find out about you? And I have a sense that you have that mic not because you run a software company for the auto industry, but because you’re podcasting too. Are you doing that?

Ernie: Well, I haven’t launched a podcast yet, but we’re going to come out with a podcast about business, about entrepreneurship. That’s one of my things. I use this for industry, audio. I do as well. My brother and I are going to be launching something. We haven’t really finalized what it’s going to be, but we want to go with a nice show that we’re just sort of talking with an open format about just life, business, and everything in general.

I do a lot of other fun things. I write a lot of articles. One of the many things I like to do is I publish in a lot of different magazines online. I do a lot of writing. It’s fun for me. And as I continue to grow my career and stuff, I want to be able to do more to help entrepreneurs out there. It’s fun for me. I love getting my name out, but at the same time I like giving other people who have maybe thoughts of going on the path of entrepreneurship a little insight, some of the insight of what I’ve gone through.

Andrew: I get it. I’m there with you. All right. And the website for anyone who wants to go check it out is . . . I’ve got so many of your sites open.

Ernie: It’s

Andrew: All right. And the two sponsors that I mentioned everyone is the company that’s going to do your email marketing automation . . . email marketing automation, a lot of words in that. Do it right, make it simple. It’s And if you want a hosting company that’s going to host your website right, go to Go for the unlimited plan.

And finally I’ve been getting really good feedback from people about the audio. It’s helping us improve the audio quality of these interviews. I don’t think this is going to be an issue because Ernie’s got a powerful good mic, but still guys, as I type, if you hear me, this is Chris. I don’t know Chris’s last name, but he was listening and he said, “Andrew, every time you type, I hear a banging on the mic. So now we’re adjusting that.”

Keep sending your feedback for me and the team. We’re all looking at them. If you email, it goes to everyone. And I’m not kidding we all will sit and look at this and we’ll dissect it, and then we’ll send it into Basecamp for discussion to make sure that we improve the audio quality of these interviews. Audio quality is more important I think at this point than anything else that I have on here. All right. So for that.

Thanks so much for doing this interview.

Ernie: Hey, it was great to be on.

Andrew: Hang on for a sec after we’re done. I’m going to say goodbye. Bye everyone.

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