I'd offer a strong word of caution against the attractive idea of viewing brokers as rent-seeking middlepersons. As a seller, you are probably very well-informed on the relative quality of your product. From that perspective, it's a simple mistake to assume that consumers have better information than they do, and thus don't need a broker.
The reality is that insurance (just like any kind of financial instrument) is extremely complicated. Brokers are a individually-tuned filter of information, telling clients exactly what they need to make an informed decision. In the insurance industry, consumers can often get this value at no cost to them (the insurance carrier pays the commission). Premiums are priced identically, whether you purchase through a broker or not; so, as a consumer, why not choose a broker?
To help people (investors?) escape this mindset, I like to compare brokers to Certified Financial Planners. To the informed, CFPs seem like an embarrassing inefficiency in a marketplace that's vibrant with free information. In reality, CFPs provide a real value to a large segment of the population: decent returns, accountability and agency, a human to soothe them through tough times, and a filter for information that feels irrelevant to daily life. Most people want to think about insurance exactly once per year, for as little time as reasonably possible, and no COO got fired for purchasing insurance through a broker.
Bottom line, if your value prop to investors is selling directly to avoid commissions, you're selling them on:
(1) your ability to convince consumers that your information funnel is a better UX (arguable)
(2) your customer support is more versatile than a broker's (unless you're open to encouraging customers to go to a competitor, this is impossible)
(3) while you're accuring brand value to satisfy (1) and (2), you're comfortable with having a growth curve with a low ceiling.
Instead, I'd recommend seeing brokers as external salespeople. If you make a product that is easy to explain and sell, and develop a first-class broker experience (receiving commissions, viewing book of business, CRMing with clients), they will actively convince their clients to switch to you at that one time each year. Brokers already have a rapport of trust with their clients, that you can leverage, even as an upstart, to win market share.
More concretely, in our experience brokers can convince people to change their carrier more effectively than world-class marketing. I'd recommend visualizing your commission spend as marketing spend. Commissions and broker tooling are levers you can pull to grow faster and higher.
It's a harder-to-sell vision, because investors tend to see brokers as an economic inefficiency to be "disrupted" away. But, again in our experience, it's the only practical way to bootstrap some table stakes in the market.
Anyways, hope whoever else reads this finds this insightful. Just my two cents; I think you all have a great vision, and I wish you the best! Learn from our hard-earned mistakes, please :)
>> Instead, I'd recommend seeing brokers as external salespeople. If you make a product that is easy to explain and sell, and develop a first-class broker experience (receiving commissions, viewing book of business, CRMing with clients), they will actively convince their clients to switch to you at that one time each year. Brokers already have a rapport of trust with their clients, that you can leverage, even as an upstart, to win market share.
I think there are two (or more) positive aspects to the Vouch approach:
1. Vouch's distribution is fueled (in part) by relationships with investors (e.g. YC). YC's twice-yearly batch is a wonderful source of start-up business. I don't by any means think it is the only source of business, but that relationship is a positive for Vouch. I've not been through YC but imagine they're happy to recommend Vouch to the folks they're coaching through the year.
2. Intermediaries are rightly lambasted for many reasons, but I think it's silly to assume that the entities that control distribution are doomed. I agree with you that brokers can be valuable, but I think their value to Vouch is different. It isn't to help funnel business in the door (though perhaps that will come), but instead they are partners that can help Vouch scale its offering as start-ups grow and require more complex insurance. Vouch helps create a distribution channel the brokers today don't do a great job servicing, and it enables the business of those brokers when/if the underlying businesses are ready.