SaaS Interviews with CEOs, Startups, Founders
1307 Insurance ChatBot Increases Quote Close Rate, $20k MRR
21 Feb 2019
Chapter 1: What is the main topic discussed in this episode?
I had a lot of experience at Dell. Other companies decided to take the leap in 2016, put in about 500 grand. Him and his co-founder of their own money to build Elaphras, which basically is, again, a chatbot for insurance agencies. It helps them get more payments. It helps them make more money from their customers.
They currently have four customers paying five grand a month, so 20 grand a month in monthly recurring revenue. Their team of 14 based between San Francisco, Ohio, and Kiev, Russia. Again, they're raising about 1.5 million bucks right now, hoping to get a five or six cap on that.
This is the Top Entrepreneurs Podcast, where founders share how they started their companies and got filthy rich or crash and burn. Each episode features revenue numbers, customer counts, and other insider information that creates business news headlines. We went from a couple of hundred thousand dollars to 2.7 million. I had no money when I started the company.
Chapter 2: How did Jake Diner transition from corporate roles to entrepreneurship?
It was $160 million, which is the size of many IPOs. We're a bit strapped. We have like 22,000 customers. With over 5 million downloads in a very short amount of time, major outlets like Inc. are calling us the fastest growing business show on iTunes. I'm your host, Nathan Latka, and here's today's episode. Hello, everyone. My guest today is Jake Diner.
He's an innovation and technology expert with two decades of experience in product management. Currently, the company he's working on is Elefris. We'll talk about that in a second. But first, he graduated from MSU with a degree in computer science.
And after working for over a decade in corporate leadership roles, including positions at Belkin and Dell, he decided to use his experience to build startups with a focus on those serving the insurance industry.
That's what led him to where he is today as CEO of Elefris, a San Francisco-based company that has built artificial intelligence-powered chatbot technology designed to help insurers meet the engagement expectations of today's consumer. Jake, are you ready to take us to the top?
Yeah, absolutely.
All right, so tell us about the company, and specifically, is it kind of a pure play SaaS model, or how do you make money?
Well, first of all, our company, Elefris, has solved the problem of engagement between the consumers and insurance companies. It started From my personal experience, I got pulled over and a cop asked a very simple question, proof of insurance. And I happened to have a smartphone app, my insurance smartphone app on the phone, and that app started updating itself the first time I launched it.
So I'm sitting there in the car with the cop standing right next to me, flashing the light in my eyes, and we're both waiting for the app to update itself. It took about five minutes, poor connection, the app updated itself, then it asked for username and password. And I had no idea what it is because I've never used my insurance app before. So that's what kind of pushed us.
Well, there's got to be a better way to engage with our insurance companies as consumers. So that's how we started our company. And essentially, we merged into building virtual insurance agents. So we are teaching AI to be capable of augmenting and perhaps in the future, replacing insurance agents.
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Chapter 3: What problem does Elafris aim to solve in the insurance industry?
How many customers are you working with?
So we have today four customers who use our solution. And in our pipeline, we have about 10 more. Insurance business, it's a very long sales cycle business. because they're very risk averse and they want to make sure they get the best technology. So we go through a lot of pilots, a lot of RFPs to make a sale.
So for customers paying kind of a minimum of five grand per month, it's fair to say you're doing about 20 grand a month right now in revenue?
Yeah.
Okay.
Roughly.
Okay. I mean, is it lower or higher?
No, no, no. It's about right. It just depends. Sometimes it's a little bit more, sometimes a bit less.
Okay. And talk to me about growth. Where were you a year ago at the same time? How much revenue?
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Chapter 4: How does the AI chatbot enhance customer engagement?
Okay, so you and your co-founder just kind of sunk in the money for the first year to support the thing and pay yourselves? Or not probably, you probably didn't pay yourselves?
No, we still not paying ourselves.
How much did you guys put in?
We put about half a million each.
Okay, wow, okay. And so, I mean, how long will that take you? What do you hope to grow revenue to while you still have that money in the bank?
Well, we are right now, so we're about to run out of money now. So we've started to raise our seed round. We're raising about one and a half million. And right now we are in the process of negotiating the term sheet.
The what? No, the term sheet. Are you doing a convertible note or a priced equity round?
A note. A note.
A note, okay. So what do you think, I mean, if you raise $1.5 million on a note, what kind of cap are you hoping to get? What interest rate, what terms are you hoping to get?
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