CAREER CHOICE CHALLENGES – ENTREPRENEURSHIP

Robyn and Mark Jones struggled on Mark”s CPA salary during their early married years.

Mark decided to take a gamble and borrow the money to attend Harvard Business School, which paid off in a well-paying job at Bain.  During this time, Robyn had decided to try house flipping, but became frustrated with the insurance agents who were unable to answer her questions,  So, she undertook the training herself and became a licensed insurance agent in 2003.  Given Mark’s high-paying job, the move surprised friends and family.  Robyn reports that, “Mark and I have made many decisions people didn’t agree with,” (ref Forbes).  And, even more stunning, was Mark’s choice to quit his Bain job in 2004 and join her business in a Westlake, TX enterprise called Goosehead Insurance.  The insurance business of retailing personal property and casualty insurance is generally done in a small business with a few agents who both sell and service.  This means that they must have both the ability to sell as well as to take calls about collisions and homeowner problems.  Mark and Robyn’s big insight was that these functions should be split – Robyn says that they realized that the sales and service personnel were “two different animals . . . we think of them as hunters and farmers,” (ref Forbes).  Hunting is done by the salespersons who work for Goosehead or one of their rapidly growing franchised agencies; farming involves the administrative work, technology, customer support, and interactions with 80-plus insurance carriers and is done by a separate staff in the Texas headquarters.  Persuading their salespeople that someone else could make their customers happy was the difficult part – but it worked.  The second big insight at the company was that Goosehead could dispense with an advertising budget by relying on referrals.  And, the third insight was to hire right out of college, so that the company could take advantage of the youthful energy – a rarity at insurance companies.  Taken altogether, these things have worked extremely well – in the first quarter, the corporate agency plus the 501 franchises brought in $147 million of premiums and net income doubled to $7.3 million. And, since Goosehead’s IPO last year, shares have more than quadrupled, giving it a company valuation of $1.8 billion.  The Jones family owns 56%.  It’s always a delight to see things done differently, not following prescribed rules – but always making sure that all those moving parts work together.

 

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