How Insurers & Drivers Benefit From CrashBay's Marketplace

Speaker A: Foreign.

Speaker B: Welcome to Profiles in Risk. This is your host, Tony Canyus. And today I have with me John Harvey, founder and CEO at Crash Bay and founder of InsurTech Canada. Ah, John, how's it going today?

Speaker A: It's a wonderful day, Tony. Uh, this is a long time coming. It's a, it's a real pleasure to be here with you. Uh, before the recorder got turned on, we were talking about my collection of uh, Tony Kenya's cards. This is my third in my baseball collection. I'm going to keep this because I know it's going to be uh, a collector's item someday. And we finally got here because I think the first time you handed me one of these cards was at an ITC maybe back in 2021. So uh, I'm honored to be here.

Speaker B: My pleasure. Thank you for, for being on three years is, is, is a long time to, to procrastinate on, on coming on the podcast and, and you're probably not the worst one ever. So, so thank you. Thank you for finally making it.

Speaker A: I'll take the label. I wear it with pride.

Speaker B: Yeah, perfect. Perfect. And you are in Toronto, right? We're recording middle of January. Uh, so I'm assuming it looks beautiful outside your window. Like I was expecting a, like just snow covered winter wonderland.

Speaker A: Yeah, it's deceiving. Like there's some white stuff on the ground still just back here. But uh, it was actually snowing pretty heavily last night and it, it warmed up. So we like to measure in Celsius here. I know it's a little backwards but uh, so we're probably like 18 degrees here. 15 to 18 degrees. So that would be double. And add 30. So like yeah, 18 degrees.

Speaker B: Probably 50s in, in, in uh, Fahrenheit. So. So actually very, very decent for uh, the like.

Speaker A: I'm sorry, I'm sorry.

Speaker B: Sorry, sorry.

Speaker A: I meant to say eight degrees. Sorry, not, not 18. Oh, okay.

Speaker B: Okay. So eight. Yeah, like ah, 40s.

Speaker A: Yeah, that's right, that's right.

Speaker B: So yeah, that's, that's chilly.

Speaker A: Not awful but, but like you know, we're for Canadians. We'll just wear like a uh, regular zip up and we're, we're good to go. Like you know there's going to be people breaking out their shorts right now.

Speaker B: Okay, awesome. Uh, I've actually never been to Toronto. Uh, I've been to uh, Montreal and Calgary. Uh, but uh, Amplify Broker Tech Fest is moving to Toronto this year so, so I'll be in Toronto for the first time for that so very excited about what actually see in Toronto. Uh, that'll be great.

Speaker A: Yeah.

Speaker B: Awesome. Uh, so we always give the guests a chance to give the elevator pitch. What is Crashbay?

Speaker A: Yeah, thanks for the opportunity, Tony. So, uh, Crash Bay, we're, we're a digital marketplace for collision repair. Um, Crash Bay was an idea six years ago. Um, and where that idea came from was really, was inspired, uh, by looking at other industries, um, looking at like, the travel and tourism industry, restaurants. Um, if you want to rent a car, you know, you can go on Turo and you can rent someone's car there. A marketplace, Airbnb. If you want to book a hotel or, ah, or book a cottage or chalet, ah, you, you can, you can rent that on Airbnb, Expedia. You know, you don't have to go to a chain hotel. You can go to independent hotels. You have all the maximum variety. And all these businesses are accessible individually, but marketplaces kind of bring them all together. So I, I was inspired by the marketplaces that exist that I interact with as a consumer. And, uh, I always say I'm an, I'm an accidental claims guy. I'm an accidental insurance guy. I studied business a little over 22 years ago. I'm dating myself. I never thought I would work in insurance, but I got my first, uh, job with an insurance carrier, um, doing claims intake. I was working in a call center, setting up F and O L claims. And, uh, so I've lived through that kind of industry and I know what it feels like on the, the policyholder side to have a claim. I know the pain that a carrier goes through to process a claim. I jumped over, um, to the supply side in 2015, and I worked for a big franchisor in the space that provides collision repair, uh, services to major insurance companies. So I spent four years there as an executive. So I understand, you know, the pains on the shop side as well. And I thought, you know, there's some problems that need to be solved here. And I think the future, and we strongly believe this, me and my co founders, the future of this space is the marketplace model. Um, and, you know, we can unpack that a little bit more. But, you know, our, our mission is to connect car owners and carriers with trusted repair shops in a digital marketplace. Um, so, you know, we sit over top of that supply chain and we roll up all the various types of, uh, collision repair shops that are out there. And, uh, I can unpack that, but that's, that's the, the short version.

Speaker B: Okay, perfect, Perfect. So I, I, I, I started at fnol. Uh, also we called it Express Claim. So, so we kept the claim and, and kind of worked the, the simple ones. And, and that was Farm bureau of the um, 2009. And they were actually ahead of the game. Uh, in, we took the claim. If we kept it, we like if we didn't have to send it to a field adjuster. Yes, we would, we would tell that the, the, uh, the client, uh, take the car to any shop you want. Uh, send us, uh, faxos at that time, uh, faxes the, the, uh, the, the, the estimate, uh, and we'll, we'll have you, we'll have you paid today. Right. And we would basically when the estimate came in, we would send it to,

Speaker A: to, uh, to, to uh, um, Review desk or something.

Speaker B: Exactly. One of the services that, that, that would review it and take OEMs off if the car was older than 2 years old, kind of, kind of thing, uh, and just make sure that it was a fair estimate and we were paying. Then I went to Nationwide, uh, and Nationwide they did have their own, uh, DRP or direct repair program. Right. And there it was. Hey, if you take it to one of our DRP shops, then, uh, it's absolutely kind of hands off. But, uh, you have the choice of taking wherever you want. But that's as deep as I got it. I didn't go any deeper into the claims that I went to underwriting. Yeah. So, so it,

Speaker A: I mean it worked.

Speaker B: It wasn't particularly.

Speaker A: Was it the best thing for the customer? Was it the best thing for the carrier? We can unpack that.

Speaker B: Yeah. So I guess what I'm getting to, I'm curious, um, why is a marketplace solution better, especially given that most larger carriers already have a drp. So if I don't have a drp, right. If I'm Farm Bureau back when I was there and I don't have a drp, then I can definitely see how this, uh, uh, gives me some advantages. But if I already have a drp, why would crashpay be a good idea there?

Speaker A: Yeah, there's, it's a beautiful question and there's a lot there to unpack and it's exactly what we should be talking about. Um, I'll start really quickly with, you know, the first example that you, you mentioned was, you know, just getting an estimate and cashing it out, uh, getting it approved. There are companies today that still use that model. They use technology tools, uh, to, to do that. They'll get estimates written and then they'll cash out and there's, there's actually some well known insure techs that actually run their claims process that way. Problem with that and actually one of our big customers, we got them off that cash out model is those cars still have to get fixed at some point. Uh, and if they want to keep their physical damage coverage, they have to get fixed otherwise they're going to only be liability only coverage. Um, so we solved that problem in getting that to a qualified repair shop. There's lots of reasons why companies cash out. Sometimes it's because they're smaller, they're at the back of the line and they just, they're going to wait too long to get booked in and they want to close that claim. Right. I'm an insurance company, I want to get that reserve closed, I want to get that risk off my books so I can redeploy that, that capital. And so cashing out makes sense to them. And it's low touch. Um, but ultimately we come in and we take over at that point we make sure that it gets to a, a qualified shop, uh, to get repaired so I can get back on the road. But I'll go in deeper into your second question there. You know, why do insurance companies need us if they already have a DRP solution? And um, you know I mentioned part of my history, I started at an insurance carrier. We were a well known brand bank owned insurance company but we were not a top 10. Um, and uh, some of my co founders, you know, they come from the industry as well. Andrew Daniels, he worked at Allstate, so he worked for a top 10 insurer in the US and uh, our other co founders, Bing Wong, he worked at Cartar, uh, and Jeff Ked, he worked at Fix Auto. So like we, we understand intimately both sides of uh, of the marketplace and, and the pain points. So if we, if we get into the pain points and I'm gonna rewind the clock a little bit here. Pre pandemic. So pre, you know, 2019, uh, there was a massive capacity issue in the collision repair industry. And even big insurance companies like the top tens, I won't name names but the top tens in Canada and the US we know them very well. We're very close to them because we operate in both countries. And they were waiting six weeks, eight weeks, sometimes 10 weeks to get a repair, to get a repairable or drivable vehicle into a shop just to get the estimate process started. Um, and the shops are the insurance carriers that use that DRP solution. It's more cost effective than dispatching, ah, a field appraiser. Um, and some customers don't want to take pictures of their car, um, to start that estimating process. It's a very small percentage that still do that. Um, and so waiting six to eight to 10 weeks, that was my, our first sign, me and my co founders, when we sat around the table to say there's a capacity issue, there's a bottleneck here. Why is there a bottleneck? And so if we get into unpacking, why that is. You have in the US and Canada combined there's about 35,000 to 40,000 licensed uh, auto body shops, um, that are operating today. And those shops fall under various groups, ownership groups. Some of them are independent mom and pop shops that are second, third generation family businesses, maybe started by the grandparents, passed down in the family. Now the grandkids are taking over and operating. We have dealership owned shops that are owned by like a Ford dealer or a Honda or a Tesla dealer. They've got a, a body shop or collision shop in the back or maybe off site. Then you've got corporately owned multi store owner groups. Some of these are big private equity backed or publicly traded companies that own hundreds of shops coast to coast. And then you have these, these big networks like the franchise groups that also operate and have hundreds of shops coast, uh, to coast in every state. The tendency for top 10 carriers is to use the big network shops, um, because it's, it's a, it's more streamlined and it's more scalable. One point of contact, I get access to hundreds of shops. Sounds logical and makes a lot of sense. The problem is that only represents about 40 to 50% of the available collision repair capacity in the market. So the market's very fragmented still. Uh, the other 50% of the industry is still independently owned. Sometimes they, even when they're in a network, they change networks, they leave networks, they go back to being independent, uh, because that was just a phase in their business. So back in the 80s and I'll try not to to bored one too much with the details, but this new idea of bringing franchising and bringing network solutions into collision repair was a brand new idea, um, and very similar to the restaurant industry if you think about the parallels. You know, you can go to a chain restaurant or you can go to an independently owned family run restaurant. Right? But you know, chain restaurants took off. There's still lots of good independent restaurants and sometimes people prefer going to those. Right. Um, the network solution or franchise solution was supposed to solve the fragmentation in the supply chain on the shop side and consolidate the industry. And that never happened to the full extent. It's still very fragmented with over 50% of the industry being independently owned. And so that's the reason why today it's even worse, especially if you're not a top 10 insurance company, you're waiting sometimes 10, 12 weeks, especially if there's inclement weather, to get your cars in for repairs. And that's why this particular problem, uh, is perfect for the marketplace model. Because what the marketplace model does is it rolls up a fragmented supply chain into one ecosystem. And so now what we're able to do when we start working with new carriers is we take those, they call them lead times, when they're waiting to get estimates booked in, and then there's a second appointment sometimes to get a repair booked in. We can cut those lead times in half and get them from waiting eight weeks to get a car repaired or in for an estimate down to four weeks or even less. Because what we're doing is we're sitting over top the entire supply chain. We don't own any shops. We never will, we never want to. We don't franchise. We simply work with those groups to connect them into a common ecosystem. And then we give that digital connection to the insurance carriers to be able to access a larger variety and capacity of shops. Um, so it's a long answer, but it's a, it's a more complicated problem than, than most people think about because, you know, like auto collision in claims, it sounds like a very simple, um, very simple business model. And the business model itself isn't overly complicated. But getting access to those, uh, thousands, like I said earlier, 35,40,000 shops, is challenging without technology. And the only way to solve it is with a technology solution. And that's why the digital marketplace, again, we believe, is the solution. And the really cool thing about it, Tony, is it levels the playing field for the small guys now to compete with the big guys. Because we can go down to any market right now we operate in all 50 states and all 10 provinces, so we're fully operational in both countries. And we can go into a market like California, uh, pick Los Angeles for example, and you've got a variety of network shops, dealer owned shops, and independent mom and pop shops. We can list all of those once they go through our qualification and onboarding criteria in our marketplace, give access to insurance carriers through our technology tools to that variety of shops, and then now they can compete for the business. And it's a performance driven Merit driven, standardized process. And now the insurance companies event, what it leads to for them and the customer, let's not forget the policyholder in this is they have more choice because ultimately that's what we want to do. We want to provide maximum variety and choice for the, for the policyholder who has a say in all of this because they ultimately decide where their car goes. They don't have to say yes to the insurance company recommendation. And to give that maximum variety and choice to the insurance carrier, which ultimately increases the carrier's ability to get that policyholder to say yes if they're providing them with more choice.

Speaker B: Right. That is so interesting. What really clicked with me is the carriers tend to use uh, multi store shops. That makes perfect sense. It's just safer from their perspective. Right. And they're risk averse. Um, and what I had no idea, like that was not a surprising thing. But uh, what I had no idea is that 50% of repair capacity is mom and pop shops. So. Yeah, of course that capacity was invisible. Yeah, yeah.

Speaker A: And, and some of it is like some uh, of these mom and pop shops are, have grown into pretty sophisticated operations. Some of them may have started as uh, you know, like a single store operator in Houston, Texas. And then they went out to the suburbs and they, they opened up a second store for overflow to capture those commuters. And then they grew into like, you know, six stores. We have these little, we call them mini MSOs, multi, uh, store owner groups that are all over North America. And you uh, know, some of them get up to like 20 stores and then private equity comes in and buys them and then you know, they become 50 store MSOs. And some of them just say, you know, I'm going to circle this geographical area and they've got family members and friends and community people working in their shops and they're running three or four or five shops, but uh, they're still independently owned.

Speaker B: Okay. And so m, uh, getting the car to the right shop.

Speaker A: Yeah.

Speaker B: Availability, um, is a piece of it. Yes. But often we're talking about towing a car, which gets expensive. Uh, so I'm just curious, is there pretty much always availability locally? Like as long as you live in a medium sized city? Uh, or.

Speaker A: Yeah, sorry, sorry, finish, finish your question.

Speaker B: Or like, like at times we're, we're towing cars 100 miles or 150 kilometers because that's where there's availability to fix it.

Speaker A: Yeah, we always. Great question, Tony. We always try to work within like a 20, uh, five mile radius maximum. Uh, because we Know, people won't drive, uh, further and even in some like, heavy metropolitan areas, they won't even drive 10 miles. Um, you know, because like in big cities, you know, driving 10 miles can take 40 minutes right to an hour. Um, and your, uh, question about like towing, um, still the vast majority, um, it's still about 60 to 70% are drivable, uh, vehicles that are out there. M. But uh, there, there are vehicles that have to get towed because they're non drivable. And that's becoming a little bit more common than it used to be because of all the technology on vehicles now. Um, and so something that m that may have not made a car non, uh, drivable 10 years ago is not considered non drivable. Um, so in those, in those situations, again, we work with the shops locally to find the closest solution. And a lot of cases, this is the beauty of the marketplace model. Okay? So our highest concentration of shops are always where we have the most volume. Right. And I mentioned earlier, you know, we operate in 50 states and 10 provinces, but our volume isn't meaningful in every single market. There's markets where we've only sent a shop one or two claims, um, in you know, the last three to six months. Um, so if we get a claim in a market where maybe we're in a suburb or we're outside of a primary market, for us, that's an opportunity for us to reach out to shops in that area and say, hey, have you heard about crashbay? We have a live claim here. You can go through the application process because all of our onboarding is digital. Just like if you want, you and I want to list our houses or our apartments on Airbnb today, we can go through digital onboarding. Right? And so they still have to pass our criteria. But, and a lot of times our, our intake process is digital. But we verify every single appointment, every single appointment goes through human verification. And if we have exceptions, like we can't, our algorithm, our locator, can't find a match within that sweet spot driving radius, then our intake team will reach out to local shops in that area and say, we have a live lead, here's a link to create a membership. And if you pass the qualification criteria and we have ways to fast track them if they're like, if they're certified as a, a Tesla shop, for example, and it's a Tesla vehicle, if they've passed Tesla certification, we know that they meet the standards to be in an insurance ready shop or Honda or Toyota or any of the major OEMs, and that's actually how we recruit a lot of new Shop members is with those live claim situations. And that's unlike anything else. Uh, a network can't do that. Um, you know, if you're a, uh, corporately owned mso, you got to buy the shops, so they need working capital to be able to do that. That's not going to happen on a claim by claim basis. If you're a franchisor, you've got franchise territory restrictions and you can't oversell your franchises because you've already sold those to other franchisees. So there's constraints there. Um, but we don't have those constraints because we're a marketplace. So as long as they meet the criteria, we can bring them in.

Speaker B: Um, for the carriers, uh, what is the integration like? Does it need to plug into my Guidewire Claim center or Duck Creek? Or is this the kind of thing where we just log in separately so it can.

Speaker A: And that's the happy path. Tony Ideal state is our claims management system talks to their claims management system through an API. Um, we recently upgraded our cms, our claims management system to uh, one of the well known ones out there that dozens of carriers use. And so that allows us to have that API, uh, flow uh, very easily from day one. So there's not a management system that we can't connect into. There is an integration path though it's usually not day one. Um, I've learned the hard way, um, that you know, if you tried too early to force uh, an API project or an integration project before you really get to know each other as a customer and go through a proper discovery, uh, and go through some of the test and learns, um, you're going to be throwing money and time and resources out the window. So happy path for us is platform integration. We usually try to get there within the first six to 12 months with our carrier clients. Um, so we do have the ability to ingest those claims um, through our own tools and we can stand up what we call private locators. So we go out and you know, there's the public face of crashbay. If you go to our website you can search shops and there'll be thousands of uh, options in both countries. But then we have the private version of crashbay which is really our SaaS solution. So if we, we actually believe it or not, run into carriers, usually it's smaller mutuals, regionals, fleet companies or self, uh, insured fleets like car share rideshare companies that maybe don't have a claims Management system or they don't have Duck Creek or Origami or Guidewire.

Speaker B: They're still in the, on their old home. Built on Prem.

Speaker A: Right on Prem systems or Homegrown system that uh, built 25 years ago, the DOS based uh, as 400 system. So in those cases we stand up private uh locators for them. We'll, we'll build tools with them uh to streamline their processes um, and give them access to our shops. And uh, we do that. Everything's stored in our cloud and it's password protected. So a big way that we like we, we serve three main stakeholders. We serve the shops because we're, we're here to help them grow and access programs that they couldn't necessarily access on their own or be an extension of their, of their sales team. We're here to service the car owner because we want to give them variety and choice as I mentioned earlier. But the carrier, we want to make it as easy as possible in a standardized way to reach as many shops as possible. Um so you know we, we can do things manually. Uh in some cases with some of our customers we're actually logging into their claims management system and we're, we're the ones importing documents if they don't have the ability to do an API. Um, and you know Tony, like some of these uh insurance companies, even the medium sized ones, uh getting support and resources to stand up technology integration. It can take sometimes 12 months, 18, uh, months or longer to get approval and then you know you're, you're in the priority queue at that point and you could get bumped. Um so we try not to let that stop us. But that is the ultimate um, end goal for us is, is integration.

Speaker B: What, what, what's the uh, what's the pricing? Who, who, who pays for, for the Crush Bay service?

Speaker A: Great, great question. Our, our, our investors ask us that all the time. Um, so as, as a two sided marketplace. Um, so we monetize on, on both sides of the marketplace. Um but right now the way it works is on the shop side which we call the supply side. Um, shops can join for free. Doesn't cost anything to become a member of Crash Bay. And our promise to them is actually you're not going to pay us a penny until you get your first claim. Um so once we start seeing a claims flow for them and we're processing the payments because we actually do everything through a central payment program. So digital payments is a big part of our business model. Um so you know we take a fee for Payment transactions for handling payments just like any other payment provider. Uh, so that's one way that we make money on the shop side. And then we also sell memberships to high volume shops. So um, if you look at most marketplaces, um, most marketplaces will have like all star hosts. Like uh, you have all star status in VRBO or Airbnb, ah, Turo, um, and you know, all star Uber drivers and Lyft drivers, etc, so we have an all star category for our shops. So if they're top performers, um, they meet a certain criteria and they're in a high volume market, we will also sell a membership to them and that gives them some priority ranking and access to additional services. And then on the carrier side it's through software projects. So when we start building with carriers, uh, and building customized tools for them and getting involved in claims workflow, um, then, then we monetize, monetize on that side. But that's, that's the longer uh, sales cycle. On the uh, on the insurance side, software products uh, have a long, a long tail as you know.

Speaker B: What, what, what are, what are the clients saying? And, and I know you have basically three different clients in my world. The carriers. What are the carriers that, that, that use you guys? What feedback are, are they giving you and what kind of ROI are, are they reporting?

Speaker A: Good question. Yeah. So where, where were you like really able to move the needle? Um, I, I mentioned earlier, uh, we're kind of focusing on outside of the top 10. Uh, because we feel like that right now the top 10 carriers are not feeling the pain enough for this to be a big, big problem for them. They will in the future. Uh, because um, you know the, and I can get into that later, but right now we want to focus where there's a sense of urgency, there's, there's a problem that can be solved and we can start removing pain points. That's usually for the tier two insurance carriers. Uh, like I said before, self insured fleets, car share, rideshare companies. There's lots of um, companies out there that have large fleets that are carrying deductibles, $50,000 deductibles and they're self insuring everything under 50,000. But they don't have enough volume at the shop level to be meaningful to the shop. So if you think about it, if I'm running a shop in any market, I'm probably running my business on anywhere from five to six to seven accounts that keep my doors open and my lights on and allow me to make payroll and you know, those a lot of times are the big top 10 carriers. And if you're a smaller shop, you just don't have access to those programs. Um, but how do we get those shops to prioritize smaller accounts? What we do is we bundle those accounts together. So we'll take three or four or five small accounts in a market, we'll bundle them. So it now becomes meaningful and significant at the shop level. And the results, like you said, the feedback, what's the customer feedback? The customer feedback from the carriers is you've just now helped me um, expedite my claims cycle time so I'm able to close my claims faster and pay my claims faster. Um, and so they're reducing their rental severity. As a result their claims adjudication expenses are going down because they're not having to pay to have a vehicle assessed in the field or uh, to you know, cash out a claim and have to chase that customer later to see if they actually um, went and got the vehicle repaired. Dealing uh, with supplements because we, we take all of that away. So once a claim comes into the crash bay environment and we've verified everything at the shop level and the, and the, and the car owner level, we stay with that claim until the, it's closed and paid. So we're able to uh, deliver a lot of synergies or sorry, uh, I should say efficiencies is a better word to insurance carriers because their adjusters, when it's a Crash bay claim, it's basically a one touch claim. It's once and done, pay and go. Because crash bay is now monitoring the shop, we're updating the insurance carrier on the status of the repair. You know, if the delivery date changes, we're letting them know, we're setting up dashboards and portals for them to log in to be able to see the status of the repair at any time. That drastically reduces, you know, phone calls, claims inquiries, inbound calls, going into claims call centers. Because we're taking that over for them and then we're taking over the payment management, uh, side of things. Having to manage and pay uh, hundreds and thousands of vendors is very costly for insurance companies. And long term that, that's not a sustainable strategy. Insurance companies won't have large vendor management departments to be able to manage thousands of vendors in the future. And so crash bay is able to take that expense and that burden, that administrative burden away from the insurance carriers. So that's some of the feedback that we get. And then you know, we, we, we measure csi, we measure NPS and, and Google scores. We have an integration with Google my business. So we're able to help the shops boost their scores and their profile in their communities. Um, you know, through, through those reviews that we're driving and you know, better all, uh, a better overall client experience for the, for the customer.

Speaker B: Did I, did I understand this correctly? We uh, asked the carrier we can write Crash pay a single check at the end of the month kind of thing.

Speaker A: Some of them write us a check. Uh, they send us electronic uh, payments every day. But, but you're right, Tony. Yeah. So, uh, that's a, that's a bulk pay process and instead of uh, you know, because in, in 30 days, if I'm even a medium sized carrier, I could have thousands of claims. You know, we, we deal with self insured fleets that have 5, 10,000 claims a month. Um, paying hundreds and thousands of vendors is very expensive. So they just pay one bulk payment to Crash Bay. And we have an entire dedicated payments team that now redistributes that money to our shops. And one of the things that we pride ourselves on is rapid pay. So why that matters to insurance carriers, that's obviously great for shops because it helps them manage their cash flow and everything else. But on the carrier side that's what gives them that priority service because they're getting paid faster on those claims from Crashbait. So now they're prioritizing those claims and they want to get them, they're incentivized to get them out of the shop quicker. Um, so, so yeah, that's right. It's just we, we take it from hundreds of payment profiles to just pay Crash pay and we will take care of the rest.

Speaker B: That is fantastic.

Speaker A: Yeah, yeah, it's, it's not easy. It's. I make it sound easy. Um, I, I'll give you a little bit of a quick highlight like you can imagine. Uh, you know, I mentioned we, we started as an idea six years ago. We spent a lot of time in, I call it in the lab conceptualizing and ironing out things for the first three years and building out the supply side and with our promise to shops of like you're not going to pay us a penny until you get your first, uh, payment from, from Crash Bay. We had to basically operate on a freemium model for an extended period of time to build trust and goodwill with shops that we will pay them on time. Um, because if you, if you could imagine even with Airbnb or, or you know, businesses as big as that, or Expedia People do not give up their banking information easily, nor should they. Right. So if we're a new entity, crash bay, you know, 18 months ago we were not extremely active in the U.S. we got our POC in Canada. We're a new entity to a shop who's never met us before. We go through digital onboarding. Then we say give us your banking information that doesn't get released easily. So we, it's incumbent upon us to build that trust with shops. And so a lot of times, you know, we can operate in a market for a few months before we make a single dollar because we're building goodwill with those shops. But once we're able to prove to them that we can pay them on time and that you know, we pay them the right amount, the amount that, that they, they should be paid on that claim, we're able to open that up. Um, and, and that spreads like wildfire. Um, because when you build trust in an industry like that, people talk to their peers. So that's, that's gone a long way for us.

Speaker B: You, you mentioned that, that for, for the big carriers, uh, at this point, uh, it's not enough of, of a pain point but that you're, you, you think it'll, it'll get worse. Why will it get worse?

Speaker A: Yeah, so let, let me, I'm going to answer your question with a question. Okay. How many people do you know that are going into the auto body trade either as a body technician or a, ah, painter or a prepper or a detailer. Do you know anyone in your family? Neither do I actually. I, I do now because um, my business partner, our co founder Bing, his son is actually getting into the business. But it's, it's crazy. Like out of even our co founder group and I've got teenagers, um, I think my 13 year old might be considering a trade. But there is a trade shortage. We know this like even electricians, carpenters, plumbers, mechanics, um, and auto body has traditionally kind of been lower. Uh, the perception has been lower when people are thinking about going into a trade. And so you know, there, there is a correction happening and more people are seeing that hey, I can make money in a trade and it's, it's a dignified way to make a living. And you know, you're working with your hands and not everybody's an academic, not everybody's cut out to get a bachelor's degree. Um, and there's, there's great smart people that need to be working in trade. So there is a correction going on. But we're never going to catch up to replacement. It's not going to be a one to one. And we already have in the collision repair industry and this has been a problem that's been going on for decades is that we have technicians now that are staying on past the age of retirement. So they could have retired five years ago. And if you can imagine, like, yeah,

Speaker B: there's a physical job. Uh, yeah, like we have, we have people in insurance who are, who are 80, especially agents but, but this is a very non physical job.

Speaker A: Like if you've ever built a deck or a fence or you know, you're on your knees for the weekend doing a project at home or something, you have a sore back the next day, right?

Speaker B: Like, okay, I'm the most white collar wimp ever. Um, I put on knee uh, pads today, change the RAM on my gaming computer because uh, at 42, uh, if I kneel on the floor my knees hurt.

Speaker A: It, it doesn't, you feel it the next morning.

Speaker B: Right.

Speaker A: But imagine some of these technicians are working into their 50s and 60s and, and now the environment's gotten better because they, part of what I want to do, you know, for anybody that's an audience member today is I want to promote the trade because it's come a long way. Uh, you know, if you go into a paint booth, they're wearing full respirators. It's safe now, they're not breathing in those chemicals. The best shops out there, you know, they, they have hoists where the mechanics can work at, ah, you know, or sorry the technicians, I should say can work at eye level and they don't have to be on their knees or you know, there, there, there's lots of equipment and tool upgrades, ergonomic upgrades that have happened in the industry to, to make it safer to build the longevity in, and automation is helping. Just like in manufacturing, the way you built a car 20 years ago is different than how it gets built now. And a lot of it's done by robots. Um, right. And if you go into like any, any auto manufacturing process and so automation's coming into the collision repair industry, um, probably not at a fast enough rate. And so it's that, that rub in between of you know, automation and there being a, a trade shortage on the technician side. And again consolidation will not solve the problem. And that's already been proven because the industry's had over 30 years to consolidate and it's still very fragmented. So with all the moving parts that are happening and you know, some, some regions are stronger than Others, you know, some regions are stronger in the trades than others, but all those moving parts, it all comes back to. The only way to replace that is through technology. So a combination of automation, the digital marketplace model, where you know, if, if there's shops that are closing in a market, we're going to know who the shops are that are consolidating, coming together or expanding their capacity and we can, we can move with that, that trend through, through a digital marketplace model. To be able to manage that as an insurance carrier long term is just not realistic or sustainable. The other side of that, Tony, is that traditionally on the insurance carrier side, the people who manage these programs, like the, the direct repair programs, the, the vendor programs, they usually come from the industry. They uh, it happens on the property side. You get, you know, ex contractors that, that come in and they now write estimates for insurance companies or they do audits. You know, you get that in an automotive as well, uh, as other lines of business and insurance. And again that's, as you can imagine, it goes back to the same root cause, less people going into the industry. So that, that knowledge transfer at the insurance company, once that person who's been managing auto body, uh, vendors for the last 30 years retires, there's, there's not anybody that can come in and, and, and bring that same level of knowledge to the table. So everything's changing in how you manage your supply chain in this space and how you manage claims. And, and so you know, for us we want to standardize and streamline as much as possible. We call ourselves a service centric technology company because uh, you know, I'm a claims guy at heart and you know, we're made up of claims people. We know you can't fully remove the human element from claims. Um, so customer service is a big, big focus for us. But we know that trend is coming faster and faster and we're, and, and automation and technology is the only thing that's going to solve it. So eventually the top tens will come to a place where, oh my gosh, all of a sudden I don't have repair capacity in a market where I, where I thought I was okay. Um, you know, for various reasons, um, at the like microeconomic reasons that are happening at the market model.

Speaker B: Very, very interesting. Uh, is there anything on the development pipeline, I don't know how much, uh, the product itself, the marketplace is changing. But is there anything in the development pipeline coming in in 2025 that you're excited about and can already talk about?

Speaker A: Yeah, yeah, super excited. And so we're actually, uh, on that note, our technology team will be our fastest growing department, uh, if you will, um, of the company, our product and engineering team, uh, because of the, the product roadmap and the technology roadmap that we have. Um, and so going into automation on the shop onboarding side, making that easier, less keystrokes for the shop to be, to have to apply to become a member for us to assess them. There's lots of uh, AI solutions out there that are available or things that we're going to partner with other companies or build or integrate on. Um, so I'm really excited about the possibilities there and being able to streamline that onboarding and application process to a whole new level. Um, and then you know, being able to give carriers more tools. Um, so we have an algorithm that's proprietary that we built and we're constantly, you know, upgrading that algorithm like, like Google, like Airbnb, you know, any of these marketplaces that you interact with based on, on the, the customer review scores, their performance and like on metrics, their response time, all of those things that we measure. We're going to be taking our algorithm to the next level so that we always have the best shops available on a market level, uh, that are ranking at the top and we want to reward shops for their performance, um, because we think the best shop should, should, should get the most volume. Um, and so those are really exciting things that are on our, our, our roadmap. They're mostly technology focused and we're currently in a venture, we're in our third funding round. Um, so we went through the whole struggle of uh, self funding for the first few years and remortgaging our houses and uh, bootstrapping, um, as a co founder group. And then we did an angel round with some industry veterans um, about two years ago and then our first venture round we did about a year ago with Marked Ventures, uh, out of Boulder. Yeah, great. Ah, nothing but great things to say about, about Marked Parker and his team. And uh, and now we're going into our, our third round of funding, outside funding and uh, we're on target to close that within the next 30 days. And that will be so that we can get to work on growing and expanding and building these automation tools to streamline the process for shops and for insurance carriers. So that, that gets me out of bed in the morning. Uh, it's super exciting. It's, there's, there's a lot of pressure, but it's fun. Like these are, you know, we're solving Problems. We're making life better for people who have claims. Uh, we're trying to make, take the pain out of that process. And uh, Tony, I gotta tell you, like I, I've been blessed with amazing co founders um, and an amazing team and some of these people I've worked with, um, for years in previous companies. We uh, have a really interesting story and uh, I, I actually want to write a book about it someday. But like the. If, if, if you'll let me elaborate, um, it's, it's really cool kind of how the, how the co founders met. Um, and I little known fact, I don't know if everybody knows this but uh, Andrew Daniels, who's based out of Columbus, Ohio, he runs uh, a little insuretech community called InsureTech Ohio, um, which has just recently been rebranded. Uh, sorry, rebranded Scout. Right. They're doing amazing things. I think they're the third largest ranked insuretech community in the United States. Andrew started that on his own and then brought in a co founder team and they've done amazing things together um, to take that community to that level. And then Daniel Teral who runs InsurTech Denver, he was actually an early investor in Crash Bay. But the funny thing is I'm running InsurTech Canada. Um, Daniel's running in InsurTech Denver and Andrew's running Insurtech Ohio. And we all met through the insurtech nerd community.

Speaker B: Right.

Speaker A: Uh, that we're all a part of and we started talking about this, this idea of bringing the marketplace model, um, into the insurance claims ecosystem. And that was a big part of the crash based story. And it wasn't uh, intentional. It all happened organically. Like we, we met as InsurTech community leaders and you know, doing some advising and consulting on the side and stuff like that. And Crash Bay had already been started. Andrew came very early in the process and, and so that insurtech dynamic turned into something and you know that, that became my, you know, a critical phase for our evolution. Bing Wong, our, our chief growth officer, I used to be his customer. So when I was a carrier he worked um, on the collision side at a, at a collision franchisor that services the top tens. And uh, when I started Crash, uh, bait, for the first few months I was on my own. He was one of the first people in the room. A funny story about being a founder and being humbled. Early on I rented a room in Halifax, Nova Scotia to do our first town hall. Tony. The capacity for that room was uh, 200 people. It could hold you know how many people showed up? Three people. Three people. I, so I was presenting to a room of three like. And I, in my head it was a room of 200. And um, you know, this is before we had Zoom and podcasts and it wasn't that long ago but this wasn't popular at that time. And uh, it was around an industry conference on the shop side and we were trying to get in front of shops. Bing was one of the first people in the room. And I'll never forget that. And you know, we had that history, that customer, um, uh, vendor history, um, uh, from the past and I knew that there was a dynamic there. And then Jeff Keddie, uh, who is our, our chief Strategy officer and our cfo, he also worked in the industry for some of the biggest uh, uh, franchisors. And uh, Jeff, Jeff. What Jeff can do with a spreadsheet would uh, amaze you. The guy lives and breathes numbers. He's got a different brain, different personality. And him and I worked on some projects, some side projects and I, uh, think we were doing a consulting call at like 9 o' clock at night one night and said uh, why don't we work on this together? So it all kind of came together. And the reason I'm sharing this uh, with everybody is um, don't underestimate the value of these conversations like that you and I are having today, Tony, or the person, you could never know which

Speaker B: one is going to open a little door.

Speaker A: The person your, your dinner partner at, ah, like an event that you're a table of 10 people or the person that is your customer today could be your business partner tomorrow. Um, and so it, it all evolved in a very uh, interesting way. But uh, I wouldn't change it for the world. But like I think about that and I think about the rest of our team and the, the amazing people that we're attracting here. That's my validation that we're on the right track. I know where the industry trends are going, but it really comes down to the quality of the people um, that, that are um, are on the Crash Bay team. And uh, I consider myself uh, very blessed to have such amazing people on our team.

Speaker B: Congrats on all the success thus far, uh, and thank you for coming on the show. Uh, when, when this goes live, we will tag both you and, and the company on LinkedIn.

Speaker A: Uh, thank you so much, Tony. If I can be. Before we close, of course, I want to give you a shout out. Um, so the work that you're doing, you know You've built this reputation, this, this image, this Persona around this guy. And uh, I've had a chance to, to talk to you one in a one on one situation. And you know, this, this makes you seem larger than life. But you, you really are like a down to earth person, uh, easy to talk to and I want to recognize you for the impact you're having in the industry. I didn't realize that you were into the hundreds, uh, of episodes, 600 and

Speaker B: uh, 700, uh, uh, getting. We're 620, just about.

Speaker A: It's amazing. Like, so I will. This is not a plug for me, but I, I do a podcast too. But we have, we've done like, I've done like 30 interviews and I get stressed out preparing for those interviews because you want it to be perfect and you want to get the message out there and you want to highlight the person sitting across from you and you want to do a good job and you care, Tony. And you're making an impact and you're reaching a lot of people and uh, sometimes it's thankless and uh, I know you're not in it for the money, so thank you for what you're doing for the industry, for getting content out there and giving people like us an opportunity to talk about our story.

Speaker B: Uh, thank you. I have a ton of fun, uh, playing this weird role that I play with the insurance and insurance world. Uh, it doesn't feel like I work. Ah, I love what I do and it's a ton of fun. So anyway, thank you.

Speaker A: You do an amazing job. Thank you, Tony. Appreciate it. This was a pleasure.