Driving Innovation: The Partnership Between Champ and W.R. Berkley | The Pair Program Ep47
In this episode, we hear from two guests: Shane Bigelow and Mike Nannizzi. Shane is the CEO of Champ, a Cleveland-based technology company that is changing the way that vehicle titles are created, managed, and transferred in the United States.
Mike runs the venture arm for W.R. Berkley with a specialty in early stage technology companies.
They discuss:
- The inspiring story behind Champ and the critical problems they’re solving in the vehicle title industry.
- W.R. Berkley’s role in supporting Champ’s mission.
- Insights into early-stage technology investments.
- The challenges of bringing innovation into the federal space.
- The future of government-collaborative technology solutions.
Whether you’re interested in entrepreneurship, government technology, or strategic partnerships in tech, tune in to get practical insights from industry leaders at the forefront of innovation!
About Shane Bigelow: Shane McRann Bigelow is CEO of Champ Titles, a Cleveland-based technology company that is changing the way that vehicle titles are created, managed, and transferred in the United States. Prior to Champ Titles, Bigelow was a Senior Vice President and Managing Director at Bernstein, where he managed a part of that firm’s U.S. business and sat on the firm’s Responsible Investment Committee that focused on the United Nation’s Principles for Responsible Investment; Environmental, Social and Governance Issues (ESG); and Socially Responsible Investment matters. There, Shane developed a highly informed view of how emerging technologies can help society through reducing the costs of government, which informs the business at Champ Titles today.
About Michael Nannizzi: Mike runs the venture arm for WR Berkley with a specialty in early stage technology companies. Mike primarily focuses on companies within the fintech space, and his investments typically involve both a financial position and role in the respective companies’ Board of Directors. Mike lives in Larchmont New York with his wife Kathy, children Sasha, Natalie, and Max, and dogs, Fergie and Malibu.
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Transcript
Welcome to The Pair Program from hatchpad, the podcast that gives you a front row seat to candid conversations with tech leaders from the startup world. I'm your host, Tim Winkler, the creator of hatchpad, and I'm your other host, Mike Gruen. Join us each episode as we bring together two guests to dissect topics at the intersection of technology, startups and career growth. Hello everyone. Welcome back to The Pair Program. Uh, Tim Winkler here with Mike Gruen. Mike. Today marks the end of a pretty epic run with one of the, the goats of the, of the game show, uh, uh, genre with Pat Sajak. Are you familiar with this? I am. Wheel of Fortune. Yep. Last episode. Yep. Is, is the, is Wheel
Mike Gruen:of Fortune going off or is he going? No, Wheel of Fortune is still going. Pat Sajak's retiring. Right. I heard Pat Sajak's retiring. Um. That's right. Yeah. That's right. Okay. End of an era. End of an era. That's right. I feel like he's a local Seacrest is coming
Tim Winkler:in.
Mike Gruen:I feel like. So he's a big, he's a big Caps fan. I know he's a big Caps fan. Yeah. I don't know if he's from DC or not. There's no accounting for taste. He must be from the area to be a Caps fan. Why else would you be a Caps fan?
Tim Winkler:Okay. All right. Ranger is a trash talker. Um, I, I was going to actually go with my pairing of, of Vanna White and Pat Sajak is one of the, one of the best one, two combos, but I got something else. I got something else, but, uh, yeah, I just got to give a shout out. That was, uh, you know, a legend, uh, in the game show host, uh, arena. So good on your pap. And ending on top, that's like, yeah, he's going out on his own terms.
Mike Gruen:That's always nice. Yeah.
Tim Winkler:Uh, all right. Excited for today's episode. Uh, so this is another one of those mashup episodes where we, we bring in a founder, uh, from a startup and we also bring in an investor who's partnering with that founder. So kind of gives us this diverse perspective and insight into, you The startup journey, you know, investment strategies, how the two kind of see eye to eye and what they saw in one another as well. Um, so today we have Shane Bigelow, founder and CEO of, of champ titles and Mike. Then none is eating an easy. How am I pronouncing that? Mike? Uh, Smith.
Michael Nannizzi:No, it's, uh, it's, uh, then easy.
Tim Winkler:Gotcha. Mike Nannizzi, Mike Nannizzi Smith, Mike Nannizzi joined us, uh, Head of Venture Investments at WR Berkeley. Shane, Mike, thanks for joining us on The Pair Program. Thanks for having us. Yeah, thanks. Absolutely. Alright, now before we dive in, we do kick things off with our, um, flagship segment, The Pair Program. Uh, here's where we all kind of go around the room, spitball a complimentary pairing of our choice. Mike, you always lead us off what, what's, uh, your pairing for today? So, yeah, uh, so I gave it some thought, uh, like
Mike Gruen:what, two a minute of thought. A good, good minute and a half, two minutes and, uh, no, and it just came to me. Um. Uh, fire pits and friends, uh, we just, we've had a fire pit for a while and, uh, the weather's been that like bright time of, you know, in the evening, having a fire and fighting people over. Um, it's just nice, uh, just nice way to spend the time and I can just stare at a fire. I don't know if anybody else can, Think and just stared at a fire or have a nice conversation, whatever. Um, so yeah, that's my
Tim Winkler:pairing fire, fire pits and friendship. That's a solid, actually just celebrated my birthday the other weekend. And, uh, we rented a cabin out in West Virginia and stayed up till, you know, pretty, pretty wee hours in the morning, just around the fire pit. Something about it. Yeah. It's a, it's good, good bond. Good stuff. All right. Yeah, we will accept that. I'm pretty pumped for this one. I'm going to present something that I think will resonate with, with our guests, um, got a frustratingly perfect pairing for today. I'm going to go with the department of motor vehicles and ridiculously long weights. Um, so DMV and long waits, I think this is a universal experience for folks, something that everyone's got, you know, a good story about, um, just kind of navigating the bureaucracy and inefficiencies of some of our beloved DMVs. Um, I, I do, uh, I do get excited when I hear about technologies or, uh, innovative solutions and ways to, to streamline this and, and to, uh, shorten some of those timelines, but, um, I'll also say that there's something nice about uniting our country when sharing these war stories about long waits at the DMV, it seems like something that everybody can relate to. I mean, shared enemies are always nice. So I'm going to stick with that. I'm going, I'm going with DMVs and, and ridiculously long waits. Uh, with that, I'll pass it over to our guest for their intros and pairing. So Shane, how about a quick intro and you're pairing?
Shane Bigelow:Well, thanks for having me. I appreciate it. Um, so I'm Shane Bigelow, co founder and CEO of Champ. Uh, yeah, my, my pairing, I probably should have done something with the industry, but, uh, you beat me to it. Yeah. Thankfully in our States, those weights are getting to be a lot, lot shorter, if not non existent as we move people from paper to digital and let them do the things they need to do with the DMV from the comfort of their own homes. But, uh, my parents a little more social. I'm going with martinis and oysters. Nice.
Tim Winkler:You want to expand on it? Any, um, anything specific that you love about the, the, the one, two punch? You want to swallow that ice cube? I didn't want to interrupt your lunch there. Sorry about
Shane Bigelow:that. Late lunch. Liquid lunch. You're, you're having your oysters. It's fine. So, uh, you know, I just, I find that when you're with friends and you can order up The gluttonous amount of oysters, uh, the, the, the right thing to do is to pair it with a martini. And I don't know, just something about that together, just as a fun experience that, you know, you don't do that, but maybe a few times a year, if you're lucky, um, it's just fun. I got to do it recently with a couple of great friends and my wife, uh, as we, uh, we were on a trip together. So just good memories. That's
Tim Winkler:great. You go, you go, uh, dirty martini or you just go on just straight, straight martini? No,
Shane Bigelow:the only olives I like are in the oil, but other than that, I won't eat them. Uh, so no, I'm, uh, it's, it's, uh, it's, it's straight up. Most people don't even think it's martini. I, the way I order it is, uh, up with a twist, no vermouth. I only have to throw in the note you for the, for the bartenders that don't understand what up. Just the bottle of vodka, please. bottle of vodka ice,
Tim Winkler:Cheers to that. Alright. Good stuff. Appreciate it. Um, uh, Mike, how about yourself? Quick, uh, intro and, and uh, your pairing.
Michael Nannizzi:Sure. So I'm Mike Nitzia. Um, I run the venture arm for WR Berkeley, Connecticut based property and casualty insurance company. I gonna say, so my, I don't know why this came to mind, but it did. Um. I'm going to go with Lee Majors and Heather Thomas, the fall guy, because I think that was one of the most perfect television pairings I can remember as a kid. So I'm going to go with that. Nice. Did you see the
Mike Gruen:movie? I did not the movie is, uh, it's good. I, I, it was an enjoyable, uh, we went for mother's day actually. It's my wife's choice. It was a fun movie. Oh, is that right? Okay. I might, I might do that. And there were nice little Easter eggs throughout. Like it wasn't, they did a little bit, uh, there's some nice like stuff in there. Uh, so yeah, it was, it was an enjoyable movie. Yeah.
Michael Nannizzi:I liked the, I mean the truck, there were lots of things about the show. I like,
Mike Gruen:yeah, I had the, I had a matchbox car that was exactly like the truck from the thing.
Tim Winkler:I don't think we've had any like active actor pairings, like, I know, I just think in that first, it's creative. I think we need to bring in creative. All right. Good stuff. Well, let's, uh, you know, make the most of our time and jump into the, the heart of our discussion. So as I mentioned, we're going to be. On unpacking this partnership between, you know, champ and NWR Berkeley, uh, on this episode and understanding how this strategic partnership came to be. But, you know, first and foremost, I want to expand on the story and the. Impact of, of champ. So I'll start with you, Shane. You know, what, what kind of inspired you to, to start champ and describe a little bit more about like the problems that you're solving?
Shane Bigelow:Sure. Uh, you know, there really wasn't like a, an aha moment. I think sometimes people think I was waiting in line at the DMV. I got to solve this. It's like, it was really, you know, 20 some odd years of experiences in different industries. My first startup was in the automotive finance sector. So I watched as lenders had a problem getting liens on and off of car titles and the inefficiency that that created for lenders, the costs that it added for the consumers. It just felt a little bit ridiculous, but I wasn't solving that problem in that first startup. I was solving a different problem for lenders. Fast forward a bit, I did a few other things and at one stage wound up working for a pretty large firm on wall street. And one of the things we were trying to do was to Put money to work around the world. And one of the things you pretty quickly realize is that in the developed markets, we take it for granted that we have these systems of record that allow us to pretty easily get a home loan, get a car loan, get a credit card, uh, in the developing world, those systems of record don't really exist. And as a result, you know, lending is stifled, insurance is stifled, um, the ability for you to, you know, keep track of your assets across generations is, is stifled and it really hinders the ability for those economies to grow. And that, that just bothered me, like, it just bothered me that there was part of the world that. Has every bit the skill set that the rest of the world has, but because the infrastructure of their, um, their governmental systems, they couldn't do what we could do. And it really probably keeps people poor longer than they ever should be. Um, and so when I left wall street and and decided with a good friend to start this company, um, you know, he was an automotive retail. Yeah. And we came together and said, you know, this problem has been around for a long time, this problem of how do you make it easier for lenders to lend insurers to ensure, uh, for consumers to get these, these loans on cars to trade their cars with their neighbors. Why is this so hard? Right? Why is this so complex? It really shouldn't be. And we set out to try to solve that problem by pursuing what we refer to as a B to G to C model. You know, we're the business, we go to government, um, we convince government to partner with us so that we can replace their system of record, give them a system of record that their constituents, that's the C, that their constituents really want, that they, that, that moves at the speed of the business of their constituents. Because as you mentioned with the lines of the DMVs, DMVs aren't generally known for moving at the speed that people want them to move at, but that might've been acceptable 20 years ago when the technology didn't really permit it. Today, the technology permits it, and it's more about the states finally recognizing that they probably shouldn't be a software company, right? My biggest competitor is when states decide that they're a software company. And, um, the most states are getting away from that. And so all of this kind of came together over, you know, 20 plus years to say, this is a problem that we can solve in this country and make the experience better for consumers, make their costs lower, allow lenders to have an easier path to land insurers, an easier path to insure. And, um, that's probably part of why, besides my, uh, unabashedly awesome looks that Mike and I came together, um, you know, he was, I think, first just attracted to, to, you know, this wonderful face that I have and, um, all of the jowls that have developed and the gray hair and the wrinkles and all the other things. Um, but also maybe a bit about how we're trying to transform an industry that, uh, doesn't change too often.
Michael Nannizzi:And for the record, I, I actually had jet black hair before I met you. That gives you any indication.
Tim Winkler:That's true. I have to imagine he took you out for martinis and oysters to get this kind of deal established. I
Michael Nannizzi:mean, we, we, we went out and had a few drinks, uh, here and there. No oysters. No
Mike Gruen:oysters. That's, that's only for friends, I guess.
Michael Nannizzi:Exactly. Or, or people he's really trying to impress.
Tim Winkler:Well, I want to expand on, on the WR Berkeley side of things and how they came to be, but I want to just pull a bit more on the, the champ thread here. Um, cause I was doing my own research in terms of some of those benefits. You talked to you cover to cover with a couple of them, like efficiency and bringing down the cost. Uh, one of the things that stood out to me, you know, was the, uh, impact on, on the environment too, that some of this has, can you, can you just kind of briefly touch on that, uh, expand on that benefit as well?
Shane Bigelow:Uh, yeah, sure. By the way, just kind of a funny aside, when you said efficiency, the, the way you said it made me think of a fish in sea. So, um, just never. That never heard anyone say it like that. So now I'm like, I'm chuckling inside. So fish and
Tim Winkler:sea.
Shane Bigelow:Yeah. You're right. Sea. Yeah. Uh, well, you know, the, the, the sea, as we all know, gets polluted because people, um, don't take the time they should to worry about the environment or maybe do some of the basic things that can be done to try to help it. And, you know, I'm not, uh, I'm not out, you know, um, hanging out protesting, uh, companies or anything like that. Um, I'm looking for places where there's a place to really do something basic that just simply helps, um, the, the, you know, the environment and the associated companies that, that, that deal with these issues. And so let me give you an example, you wouldn't think that titling would somehow solve an environmental problem. Well, okay. So there's the first part where maybe we make things digital instead of paper. So there's some, uh, a lot of trees, a lot of paper that's saved, you know, paper production is, is, is in its own way. Um, not great for the world, but nonetheless, so maybe that helps a bit, but one of the really exciting places is that, uh, when cars need to be recycled. Uh, so they get in an accident and they need to, uh, be parted out so that the good parts can be sold again and reused, uh, and the bad parts can, can be disposed of. Um, that's a tricky process, right? Cars are one of the few things in, uh, this world that are 100 percent recyclable. And I don't think people realize that. So when you see these salvage yards and you look at them and you say, okay, so everything in there has value, um, it's, it's somewhat intriguing. Well, the problem is that, you know, 10 years ago, and Mike can tell you this from the insurance side, 10 years ago, 6 percent of insurance claims were total losses where the car was end of life because of the, the complexity of the accident or the damage to the vehicle. Today, that number is 26 percent of all claims are total losses. Now, most of that has to do with the added technology that's in cars that makes it easier to do a lot of damage quickly with even a minor accident. But the reality is those cars, when they're totaled, they go sit in a salvage yard on average for about 55 days. So they're leaking fluids, causing problems, not being recycled, um, EVs have a tendency because of the batteries to catch on fire more frequently. And so all of these things are doing bad things to the earth and it's really no one's fault because the salvage yards are doing exactly what they should do. Trying to shepherd this car through to be recycled. The recyclers want to buy the car as fast as possible because the part value is depreciating the longer they have to wait to get the parts and the insurance carrier that insured the car. They want the car to be sold quickly so they can recoup some of what they paid out on that claim. But you're waiting for 55 days for a piece of paper from the government to say that the policyholder who got the money from the carrier is no longer the owner. It's crazy. It doesn't make any sense that it should take that long and that that car should have this opportunity to do damage in the meantime. So we speed that up to just a few hours. And that's a huge change for the industry. And it's a huge change for the environment. And so it's an easier way for these salvage yards to become smaller, uh, because they'll turn the cars faster. So they need less land. Um, and that's just one of the easy things that can be done when technology is applied in an area that you wouldn't normally expect would have a positive impact on the environment. In fact, it has a pretty large impact on the environment.
Tim Winkler:Yeah, I'm really glad I asked the question because I was thinking from the, from the trees and the paper perspective and you flipped it on me and open my mind up there. It's, it's fascinating. Um, I, I, I want to pass it over to Mike now and, and just, you know, obviously give us a little bit more, uh, background on, you know, the unique approach that WR Berkeley takes from an investment perspective, why it's A different type of approach than your traditional VC. And then I'd love to hear how, you know, the story between how you and champ kind of got connected.
Michael Nannizzi:Sure. Yeah. I mean, uh, so, so just to back up, so I joined Berkeley about seven and a half years ago, and I joined a role that was created to make financial investments in technology companies where, where we are a little different, I guess, is we aren't managing other people's money. And so we don't have, there's a lot of venture firms raise, uh, partner funds, limited partner funds, and then deploy those. And so we, we typically, and that has a whole series of knock on effects. We've kept it pretty simple. We invest our own capital. And so that's number one, I guess. And number two is unlike a lot of more traditional corporate venture arms that have strategic requirements. So they need to have their investments. Uh, achieve some sort of strategic imperative. We don't have those either. So that, that's sort of what makes us unique is we're not structured like traditional venture firms, but we also don't tend to invest like more traditional corporate venture arms. Uh, and so, you know, our mandate and my mandate is sort of pretty, pretty broad, but our approach is pretty simple. We want to invest in companies that. Can create value for themselves and their customers at the same time. And that technology allows them to do that at scale. So pretty simple. I think champ is a perfect articulation of that. And so that's generally sort of how we think about the types of models that we're interested in. I'd say, but more important than that, in terms of like the financial profile and the opportunity, I really do see us just investing in people, you know, and we're, we need to make sure that we believe in the leaders of these companies. We need to make sure that we can trust them. That, that we can have the kind of relationship that we're trying to help them and they want us to be successful too. And I mean, these sound like really basic attributes, uh, that any investor would have and that any company would have, but it doesn't always work that way. And so I'm really proud of what we've done and the companies we've invested in. And sort of really proving to them that this is what we want to bring to the table.
Tim Winkler:Yeah. Something that you mentioned in our previous discovery call that I, I'd love to hear a little bit more, maybe you can use champ as a specific use case or, or another, uh, company within the portfolio, but the, the, the advantage of having the footprint as an insurance company. And the ability to kind of, you know, plug and play, maybe, you know, your portfolio's technology offerings into the hands of real users, uh, maybe partners. Uh, to, to, to try these products in a true production environment. Can, can you expand on that or share an example of this and you can use champ or you can use another example as well?
Michael Nannizzi:Sure. Yeah. I mean, I'm Shane, I imagine you're all right with me talking about what we did together. Yeah. I mean, I think there was a time, I don't know, a couple of years ago, maybe when Shane came to me and said, you know, we would love to. Be able to prove that we can process a title for an incident in one state through a different state. And so we have a collection of small insurance companies that all do different things and lots of them do those things in different places. And so she said, we want to process a title in this state. And we'd like it to come from another state. And so he's okay. So I found, you know, uh, an operating unit at Berkeley that had auto exposure and had claims that sort of fit the profile Shane was asking for. Uh, and so we asked them, we said, Hey, listen, can we, can you try this out? Can you try this out? And, uh, and they said, sure. And so we had to kind of jump through a couple of hoops just because it is a little different and Then, um, typically the way insurance companies operate and insurance companies are really good at having processes in place that they follow no matter what, and so we were able to sort of get that, uh, to a point where we could get it done and, and so we were able to get that transaction done. I don't, was it probably two years ago, Shane, something like that. Yeah. Um, and then, you know, cause my thought was like, like when I look at companies and they say, here are all the things we can do, it's a very different bucket than when companies say, here's what we've done. So I, to the extent that we can help, you know, our portfolio companies do that. Um, you know, this was an opportunity to. To make that, to make that happen.
Tim Winkler:Yeah. And Shane, I guess I'm from your perspective. I mean, the, the value of something like that, you know, obviously, you know, capital is, is where everybody's mind initially goes to when you're thinking about, you know, uh, uh, venture partner, um, but some of those other areas, like I look at this as like network access, right. Um, incredibly valuable, you know, were you anticipating that going into this? Or I guess, what was your, your thoughts when you kind of, you know, experienced some of that value?
Shane Bigelow:You know, we've been lucky in that, um, every round we we've done since we started has been oversubscribed. Um, and that we've had competing term sheets all along the way. But, uh, the reason why We initially went with with Berkeley and they've been involved in everything we've done ever since then is, uh, it wasn't because they had the highest valuation. Um, they didn't. It's because they were the right partner, right? They have the right culture. They have the right, uh, I think, mindset of stewardship over their companies that isn't always the way you feel when you're inside of a portfolio for a venture firm. Um, but Berkeley is very different. I mean, for all the way from their CEO, Rob, who. It's just an amazing CEO and leader, uh, all the way down to the, the, the newest of employees that we might interact with on a particular transaction. There's a, this mindset of care and stewardship for what they're a part of what they help create. Um, it's an ownership. Uh, the ethos that I don't think is, is, is typical to find in companies. And as we were going through the initial process back in the series, a, where we now just completed our series C, but when we were going back through the series, a, it was really clear that they were different. Uh, I didn't know, you know, you hear from, from firms, uh, when they're competing to put money in and you hear from them, Oh, you know, we have. Business units, you can try this out and, you know, you kind of, you don't know for sure until you actually try it. Um, but boy, was it real, right? We, we, we had a need, we wanted to prove something out. Um, we didn't want to, you know, try to route through a long sales cycle to convince someone we needed, we needed an early adopter and who better than someone who has already invested in us, knows us, trusts us, we trust them. And it, you know, it, it set, it set a standard for a transaction that had never occurred in the industry before. And it told the industry that this is possible. And we just proved it not in theory, but in reality. And to Mike's point, uh, it was the stepping stone for one of our largest products that's in market today. So, Um, yeah, it's very, very unique dealing with, um, an investor that has that type of, uh, mentality, care, stewardship, and ownership ethos inside of the way they, they live there. Their daily business lives.
Mike Gruen:I would definitely just coming from startups and having worked with many different investors, it is very rare to find that partnership that like really that they're there for more than just the, the, the outcome, right. That they're there to help with the journey and make the connections. And, um, I think it is quite rare. So that's awesome. Um, and your point about the like lower valuation, I think there's too many founders that focus on that number and not enough on, What's who's giving me this money and where are they going to be able to do? Like, how are we going to help each other beyond just this sort of.
Tim Winkler:And Mike, you, you know, when we, when we first spoke as well, you mentioned that you only deal with a handful of companies underneath the portfolio, and that's a very intentional choice. So, um, what, what kind of, what value does that create for founders like Shane, just being able to dedicate that much more attention to a handful of folks?
Michael Nannizzi:I mean, I mean, that's probably a good question for Shane. I mean, if I think from our side, I just, so my general approach is I don't like to promise things that I'm not going to do. I don't, we're, we're not trying to institutionalize this effort, right? We're not trying to scale. You know, I talk about wanting to invest in companies at scale. We're not trying to scale this, right? We're, we're trying to, I've been here almost eight years. We've made eight investments. We don't invest in a lot of companies. We're really careful about who we want to work with. And, uh, and we're gonna do everything we can to help them get there. And so part of the ethos for me is like. If I did try to invest in 20 companies, then if Shane needs me for something, I'm not available because I'm in 19 other board meetings that season, you know, it's just, and, and I, there are, that does happen more often than you might think. And so we try to tell people like, look, we're different. We want to help. We want to bring value where we can. And so we limit ourselves to our portfolio to make sure that we don't stretch ourselves too thin.
Mike Gruen:I think that's the whole stretching thin what ends up happening. I plenty of friends that are in VC, you know, that do this, they just spend all their time with the companies that are struggling. They don't get to work with the ones that are doing well. They just spend their time on the ones that are having problems and, um, and, and not, you know, and I think, you know, if you're a company that's sort of in the middle, that sort of, On the cusp, that means you're not getting maybe that attention that you need to really get to that next level. I think, you know, so I think that's really an awesome approach.
Tim Winkler:Shane, you're, you're dealing with a number of different stakeholders. Um, you referenced, you know, some of the, the government stakeholders, what, what are the biggest challenges that you feel like you run into, um, you know, juggling so many of these different stakeholders?
Shane Bigelow:You know, it probably sits on a on 2 fronts. The 1st is we're going through in, in government, broadly speaking today, um, Government in the United States is going through this, uh, maturation process where they're, they're finally stepping out of, uh, the technology building. Um, you know, I think for a long time, governments thought of themselves as, as software companies or, or it companies and, you know, probably the move from, um, on prem to cloud, right? I can still remember when governments were. Creating their own clouds, like you think about how silly that is in hindsight, right? Like, okay, Amazon and Google pretty much have this one figured out for you. Um, so, uh, you know, there's merit, I suppose, in some, in some places within government, uh, where you might need that, but, but generally not right. It's generally cheaper for the constituents of government. If you're using the private sector and, um, You know, they're creating technology for you. So, so that, that's the first thing to juggle is this change of mindset within government that, uh, has probably taken about 20 years to take hold, but it's here, right? They, it's very difficult to keep up just with the expenses associated with software production today, if you're on a government salary, right? My, my, the average wage of an employee at champ probably far exceeds the average head of a DMV. In most states, right? And that's not because we overpay. It's because that's what a software engineer costs. Right? And, and the reality is that if you are paying for that talent, you're generally creating pretty good technology. It's not exclusive to us, right? Other software companies do the same thing. Maybe even our competitors. I don't know. But, um, But I'm, I'm confident other software companies do the same thing. So that's the first thing that juggle is that change because the government doesn't move quickly. So when they experience a change, it's, it's pretty dramatic to their daily lives. The second thing is that we've introduced inventions into the market, right? We, we referenced one that we, we did with Mike, um, and, and with WR Berkeley. Um, You know, but there have been others, uh, the, the digital title, right? It sounds for years, states are talking about electronic titling. Well, we have the first digital title that truly is digital. You know, it's gone from being a paper based asset to now being something that can live. Entirely digitally and you know, like, like the boarding pass for airplanes, there's a, there's an arc of change that you go through. I remember when I was a kid, boarding passes would be mailed to you with carbon copy pieces of paper. God forbid you lost the thing or like, literally your dog ate it or your mom threw it away. Like, you couldn't get another 1 or it cost you 100 bucks or something silly. And then eventually the airlines were like, well, you know what, you can just print this at home and people were like, Oh my God. Okay. Print it at home. Now don't lose this. And it's like, wait a minute. Maybe I can lose it. Maybe it really doesn't matter. And then now today, you don't even think twice about it. It's on your phone, you know, and think about what the airlines have been able to do by going through that transition. One, they've reduced the cost. They've made it easier for the consumer. Two, they've increased their own revenue streams, right? They've managed to now I go on the app. What do I do? I changed my seat. I booked my bags. I pay for oversize baggage. Uh, I might upgrade myself. Um, you know, uh, if, uh, if the opportunity is there, uh, I might pick a meal. All right. I might pay for my wifi. All of these things are revenue streams. Now apply that to government, right? Government's under a tax crunch. Like nobody wants to pay more in taxes. But if the government supplying a service that far exceeds what has been available in the past, people have shown a willingness to pay for it. Now, we're not in this business, but a great example is playing on your joke from earlier on. People will pay many state governments in order to pay Reserve their spot in line at the DMV, they'll pay 2, 5, 10, whatever it is to reserve their spot simply because they don't want to wait in line. Well, that's great. That's an extra 2, 5, 10 that the government didn't force on anyone, but made it an option that you could pursue. So the government can then collect less taxes. They collect user fees from people that are actually using the services and we're doing the same thing in titling, right? We're making it so that lenders get a better way to put liens on and off of their titles. Car dealers get a better way to title their cars and move their assets and their inventory around. Insurance carriers can do the total loss solving of titling like we talked about earlier with the environmental example. All of that comes with incremental benefits that benefit those companies, benefit their bottom lines, benefit their ability to compete with their competitors. If they're doing it before everybody else, but it was supplied from government. So government should generate some more income as a result of that. And the users not. Everybody in the system, but just the users are paying for it. So it's very fair in terms of the cost allocation for who picks up the tab. Um, and it's not the silliness of government. Um, you know, like, like, Okay. Let me back up. The, the silliest thing that occurs in government is that they put out a bid for a contract, and then they pay the vendor upfront, like what other industry actually pays upfront before the service? You don't even pay your doctor upfront, right? You and, and so. Somehow the government is doing it exactly the opposite of the way that makes rational sense. They're paying a vendor up front a ton of money for a five year, six year, ten year project. So the government, the vendor's incentives have immediately gone to zero to do anything quickly or anything particularly well. They're collecting maintenance fees every year on top of it. And the government just has to sit back and wait for the vendor. Like this is the silliest use of tax dollars. If, if all government contracts went to a place where they're only paying the vendor for performance for actually changing the behavior that we wanted in our case, moving someone from using paper. To being digital, then imagine how much more efficient that capital is allocated. And by the way, the government doesn't have to pay vendors like us, the users pay for using it. And we could rip so much excess out of government. If we started to change contracting and the way we think about it that way. And, um, and the reality is like, that's all the stuff we're juggling right now. Government's realizing that they can. That they can actually make this change out of building technology, that they don't need to pay these vendors up front, that they can pursue a transaction based model, provided that the constituents are actually getting something better. And, you know, I take a lot of pride in the fact that what we deliver through government is better than what was there before, because I'm, I'm definitely not here to sit around and just take a big government contract and. And say, hooray, that's not the point.
Mike Gruen:Well, can I just say that having worked in government contracting, you miss an important part, which is not just the incentive to move slowly, but to actually not complete stuff, because that's how you get add ons and follow ons. And there was a number of years ago, I forget what it was. It was, I know it was New York state was suing one of the, like one of the big contracting companies that they'd hired to build out something. And, uh, And that company did exactly what New York state asked them to do. And New York state's like, we hired you because you're the experts. Like, you knew that this was going to fail and you did it anyway. And they New York state, it was like one of the few times I've seen the state actually win the case. But like the whole thing was like the vendor knew from, from go that this was never going to work. And they were like, yeah, of course we wanted to do that because then there's the follow on work to fix it. Like just insane. So, I mean, there's so much there. It's not just like, I don't know. Government contracting is a, is a, is a brutal place for like, when you think about the amount of just waste wasted money. Um, on these things and on these, on these things, you know, where, you know, and so it's nice to see, I think, especially where you're talking about, um, a platform where it's interacting with government, but it's also into, you know, there's other players in this. It's not just some platform. The government is building for themselves, right? Like, there's all these other things that have to interact with it. And if every state government is doing their own or. Then it becomes that much harder for a comp, you know, for all these companies and other players to integrate and work with those across multiple States. So I think that's really,
Michael Nannizzi:I think 1 of the things that, I mean, what we, we always loved about, uh, champion, you know, Shane's vision was, um, to sort of turn the government model a little bit on its head. And we had a company that was looking to do some work before with. With governments and, and they sort of stopped because the model is so difficult. It's like you tender something, it's sort of a big number. And then the maximum that you could charge later is a percentage. And then. You're making your value for them is going like this and they're paying you like this. It just doesn't make sense. And the fact that Shane figured out how do we give the state something that actually doesn't just deliver something that their customers will want and will pay for, but it actually could end up improving the fiscal situation of the states themselves, you know, and that I thought was really smart because. In the end, I mean, that's what, that's what you're trying to do. Like sure, the better experience, but better experience and also better financial outcome. Right. And I think that that, that to me was what, what always got my attention with Shane and, and, and with Champ is that. You know, they didn't just go at solving the problem the same way that other people solve the problem, just with more technology, they actually flipped the business model over in a way that I think is super compelling.
Shane Bigelow:It's really, yeah, sorry. I know one of the things that, um, you know, is sort of, I think core to our, our set of beliefs is that, um, there's a, there there's a, there's a right way to be a citizen. Right now, I happen to be fiscally conservative and socially liberal, but in my view, any citizen that abuses. Government spending is abuse, is abusing themselves at the same time. It's our money. We paid the taxes, right? They're taking our money and reallocating it. If we're not responsible with the way the government's doing that, and we're not putting controls on it, we're not giving them in the private sector, the right incentives, their behaviors, not going to create the outcomes we want. Right. I can tell you, and anyone can tell anyone exactly how someone will behave. As soon as you understand their incentives. And the incentives attached to a vendor that gets paid up front are generally pretty bad. The incentives for government who doles the money out up front are generally pretty bad. But if you make it pay for performance and you partner, that's the, that's the way public private partnerships should work. Like the rising tide lifts everybody. And you've done it with capital efficiency, that means taxpayer dollar efficiency, and we lack that. And it's part of the reason why we have, you know, 30 some odd trillion of debt right now.
Mike Gruen:I mean, I
Shane Bigelow:think that's, I
Mike Gruen:mean, that gets into why it's so, I think, slow to change as well, is that if you look at how government generally has The incentives, if you work in government, a lot of times, it's based on how big is your budget. How many people are working for you? That's why we end up having a lot of it projects and other things that are housed within an agent within this government. And there's a lot of work trying to shift that more towards purchasing the purchasing outside and. Being more value based is, is it's happening, but it's slow, but it's nice to see that it's happening. Okay.
Tim Winkler:Yeah, we run, we run a number of episodes centered around dual use and, um, the injection of commercial technology to, to help streamline, modernize, you know, government technologies. And a lot of that stuff really comes smashing in the face when you hear the stories of folks that are warfighters out there trying to get access to some sort of a, you know, piece of information, but they can't do it. They can't streamline the technology because they didn't go through this one policy. And then, you know, they never really adapted to a more modern technology to make it more streamlined and, you know, get that information quicker and folks lost their lives because of it. And then you, you really hear stories of folks coming on and being very passionate about why they're determined to, you know, change the way things have been and tried to break down, you know, some of these regulations that are. So slow to, uh, inject, you know, better technology into the system. So it's, uh, it's, it's, uh, it's an area that we're, you know, we're big advocates on, on the, on the podcast and our community at large. Um, I think it's really interesting what you guys are doing, uh, you know, in prep for, for this, I was talking to a couple of friends about, you know, what you all do and, you know, it's, it's odd to think about, but it is, it's such an archaic thing, but everybody knows they've got that paper title somewhere tucked away. That's just God. Yeah. Piles of dust in their old file cabinet. And it's like, I don't know why it's there, but it's there. Um, what
Shane Bigelow:states are you operating in, uh, West Virginia, New Jersey, Kentucky and, uh, soon Illinois. Excellent.
Tim Winkler:Excellent. And I'm sure there's a, uh, strategic roadmap to continue to build on that. We're, we're definitely rooting for you all and excited for the progress that you made at this point. Um, Mike, you know, you, it sounds like a great partnership that you will have found and, uh, I respect and, uh, admire the, you know, the, the model that you all have with being very diligent and intentional with. It's a handful of, of portfolio companies and working with a select number of founders that, you know, that you can add value with, I think it's a really, really strategic partnership. And, um, you don't see it very often. So kudos to you all as well. I want to transition and close this out with the, uh, the final segment to the episode with the five second scramble. Here's where we, we go around, do a quick little rapid fire of Q and a. Uh, uncover your deepest, darkest secrets. I'm joking. It's not very light, very lightweight, fun. Uh, Mike, you're, you're going to lead us off with, uh, Shane, and then I will get with you, Mike. Not at all. Confused. I will
Mike Gruen:be doing the first round of questions with you, Shane, if that helps clarify things, uh, which, which Mike is, which, uh, having the name Mike means I'm sure Mike also feels this way that we, it comes up a lot. Uh, anyway, uh, so yeah, so I'll ask you some questions, uh, and they will be different. So, uh, they're not, you know, you don't look at the same questions. There's a little bit of overlap sometimes. All right, here we go. Uh, explain champ as if I were a five year old. We build new systems for DMVs. Uh, what type of technologists thrive at Champ?
Shane Bigelow:The kind that treat no as a stumbling block on the way to yes. Nice. Um,
Mike Gruen:what's the biggest, uh, challenge facing tech execs in 2024? Uh,
Shane Bigelow:in the aggregate of tech execs, um, probably the underlying, um, fracture in the economy where, uh, I think a third of the country is in a really severe recession, the third is, Not saving spending every dollar. And a third has no idea that this is going on with the other two thirds. So the knock on effect is that, uh, you wind up having really disparate views of what correct compensation is. And, uh, it's hard to manage that because you lose people. Um, because of reasons that, uh, are external to your company, uh, the, the, it's their own fiscal constraints, their spending issues, the amount of inflation they're dealing with at home. Um, it's a complex problem, but complex, maybe more of an answer than you want it.
Mike Gruen:No, that's, that was probably one of the best answers. That was really great. I'm just, I'm just taking it in. Uh, uh, what's the best piece of advice you've ever been given? Um, if you're not living for the story, then you're just not living. Uh, what's a book every
Shane Bigelow:entrepreneur should read? Uh, the monk and the riddle by Randy commissar.
Mike Gruen:Hold on while I write that down. Uh, all right. Uh, what's something you did as a kid that you still enjoy doing? Um, playing soccer.
Tim Winkler:Cool.
Mike Gruen:What position? Defense. Me too. Uh, back when I played now, I don't play so much. Uh, what's the, uh, largest land animal you think you could take in a street fight? No weapons, just bare hands. Like a bunny rabbit,
Shane Bigelow:maybe? I've got this answer we've never received. It's so old and slow. Like, I couldn't catch the rabbit, but I suppose if we were actually in a fight, I'd know. Not the one from Monty
Mike Gruen:Python, I assume. Uh, what's the most outdated piece of tech you can't let go? Oh God.
Shane Bigelow:Uh, I don't know. I am like tech forward as much as I can be. Um, I just probably like the cords in my car. I, I still use them more than you probably need to for given all the Bluetooth and everything that's available.
Mike Gruen:What's a charity or corporate philanthropy that's near and dear to you?
Shane Bigelow:Uh, there's an organization here in Northeast Ohio. They're, they're versions of this throughout the country. Um, that's an organization called blue coats. Um, when, uh, a first responder is, is killed, uh, in the line of duty. So, you know, fire, police, ambulatory, whomever, um, those families are left with a lot of needs, mortgages, schools. Bills, funeral expenses, the list goes on and on. Um, organizations like blue coats around the country generally step in very quietly to, uh, to be there to help. Um, it's not a political statement. It's a reality of someone put their life on the line for us. And the least we could do for them is stand in their shoes while they're not here.
Mike Gruen:Uh, last one. Uh, if you could live in any fictional universe, uh, which one would you choose?
Shane Bigelow:Oh, um, uh, what's that movie with most deaf? Um, where it ends with the dolphin at the end? Uh, gosh, that was a good one. It's like, uh, oh God, I'm blanking on it. This is gonna bug me and ask, ask Mike's question and I'll secretly Google it in the background. The Hitchhiker's Guide to the Galaxy. Yes. The Hitchhiker's Guide to the Galaxy. That would be where I'd live. Yeah. Awesome. Yeah. Great. Great reference. It ends with the dolphin. I'm pretty sure that was the movie and that I was definitely sober when I watched it.
Mike Gruen:All right. Good stuff.
Tim Winkler:Good stuff. All right. Uh, Mike, are you ready? I mean, I guess let's do it. Um, what, what is your favorite stage of startup to, to work with
Michael Nannizzi:post revenue pre scale?
Tim Winkler:What's the biggest pain point you would say facing startup founders in 2024?
Michael Nannizzi:Making good decisions about who they choose to partner with.
Tim Winkler:What's one trait that you find consistently in great founders from startups?
Michael Nannizzi:Uh, honesty is. An underappreciated trait.
Tim Winkler:What would you say are the top two areas that you add the most value for founders across your portfolio?
Michael Nannizzi:Try to limit the advice we give to things we actually know about.
Tim Winkler:What's an area of tech that you're most excited to see impact the insurance industry in the next five years? Uh,
Michael Nannizzi:oof. Um, gosh, I don't. I don't know, uh, the reality is because I don't invest just for the insurance industry. I don't, I'm not, I don't know that I'm best equipped. Um, is there just an area of tech that you're excited about? I mean, look, I think all of this. Insurance companies have a ton of data and still are trying to figure out exactly what to do with it. So I do think sort of predictive data, using data to make better decisions. I mean, this is before all of that AI. But I would say tools that help insurance companies better leverage data to make decisions. Okay. What, what's the favorite country that you've ever traveled to and why? Favorite country I've ever traveled to. Um, I'm, I'm gonna, I'm gonna twist a little bit. Most recent, uh, country I've traveled to that I was surprised how much I like to, like, I went to China a few years ago and it was amazing. It was an amazing country. I thought it was gonna be really crowded and really difficult to get around. And it was. Western and beautiful. And yeah, I mean, so many things about it that were surprising. Um, really enjoyed it. What's a
Tim Winkler:charity or a corporate philanthropy that's near and dear to you?
Michael Nannizzi:Uh, we've been getting closer to a group called the Jed foundation. I don't know if you're familiar with it. Um, it's a group around helping provide mental health, uh, support services to high schools and universities sort of really targeting, um, the mental health crisis among. Adolescence. And so that's a group that we've, my family's been getting a lot closer to, I think it's an important issue. It's wonderful.
Tim Winkler:Yeah. Well, and we'll include both, both of those, uh, charities into the share notes as well. Just build some awareness for them. Uh, if you could have dinner with any tech icon, past or present, who would it be with
Michael Nannizzi:dinner? Oh man. I mean. Steve jobs, I think would be the one if I could, but you like being insulted. It's actually part of the reason I became an investor. I'm good at
Tim Winkler:taking, taking insults. What, uh, what's the worst fashion trend that you've ever followed? Oh man, the hammer pants.
Michael Nannizzi:We're
Tim Winkler:going to need
Michael Nannizzi:a photo, uh, for credibility for that. Hammer pants were a big deal. Part of my high school repertoire. Only on Fridays though.
Tim Winkler:Friday, hammer pants. It's good. All right. Uh, closing question. Uh, what is, what was your dream job as a kid?
Michael Nannizzi:What's my dream job as a kid? Man, it's a tough one. Um, I think, I mean, I wanted to be an athlete. I thought that, that, that would, uh, happen and it did not athlete
Tim Winkler:investor.
Michael Nannizzi:Yeah, exactly. So it's close, but close at all. Um, but I will say my son who like, likes to play basketball, he, uh, He asked me one time, I was putting him in bed and he was very serious. And he's like, dad, what are we going to do if the warriors retire number 30? And I was like, I guess you'll have to have them give you a different number. His view was, I'm going to play for the warriors. So maybe he'll get his, and if I didn't get mine,
Tim Winkler:I love it. Uh, all right, well, that's a wrap. I do appreciate you both spending the time with us on the pod. Uh, excited for the future of URLs partnership as well, and wishing you guys best of luck. Thank you so much. Appreciate the opportunity to be here with
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