Ilya Bodner has launched several startups, but Bold Penguin is his largest — and most successful.
The software company, which builds insuretech for commercial insurance, recently passed 100 employees. Bodner’s goal is to double or triple that — if the company can hire the right employees — in the next 12 months.
“Every business needs to have three legs to a stool,” says the co-founder and CEO. “You need to have an idea. You need to have capital. And you have to have great people running it. Those are the three legs and all three have to be about the same size.”
If something doesn’t fit through that lens, you may be better off focusing elsewhere, he says.
“When we started Bold Penguin, we looked around and said, ‘Do we have all the right people to do something in commercial? Do we think we have enough money to be able to sustain that first year of having to prove out ourselves? Do we think the idea is big enough?’ Those three lined up and that’s when I decided to go for it.”
Neutral like Switzerland
Bold Penguin is only three and a half years old, but it doesn’t really have competitors. After it proved out its digital infrastructure for commercial insurance, which can run on any carrier’s system and speeds up processing time to originate policies, the past two years have been spent scaling up.
“The early days is the land filled with 1,000 conversations,” Bodner says. “You have to talk to everybody and anyone and show what you can do. Your first customers always buy you or they trust you, not the company, not the product. It’s not really developed. A lot of them just took a chance on us, as people, and the early signs of a new unique approach.”
Bodner jokes that Bold Penguin is like Switzerland; the technology isn’t built with any one company in mind, which is why it’s used by such top 25 property and casualty insurance companies as Progressive, Nationwide, Encova (formerly Motorists) and Liberty Mutual, among others.
“Unlike our peers, the startups who try to build a robo-adviser or try to build a virtual consultant, we’ve taken the opposite approach,” he says. “We’ve said the real problem is that there’s no infrastructure that is standard across the entire industry. So, let’s create it, and then let’s deploy it inside some of the biggest names in the space.”
By giving the industry’s ecosystem an upgrade, Bodner says, everybody rises with the tide and everybody wins.
Bold Penguin is nimble and can work faster than its large clients who may get bogged down by bureaucracy, legacy systems and committees.
Bodner, who emigrated to Columbus from Russia, sold automotive and home insurance in the beginning of his career, so he’s familiar with the industry. He also can see insurance companies out of literally every window of his downtown office.
Another difference he’s noticed between Bold Penguin and its customers is the bigger organizations are more interested in the process, than what’s in the process itself.
The biggest bottleneck for Bold Penguin today is hiring, especially with the low unemployment rate, Bodner says.
“Commercial insurance isn’t exactly a fun topic to talk about at dinner parties,” he says. “So, having to recruit into the industry has been a challenge, but one we’re overcoming, for sure.”
Bold Penguin also did a funding round in the fall of 2018, which was led by Pivot Investment Partners, a New York investor in late venture and growth stage fintech and insuretech companies.
Bodner says the funds are like working capital. It enabled Bold Penguin to accelerate insurance company integrations, expedite the onboarding of agents, augment the software engineering and DevOps teams, and build a more robust sales, support and marketing organization
“Our business is pretty old school,” he says. “We built in features. We roll them out to our clients. We bill our clients for the usage of those features and we hope our clients pay on time. It’s a traditional business model. You try to make sure there’s enough markup in your product to cover costs and then have a little bit of margin, so you can get up the next morning and keep growing.”
Going back to the three-legged stool analogy, getting people is the hardest leg right now. Capital is easy because of the high interest in insuretech, Bodner says.
In the beginning, the challenge was more about triangulating all three legs.
“Sometimes you run into people that want more equity,” he says. “Sometimes you run into capital that has some hooks to it. Sometimes the idea is awesome, but it’s just not big enough.”
If your company has a great idea, the right management team and the right economic model built around it, money will come, Bodner says. But it’s important to stay customer-focused; your investors shouldn’t be treated like customers.
“You have to be obsessed with your customers and them having great results,” he says. “That itself will bring the rest. It will bring investors. It will bring people. Your P&L is like your report card.”