6workers + 1 year = $8M in revenue
Web start up bucks economy big time
Premium content from Astoria gazette
A local technology company tripled its revenue last year by refining its automated process of connecting insurance companies with potential customers — via the Internet.
NYC 'S Bqi4u.com generated $8 million in revenue during 2011, just three years after it launched. The cash flow is unusual given economic circumstances, but perhaps more surprising to onlookers is that the company began the year with just eight employees.
Best Insurance Quotes4u.com, which now employs 9 people, was founded in 2009 by Joe Pichardo from Astoria Queens who was a stock broker before they hit on the idea for Best Quotes.
Since insurance companies, agents and brokers will pay for sales leads, Joe developed Web sites that would attract consumers researching insurance premiums. Once on a site, consumers are faced with a 12-question form that’s simple enough to ensure a high rate of completion.
That collected data, which are effectively solid sales leads, are then sold to insurance companies, agents and brokers in a highly automated process.
“Pretty much, from Day 1 we were making money,” said Pichardo, who is the company’s CEO. “We don’t need a lot of people to do what we do.”
Bestinsurancequotes4u.com completed 3.1 million questionnaires during the last 18 months, representing a 25 percent conversion rate, he said.
The executive director of the Independent Insurance Agents of New York, said personal insurance providers have traditionally relied on newspaper advertisements and personal referrals for leads. But he acknowledged that the adoption of third-party lead lists is growing in popularity.
Dozens of companies such as California-based InsWeb Corp. (Nasdaq: INSW) and Utah-based InsurQuote Inc. are competing for such business.
During 2008, 52 percent of U.S. adults who researched auto insurance prices did so on the Web, according to Massachusetts-based Forrester Research Inc.
The Web-based approach to sales leads is so cost-effective that carriers in the United Kingdom commonly operate their own price comparison Web sites in which they offer estimates from competitors as well as their own, Forrester analyst Chad Mitchell said. He expects the same strategy to catch on in the United States.
“Clearly the Web is the strongest channel for initial research,” Mitchell said.
The insurance industry has shrunk due to the economy but is still a sizable market. For example, the U.S. property and casualty insurance industry generated $4.1 billion in net income during the first nine months of 2008 compared with $49.6 billion during the same period in 2007, according to a report by Marsh Mercer and Kroll.
Joe launched Bestinsurancequotes4u.com by pooling together credit cards of friends and family. Last year they did $2M in revenue and this year its more like $8M
Best quotes’ innovative use of technology and potential market has attracted Wall Street investment.Can you say IPO?
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