My name is Drew Monroe, and I am the president of Prosper Insurance Group. I dropped out of college and with very little money and with no revolutionizing technology or invention, and I have grown a company recognized by Inc Magazine as one of the 500 fastest growing private companies in the US. I did in an industry saturated with competition and in a market dominated by companies that that had been in business for decades. It has been difficult and I have made a bunch of mistakes along the way. I'd love to share my experiences with anyone growing a company or thinking about starting one.

Proof: I said hi to Reddit in the middle of the menu bar. Here is a screen shot of my email signature and our recognition on the Inc Magazine website:

Comments: 109 • Responses: 38  • Date: 

Eternally6512 karma

So you went from $1.25 million in 2011 to $2.5 million in 2013? After starting in 2010? Is that how I read this?

monroeins8 karma

We did $254,000 in 2010 and grew to $2,800,000 in 2013. That is commission revenue, so in actual sold insurance premiums we were at close to $10,000,000 in 2013.

franker11 karma

How did you start an insurance company by yourself? I assume you didn't just walk up to people and go, "Hi I just dropped out of college, and if you could give me money on a regular basis, I might give some of it back to you if your house gets totally wrecked or something. Are we cool?"

monroeins14 karma

Well, I am a middle man, so I am not the insurance company. I am just the access point to the insurance companies. Like most entrepreneurs I know, I sort of stumbled into it. I bought a house when I was young and had about $50,000 of equity in it. There was a very small insurance agency (about 400 clients) that went for sale around the corner for me. I took out a $30,000 loan, bought it a ran it for a couple years. I sold that company, and then started my current one.

In regard to being a drop out. Being young has been difficult. I have had to fight for legitimacy for a long time. My industry is dominated by old white guys, and it took a long time for insurance companies and clients to take me seriously. In the end though, money talks and people take me seriously now. :-)

kicktriple18 karma

$50,000 in equity at a very young age? Congrats at spending it properly but I couldn't imagine having that much equity under the age of 30.

monroeins1 karma

I bought a condo close the beach in an area that was up an coming. Very good timing. I also sold it at the right time too. Luck, but to be honest I didn't need 30k to start. I could have done it with less. But if you don't have start up capital, you need to be ready to not have a steady paycheck for a while.

thisheregirafFe-1 karma

80 grand in assets is by no stretch of the imagination "very little money". how is this not a shameless plug?

monroeins2 karma

I only used $30,000, and I didn't really put very much of that at all in capitalizing the business. I more used it to live off of while I was growing.

BethTheHoly8 karma

Can you discuss when and how you used professionals (specifically attorneys and accountants) in the creation and early stages of your business? Also, what tasks do you wish you had used a professional for because it would have been a lot easier?

monroeins7 karma

This is a great question! My attorneys have been so valuable. The problem is that them and accountants are expensive. My advice is not go to a big firm. My attorneys really worked with me in the beginning and charged me very small amounts because I think they saw that I was going to grow and it would be worth it for them to invest in me. Sell to them. Tell them to hook you up now and when you get bigger you will stick with them. A lot will go for that.

I wish I would have had a better understanding of our accounting early on. It starts out that accounting is a hurdle. Something that you have to do for the IRS. The sooner you can use it as a tool to understand your business the better. Get a good, cheap book keeper to save money, and then use an accountant for big picture stuff.

Also, find a mentor. Most entrepreneurs don't mind giving advice to someone starting out. They can be more valuable than accountants and attorneys sometimes.

kurtburtwert6 karma

What exactly do you mean by "hitting the streets"? Did you go door to door, b2b, b2c, cold calling... How did you reach your first couple clients?

Great post, thank you for doing this!

monroeins5 karma

Traditional networking, door knocking, friends and family, and yes some cold calling. I didn't focus on individuals, I tried to get in front of people that could send me a lot of business. I went to mortgage companies and said, "I can make the client experience better for your borrowers if you send them to my company for these reasons..." I established and then nurtured these relationships. It has worked well for us.

robball6874 karma

I've been saving some capital and I'm just looking for the right opportunity, which seems pretty difficult. When choosing the type of company you want to start what do you look for?

monroeins5 karma

First of all, I believe you can make it in any industry if you work hard, but this is what I would stay away from if possible:

Restaurants and trendy retail shops like frozen yogurt, etc. Go for an industry that wont fluctuate too much in a down economy if you can. Also, do something that you can sell outside your market without having the overhead of another location.

Find a pain point. Find something that fills a need and then go to potential clients and ask them. Ask them and say, "if I had a company that did or created this, would you want it? How much would you pay for it?" If you get a lot of yes's and you can find a profitable margin, go for it!

IsopropylOH1 karma

Would you please elaborate on what kinds of industries you think it would be good to invest in?

monroeins3 karma

Any non-commotidy industry with a growing demand. I've seen people make it in all industries and economic conditions.

MaxFreedomMoussa1 karma

Why non-commodity? Some people (on reddit alone...) are going from $0 to $50k+ per month in 6 months as individuals through importing. It's almost a golden era for it.

monroeins7 karma

Maybe you are right. I read Jack Welch's book and he warns to stay away from it. The thing about a commodity business is that as soon as someone else can do it cheaper, everyone switches. It pushes margins really low. In a non-commodity industry, you have the ability to charge more by providing a better product or experience.

InsaneAngler4 karma

I've always wondered this the most about getting a business up and going -- how did you find and land your initial clients?

monroeins6 karma

Hitting the streets. I have found that most people are inspired by someone trying to make it on their own. If you start a company and look someone in the eye and say, "I am committed to building the very best -fill in the blank- company. I am going to not stop working until I am the best. Give my an opportunity at your business, and ill show that to you." Most will give you that opportunity. After your initial clients, it is about created a MEASURED and METHODICAL marketing system. Find a niche, market, measure, adjust, and keep going.

See_Em3 karma

I love your enthusiasm. My start up is getting out the door next month. I doubt we'll be as profitable as you are, but it's refreshing to hear someone else talk about getting started from the ground up.

monroeins3 karma

Congrats! It will be hard, but rewarding. Good luck!

coscorrodrift3 karma

Do you like cars? What car do you drive? What's your dream car?

monroeins4 karma

Not a car guy per say, but I'd love the newest Tesla. I think any entrepreneur probably has respect for Elon Musk. It is a fast car that I guess is good for the environment and looks nice and I'd love to support one of his ventures.

akchris3 karma

I've gotten rather good at finding decision makers and presenting ideas to develop or improve business models (think marketing consultant but with a very niche focus on the scientific/medical industry). My problem (if you can call it that) is that I'm seen as a consultant, at best, a prospective employee at worst.

What's the key to giving your business more "heft", making the jump from little guy providing a useful service to an important player in your market?

monroeins4 karma

I would try a couple things. First, do things to establish yourself as an expert. Get something published. News article, book, etc. Get some designations or awards. You'd be surprised how far these sorts of things can go with business owners.

Next, land a big client. Give your service away if you have to. When you say "I did this, for this big company" people will listen.

someoneinsignificant3 karma

How do you have fun at work? I'm not sure everybody else wakes up and goes "I'm going to run the best insurance company ever!" because it doesn't seem like the most exciting place to work

monroeins4 karma

Haha thanks for asking this! Yes, go to our facebook page. We go to great lengths to keep things fun in our office. Once a quarter we have a volunteer day out in the community. We have a ping pong table, stand up desks, dart boards and a ton of social events. Also a casual dress code. We have tried a build a work hard, but have fun culture which is a balancing act. We also plant a tree for every policy we write. Its our goal to make employees feel like that are a part of something unique.

someoneinsignificant2 karma

I like it, where do I sign up?

monroeins2 karma

I'm sorry, I think it would damage the credibility of this AMA if I were to try to get any business or employees from the post.

someoneinsignificant2 karma

It's cool, I'm a chemistry major anyways. I don't think I'd be so useful when I don't know a thing about business 8)

monroeins2 karma

Learn. I didn't know anything and frankly I am probably not qualified to be running a company my size. You will learn things the hard way, but anyone that is willing can learn it on their own.

someoneinsignificant2 karma

That's what I plan to do. Finished the chemistry major in my 2nd year in college, moving on to physics. Gonna go engineering in grad and combine all 3 to do some kickass applied sciences. The goal is to eventually start my own business but it's gonna be 100% science yeah (sorry but insurance doesn't seem to be my thing)

monroeins1 karma

Haha, it wasn't my thing either, but it has been a great business. I want my second career to be in applied sciences. Reach out to me when you are ready. Who knows...

vageenahertz3 karma

Hi Drew. I want to start a digital marketing agency but I don't know anything about digital marketing. My question is, how do you go from not knowing anything about a subject to becoming an expert at it?

monroeins3 karma

I might suggest to go work for one for a while. Other than that, there are so many resources these days. Find a couple blogs and follow them. There may be some designations in your industry. Read books, take classes. That is a competitive industry, but it is growing. It won't take long for you to be an expert relative to your clients, which is the most important thing.

vageenahertz3 karma

Did you work for an insurance broker before starting your own? It seems like a good idea but it will take a lot of time to do.. I feel like I'll learn more from self studying and executing.

And your right, digital marketing is quite competitive but it is not as competitive as insurance. Everyone and their dogs are selling insurance of some sort. Have you seen the Adwords CPC price for insurance terms? It's like 30 fucking pounds per click ($50). And you made it. So I'm not too worried about competition.

monroeins3 karma

I started in a franchise model - Allstate. That helped me learn the ropes. Then I sold it. Yes it is extremely competitive, but the market is HUGE. US personal lines insurance is a trillion dollar industry, so the market share I have to get to be successful is really small.

Yharaskrik3 karma

Hey! Thank you so much for doing an ama! I have started (still currently operating or just starting) 3 companies so far and am just turning 23. One was a cryptocurrency brokering company, another aerial analysis and thermal imaging using drones and another a social discovery mobile app. I have had varying degrees of success (and failure) with all three, if you had some advice for someone young like me wanting to do this kind of thing and business development for my life what would it be? Thanks again for the AMA!

monroeins3 karma

First of all, that is awesome. 90% of being an Entrepreneur is having the grit to take the risk and jump into the arena. I think Ziggler said, "You don't have to be great to start, but you have to start to be great." I have a couple things I would advise.

Find a mentor. Successful business people like talking about their businesses. They are often much more helpful than you would think.

You sound like you are like me - great with ideas and like to jump into anything new and exciting. Balance that out by working with someone that is the opposite. Detail oriented and will challenge your ideas and keep your feet on the ground.

Stay focused on execution. Great ideas don't make companies. Good ideas that are well-executed will win out almost every time.

Good luck!

supadave243 karma

What would you recognize as the best reason you are doing so well in a competitive market?

What are you doing differently/better?

monroeins10 karma

One of the surprising things I have discovered is that most companies are not REALLY committed to be the best. The most important thing my company has done to be successful is that we have consistently sat down every two weeks and had a meeting with one topic- How can we be better? Very, very few companies actually do that, and I am convinced it is what has made us better. Small incremental steps of improvement that add up to a better run organization. That barely beats out the importance of hiring the right people. That is the second most important thing we have done.

Jiggyjiggy143 karma

What are some books you would recommend that have had a big impact on your growth and success to this point?

monroeins4 karma

My management team reads books together. There is really so many great ones. The ones that have been great for me are- Good to Great - Best I have ever read, but makes more sense once you are in the industry for a couple years. Read it twice. E-Myth - Really good one, but i think it slightly under-values the importance of hiring the right people. Who - Great book for hiring Delivering Happiness - Good one to start thinking about company culture.

Beyond that - self improvement books are important too. Being a entrepreneur is tough mentally. It is not bean counting. Work life balance can be tough. Many bad decisions in the business world are made because of fear or ego or a number of different emotions. Your business will be stronger if you are stronger as an individual.

Hecket3 karma

As you work on a commission basis, how do you get leads? Website marketing? advertisements? What problems did you walk into getting clients. You mention the industry not taking you seriously, was it only when you were able to supply a certain amount of clients to them? Have you been able to renegotiate the commission price thank to higher throughput?

monroeins5 karma

Yes, there is a chicken and egg problem when you are the middle man in most industries. So few companies do well in the beginning, so vendors, or in my case insurance companies, typically only like working with companies that have a track record for doing a certain amount of business. But you can't do the business unless you have the product. I used to have to beg companies to work with them. A LOT turned me down. The fun part is that a lot of them have come back to me and now they are begging to work with me. :-) Yes, we have renegotiated now, and on average I make about 25% more from the companies than I originally did.

As far as marketing, my biggest challenge is that I work with thin margins, so finding something with a good ROI was tough. We mostly market to the real estate industry, virtually all media outlets. The biggest thing is to start small and try a lot of things. Don't commit to long term contracts. Measure if it works and do more if it does. Don't worry about branding in the beginning. That will come. Every marketing dollar is crucial until you are established.

mrshatnertoyou3 karma

Can you discuss your methods to keep customers satisfied in a way that the larger insurers do not? Was that your original concept that you wanted to use as your competitive advantage?

monroeins3 karma

Fortunately, the bar is set pretty low in my industry. Typical local agents have not responded to changing consumer expectations and are too slow and not technological enough. The big direct companies, ie. Geico, Progessive, etc are fast and efficient, but don't have the personal touch and clients tend to feel like a number to some degree. We have tried to strike a balance in the middle. We sorta stole the Zappos idea of when you have a client on the phone that is a valuable and precious moment to "WOW" the client. This is difficult to maintain as you grow. So we survey our clients. I know those stupid surveys are annoying sometimes, but we can only be the best unless we ask how we can be better. Again though, it is about commitment. Always asking, how can we service be better.

My company name is Prosper because I believe in the win win. I believe if you put out a product that people need while always treating them right and treating employees right, everyone can "Prosper", and profits will come. I know it is cheesy, but its the basis our culture. I didn't really establish a "hedgehog concept" (taken for Good to Great - Read it if you haven't) until a couple years in. We discovered our competitive advantage as time went on and then focused more on that part of the market.

MD823 karma

Hello! I've notice nowadays companies use social media a lot to market and connect with clients, did you take advantage of social media, and what is your opinion on using it as a tool for business?

monroeins4 karma

A little bit, but to be honest, I am not a social media expert. I have seen companies that use it a lot and there a ton of resources out there where you can get information about how to do it. It definitely works when you leverage it the right way. It's just that our current marketing plan has worked well enough that we have stay focused on it more.

CarterDee3 karma

What advice would you give to a current engineering student who has ideas for products and the knowledge of how to create and design them but has no money to back that up?

Thank you so much.

monroeins3 karma

The ability to get money for ideas like yours has never been easier. Crowdfunding wasn't even really around 5 years ago. Ask around your business community and ask where you can find some "angel investors". Then meet with a GREAT attorney. I can't say how important that is when it comes to negotiating taking on investors. If you can't afford the attorney, offer 5% of the company to them if they do the legal work. Trust me, having an attorney on your side that has experience doing private placements is invaluable.

bharathirajac3 karma

Dear sir, how much preparation did you do before starting the company?

monroeins4 karma

Business plans are a bit of a paradox. I have done multiple plans and projections over the years, and nothing ever ends up to be what you expect. However, taking a top-level planning approach forces you to think about the big picture. Start your planning with where and how quickly you can get revenue. Too often people focus building systems and infrastructure first. They are important, but you need to establish quickly and before investing a lot whether the product you have is something people want and at a price and distribution point that they will accept. Once revenue starts rolling in, you'll know you have something and then build the back end.

huhaskldasdpo3 karma

How many employees do you have?

monroeins5 karma

About 25, but we also outsource some customer service. That team is about 10.

Bakayaro_Konoyaro3 karma

How do you outsource your customer service? Is it like, work from home calls, or do you just send it to a specific call center?

monroeins3 karma

My passion has been about growing and selling. We stumbled over a company in TX that does customer service for companies like mine and they are VERY good at it. Building out a customer service unit is tough, and it is difficult to trust another company with your clients you have worked so hard to acquire. But the proof is in the pudding. Their customer service is so good, that we thought they could do it better than us and that if we shift the focus and resources of building a customer service unit into sales, we thought it would push our growth even higher.

gazanga2 karma

To be fair, isn't the Inc 500 based on your submitted data to Inc? I just ask because I've seen their lists and some of their 27,000% growth companies seem a little unreal.

Second question, what kind of business coaches do you use?

monroeins3 karma

It uses submitted data, but it has to be signed by a CPA, so I don't think it's likely that any of the data is fake. That being said, there are a ton of companies that don't apply for it. So while I still think it is a worthwhile accomplishment to make the list, there are other companies that could have made it, but just didn't apply.

monroeins3 karma

I forgot to answer the business coaches question. I found a couple mentors that helped me out early and when my revenue was higher I joined the Entrepreneurs Organization. You can find them online. That has been a big help for me. In general, I look at business coaches like personal trainers. In most cases, I feel like business owners know what to do, but they lack the consistency it takes. Business coaches are expensive, but they give owners accountability just like a personal trainer would. That can be invaluable.

CyriusBloodbane2 karma

I am more technically minded and not really a 'sales' kind of guy. I have a lot of knowledge and can communicate that well, but schmoozing is not my thing.

Is being an entrepreneur something I could do?

monroeins2 karma

Some of the best business owners (better than me) I know, have very little natural sales ability. Being able to sell is a good tool because every company says there product and service are the best, but if you truly are better it is only a matter of time that you will naturally rise to the top. I think being able to schmooz can just get you there a little quicker.

trajanconquers892 karma

What would you do in a situation where you had an unusual name that was hard for people to pronounce? Would you stick with it and build a brand around it or change it to something easier?

monroeins3 karma

I would change it. In the end, if you are the best, it won't matter what you are called, but you may as well give yourself every tool to push yourself to success more quickly.

alystair2 karma

Are you willing to answer a question via PM? this is regarding your website.

monroeins2 karma

Sure. I know it is not the best.

trail222 karma

What's the most morally dicey thing you ever did to grow your business?

monroeins2 karma

Reputation is incredibly important, and it is very difficult to repair if you mess it up, so I haven't done anything that is clearly immoral. But there are still ethical dilemmas that come up. How much margin is it ok to charge a client when you know that you are saving them a ton of money? We have fees that we charge that clients sign off on, but we don't put them front and center during the sale. That is legal, but how ethical is it? I have always been committed to putting profits second when addressing ethical questions with the hope that Karma will pay me back.


Do you consider yourself a question enthusiast?

monroeins4 karma

Just an information enthusiast.

NorbitGorbit2 karma

which companies have you seen do well despite offering inferior products/services?

monroeins2 karma

I have seen so many! The same ones I am sure that you see and ask yourself, "how the hell is this company in business?" Fortunately, online reviews are really starting to hold companies accountable.

graffiti81-1 karma

So you started in the insurance industry with no industry knowledge, backing, or experience? That seems pretty unbelievable.

monroeins2 karma

Well, my personality has always been not afraid to dive into things. I probably would have done better then I have if had more experience and backing, but I think I replaced them with hard work. I took 9 days off in 4 years when I was getting things started. Also, starting in a franchise model helped get over the learning curve more quickly.