William Leonard
Hey, ladies and gentlemen, welcome back to the Atlanta Startup Podcast. I’m William Leonard, your host and investor here at Valor Ventures a leading seed-stage VC firm here in Atlanta, Georgia. Today, I’m really excited to sit down with Dustin Walsey, co-founder and CEO of Buckle. Dustin, welcome to the podcast.
Dustin Walsey
Thank you for having me. Excited to be here.
William Leonard
Awesome. Well, Dustin, I would love to have you educate our listeners on what Buckle is practically doing in the insurance space.
Dustin Walsey
Buckle is actually greater than insurance. What Buckle really is doing and what we’re building is a financial infrastructure for what we call the gig economy and the emerging middle market. What we strive to do is provide financial services to people within this segment of the population, starting with insurance then moving into credit to help them achieve economic freedom. We started, I think, as you mentioned there is the insurance world where we’re insuring vehicles. We’re also working with our customers, or we call them members to also lease their vehicles in the form of credit. We also build out a platform for this segment of our population that supports the world we live in. We are an inclusive financial infrastructure for the emerging middle-classes, as we’d like to call it.
William Leonard
Awesome. I guess I’m curious. How do you define the emerging middle market? Why did you decide to start there with your customers?
Dustin Walsey
Well, we originally started very specifically in the gig economy, and rideshare was our initial focus. And this segment of the population, they tend to have lower credit scores. They tend to live more paycheck to paycheck or gig to gig and starting in this part of the economy, what we realized is there’s a broader group of people that are out there. As I mentioned, we started in rideshare. But now it’s moved into the delivery of food, goods, and services as well. This broader population supports the entire world we live in. We realized in order to be really successful in the gig economy, people are moving in and out of the gig economy on a regular basis. Sometimes they’re driving for Uber and Lyft, and sometimes they’re not. Sometimes they’re having a regular job and they’re totally out of the gig economy. They’re popping in and out. What we realized is we had to build an infrastructure for this entire population that the gig economy is a fundamental piece of how it morphed into this broader population. But we look at this as a group of people that tend to have credit scores of 650 or less. The world truly penalizes this population, in the form of 50-100%, more for their insurance costs. Two to three times more in their leasing and financing costs. Society is just holding them back. If we can help these people breakthrough and save some money on their insurance, and get a better vehicle that can earn more money, the whole ecosystem and the whole society will get better. Our focus is really on people that are trying to break free of what we call a credit score trap and the trap that’s holding people down. That’s really our focus. If you look at what the gig economy is, it’s people that work, for example, at a CVS that do extra side hustles on the weekend to make ends meet. They might work in an Amazon warehouse and do work on the side to help pay for a vacation. It’s this segment of the population that we’re trying to provide this financial infrastructure for that the world just doesn’t exist today.
William Leonard
Got it. No, I think that’s an interesting way to enter into the market there. Taking a step back here a little bit, Dustin, what is your background? How did you come to figure out this large issue? What were the practical next steps for you after realizing how large and how impactful this problem was in the community?
Dustin Walsey
I’m born and raised in Atlanta so Atlanta is a very important part of my life. From the city and its growth to our sports teams and the likes. Specifically, I grew up in the newspaper business from a family of entrepreneurs where I worked as an intern with my family and in the newspaper business. But fast forward, I got into the insurance business in 2008. I started insuring taxis and limousines and to refresh your memory, Uber started in the black car business where you would ride limousines. That was their original business model that then eventually morphed into people using personal auto or their own cars to drive for Uber in the form of UberX. What ended up happening in the insurance industry, and still, to this day, the challenge that exists is when people use a personal asset in a commercial fashion, the financial infrastructure is very broken there, right? The world lives in personal or commercial, whether it’s in the insurance space, whether it’s in banking, you name it. When Uber smashed those two things together, it created a void in the marketplace. Because as a salesman at heart, I didn’t have an insurance product to sell to an UberX driver, because all the insurance carriers would deny coverage if they found out you were driving for Uber. That became the idea to build insurance policies specifically for this driver and that started Buckle back late 2016, early 2017.
William Leonard
Got it. And so did you like riding in the back of these vehicles to start out to really understand the problem? Tell me a little bit about that.
Dustin Walsey
It’s funny. The answer is yes, I’ll never forget. What I realized is when Uber black showed up, I could get in the back, it was just called Uber at the time, and sell to these drivers. I would sell commercial policies. I talked to all the drivers so I got to know all the commercial policies, or the black car drivers and the vast majority in the state of Georgia. So that’s where it started. Obviously, I got to know people in Uber and Lyft. That’s where I, you know, understood where the void in the marketplace started to occur. I mean, today, we still have brand ambassadors that go out and talk to drivers and do the things that we talked about riding in the backseat of Ubers. But we also advertise smartly through Facebook groups and the things where drivers tend to congregate. We also work with our partners, for example, Lyft, will vary who promotes us through their app. Actually, you can buy our actual insurance policies in the Lyft app right now. Partnering with the delivery companies, the TNCs, to smartly reach out to these drivers.
William Leonard
Interesting, interesting. As you think about insurance, and really at the onset of Buckle insurance is kind of a state to state thing. Right. You started in Georgia. You mentioned you’re born and raised in Georgia but was launching your business here more so a factor of proximity? Or is there something about the infrastructure of the state of Georgia or a combination of both?
Dustin Walsey
There’s a couple of things in that question. Yes, insurance is state to state which is absolutely brutal, because you might as well be country to country because everything is different as you cross state lines. That creates its own unique challenges, which we can go into later. But we started in Atlanta because down here, I had experience in the Georgia market in general. On top of it, it’s a very strong market. From the population, we’re one of the largest states in the country or cities for that matter. And on top of it, it has a very strong, at the time, rideshare driver base. One of the largest because when you take out New York and San Francisco, those are real full-time drivers and look more like taxis and fleets. The vast majority of drivers down in Georgia or Atlanta are part-time drivers, which is defined by us. By people driving less than 30 hours a week, which is our core focus. It didn’t hurt that there is a lot of talent down here, both on the insurance side as well as the tech side to get started. But that was the reason for it. And being from Atlanta living here, it made sense.
William Leonard
Right. Perfect. I guess how many states are you all operating in right now? Is California included?
Dustin Walsey
We are not in California yet. We have various programs across a bunch of different states in the country. California is one of the more challenging states to get into from a regulatory perspective. It’s taking some time and it’s definitely on our roadmap, but I don’t know the exact count today.
William Leonard
I asked about California and in larger states like that because of the legislation we saw last year on Prop 22. How does legislation like that trickle down and impact Buckle at some point?
Dustin Walsey
We pay a lot of attention to the various laws or proposals being introduced across the country, specific to Prop 22. Uber, Lyft, and Doordash, these companies invested a lot to make sure that these drivers were classified as independent contractors. We can live in a framework. Buckle can go either way, but we believe that the independent framework is what these drivers really want because they want to work when they when, where, how, what, you know, all the likes. We support that as well. California is just a massive state. They’re a leader on some of these issues and we’ll see what happens over time. I know there’s some legislation in Massachusetts around this similar topic. There’ll be other things in various states and how they classify, but I will tell you, if anything I’ve learned in the last 18 months is post COVID, the gig economy is not going away. Our habits have been changed. We like our food delivered. We like our groceries delivered. We’d like our packages delivered. And if anything, COVID solidified the gig economy into our world. Whatever happens with whatever types of legislation, Buckle will be positioned right there, because these drivers and these workers are embracing this side of the economy which is how we now all consume goods and services.
William Leonard
Definitely. I’ve seen an uptick in delivery. I think Uber now has the package service where they deliver and things like that. You’re kind of seeing a reverberation throughout the entire ecosystem of innovation and just new services being added. Thinking in terms of Buckle as an insurance company and financial services provider, obviously, you’re going to be offering insurance services to gig economy workers. But you know, what are some of the other core services or values you’re providing to the workers in this space?
Dustin Walsey
We touched on insurance. And then the second most important thing is vehicles in leasing. What we’re doing is we’re helping our members purchase vehicles through lease-to-own programs where they build equity in these vehicles. They own the cars, they’re not paying exorbitant interest rates or paying fair rates, they’re paying fair market value through reputable dealers. Reputable dealers, not these buy here, pay here lots that have just that predatory lending practices. Helping these drivers get their vehicles is a critical piece. If we insure them, help them provide vehicles, and it’s just great for the entire system. Over time, we probably will be insuring these big TNCs and delivery networks as well, because they’re carrying corporate insurance on those wheels. So our focus is really to be just a total infrastructure play for the entire ecosystem.
William Leonard
Interesting. Okay. You all have been in operation since 2017, correct?
Dustin Walsey
Yeah. I mean, we were very small in 2017.
William Leonard
Okay. Got it. And obviously, over the last four years, the gig economy has become more relevant. I think it’s one of the largest populations of employment in the country right now. Obviously, that’s going to call for more people to build companies in this space. I’m curious as to how you see yourself and differentiation from the competition in other companies building in this space?
Dustin Walsey
What’s so hard about this industry is it’s regulated at the state level. It takes a substantial amount of patience, capital, and infrastructure to build out a full-stack insurance carrier that can operate in every state in the country. It’s not just buying a carrier, it’s dealing with all the regulatory compliance issues that exist in every single place that we do business and they’re all different. And in being successful, that creates very large challenges for new incumbents to come in. We feel that that’s important to us. I mentioned earlier, one of the things that are close to us is we don’t use credit in any of our decision-making processes. If you look at most of the carriers out there and the insurance companies out there, credit is fundamental to their business model. And by ignoring credit, because we do again think it’s discriminatory, we think it creates a competitive advantage because we use other metrics and other data sets to underwrite to allow these drivers to be more competitive. We look at various forms of data to create our unique underwriting advantages, pricing rates, rules, and forms. There’s a lot of things out there. On top of it being very smart on how we distribute our product. It is a very competitive industry. I mean, you probably turn on the TV and every other ad, if not every third ad, is an insurance ad. How do you smartly acquire customers and provide them the products or the coverages that they want and need? A lot of time and energy is invested kind of in those three fronts, but standing up a full-stack insurance carrier is not a trivial task.
William Leonard
I think you mentioned something interesting there: the deviation away from credit scores and credit assessments, do you think that’s going to become the norm over the next decade? Is deviating away from that and looking at other points of data more important versus a credit score?
Dustin Walsey
I think it has to, right? We’re starting to see it across the industry where people are starting to talk about credit scores being discriminatory, but it really is. I think we’re gonna seem regulators really try to drive away from it because it creates redlining situations. It creates, again, discriminatory issues for people. I think we’re gonna see moves towards that over the next, not even the next decade, over the next two to five years even faster. Because as the economy grows, it’s separating more and more between high credit and low credit, and how we can get this population a better product and service because their credit score probably doesn’t reflect truly what they’re doing. As I mentioned before, you have a low credit score, society is holding you back based on your credit score, and you just can’t break free. I mean, listen, if you can save $50 a month on your insurance because you don’t have poor credit, I mean, it goes to your bottom line. How do we help these drivers, these people get more profit in their pockets, to break free of this credit score trap? We do believe fundamentally, as part of our business as well, that society is going to move.
William Leonard
I hope we do shift away from more predatory discriminatory practices like that. Shifting gears here a little bit, a large portion of our listeners are early stage, pre-seed founders, and every time I have a founder on a podcast, we try to get insights, tips, and tricks on fundraising. You’ve raised over $30 million at Buckle. You’ve seen a lot and you’ve learned a lot and curious, do you have any unique insights that you can share with our listeners about fundraising at the early stages? How to navigate this cycle, how to navigate efficiently through just fundraising in general, anything to look for investment partners, or any tips?
Dustin Walsey
The first thing, and probably the most important thing is to really have, in my opinion, your story, addressable market, and how you fit really simple to understand extremely tight. If my 15-year-old or 14-year old son can’t understand and articulate it right back to me as clearly as I did to them, it’s too complicated. So my first thing is really, really hone in on what it is that you’re building, and be really tight and how the market wants that. I think if anything, that’s the most critical piece. Probably till the end of time, I mean, if you look at all these amazing companies, we all kind of understand really what they do. It’s not hard to figure out what Amazon does, right? It’s being able to really understand it. The second piece is to talk to as many people as possible, not just investors, but potential partners and potential founders, just to start networking because it’s amazing in the early stage what you can find by talking to people that have similar challenges or face similar challenges and the insight that you can get for them. Because we all make mistakes, and we all have wins, but learning from others, it would be a critical piece as well. I would also say, obviously, you have to surround yourself with people that know things that you don’t know and to diversify. You’re in the fundraising process but at the same time really target what we did successfully as people that fit our niche of what we’re trying to do. Our VCs or our early-stage funding had really strong insurance backgrounds where we started. We didn’t have to do a huge education of what the insurance industry is and how it works in order for them to understand where they need to be. I’d say those sorts of things. But again, a tight story that ‘s very easy to understand. In the beginning, it was like insurance for Uber drivers, I could break it down and worst case to that, people like I understand.
William Leonard
Right. No, I think that’s excellent advice. Oftentimes, founders tend to overcomplicate what they do and really kind of butcher the elevator pitch, because it just becomes so elongated and so complex. And like you said, insurance for Uber drivers is simple, you know what they do but you can break it down if necessary.
Dustin Walsey
Yeah, I mean I would even say, if you can’t make it into this beautiful slide deck that’s a couple of slides that anybody can understand, it’s just too complicated. I’m not saying that complicated companies can’t make it but that means simplicity really wins. I can’t say enough about that.
William Leonard
Buckle has become a large company now. How have you thought about growing the team and in company building? Is there any insight into how you can effectively hire, how you can create a culture where people want to work for you, and really love what they do day in and day out?
Dustin Walsey
It’s an evolution without a doubt. I think, from a cultural perspective, it’s being inclusive, and diverse across your entire team, and very much communicate and be very open with what we’re trying to do, how we’re trying to do it, to get everybody bought in, but also get everybody else’s opinions and points of view, because if you don’t have this diverse point of view, you kind of all get yes people. I think that’s one thing. Being in the Insurtech and FinTech space, there’s a lot of excitement. I think that definitely helps. Being able to capitalize on things like that. But also, again, finding and exploring, trying to find the right talent to surround yourself with because as we grow, right? I move further and further out of the day-to-day functions and getting people that you trust that can take on huge tasks, audacious goals, and accomplish things is so critical. Again, getting your story right, talking to the right people, networking, networking, networking. I know it’s a little harder. Now that kind of COVID is over, but talk to as many people as you can, and you’ll find amazing people out there because companies at the end of the day, I don’t care how good of an idea it is. If you don’t have a killer team, nothing will happen.
William Leonard
I agree. We see it all the time. It’s so important to hire people into the culture into really the environment that is going to help build your company and solidify and get others to want to join. It’s a really great insight there, Dustin. And lastly, you know, as we wrap up this episode, you mentioned you’re an Atlanta native. You grew up here your entire life. We were talking prior, your children are getting ready to go to school, to university. What impact has been in the southeast, specifically Atlanta had on Buckle’s success? If you had to do it again, would you build here in the southeast?
Dustin Walsey
I think diversity. You see it within our team. It was a key piece to our early success. Would I build here again? Yeah, why not? I mean, there’s so much talent here. There are so many great things going on in Atlanta. Selfishly, I always want this city to win out on everything, all the corporate headquarters moving here and the likes. But you know, Atlanta is a special city that’s got this incredible group of people. You know, whether it’s, all this stuff popping out of Georgia Tech in the ATDC and being involved down there, and just being involved in the broader community creates this awesome environment. Now, we’re much more spread out than we were. We’ve learned how to be more decentralized due to COVID. It’s allowed us to hire even a more diverse group of people because everybody doesn’t have to be in one or two places. We’re learning how to deal with that but we will always have a strong presence in this town. It’s just a great town for all different types of talent.
William Leonard
Certainly. As you mentioned, Georgia Tech, you’ve got Georgia State, Morehouse, Spellman universities that are just continuously consistently putting out great talent, feeding right back into the ecosystem here. You got Microsoft building their hub on the west side of the city. Atlanta is at a true inflection point, I think, of growth and really building a sustainable ecosystem here. I’m excited that you’re building here and that we’re seeing more companies relocate from West Coast cities here, because of the talent, because of the cost of building, because of the resources, and the corporations here. It’s exciting to see you all together.
Dustin Walsey
Yeah. And then those companies, founders will spin out of Microsoft or Fanduel, I believe just announced, it’s going to be here and Facebook’s got a huge presence. People will start companies out there, and it will just create this flywheel that keeps spinning and there’ll be more companies that start out of Atlanta, and some of them will be the next, big, amazing thing. It’s really an awesome place to be on a lot of fronts.
William Leonard
Exactly. Well, Dustin, this has been a really insightful episode. I think our listeners will have a clear understanding of what Buckle is doing in the gig economy space, and how you’re really trying to increase inclusivity and really just enhance the overall experience for the middle market. Really excited that you were able to join me today. I appreciate your time, Dustin and hopefully, we can do this again soon, man.
Dustin Walsey
Thank you very much. I appreciate it.
William Leonard
Cheers. Take care.
Lisa
Thank you for listening to the Atlanta Startup Podcast. You know, we’re not just a podcast, we’re a community, and we’d love to see you at one of our digital or physical events, go to valor.VC and sign up for an event that makes sense for you. We have events for founders and the investors who back them. Another event you might enjoy is Startup Runway. The Startup Runway Foundation is a Valor organization that provides $10,000 grants to founders who are women or people of color building next-generation software products. Applications are free and we’d love to hear from you at startuprunway.org. And as always, thank you so much to the organizations that make this podcast possible. Not only Valor Ventures, but also Write2Market, a tech marketing and PR agency in Atlanta, Georgia, and the Startup Runway Foundation and Atlanta Tech Park Valley’s headquarters, and also headquarters for over 100 local entrepreneurs, building global businesses. See you next week. Please bookmark the podcast and join us.
