
How we came back after being shut down in four days - jasontraff
http://blog.leaky.com/how-we-came-back-after-being-shut-down-in-fou
======
tptacek
I love this story, because it involves bullying from big companies turning a
marginally shady† business model into a genuinely interesting and valuable
above-board offering. These stories so often end in shrill shoulda-coulda
ranting and uninformed legal speculation. This one ends in a great hack and an
even better company than the one that originally launched.

† _I don't think the Leaky people are shady, just that scraping hypersensitive
sites is a duct-tape-and-baling-wire solution._

~~~
patio11
It also pivots them from a thin affiliate model, where they add no value above
the traffic stream, (and fight other people doing same with less
ethics/stature) to one where they have a competitive moat and produce value
independent of insurance purchases. They're essentially a publicly accessible
interface to "transparent" documents mandated by the regulations which, at
present, might as well not exist outside the industry.

It's almost like they're a patch to the law, really.

~~~
cannuk
Let me preface this by saying that I am not trying to troll, I genuinely want
to know if I am missing something. How does the pivot remove them from the
affiliate model? Granted, I applaud them for rewriting it and "doing it the
right way", but does it change the way they could make money?

~~~
mrkurt
They basically have original knowledge they can sell, now, versus "just"
scraped data. They can license their price prediction engine to anyone who
doesn't want to go through the agony of doing what they just did.

~~~
webjprgm
And this does have real value. Myself and 2 other friends were this close to
doing exactly what Leaky is doing, but I (the programmer) did not want to
spend a lot of time implementing that price prediction model off of hard-to-
read (and constantly changing!) legal documents.

From the previous HN post a few days ago, multiple people raised the concern
that Leaky quotes them at twice what they are actually paying. Someone else
said that without looking up a credit score the rates are basically worthless.
So I still have my doubts as to the accuracy of Leaky's data, even though they
say it's within 1%. Maybe that's 1% given some default middle-ground credit
score?

I was told that the rates insurers file change frequently. So I'm also
interested to see how quickly Leaky can stay on top of up-to-date results.
That's my second accuracy-related concern.

If these concerns did not exist, I'd already be in this business. I'm sure the
same can be said of other people. In fact, I assumed that with such an obvious
need for a business like Leaky the absence of such suggested a higher barrier
to entry than is visible at first blush. I think what happened in Leaky's case
is that they were too naive to know they were being naive, and then kept
pushing on it anyway. Isn't that a Steve Jobs quote or something?

~~~
gruseom
_Isn't that a Steve Jobs quote or something?_

I believe it's Emerson. But Steve Jobs might well have adopted it, like the
fake Leonardo quote ("simplicity is the ultimate sophistication" - actually
William Gaddis) and the fake Picasso one ("great artists steal" - actually
T.S. Eliot).

~~~
FreakLegion
_> actually T.S. Eliot_

Almost! With context: "One of the surest of tests is the way in which a poet
borrows. _Immature poets imitate; mature poets steal_ ; bad poets deface what
they take, and good poets make it into something better, or at least something
different."

I'm also a fan of the way Gilles Deleuze framed it: "Proust says: 'Great
literature is written in a sort of foreign language. To each sentence we
attach a meaning, or at any rate a mental image, which is often a
mistranslation. But in great literature all our mistranslations result in
beauty.' This is the good way to read: all mistranslations are good -- always
provided that they do not consist in interpretations, but relate to the use of
the book, that they multiply its use, that they create yet another language
inside its language. 'Great literature is written in a sort of foreign
language...' That is the definition of style."

~~~
gruseom
Not almost; unequivocally. That the wording got polished over time is just
what happens in popular discourse.

I don't see the connection to Deleuze. Eliot isn't talking about
mistranslation or about how audiences receive art. He's talking about Dylan
lifting the melody to "Don't think twice" from some other song.

~~~
FreakLegion
Yes, almost. Eliot _almost_ said that -- said something superficially
_similar_ to that -- but didn't say _that_. People use "great artists steal"
as incorrectly as they use "information wants to be free." The line hasn't
been polished; it's been co-opted and transformed. Which is exactly what he
and Deleuze were interested in, and why they so often circle the same drain.

Of course how audiences receive art and how artists create it aren't disjoint
processes, but I understand you getting hung up on Deleuze's use of the word
"mistranslation" there. It helps to know that he's working out of a tradition
that treats the idea of translating as a figure for "owning" (in the
Heideggerian sense, also translated "enowning").

~~~
gruseom
What I meant is that there is no other plausible lineage for that quote - and
I've looked. If you claim otherwise, I'd love to see the citation.

It doesn't help to replace one obscure jargon with another, even more obscure
jargon.

~~~
FreakLegion
Absolutely that's the provenance of the saying. Eliot just wasn't saying what
the saying says =).

------
pg
I have to say, I'm surprised they managed it. I would not expect a site that
was C&Ded out of existence so fast ever to reappear.

~~~
jasontraff
Thanks again for all of the support

------
lambda
Great idea for a product, but the privacy policy here is seriously inadequate.

In order to use this, I would have to give a lot of personally identifiable
information. The privacy policy basically gives Leaky the right to do whatever
they want with my personally identifiable information, such as providing an
unlimited set of third parties for "internal business purposes," an unlimited
number of present or future affiliates which they will "seek to require" to
adhere to the privacy policy, to anyone who may purchase the company or its
assets, or for a fairly extensive list of fraud and law enforcement reasons,
to disclose it to an unspecified set of entities.

On top of that, there is no limitation on how long Leaky will hold such
personally identifiable information, nor any information about how to get
Leaky to remove it. So basically, once I enter information into Leaky, they
may hold onto it forever and sell it to whoever they like for quite a wide
variety of reasons, with no recourse for the user to protect their
information.

I don't think that I would ever want to put such personal information in a
service with such a weak privacy policy. And given the new model, in which
this is just an implementation of the complex pricing structures used by auto
insurance agencies, I wonder why this couldn't be made into an application
that runs locally and never exposes my personal information to anyone else.
Yes, you would probably have to go with a paid application, rather than an ad-
supported web site, with all of the problems that entails, but for a product
like this with such important privacy concerns and such little value (to the
customer) to putting the data online or sharing it with people, it really
seems like it would make more sense as an offline application, not a web app.

~~~
rdl
Sure, they could do with a better privacy policy.

However, what exactly is the sensitive data here? Your first name, your zip
code, your car make/model/year, and your profession.

99.99% of people would happily give you that data for a free pen, just for the
asking.

Also, while the Leaky guys (being in YC) are likely to actually be better than
their privacy policy, what happens when you click over to the actual insurance
company and give them your full details (SSN, credit info, vehicle accident
history, license info, etc.). I'm more concerned with how AIG will use my data
than how a small startup will, and the insurance company is the one collecting
vastly more -- and their privacy policy allows them to use it for all sorts of
things which are opposed to the user.

~~~
lambda
So, I haven't actually tried the service (due to my privacy concerns, as well
as just time). I was assuming they would use more information than that
(credit info, vehicle accident history, etc) if they were going to do a good
job of modeling how car insurers do pricing.

The amount of information you mention is not as troubling (though you missed
your email address), but I would still like to know that they will delete that
information after they are done with it, not retain it forever while
maintaining the right to give it to pretty much anyone they want as long as
they are "affiliated" with Leaky.

And yes, a YC startup may be more trustworthy than an insurance company, but
on the other hand, the insurance company needs to collect that information,
and is much more heavily regulated, while Leaky, as a private company under
not much regulation, can do pretty much anything it wants.

~~~
staunch
I haven't read your comments (too long, no time) but I think you should fix
them. They seem like they might be critiques of a product you haven't even
tried.

~~~
AznHisoka
If you haven't read them, how do you know they are critiques of a product he
hasn't tried?

------
bryanh
The fact that the insurance companies acted so swiftly and decisively shows
how vulnerable they are. It's pretty obvious that insurance is an industry
whose margins are bolstered by consumer ignorance.

I'm glad you guys are spending the time trying to fix this, and it is very
impressive how you bounced back so soon.

~~~
rogerbinns
Most bizarrely almost all of their advertising seems to have the same script:
"switch to us and save money". Some even go so far as to mention you can call
them when there is an incident, but you'd think that is standard!

~~~
mdda
The regular wording is really sneaky : "99% of customers that switch to GXXX
save money". That's completely to be expected : The only people that have an
incentive to switch are those that would save money.

It would be far stronger if the wording was "99% of customers would save money
by switching to GXXX" - which is seductively similar, but completely
different.

~~~
rogerbinns
Maybe it is because I'm not a US citizen, but the premium price is the second
most important factor to me. The most important is what will happen when there
is an incident. The insurance company could quite easily deny you, drown you
in paperwork, abandon you to lawyers, make your life miserable etc. Or they
could be a delight. Any company can take your money, and any company can take
less of your money. That is the easy bit.

I actually pre-emptively switched from Farmers to CSAA because of this.
farmersreallysucks.com has lots of reasons why although it seems some industry
deployed software named Colossus really helps in annoying customers.

This same thing must be why Americans are so confused over healthcare. Each
individual believes they are indestructible so why should they pay for other
people's health when no one will ever need to pay for theirs. Pay the least
amount in car insurance since you'll never be in an accident.

~~~
e28eta
I think it's something most people haven't learned yet, or at least the
advertising hasn't caught up with. After getting screwed by Geico on a claim,
I'm certainly more aware of this.

------
ChuckMcM
Awesome story. Expect to see state and federal legislators get lobbied to make
non-humans reading these published documents illegal (big sad face, the
insurance guys have no imagination) but you are doing your _customers_ a great
service, and that is what its all about.

What ever you do, don't say "Well if someone offered to buy us for $2B we'd
just sell and shut down the site."

~~~
sologoub
Actually, this is an excellent point - get a head start and see how you can
get involved with legislators/regulators to pitch yourself as a neutral 3rd
party that is essentially checking if insurers are playing by their own rules.
This way, you are also becoming a sort of audit tool that legislators never
had an easy access to.

~~~
webjprgm
Nice angle. Any way to hold them responsible when Leaky's quote does not match
the insurer's quote? Force them to make the price 100% reproducible from
public documents given the same information on the consumer.

------
gruseom
What a great and inspiring story. Damn well written, too. Reminds me of those
lost cat stories where the cat somehow jumps out of the car hundreds of miles
away and shows up back home against all odds six months later.

I completely understand why you would go back to the thing you were passionate
about. It's amazing how ingenuity becomes available when you do that.

By the way, I think you should blog up a storm around your startup. You have a
great david-and-goliath story and the ability to tell it. Everyone is going to
be cheering for you.

Edit: hmm. After reading <http://askolo.com/thomas#4f72682c83a416244b000022>,
maybe not blog, I don't know. But definitely find a way to keep sharing your
story.

~~~
jasontraff
Thanks, that's a really nice thing to say

------
jreposa
I'm glad you put up the notice about California rates only. I'm in NYC and saw
that I was paying nearly double what I should be paying within the same
insurer.

My question... Is it possible to vary that much between the different states?

~~~
jasontraff
The short answer is yes.

Because insurance is regulated on a state-by-state level, each insurer will
submit different models to different states. For example, in California
doesn't include credit score and New York does - this alone could change your
rates by 60%.

However, while the final prices may not be the same, the magnitude changes
that happen to your prices as you make different selections (ie changing your
vehicle or get a speeding ticket) will be largely similar across states.

~~~
jreposa
Now that I remember it... I found it odd that it was asking me my profession.
I entered Engineer and it dropped substantially.

Anyways congrats! It's really interesting stuff. I have very similar issues to
Leaky on my personal finance/banking startup. Really like the way you
incorporated the ratings at the end.

~~~
randomdata
In my test, there was almost a $200/yr. difference between Engineer and
Software Engineer. I wonder what makes software engineers specifically
statistically poorer drivers?

~~~
jasontraff
Some companies draw distinctions that sometimes seem arbitrary, which is
another reason that we think Leaky is helpful.

However, there's almost always a statistical analysis for the decisions that
they make and it may have nothing to do with driving record. It might be that
one profession stays with the insurer longer or is a more profitable customer
by allowing the insurer to insurer multiple-lines for them (house, life,
etc.).

~~~
webjprgm
Huh. So now all of us "Software Engineers" will start claiming to be
"Engineers" on our auto insurance, and then the insurance companies will have
to recalculate their rates to raise them on the "Engineer" category.

------
forgingahead
Congrats guys, and the site is beautiful. One small thing: The progress bar
for the survey is good to have but on the second page (Driver Info), it gets a
little long and I was suddenly unsure of how much more time I needed to spend
on it.

You could possibly have the progress bar hover like the pricing sidebar, so
even as users scroll down to finish their form they get reinforced that it's
the last step and the end-point is coming soon.

Just a quick thought -- my headaches from doing insurance shopping previously
came from being lost in surveys and not knowing when the end would come. Your
form is so simple, it would be good to highlight it more.

~~~
jasontraff
Thanks, that's really helpful feedback

------
jakejake
I really like this real-time results. This site particularly caught my
attention because I spent a couple of years working at a company that
basically has been doing this exact thing for nearly 10 years called
www.insurancenoodle.com (business insurance instead of car insurance, though).
I can't see what Leaky's path to earning revenue will be but there's already a
simple, proven business model. It involves becoming a licensed agent so that
you can actually write the policies on behalf of the carriers and you earn a
commission.

At least as far as business insurance goes, the carriers are happy to have you
sell their insurance products as long as you're licensed in the state you're
selling and sign up with them as an agent. They rely on independent agents to
sell their products, so it's really not a new or unusual business model. But
if you're not working with the insurance companies then I have no idea how you
would make money except I suppose advertising. It would be a wasted
opportunity if Leaky is not trying to become licensed agents for these
carriers.

I'm not sure how much things have changed but back in 2002 we were dealing
with crazy archaic data feeds and screen scraping. The carriers didn't have
any APIs and we spent a lot of our time tuning our scraping and parsing code.

------
rdl
Now that the insurers know you can do this (legally), they should just let you
back in (which would improve your accuracy slightly, and make it easier to
cover other states).

Once someone's on Leaky, they're going to buy the best priced insurance they
can. An insurance company trying to block you basically just guarantees that
no matter how good their rates might be, they won't get Leaky customers.

(Also, if you're in California, I _strongly_ suggest bumping your insurance up
to 100/300 with high uninsured/underinsured motorist, unless you're utterly
broke. It doesn't raise your premium much, and really keeps you from getting
screwed. The minimums are utterly insufficient in a place with both lots of
expensive cars and lots of uninsured/illegal drivers, even if you drive a $500
Honda.)

------
gfodor
This is a great and inspiring story. Would love to hear more about the in-the-
trenches technical work involved in the OCR and modeling involved for the
insurance industry. Surely there were a few hard earned lessons there that
others could benefit from. Keep blogging!

------
ceejayoz
The truly great thing about this is it's probably going to be more reliable.
They could've silently detected Leaky's scrapers and served much lower prices
to it, but they can't as lie in the insurance filings without committing
perjury.

------
SatvikBeri
Wow. That's incredible...what a combination of intelligence, passion, and hard
work. I don't even have a car, but this makes me want to use Leaky.

~~~
jasontraff
Thanks, we really appreciate the support!

------
mrkurt
This is _amazing_. I'm really happy for you guys.

~~~
jasontraff
Thanks Kurt, we're just really glad that we'll get to see it through this
time!

------
DanBC
Good Luck!

I'm amazed that you don't have sites like this in the US. Price comparison
websites are very popular in the UK. Not just for insurance (car; home; etc)
but for electricity bills and cell phones and Internet service provision and
etc etc.

There is a problem in the UK of "referral fees" - insurance companies selling
on details to no-win no-fee solicitors.

([http://www.telegraph.co.uk/news/uknews/law-and-
order/8742611...](http://www.telegraph.co.uk/news/uknews/law-and-
order/8742611/Controversial-10000-referral-fees-should-be-banned-says-top-
judge.html))

And there have been other dodgy practices by insurance companies.

(<http://www.bbc.co.uk/programmes/b014lzz1>)

~~~
vaksel
there are hundreds of these...this is just a YC backed one

------
krelian
What I don't get is if you alienate the insurance companies so that they don't
want to do business with you, where is your business model? The only potential
client for such a service is an insurance company. Or am I missing something?

~~~
webjprgm
That's only if you want a piece of the affiliate sales / agent money. You can
always go for just ad revenue.

------
abc_lisper
Very nice. I just got insurance, and am impressed at how close you were to
what I am paying. However, there is no option for telling you I was involved
in an accident in which I was not found at-fault.

Anyways, nice work.

~~~
jasontraff
Great! We do a lot of testing, but it's always nice to hear that the prices we
gave were accurate!

(Insurers shouldn't care if you had an accident and weren't at fault - their
models say that should not affect your price, which is why we only ask for
'at-fault accidents')

~~~
abc_lisper
Ahh.. I see, thanks for that info. This means I can bargain harder :)

------
RandallBrown
How do the insurance companies that offer price comparisons do it?

~~~
ceejayoz
They don't actually care to get the competitors' prices right. They find a
"worst case" example somewhere and go with that, with tiny fine print saying
something like "results not typical" or "results may vary based on location".

For example, Geico says "you could save up to $500". I don't even __pay
__$500, but as long as they can show there was a single case where they saved
someone $500 they're golden.

~~~
jasontraff
This

------
aed
Anecdotal evidence is anecdotal and I'm a major skeptic of all things, but I'm
amazed at hour accurate Leaky was for me.

My wife and I pay $119 per month for car insurance and Leaky's magic was
within $3 bucks. Wow.

EDIT: Might I suggested some kind of accuracy checking feature? For example,
my Leaky estimate vs. actual was really close and it would be cool if you
collected data on this. Like if I selected "I use company X and my rate is
$Y", then you could compare accuracy.

~~~
jasontraff
Thanks! We do a lot of internal testing, but I'm always really excited when I
hear that we were close for an actual person!

Thanks for the feedback too, it sounds like something that we're working on to
allow users to fold their information into our routine accuracy testing -
which should be helpful for them and us.

------
rhizome
Were you made aware of any legislation or caselaw that would illustrate that
scraping was illegal or otherwise actually actionable?

~~~
ceejayoz
Doesn't matter.

The insurance companies would be entirely within their rights to block the
scraper, and they'd probably be happy to sue and drag it out for five years.
It wouldn't take that long for Leaky to run out of funds (and the distraction
would likely be fatal even if the legal expenses weren't).

~~~
rhizome
I was just asking for information. It might not matter to them, but it might
help others.

~~~
ceejayoz
My point is that it doesn't matter to anyone. It might be entirely legal, but
they'll be happy to bankrupt you while you attempt to prove it.

See also: patent trolls

------
madiator
I thought the title meant they came back online in four days. Should it not
read, "How we came back, after being shut down in four days"? Also, even
before starting to use, their website asks me for the zipcode and EMAIL. I
wonder whether asking for email before doing anything scares off a bulk of the
visitors (like me).

------
jayzee
Great stuff! Your persistence is inspiring.

------
sounds
First time "try it out" impression: awesome.

I'd be surprised if the insurers don't buy it or copy it within a year or two.

I'm sure the Leaky team is aware of the problems to still sort out, and other
commenters have pointed them out. But go for it!

Oh... it's not clear to me how you're going to make money. Care to explain?

------
evan_
Insurance companies have been doing this exact same thing for years.
Progressive had a huge ad campaign a few years ago around the idea that you
can compare your rates between Progressive and other companies instantly- that
worked the same way as this tool.

~~~
webjprgm
Yes but do you trust Progressive to report rates from their competitors? (I
don't. There's so much they could leave out to cause competitor's rates to
look worse. Even if they aren't doing that I can't be sure and so don't trust
them.)

------
kirillzubovsky
Great story. Especially impressive how you guys outsmarted the insurance
companies (so far) by basically reverse engineering their systems. This feels
like just the things startups should do when faced with tough challenges. Very
inspiring, thank you.

------
seanp2k2
This is an awesome story and goes to show how bad the oligopoly problem is
here in the states. Insurance companies /don't want you to compare prices,
because direct comparison drives down prices/.

------
bdiefenbacher
Fantastic start-up because you went outside of the norm. Your new data source
is unstoppable, Congrats! I love the UI, but as a Canadian, how are you
different then kanetix.ca?

------
michaelkscott
Great product, great site, but one tip: you need to knock out The Leaky
Cauldron from Google's SERP page for your name. I'd want to see leaky.com as
#1 for leaky.

------
adam_quartzy
Well done. Just tried it out and love it.

~~~
jasontraff
Thanks Adam - we really appreciate the support!

