This 25-Year-Old Built a 2-Year Moat Nobody Can Bet Against | Corgi, Nico Laqua & Emily Yuan

1. 0:00 – 0:51

   Intro

   1. EYEmily Yuan0:00

      It's kind of hard for someone else to make like a Corgi 2.0 because we had to spend so much time and so much money like getting the infrastructure set up. Most companies just can't do that.

   2. NLNico Laqua0:09

      We would've been kind of, I think, a pretty boring company, and I don't think we'd be an important company if all we did was resell someone else's product. Um, I don't think you can change the world if you're reselling someone else's product. So in our case, we decided to become the infrastructure.

   3. EYEmily Yuan0:23

      Nico actually lives in the office, and a lot of our like team members just like live close to the office as well.

   4. NLNico Laqua0:28

      That energy is something, and that time they're able to spend on these problems is something that's really hard to, to compete with. My name is Nico. I'm the CEO of Corgi. Corgi is an AI insurance company for technology startup, and we'll end this year at several hundred million dollars in ARR. We're one of the fastest growing B2B companies on the planet, and we're just getting started.

2. 0:51 – 2:58

   Pursue the Most Ambitious Version of Your Goal

   1. NLNico Laqua0:54

      I grew up in San Diego, California. In high school I had a couple jobs. Anyone who works jobs while they're in high school knows that they suck. You have like a boss that's like an idiot that's like telling you all sorts of like things that are just like wasting your time. I think at some point I, I just kind of decided that I wanted to do something that was like big and important with my life, and it seemed like starting a company was a really good way to make a difference. Before COVID, I spent a lot of time kind of in the startup hacker communities, and I was working on making apps. One of the apps I was working on was an app for college clubs. It's the type of idea that I think a, a 19-year-old who knows how to program and doesn't know that much about startups, um, typically does. Emily, at that time, she was really interested in startups, and she was running one of Stanford's entrepreneurship clubs, and I wanted her to test out this app. And most of the people that I knew weren't like giving me that great a feedback at that time. But Emily came back with like a, a Figma page with like 100 comments about the app.

   2. EYEmily Yuan1:50

      Hello. My name's Emily, and I'm the co-founder and chief operating officer at Corgi. Nico wanted someone to help like promote his app to like everyone [laughs] at Stanford. So I agreed to help, and I kinda just became more and more involved. Eventually, that became the company which was Picnic, and then it became the gaming company Basket. Nico is very good at identifying good opportunities, and I think that actually complements my skillset. I'm very good at helping make sure that we can figure out how to like get all these different things done. So you can throw like a very complicated thing at me, and I'll go and figure out how to like get it done. In high school, I actually started a nonprofit with a couple of my friends called Paper Bridges. I think it was an area where there could be a lot of work done. I could make a lot of impact even like as a student without a lot of funding, without a lot of resources. We started off sending letters to orphans and foster kids around the world. As we grew and scaled, we started donating medical supplies and to donate like face masks to a lot of these centers in the US. If I'm able to do it, like I should just go and like get people together and just go for it.

3. 2:58 – 3:30

   Walking Away From a Working Company

   1. NLNico Laqua2:59

      Basket, they make a lot of really great games. I got that company to the destination that, that I wanted to get it to. I spent over four years there.

   2. EYEmily Yuan3:06

      But it didn't feel like a very impactful company. It's a very different type of company than what Nico and I really wanted to spend the next like 10 years building. And one thing that I really wanted to make sure I do is that I spend my time in like the highest leverage way possible. We want to do the most like biggest, most ambitious thing

4. 3:30 – 4:52

   Why Bigger Ideas Win

   1. EYEmily Yuan3:30

      possible.

   2. NLNico Laqua3:31

      Oftentimes a young startup founder try to make products that you yourself would use, which is normally pretty good advice. But the problem is that problems that they, they try to solve are often not as big as they could be. And I think a lot of people think that if they take a really big idea and kind of scale it down to something very small, that that makes it more likely to succeed. But actually, I think that people should do the opposite and think of the most ambitious version. Because if you're doing that, then suddenly a lot of really smart people want to join you on your mission. A lot of investors will be more likely to, to fund those sort of ideas. And success actually changes the world in, in like an interesting way. I guess there's... It's hard to say that something's a good idea or a bad idea, 'cause sometimes things just work out really well in unexpected ways. Um, but generally I think a good idea tends to be really difficult and tends to be hard, and doing the hard things ends up working out much better, and that makes it hard for competitors to come out and try to copy our stuff. Being the 50th app for college students on campus, the 500th restaurant in the financial district is not, um, a good business because it's kind of being the same as everyone else. I think a good business means that you're doing something unique and you are like the company in that category. I think in order to be category-defining, you can't just do something very simple and very easy and very capital light. Um, I think you need to do something very ambitious and difficult and hard. Kind of the craziest, the highest impact, the highest leverage one of whatever

5. 4:52 – 7:40

   How Two Outsiders Broke Into a Legacy Industry

   1. NLNico Laqua4:52

      their idea is.

   2. EYEmily Yuan4:56

      Historically, it's been very difficult for tech startups to get insurance.

   3. NLNico Laqua5:00

      I mean, I had to get insurance for my last company, and we didn't have a lot of money at that time. And I remember the insurance policy was $60,000, and that's a lot of money to buy anything. I was making less than that in my salary. I think I was making about 1,000 or $2,000 a month at that time. So this was a huge expense. But, you know, my experience was terrible. I had to call these brokers. I remember it took several weeks to get the policy, not answering my emails to them for like weeks. And of course, they never paid out anything.

   4. EYEmily Yuan5:27

      And it was just shocking like how slow the process is. Like we were trying to give them a bunch of money to buy this product, and everyone was just taking forever to get back to us. Like it was very confusing like what we were even buying. We just looked at how everything was set up, and we were like, "Wow, this is terrible." Like, "How do you have $100 billion company that runs like this?" [laughs]

   5. NLNico Laqua5:47

      And I thought, "You know, this stuff is a scam." If you look at it as 12% of the GDP, it's about twice as big of a market category as software. But I think that all of the regulation around it and the huge regulatory barrier to entry, coupled with the fact that most of these big insurance providers started 40 years ago or more, that's led to them being very comfortable, them being very complicit, them to continually worsening their product quality.

   6. EYEmily Yuan6:10

      I think a big problem with people who have been working in the industry for 20 years is like, one, yes, they have a lot of experience, but they kind of like have this like solidified mindset of like, "This is how things are supposed to work. And okay, we'll use tech, but we're going to like plug the tech into like this existing like infrastructure." It's actually a big advantage for us because we can come in with a brand slate and we can look at things. And if something doesn't make sense, we can question like, "Why is it being done this way? And is there a better way of doing it?" We don't really need to do if we're building it from like a AI and like tech native point of view. We actually didn't think about like too many other industries when we were kinda thinking about Corgi. It was just- Insurance just seemed like perfect, like right place, right time. And we thought that, like we were able to build a team to do it.

   7. NLNico Laqua7:02

      And we applied to YC already licensed to be an insurance brokerage. Our idea there was to embed with contract management companies. We just wanted to be a broker and do the normal thing. Um, that's what we started with, and actually it was working pretty well. We sold a couple, like tens of thousands of dollars of premium, and our revenue growth was pretty good.

   8. EYEmily Yuan7:20

      But when we first started, I don't think we understood like where the problems were in the insurance stack. We thought that, hey, like these insurance companies just weren't being aggressive enough. Like they should just market more and promote their companies more. But in reality, what was happening was because they had to rely on these like really old traditional insurance carriers, it made it really hard for them to

6. 7:40 – 8:30

   A Multi-Trillion-Dollar Industry Still Runs on Faxes

   1. EYEmily Yuan7:40

      have a good product.

   2. NLNico Laqua7:41

      It was really nasty to deal with the insurance carriers, like making phone calls to them for every single policy. We had to get a fax machine, and we were like sending faxes to them back and forth. And I would look up these carriers and I'd see they're like 100, 200 billion dollar companies, and this is the way they work with faxes, with people calling them for every single policy. And I thought to myself, there's no way that like this is the way a huge part of the economy works. There must be like a better insurance carrier out there. And we checked every single one out. There weren't any that were better.

   3. EYEmily Yuan8:10

      And through doing that, we realized that the problem wasn't like the website, it wasn't the tech. The problem was the actual underlying product, which is the insurance policy. So then we had to figure out like how do we actually go and be the company that is creating and has like control over the product. And the only way you can really do that is to become an insurance

7. 8:30 – 9:27

   The Decision to Shut the Working Business Down

   1. EYEmily Yuan8:30

      carrier.

   2. NLNico Laqua8:30

      So we decided to shut down what we were doing, which was working pretty well. And at the time, that was not an obvious decision. That was a very controversial decision. I think we could have been like well regarded, may- maybe not the top company in our batch, but one of the top companies in our batch if we just continued to, to do what we were doing. But we shut that all down and we decided we're gonna become the insurance carrier. It's our vision not to build on top of, not to modernize, not to fix what's already there. We're building a new type of financial institution where we actually become these highly regulated financial entities and rebuild them from the ground up using AI.

   3. EYEmily Yuan9:02

      You just really need to come in with new and fresh perspective. It's just really hard to untrain yourself from the existing paradigm of like how things are done. At least in our case, being new to the industry really allows us to come in with a different perspective, questioning how a lot of these like traditional industries are run and just say, "Okay, like we'll just go and make an AI version of that and rebuild

8. 9:27 – 10:40

   The Harder It Is, The Deeper Your Moat

   1. EYEmily Yuan9:27

      it from ground up."

   2. NLNico Laqua9:31

      And the problem is you can't just like start one. It's, it's something that's very difficult to do. So we went from a company that was, you know, doing very well in our batch to one that was not doing well at all. Um, and we didn't do demo day. We weren't one of the hot companies in our batch at all. It ended up being a very long multi-year process where, um, our company almost ended on many, many occasions throughout this. There were a lot of times where we were very default debt. In our case, it, it ended up taking us tens of millions of dollars and several years, and we had to, to raise almost pre-revenue like $80 million. We raised all this money. We never made a pitch deck. We never went out to market or anything like that. We never did competitive fundraising. And I think we just made ourselves a hard company to bet against. Actually, like the initial investors we had during Y Combinator that came in, they'd visit the office, they'd see it full, you know, every single day of the week. They could see and sense in talking to anyone at the company, they could see that we deeply cared about the problem. We wanted to be winners, and we wanted to win, and that the, the end kind of destination, um, would lead to the world being a better place. And I think when you kind of combine all of that, it makes it, um, you know, a bit easier for people to, to bet on you instead of against

9. 10:40 – 12:11

   Time and Energy Beat Money

   1. NLNico Laqua10:40

      you.

   2. EYEmily Yuan10:40

      If we're trying to tackle a industry as big and as complicated as insurance, you really do need to spend a lot of time on it. I live very close to the office, so I can get here quickly. Nico actually lives in the office and a lot of our like team members just like live close to the office as well. If we don't put like 110% effort and a lot of time and energy into it, like you just can't do it properly.

   3. NLNico Laqua11:06

      And I think the superpower that young people have is that they have a lot of time and not a lot of commitments. Um, the trade-off is they have like not a lot of money. And I've, I've been there, you know, it's tough, but that time and that energy is worth a lot. That energy is something, and that time they're able to spend on these problems is something that's really hard to, to compete with.

   4. EYEmily Yuan11:26

      It was a very long process, and I think something that I've always been pretty good at is reading legal documents and kind of like really understanding what goes into them. And I think regulation, it's not like some like mysterious thing. Like they tell you, like you can do X, Y, Z and you can't do X, Y, Z, and you just make sure you follow the directions. If you can make sure that you just follow, like you stay within the guidelines of like what you're allowed to do, it's all doable.

   5. NLNico Laqua11:52

      It wasn't for fun that we had to raise over $100 million to, to make it happen, and it wasn't for fun that it took two years. Overall, I, I think regulation is something that's, that's pretty difficult and pretty challenging. But once we got our first set of licenses, our revenue started growing very quickly. We started looking a lot more healthier, and I think the company kind of inflected,

10. 12:11 – 14:03

    When the Bet Started Paying Off

    1. NLNico Laqua12:11

       um, after that.

    2. EYEmily Yuan12:12

       People will just go to the easiest, most convenient product available, and if you're just that, then people will come. There's not that much additional like marketing we really have to do. That's just fundamentally a better product than what's available. Unless someone else goes and makes an entire new carrier for startups, like there's just aren't that many other options. [laughs] Yeah, so I think operating in regulated industries, it's, it's very difficult and is very capital intensive, but once you're able to actually get the core infrastructure set up, there's a lot that you can just build on top of it. I think it's a very good advantage and it's a big moat that it's kind of hard for someone else to make like a Corgi 2.0 because we had to spend so much time and so much money like getting the infrastructure set up. Most companies just can't do that. [laughs] So I think just doing the hard thing and just getting it out of the way and getting it resolved, I think is a really big advantage for us.

    3. NLNico Laqua13:08

       It's hard to say that something's a good idea or a bad idea, but generally I think a good idea tends to be really difficult and tends to be hard, and doing the hard things ends up working out much better. Like for us, it's been almost two years getting regulatory licensing in order to launch our first product. We would've been kind of, I think, a pretty boring company, and I don't think we'd be an important company if all we did was resell someone else's product. Um, I don't think you can change the world if you're reselling someone else's product. So in our case, we decided to become the infrastructure and, um, it took us a lot longer and a lot more money than we thought it would. But in the end, um, I think it ended up working out. [outro music]

Episode duration: 14:14