#24 | Leveraging Data to Revolutionize Insurance Compliance & Risk Management with Ashwin Agarwal - CEO & Co-Founder at Advocate

What does it take to turn a bold vision into a transformative business, especially in a complex, data-driven industry like insurance?

In this episode, Frazer and Ashwin discuss: 

> How applying first principles and balancing operational grit with strategic vision can turn complex markets into playgrounds of opportunity.

> Why product differentiation and data transparency are key to disrupting traditional markets and building scalable, impactful businesses.

> The value of leveraging technology to automate compliance processes, reduce operational friction, and unlock new growth opportunities in financial services.

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Ashwin Agarwal is the CEO & Co-Founder of Advocate, a high-growth technology company providing modern insurance operations for the commercial real estate space. Before founding Advocate in 2020, Ashwin was the lead insurance and technology investor at Elysium, the multi-billion-dollar family office of the Founder of Apollo Global Management. At Elysium, he sat on the boards of Convene, ITMA, Risk Settlements and Augustus Specialty. Prior to private equity, Ashwin worked in the TMT investment banking group at Goldman Sachs.

Transcript

SPEAKER_00 0:10

Friends, welcome to the Best2Go FinTech Podcast. I'm Fraser Anderson. Today I'm excited to be joined by Ashman Agarwal, co-founder and CEO of Advocate Technologies, a technology-enabled insurance compliance automation business for commercial real estate lenders. Prior to founding Advocate, Ashman got his start in TMT investment banking at Goldman Sachs in New York before joining Elysium Capital, where he led investments across insurance, financial services, real estate, and technology. So without further ado, let's get to my conversation with Ash. Ashman, welcome to the show. Hey, how are you doing, Fraser? Good. It's uh it's been a long time. We've been talking about uh doing this basically since we partnered up together a couple of years ago. So I'm I'm pleased we're finally together to talk a little bit about Advocate and share what's under the hood. But I think um I think what would be really helpful to start is with your background and um and what what were some of the first memories you had that seeded the idea of entrepreneurship and building technology companies? Because there's you came by it fairly circuitously.

SPEAKER_02 1:16

Yes. Yeah, I think like, you know, my background is in some ways pretty traditional, in some ways very non-traditional. Even though we're based in New York City and my first career was in finance. I mean, I grew up in I grew up in Palo Alto. So I was born in Palo Alto in the late 80s, and my parents were microprocessor engineers, you know, working on the 8086 at Intel. Um I actually even have uh I have an 8086 book uh dedicated to me, which if you if you you know want to read up on on all sorts of I guess it's called assembly language, but stuff like that. Um and and my my my you know my dad started a tech company in 1992. It didn't go anywhere. Uh but it was it, you know, it it it had some it had revenue, it sold, you know, boxes of software. Um and so my exposure to to technology has been really through the version of Silicon Valley in the 90s. Um because in 2005, you know, I left I left Palo Alto to come to New York. So it's almost like my experience as to what technology is is frozen in time from 1990 to 2005. And then and then the finance started.

SPEAKER_00 2:37

Yeah, significantly more optimistic times, and then um and then you you basically went to university at the worst time for anybody who wanted a job uh after school because you graduated in 2009, correct? That's right. Uh and what'd you do then?

SPEAKER_02 2:53

Yeah, so uh I found my way to Goldman and I I think like I joined Goldman at the time where actually everybody was joining Facebook. Like, you know, I was joining Goldman in New York City, and everyone was joining Facebook and Palo Alto. Uh probably from a relative net wealth, I I should have done, I should have done the Facebook bang. Um, but yeah, I joined Goldman um, you know, first in one of their legal and compliance groups, and then eventually I was I was in their uh TMT investment banking group. So somehow found my way back to technology, but but more on the M ⁇ A side.

SPEAKER_00 3:28

It was it was funny. I was uh I was training with Matt Alfieri, who I don't know if you know Matt from Santana. He uh he's a tremendous guy, but he was telling me you know he did his he did his summer internship at Goldman in 2007, and then I think it was to probably 2008, and then when he got his um when he got his offer, they weren't turning on the air conditioning on the weekends.

SPEAKER_02 3:49

Yeah, yeah. Well, I remember actually it's such a great story. I remember one day we walked into the offices and all the plants were gone. I was like, where did all the plants go? You know, at like 200 West. Yeah. And uh I think the story was that they just didn't want to pay to water them anymore. So yeah, those are the times.

SPEAKER_00 4:07

Yeah. Um talk about like what the experience was like working in TMT at that time. You know, like was entrepreneurship like in your mind as something you would go to eventually?

SPEAKER_02 4:20

Or yeah, I I like I had I originally, yes. Like that's actually how I found myself to TMT, but T TMT was a very was a very interesting place because in San Francisco, there's a San Francisco office and a New York office. And if you looked at the paths of the analysts in the San Francisco office, everybody who was an analyst ended up either working as like you know, the director of business development at a startup, or they went to VC. In the New York office where I was, it was still very traditional culturally. So we all went into PE and hedge funds, and I think it was very much just the culture of what was popular, right? Like, you know, what what was the currency of of uh of I think success, to be honest with you. And yeah, I had thought about entrepreneurship, but very quickly was like pretty much, you know, pretty allured by like the idea of going to the buy side.

SPEAKER_01 5:08

Yeah.

SPEAKER_00 5:09

And then you went to the buy side and as far as I can tell, focused on investing in assets that were pretty far from what one would consider, and frankly, investing in a style that would one would generally associate with high growth, ultra high gross margin, capital burning, software companies.

SPEAKER_02 5:32

Yeah, no, we were we were cash flow yield six times EBITDA investors, you know?

SPEAKER_00 5:37

Yeah.

SPEAKER_02 5:38

Buying things, um, you know, where where really in that overall investment thesis, the thing that mattered the most if you looked over time in terms of returns was entry price. Yeah, that's what it was all about. So yeah. But you but you did get to learn the insurance industry. I did. And so insurance, you know, which is like it's what advocate technologies is, is you know, it's for someone who has a bit of a more of an entrepreneurial mindset, which like I which obviously I do, it's it's this playground, and I think fig in general, banks insurance, um, it's this playground for financial thinkers where I think the investor actually has more creativity in terms of thinking through the investments. Look, if you're investing in a media business, like your operators are going to be the ones who are doing all the core decisions that are going to drive returns. You know, you're there to sort of allocate. But in insurance and and fig, you can set up structures and you can put together different, you know, vehicles, right? Because you're dealing with like abstract financial products that's the core of the business, um, to actually drive returns yourself. So what the reason why I fell in love with insurance was because I felt like it gave me this opportunity to be, I think, pretty entrepreneurial and creative.

SPEAKER_00 6:49

So that's something that I think gets lost on a lot of people when I speak to I mean, folks that we you know work closely with, like BJ Dowling as an example, like these incredibly talented, like and very creative, you know, these are insurance folks and extremely entrepreneurial, so you know, creating businesses, creating markets. You know, could you maybe try and make that a little bit more concrete in terms of like you know, just an example comes to mind?

SPEAKER_02 7:19

Yeah, you know, absolutely. That's such a great question. Okay. The best example is like if you conceptualize like what is an insurance product, okay? Like they sell products just like you know, Zappa sells shoes, Nike sells shoes, and uh, you know, Toyota sells cars, there is a product of insurance, and that product is called an insurance policy. You know, and that insurance policy is like this boring thing conceptually, but like actually, you know, what you choose to insure and the profile of the insurance is based off of historical loss data, you know, where you say, I'm going to insure this risk. And so as a financial investor, you can actually be involved in the decisions around what product should be created. You know, you're not um you're not that far removed from it. It's not like crafting a shoe. I mean, I think actually some of the best insurance investors in the world, or insurance operators in the world, like Bill Berkeley, uh, for instance, and I think you could put Warren Buffett into that category as well, as insurance operators are investors. Yeah. And that should tell you something about like how the function works. I'll give you like one example, you know, there's insurance policies for funky and weird kidnap and ransom situations. There's there was this there was this idea apparently at AIG 30 years ago to uh when when I guess cryogenics was happening, was to come up with a policy that was like called severed head insurance. So that was like something that kicked around. So, you know, people do it, you can do whatever you want, you know.

SPEAKER_00 8:57

Um that's pretty exciting. And so, you know, the impression I get is that this sort of entrepreneurial itch would remained with you. And when did you start thinking about scratching it in a more sort of traditional way? Um, what were the things that you saw that made you see like, hmm, there's an opportunity here?

SPEAKER_02 9:18

Yeah, I I think actually by nature, even though I've taken a ton of risk, you know, over the last, I'd say, five to seven years, I don't think I'm the most risk-forward person. I think I'm like someone who thinks things through. You know, and for me, the reason why I decided to do this is because it was about the idea. You know, I I couldn't just start a business to start a business, for instance, like a a DoorDash or something. I I would be lost. Um and this was the idea for me. I mean, and you know, there's multiple things inside of what we do at Advocate that we can talk about, but it was this viewpoint of you know, you feel like you can see what the future could be like, right? You have a flash of like, oh, wait a minute, this is the core thing. And I think for me, I'm very vision-driven. Like, I have an opinion about what I think 20 years from now should look like. And I think the there's that, you know, not to quote people who are just like infinitely better than I am, but um, Jeff Bezos on this idea that you know you should be stubborn on the vision and flexible on the details. Like I think that's very much how I operate, and it was that vision that got me excited.

SPEAKER_00 10:34

So I I think it's worth digging a little bit deeper here because I think the folks that are gonna be well, there's there are gonna be many different kinds of people that are successful. I think working with you at Advocate is the story really matures, but I think there's room for a lot of former investors um to have an impact to the company based on what you do, and we're probably gonna have to recut uh an explanation of what Advocate does. Yeah. Um, but but tell me tell me how long you had this vision before you decided to do it.

SPEAKER_02 11:09

Yeah. I mean, I worked it over in my head for two years. Like, I think everyone comes to entrepreneurship differently. And for me, I as an investor, I was investing in insurance companies. I really thought about like, well, what is going on here? I mean, to cut to the to the core point, and you know, we can talk about what advocate does, you know, maybe maybe separately, but there's this idea that you know, product uh pricing and transparency is is what's critical to solving the the insurance landscape. And I think there's a second observation, which is that insurance is no different than financials. Like you have financial products uh like stocks and bonds, and you have insurance products like policies. If you just analogize to what's happened in the financial market and say that can happen in the insurance market, like you've got a very good idea of what we're up to and where we're going.

SPEAKER_00 12:01

Ash, tell me what Advocate Technologies is and does.

SPEAKER_02 12:07

Yeah, for sure. So Advocate Technologies is building an automated insurance risk manager. Um we start with providing, we've started by providing insurance risk management services to lenders. Um and what lenders and why lenders need insurance risk management is that you know when they enter into a loan transaction with the borrower, they are sharing the underlying loan collateral with that borrower. And so if that borrower experiences, let's say it's a building in Miami, Florida, if that building experiences a hurricane event and it's not properly insured by the by their counterparty, the borrower, the lender could actually experience a default event. Um and so as a part of their overall underwriting and during closing and throughout servicing, um the lender is doing an insurance risk management check. They're checking the borrower's insurance policies. Uh and so we do that function uh for lenders, but we're expanding, you know, out into different functions because the stack of what they do of what we do for lenders is necessary, you know, across a across a bunch of different industries.

SPEAKER_00 13:23

And like, you know, right off the bat, this is when you were explaining this to us, what was it, two and a half years ago. It was so like, okay, per the perfect niche for like us to be investing across. Like we were, you know, I think we gave you a term sheet like the same day we spoke.

SPEAKER_01 13:39

Yeah.

SPEAKER_00 13:39

Um it's like the fastest term sheet we've ever given out. So so it seems like a very uh obvious niche to get excited about. Now, like, you know, the current state of play, and I think this is probably still the case today, is you know, some of the lenders have this function in-house. Uh, there are consulting firms that do this. So, you know, obviously someone from Silicon Valley, which I guess you are, would just say, well, I'll just go out of a software. But like, what were the what were the unlocks for you or the visions that made this so compelling to go after, other than like, I'm just gonna build, like I must be able to build a better mousetrap?

SPEAKER_02 14:15

Yeah, I think number one, and there's a whole data strategy in sort of what we do was that this is a like this is a very data rich opportunity. And I and I think that we were, if I could give us some credit, three and a half years ahead of where people are today. Yeah, which is that you want to deliver an outcome, and when you deliver that outcome, you also want to own the data.

SPEAKER_01 14:42

Yeah.

SPEAKER_02 14:43

That's what we do. We've been doing that for three and a half to four years. We are a tech enabled service that believes we can grind up gross margin, and we do, but we deliver an outcome to the client. And when we do that, we also have an entire data strategy to capture things to create the smoke. And when one of the things I think is look, I think this comes from my thinking as a financial investor, which is counterintuitive, is I've just never really believed in recurring revenue subscriptions as something that must be like the number one goal of a business. You should do you should have high margins, you should grow fast, and you should deliver value. The structure of the contract, like, you know, it can churn if you don't deliver value. And we've always been a transactional-based business that said, are we delivering high value? Um, and I look, I think today, in many ways, the market is coming around to understanding what we're talking about.

SPEAKER_00 15:43

And so you talked earlier about the way in which there are a number of well, for some people it's a source of great wealth, but um one might say problems with the insurance marketplace today due to a lack of data transparency. Yeah. Talk about what makes what you do particularly compelling in that context and and why there aren't really other ways that seem frankly feasible to acquire data with enough kind of granularity, enough scale that you can actually start to build interesting products on top of.

SPEAKER_02 16:22

Yeah, it's the biggest problem, sort of sitting there in the largest industry that it hasn't been solved and that's staring people in the face, which is that there is no pricing transparency in insurance. And people don't understand, they don't really understand what that means. But it's a multi-trillion dollar asset class where you can't define what products are available and what price you could pay for them. There's a bunch of reasons why that's the case. Uh, and if you want to know why and how to solve them, you should come work for me. Um, but like the the the thing that I'll I'll tell the audience is like just think about all the insurance commercials you listen to. All they're doing is competing on price. 15% 15 minutes or more. Bundle and save. What like what what do you think is happening in there? Or price comparison for progressive. What's happening in there is that there's a market that is so opaque that $50 billion of advertising spent are spent every year just to describe that fact. And that exists not just in homeowners and auto, but all the way through commercial. And so the point is that Advocate, through this broader data strategy that we have, is collecting incredibly high fidelity data on this information. And, you know, we're gonna utilize it to benefit us. I think in terms of how we do that and and what that what that is layered into this automated risk manager, again, like, you know, come come come find me if you're a smart person you want to work here.

SPEAKER_01 17:53

Yeah.

SPEAKER_00 17:54

When you talk about like, you know, using using technology to or to tech enabling this process, you know, what were you what were the big unlocks for you uh in terms of kind of early product and like what were the experiences that your customers had as a consequence?

SPEAKER_02 18:13

One of the big unlocks for me is just having, first of all, like a really great co-founder and CTO and original team around me who was willing to try anything with me. So, like I, you know, my my co-founder Dimitri, and there were some, you know, early engineers, a guy named Giannis and some others who who really one of the unlocks is having an engineering team that's willing to go on that journey with you and learn something that's really nuanced and complicated. Like, you know, they were willing to learn the like the product components of what I'm talking about. And and I think like that, I don't know, feel I feel like that gets lost in the context of building, which is like as a team, do are you guys talking about the same concepts? And will you if you're not a CTO, which I am not, can can your team build that with you? In terms of I will say, like, what are one of the big unlocks to having a successful product? Because I think this really gets lost. I don't know why more people don't do it. I think it's just because I don't know, no one wants to be contrarian. But like because we were doing the work, the product that we built, we felt the pain of it not working. Like, yeah, we we were just delivering an outcome. Like my clients, they don't really care if there's technology, and I still to this day don't really care if they know or not, they just want speed and cost and accuracy in terms of the underlying that's what people just want. And I they don't need an experience in software, they don't want outcome. But in the back end part, we were doing all the work, like it's very painful when your software doesn't work, yeah. Yeah, you know, like it's a much higher bar. And so what I would say though is like that made a much better product because we are the ultimate dog food company, yeah. You know, like there's nobody that dog foods more than us. The trade-off, though, that you have to be really what willing to do if you're an entrepreneur is one, you got to be willing to manage an operations team, right? And the software product and development team at the same time. That's a that's a hard execution challenge, right? And then you also then on the investing side, which Vestigo gets a lot of credit for, you have to be willing to look at the overall product that's being built and not necessarily myopically focused on gross margin day one. Because you're you're grinding it up, you're you're you're creating differentiation. Like you have to believe that. And I don't know that a lot of people are as creative as Vestigo or Metaprop or the other investors that we have around the table. They just want to stick something into a unit economic thing.

SPEAKER_01 20:45

Yeah.

SPEAKER_02 20:45

And like, look, I'm the former financial investor. I'm here to tell you like it's not about that. It's about the product differentiation. That's my own opinion.

SPEAKER_00 20:55

Yeah. Well, I mean, like, it's um it's interesting. And I think, you know, I was um I'm sorry, of course it is about that long term.

SPEAKER_02 21:02

I'm just saying, yeah, day one.

SPEAKER_00 21:04

No, no, no. It's interesting. I think um, you know, I think most people in my business, anyway, after a certain amount of time, they start to develop like a style of founder that they tend to like to work with. There's like uh there tends to be like a natural synergy. And you know, I think uh personally, anyway, I I can find myself gravitating towards sort of folks that have an investing background because I I think especially in a kind of East Coast style of venture capital where your objective is really not to disrupt, it's to create a network within the existing players with technology and um and and really kind of create a new way of everybody to participate in the market. I think you um you have to have a lot of faith that the founder, what they're doing, is gonna tie back to some kind of an economic outcome like sooner rather than later. Later. And uh I think it can be it's always at least for me anyway, it's it's very challenging when someone's to do that, frankly, when someone's not grounded in the kind of X's and O's of creating enduring enterprise value. It's you know, you just you can find yourself kind of building to nowhere, and you know, in other parts of the country, that's kind of fine as long as the company's growing fast enough, but it's certainly not our style. Uh, and it certainly gave us the conviction to like really and make the product investments we've had to um over the past couple of years. And uh well, I mean, it's been it's been so good to see this this paying dividends.

SPEAKER_02 22:42

That that's a hundred percent. I mean, you understand the customer. I can have conversations with the customer at the CFO level. Like, I know exactly what the line managers are thinking because I know what their bosses want. Like I've been in, I understand the how that runs the through line of that. And so I construct my sales pitches to consider how can I help this line person impress their boss. Yeah, like it's that level of sales. You have to know that. You have to step in their shoes. The other thing I would say though, about you know, backing former investors is I think the question is actually a lot of the training that exists at these investment shops is better than what's existed at Fang. Okay. Okay. Like actually it's more rigorous. Yeah. Oh, well, that I'm certain of. And so you have people who are incredibly good at what they do. They went, you know, whatever, they were at JP Morgan, Morgan Stanley, Goldman Sachs, or maybe a mid-market spot. Like, they shouldn't sell themselves short. Like they they know things and they've been trained in in what good looks like in a way that when I talk to people who are at FANG, I'm not quite 100% sure that everybody, yes, I do think, of course, there's a component of them that that that get great training, but it's pretty consistent, you know, across across Wall Street. Now, the flip side, and you and I have talked a lot about this, is that investing is is is a it's a very proper uh profession. Like you get to sit and think, and you know, I'm wearing my suit today, you know, will I wear and and and sort of like and sort of really measure, be measured in your communication with somebody, you know, and I remember that you're very measured, you're very polished. Polished is the word. That's not what that's not what starting a business is. And so the question for the investors that you know you guys back as entrepreneurs is, you know, do they know how to get into a knife fight? Literally, it's like that's the question. Can they like do that? Okay, fine, you can strategically think, but like are you willing like day in, day out, to just push that ball, like push that rock up and be there on the front lines? Because if you're that type of investor who's like gonna sit at at like the high level and not get down there into the muck with your team, like you're gonna be you're gonna be it's gonna be a problem.

SPEAKER_00 25:02

Yeah, I mean, 100%. That's like, and that's something we have definitely like learned to test for. You know, I I'd love you to describe what that journey's been like, you know, day days here to what is it, where like day a thousand or something.

SPEAKER_02 25:17

Yeah. It's it's been the transfer. Well, okay, if I was to maybe not make it, if I was to be like serious about this, like the what is real, what have I really learned if I step back and think about it? It's it's more clearly understanding what drives value. And I think in the investing seat, a lot of it is like, you know, you can make these thematic dots and bets, and you can drive a tremendous amount of value. But in the you know, you get to make multiple bets like that. But it's very different in the operator's seat. I think when I was when I was starting this, someone told me he was like, you're basically making one investment. I was like, that is true. Like I'm making one investment, but the difference is that I can change the slope and the trajectory of the investment. And so the the the thing that drives value, so long as you get the vector right, like you're going the right direction, okay, you do need, so in some ways, you do need to be very good at investing to be an entrepreneur because you got to pick the right path.

SPEAKER_01 26:12

Yeah.

SPEAKER_02 26:13

And once you nail that, the rest of it is understanding, like, okay, there's a thousand things you can do, but like to push incrementally every day towards the most high value thing to create your product to be differentiated. What is that thing and how do you like push on it every day? So you get up every day, you know, you you get you like the first two years, it just felt like you know, you're just you sort of getting kicked around every day, and you get back up and you're like, okay, you know, how are you gonna, how are you gonna continue to push forward? And what sort of one of the amazing things is is that I say I don't know how it works like this, but if you just push hard enough, like things happen. Yeah, like it just it's it's sort of like this act of will. Like you look back, you're like, oh my gosh, like I just I just push through it, you know, and it's pretty cool.

SPEAKER_01 27:01

Yeah.

SPEAKER_00 27:02

Are there um, you know, when you when you interview folks um to bring into the organization, like you know, how do you think about how do you think about maintaining your culture? Uh how do you test for that willingness?

SPEAKER_02 27:18

Yeah, it's such a hard question. I am not a I do not run a larger scaled enough organization to be able to tell you that I have done it enough, that I have tricks and trades that worked. I think the only yeah, the only the only thing that I can say I think works is being really upfront. Like I tell people, if you're gonna join here, the the cultural value that I like the most that we have, I ripped it off from Parker Conrad at Rippling is go and see. Yeah. And that that that value is like if you're a middle manager or a little bit more senior, like you need to get down onto the ground and understand what's happening in the work. And I try and drill that into people, like you have to get down into the work. Don't manage from here, you know, manage from the work. And I think the best way to do that is by doing it yourself. And so I'm always like trying to look at the work, maybe to like maybe it can be somewhat detrimental sometimes, but most of the time it's very positive. Talk about your other cultural values. I think what I think so what I was gonna say is this goes to this idea that like every company is different, so there are no playbooks. Yeah. This idea that someone else's cultural value is gonna work for you is like, no, the only thing that's real is that works is first principles. Like that's what I've learned. Like you better understand exactly what the core first principles are and then build back up from there. And so one of the things that I think is very important for our business is being deep industry experts. Like I I actually think that everybody so a good example of this would be like Dio, who's our CFO now. He started such a unicorn hire, by the way.

SPEAKER_00 29:05

Oh my god.

SPEAKER_02 29:05

Yeah, it's great. Like he started as managing our operations team, took two years to really learn and understand insurance compliance. Okay, is he our most knowledgeable insurance compliance expert? No, but he understands the the the details of how it works. And so as a CFO, he's much more effective. Like he understands what other people care about, you know, and he can drive capital allocation decisions that way. So for me, one of the most important things is that everybody understands the core. And and look, as we've scaled, like we've tried to keep that through documentation, but it's hard. So yeah.

SPEAKER_00 29:42

And so, yeah, I think it's been some of the mean to get to the conversation. Um, and it's almost obligatory to ask at this point. But you know, you were talking about selling the work, and like, you know, we uh we fortunately made an investment um in another technology-enabled service company, which we're really excited about um when we'd first met. And so that was not like a bad word for us. Um, and now, of course, like sort of sell the work, and um, it's all very much associated, I would say, with kind of like generative AI. You know, as you've gone on the journey using software, you know, how are you thinking about applications for AI machine learning throughout the product and kind of like service delivery?

SPEAKER_02 30:25

So I want to make one kind of comment, which is, and this is maybe no one's asking for this comment, but it's something that's not been on my mind, which is that if if if VCs are gonna be investing more and more in the do-the-work types of businesses, the do the work that there's talk that they're talking about is like higher IP work. And it's not just basic phone call work. It's like what we do. And the if you're gonna have an operations team, like the I think there's a new sort of founding team that you need, which is someone there's a founding team that can manage both the operational side and the technology side, you know, as you sort of try and automate more and more. And that's hard. That's kind of point number one, but it's unrelated to what you're talking about. On the on the actual like application of AI um and and ML items, I mean, basically it's gonna allow us like the end state of what I thought could be automated. I thought it was like gonna be 80%, and through just deterministic software. Yeah, uh, now I think it's like 98%.

SPEAKER_01 31:29

Yeah.

SPEAKER_02 31:29

And so what's gonna happen is our teams internally are gonna become much higher leverage, they're gonna get much higher leverage, and they're gonna really do only the most important knowledge work, which I think is great for them. You know, they're gonna be actually able to up level their skills because they're not gonna have to do the document reading and stuff like that. So for us, our approach is that we believe our core compliance solution is a deterministic, like the rule component of what we do, we feel like we've solved it deterministically. And so we'd much rather solve something deterministically than probabilistically. And then we like because it's you know, you don't have to audit it or you worry about fine or training or whatever. So that that part will be deterministic, but then there's basically, I would say, the ins and outs of the system that I think generative AI are going to be amazing for. So in some senses, it's almost like a replacement for an API. Like, you know, because it's okay, I've got this engine, I've got this thing that I do, but the way that data comes in from the outside world is just like all over the place. You know, it's emails, it's it's phone, it's this, it's chat. Okay, so that component that's a mess is where there's just a tremendous amount of opportunity to apply um generative AI. So yeah.

SPEAKER_00 32:48

I would also think in terms of the way the work is delivered, there's a lot of opportunity because you're sort of like you're contextualizing data that you know to be true with recommendations, whether you that like you know gets pushed to an API or gets pushed into a document, um, or gets pushed into somebody else's like flow. Uh it strikes me that you know, as you just continue to deepen what you do for your customers, there's gonna be a lot of opportunities uh in terms of how they're starting to ingest the solution.

SPEAKER_02 33:22

I I think that's right. I like the question for us, and I think a lot of businesses is when are their customers gonna get off of email?

SPEAKER_01 33:29

Yeah.

SPEAKER_02 33:30

You know, there's this you have never like there's this struggle of can I deliver this to you in a portal, or do like I just look, you're doing your job in your inbox. So so I have to deliver to you. That's the interface that we're using, and I'm not gonna fight that. Um but I do but I generative AI is great for email though.

SPEAKER_00 33:49

Elon Musk, doesn't he? He says, like, uh, if you're designing a robot, you make it humanoid because the world is designed for humanoid-looking creatures. I mean, it's sort of like yeah, generative AI is sort of the same thing for basically all knowledge work.

SPEAKER_02 34:03

This is exactly what I mean by be stubborn on the vision and flexible on the details.

unknown 34:08

Yeah.

SPEAKER_02 34:08

Like, how does the customer want to interact with what we're doing? We're after like creating an automated risk manager and data and stuff like that. How we get there, you know, we'll we'll do what our customers would like.

SPEAKER_00 34:21

What's it like working at Advocate?

SPEAKER_02 34:26

I think that because we were born during COVID, you know, we have this like disaggregated and you know, our base is not just in New York City. We have a lot of people in Athens, Greece, we have a lot of people in Central Europe, and then we've got a lot of people scattered throughout like the United States, and then we've got like call it 10 to 12 people in in New York City. And so I do think that in your glamorous Soho office. In our glamorous Soho office, yes. Which was uh we got a discounted rate, we took over the lease from uh the social media influencer, the fat Jewish, so that's uh the story. Um but um I think there's definitely an international flavor to what we do. Yeah, we are an example of that, even though we do have in-person centers, yeah. Um and I think also being an advocate's a bit of uh we've done really well. I think everyone who comes inside looks at the innovations and the ideas and gets excited by insurance, and they never thought that they would. But it's sort of a weird existence because we don't it's not like we're doing a lot of publicity, you know. So I think I like to say that people I would like to think that we think we're on to something and doing something very special, and we don't really feel the need to really tell other people about it. We just need to make sure that our customers are doing well.

SPEAKER_00 35:52

All right, last long form, and then we're gonna go into quick fire. What would you tell yourself four years ago, the night before you started Advocate?

SPEAKER_02 36:02

I would have said that building product is not like running a deal. Like I came from the investing background. I used to do private equity deals, you sprint, you stop, you sprint. It's it's building a business at its core is just like consistent execution. So it's okay to step back. And even if you're working really hard, because we work really hard. Like, I mean I like to work hard, like, and it's you don't need to run. Like you can, it's actually you will go further by being a little bit slower, you know, and and and just running towards towards it um in a more consistent manner. All right.

SPEAKER_00 36:48

All right, Ashwin, are you ready for quick fire? Yeah, let's do it. Who impresses you?

SPEAKER_02 36:55

There is I don't really know all that much about this person, but I think uh there is this podcast, the founders podcast, which I'm sure like everybody who's listening to this has listened to. And if you haven't, you should you should consume it. And uh the David Sumner talks about the guy who started Dyson. And this, like this, he was just this, you know, guy who had this real vision for a better way to make a vacuum cleaner. And he just he poured all of his money and time into it, and he has these stories or like about how he'd come back and his you know, he'd wasted his money, and his wife would just like look at him like he was a total disappointment. And he just kept doing it. Like, I don't know why, but he just it's just like an incredible amount of grit and pain, you know? And cause because there's pain, yeah, there's pain, like there's there's there's gents and huang pain where like you're successful, okay, and there's pain. That's different. That's a different kind of pain. Yeah, there's this pain where you're like doing it for 20 years or whatever, and you just still do it.

SPEAKER_00 38:12

Yeah, and Nasim Taleb, I think, calls it the anti-chamber of hope.

SPEAKER_02 38:16

Okay, yeah.

SPEAKER_00 38:18

Well Which is like you just it's it like the thing that drives forward progress in our world is just the it's the it's not the one in 100,000 Dyson owners who does it, not knowing that it'll pay off and then it pays off. It's the other 999,999 people that take that grit and it never goes anywhere. And their sacrifice is like what's necessary for the ultimate success of a Dyson.

SPEAKER_02 38:46

Okay, so maybe that's why I feel that way because I grew up in Silicon Valley in the 90s, and let me tell you, I saw a lot of people not make it. Yeah, and I what I really don't like about Silicon Valley right now is it's not the Silicon Valley of the 90s. Like people were just like they were real renegades. Like the people of my mom and my dad's cohort, like a lot of them who like you can you see you see the old Silicon Valley passing away. Like they were nothing like the people that I see today in Silicon Valley. They didn't do cold sponges, they didn't medicate they they I mean, you know, they did, but they did it because they wanted to. And I don't really know that there are that many people that are originals who are doing things because they want to do it for the idea. And like I think it's an indictment, like of generally like a lot of the people out there. So yeah, I don't know. That's why I like the Dyson guy. What companies do you aspire to be like? There's a lot of things about Bloomberg that I think just like as an analogy to what we're doing, that I find really fascinating. Um, and and creating transformation, you know, in an end market. Uh like they create a transformation in the financial end market, and I want to create transformation in the risk end market.

SPEAKER_00 39:55

So I've seen you when you kind of go into the like the grind cave, and then you like come out on the other side with the usually like a very long, very detailed document that is like encapsulated your thinking. Like when you're working, when you're doing kind of deep work, do you cultivate like sort of states of flow or like intense focus in any specific way?

SPEAKER_02 40:17

Like, if so, how one of the things that I've realized is that I can't fight sort of where I'm at mentally or like emotionally on something. Like sometimes it is the right time. I'm ready to rewrite and think about where we are strategy-wise. And it's not on a quarterly cadence, unfortunately. It's like enough has happened where it's like there's just something I gotta talk about.

SPEAKER_01 40:50

Yeah.

SPEAKER_02 40:51

And I would say that I'm trying to find the balance between being a consistent manager in the business and a consistent leader, and also staying true to like where do I feel like right now, if I applied my energy, I'd have the most output. Because I think that matters. Yeah. You know, like if you're feeling it and you're you're feeling it on XYZ thing, this is one of the things about being an entrepreneur. You have ultimate latitude and an agency, and you apply that agency, great things can happen. So I think there's a balance there. But I I maybe the summary is that you know you can't discount where you know how you're feeling.

SPEAKER_00 41:27

What's something controversial that you believe?

SPEAKER_02 41:32

I don't like the best question. Yeah, I mean, I think I already said it. I think I think recurring revenue, I think recurring revenue metrics are kind of silly. That's controversial. They are they're controversial. I mean, it's like it's not recurring revenue isn't output. The input is product differentiation. Okay, like, and now in today's day and age of 10 different CRM or AI SDRs, you know, that all have recurring revenue, like that doesn't make a lot of sense. And I think also make another point, another controversial point, which is just because you have some early revenue traction doesn't mean that it's an interesting business. I think revenue quality for whatever reason is no longer I think it's actually coming back as people talk about.

SPEAKER_00 42:15

Oh, yeah, no, quality of revenue is is is starting to become important. But I mean, at least at the early stage, what's wild is the growth rates for some of these sort of selling the work, outcome selling companies are so high that investors I think are really struggling because they have no way to manage measure revenue quality, and that's completely by instinct.

SPEAKER_02 42:38

Yeah. Yep. So yeah, I mean, and look, I I think though those are controversial views, but they are they come from a place that's not controversial, which is that all that really matters is how differentiated your product is.

SPEAKER_00 42:51

Yeah. Ash, I've been looking forward to this. Glad we did it. Thanks for making the time. I'm looking forward to revisiting this conversation when we're able to launch a few of our data products and we can start to uh you can start to open up the hood a little bit and and explain some of the new innovations that we have coming down the pipeline. But it's uh as always, it's a pleasure to talk to you and and thanks again for making the time.

SPEAKER_02 43:16

Likewise, I appreciate Besco being such a great partner. So if anybody's thinking about working with you guys, highly recommend it.

SPEAKER_00 43:23

Before you go, how can the the listeners of which we have hundreds and hundreds of millions probably uh learn more by you?

SPEAKER_02 43:32

Yes, we are on the Joe Rogan podcast. So well, if you want to learn more, please go to triadvocate.com. If you know any lenders that want insurance compliance services, or you're a life co lender or anything like that, please contact me uh at Ashwin at triadvocate.com. And we are also going to be hiring, or we are hiring, for sales and marketing talent across the board in New York City. And so we'd love to hear from you if you are interested in. Working with us.

SPEAKER_00 44:01

Tremendous. All right. Thanks, Ash. Thanks. Take care. Hello again, friends, and thank you very much for listening till the end. One final thing before you go. If you enjoyed this episode, do you think you might also enjoy a monthly email from us where we share more stories, news, and perspectives from our early stage fintech ecosystem? If you think the answer might be yes, head over to our website, vestigoventures.com, and sign up for our Envisions newsletter. In addition to blog posts with our latest thinking and updates from our portfolio companies, we always include a short video interview with incredible people from our network. If you do sign up, I hope you enjoy it.