Good afternoon, everyone. Thank you for joining us for the fireside chat with EverQuote. Before we dive into questions, I wanna turn the call over to Brittany Johnson from the Blue Shirt Group to share some disclosures. Brinley, think you're on mute.
That was the EverQuote safe harbor. Thank you.
R two. Yeah. There you go. Okay. Oh, good.
Okay. So that that's good. The safe harbor is over. Perfect. I thought you were gonna read it.
So, anyway okay. Thank you, Brinley. So, yeah, thanks everyone for joining us. And, you know, it it it's not the happiest of circumstances why we're here in terms of Seth's passing, but we are excited about the, future leadership of EverQuote. And, we thought it would be important to, to bring Jamie on to address investors.
So we're excited, to have Jamie Mendal, who is the, CEO now at EverQuote. Jamie, thank you very much for joining us. We sincerely appreciate you making time for us. And before, you know, we sort of dive into questions, just wanted to kind of maybe ask you to share a little bit, prior to joining EverQuote, maybe just talk a little bit about some of the experiences, that you've had in your career that you think were important in preparing you, for this role.
Sure. Thanks, Mike. Thanks for hosting, and then thanks, everybody, for joining. You know, I think I've picked up lessons at different stops along the way, the collection of which, have certainly helped prepare me, for this. I started my career as a management consultant.
And so in that role, get to see how big complex organizations plan, operate, use data to make decisions around big growth bets. And I was fortunate enough to be around quite a few cycles of this major product launches, like pharmaceutical companies as an example. And for me, was just this was the orientation and it was a good orientation to how kind of big companies operate. From there, went to business school and I think the big thing I picked up there was just a bit of a mindset shift. At HBS, they kind of beat it into you that if you're here, it's likely that someday you'll be leading a large group of people and you need to adopt a a mindset that will enable you to do that well.
So, you know, for me, I think one one of the lessons I picked up there, remember I had a professor who said something to the effect of, you know, your your whole life, you're you wanna be liked. Right? Like, that's that's in school. You wanna make that's like the human instinct. And, when you enter a leadership capacity, your goal is no longer to be liked, but it it is to be respected.
And so, you know, you'll never make everyone happy, but you can earn people's respect by the way you carry yourself, the way you use data to inform decisions, the way you communicate those decisions and treat people around them, especially the difficult ones. And And I did internalize that. I think I emerged from business school with a slightly different mindset than when I went in. And then my role prior to EverQuote was at Power Advocate, a tech company here in Boston.
I was
running sales and marketing. And, I think the big thing I picked up there was carrying revenue responsibility directly for the first time and and experiencing sort of the weight of it, the thrill of it. You know, I I found that I I personally, I I really enjoyed that. You know, I kinda operated at my best, worked my hardest, got the most out of my team under under that type of pressure. And I don't think I would have been prepared for my role as as CRO, my first role at EverQuote, had I not been in this role prior.
And so I think all that experience, you know, it helped. It all it kind of builds up and came together, in my first role at EverQuote. I think we had you know, I had good success in that role as a result of of many of these experiences. We drove up the revenue per quote request and revenue quite a bit over that stress 2017 to 2018, which in many ways, I think, kind of paved the way for the IPO. So, here we are.
But those were some of the the the the experiences before arriving at EverQuote that I think helped kinda shape my my approach to this.
So in your, thanks for sharing that. In your in your management experience and maybe as you think about approaching the role of CEO, can you just talk about some similarities and maybe some differences as to how you think about that role maybe compared with with how Seth thought about it?
Sure. You know, the the similarities, I guess, I I will I will credit to to Seth. You know, these are things I I largely have have admired about him and emulated in the way that he did things. The first is really pushing the the team to think on a big scale. I got our vision, mine and Seth's vision for the company evolved to a place where we we both believe deeply that we have an opportunity in front of us to build a very big industry defining company.
But to do that will require us to hold a very high bar on the teams and really push them on the way that we think, the way that we plan. And so we've gotten into a good just approach of doing that. And I think that will certainly persist, for the organization in Seth's absence. The second similarity that I'd probably highlight is the prioritization of of talent in in kind of our relative priorities. I think one of Seth's greatest lessons for me was was in the the the the the criticality of attracting and retaining great talent and really investing disproportionately, I would say, relative to some in that.
And that's carried that's gonna, you know, certainly carry forward for us. Those are some the similarities. Think differences, you know, for those of you who who knew Seth, he was he was a larger than life personality. Right? I mean, there there are personality differences relative to Seth.
I I think our team would characterize me as a bit more understated and kind of mellow in my management style. It's not necessarily better or I guess depends on who you ask, but different. And then, you know, another difference is he was Seth was a quintessential entrepreneur. He was very focused on on the vision. He was a brilliant visionary at that, but I think he'd be the first to admit that when it came to to tactics and operations, like, that that was that was for me to sort out.
So while I share his proclivity to, you know, to think about the the longer term, I am a bit more operationally minded. And I will take you know, I won't just take the idea and immediately delegate it out. I'll take the idea. I'll kind of work I'll I'll work it a few turns before, you know, before pushing it out to the teams.
That makes a lot of sense. And maybe just one more kind of bigger picture question because I always think it's interesting to ask, leaders. Do you have any role models, you know, outside of of Seth, obviously, but do you have any role models that you are thinking about as you sort of move into running the company?
Yeah. I I think there's a few people I I look up to in that regard. You know, I'll give you a couple examples. One is, you know, at the risk of sounding cliche is is my father. He's a small business owner, owns a leather tannery, and has been, you know, doing that his whole life.
This business has been through countless ups and downs. And really no matter what, he never lost focus on on the long term and what he was trying to build. And for me, it serves as a model. I mean, in our in our short life as a public company, we've had a great run, but certainly not without our share of obstacles. And I have to say watching my dad's business go through some of these extreme oscillations over the years and how we kind of balance just focusing and getting through the near term execution you know, with a vision for the long run was has been, something that I, you know, I admire and I I kinda take into how I approach things.
The other example I'll give is is perhaps a bit more, you know, relevant for the role I'm in. Reed Hastings, not just because Netflix is, you know, has been phenomenally successful, but I think, you know, I spoke earlier a little bit about the the the outsized emphasis we place on talent and team. And I I do believe that Reid has a a deliberate strategy around talent at Netflix that's really enabled them to grow like crazy, but also to just adapt and reinvent and and build something really big and and and lasting.
Yeah. That's a there's a great document somewhere. I think it's on Netflix's website for those who haven't seen it, Jamie. Sounds like you obviously have, but about the talent of
both. Yeah.
Cool. Okay. Thanks for thanks for sharing that. So let's get into, you know, a little more, detail. How long have you been at EverQuote, Jamie?
And what roles have you played so far in your organization?
I joined in 2017 as the chief revenue officer. So in that role, I was accountable for, revenue for revenue per quote request. Those are kind of my primary KPIs. And my teams manage the the provider side of the marketplace. I think at the at the time, we were running at, like, a 120 or so million dollars a year of of run rate.
And so we've more, I think, three x since then as of as of q three. But in early twenty nineteen, I was promoted to Chief Operating Officer and then more recently to President. And in those roles, I was running operations. I was running all day to day operations, including all of our revenue generating, go to market, our customer acquisition teams, as well as all of our annual and quarterly planning processes, our weekly operating committee meetings. I was effectively, I was personally responsible for the numbers.
I mean, for from revenue to VMD to OpEx to adjusted EBIT, those those those were my numbers.
Okay. I mean yeah. And and you touched on this a little bit earlier, but I know, in in some of the discussions, you know, over the past couple years, you and Seth had a very close partnership, and I think you both, you know, share a common vision for strategy. But can you touch on on, a couple of things? Number one, how do you divide your responsibilities between strategy and operations?
Maybe just touch on relationships with the investment community as well. And then secondly, are there any areas despite the shared vision, are there any areas where maybe you had some differences in terms of vision?
Sure. So in terms of how we divided responsibility, I think the well, was me. I've run all, as I mentioned, all day to day operations for the last two years. With respect to strategy, Seth and I really co developed the strategy that we have in place today. So we this past summer, we formally adopted a long term plan that runs through 2023.
It's a written document. I probably wrote like pen to paper wrote about 90% of it. I'm the named author on it. But Seth and I co developed the strategy. We really enjoyed a true partnership in running the business over the last few years.
And I think if Seth were here, he would probably say that I was doing 80% of his job. The 20% that I've been least involved with was analyst and investor relations, which I really didn't spend much time on outside of, I did participate in the IPO roadshow and got pulled into a handful of investor interactions, but I was largely uninvolved with that. That being said, recent the recent promotion to to president was with recognition that he wanted me to get more involved in these external areas as part of the natural succession plan. But that's sort of the divide and conquer. With respect to, I think next question was around, whether we might have areas where we place different focus.
Given how closely aligned we were, I really don't anticipate any near term changes to the strategy or the model. Like I said, we just adopted a three year plan a few months back that he and I co developed. We believe very much in, you know, what we laid out there. I think it's the right strategy for us for the next several years, and we're really just focused on executing that at this point.
And you're gonna be screen sharing that plan here in a little bit? Okay. That that makes sense. Do do you have any, I mean, you've been in the role, the CEO role now for three weeks. Any big observations or, you know, what what have been your immediate priorities or or big challenges that you've seen in the in the short time so far?
Yeah. Sure. I guess you know, it has been very heartening to to see how the team has come together. I think the greatest gift that Seth left us was the team that we have in place today, and I'm fortunate to have the full support of that team all the way up to Dave Blunden, our chairman, you know, his cofounder, Tomas. Right now, my current priorities are just fostering a sense of normalcy and continuity for the team and for our partners while making sure we end q four strong and we set ourselves up for for a good year next year.
And so the biggest challenge, you know, candidly has just been kind of balancing the the emotional part of of this supporting many team members who are personally close with Seth, myself included. Balancing that against the task at hand, you know, we we we do have a job to do, and and we we intend to finish the year strong and, get back to focusing on building a very big business, which is no doubt what what Seth would have wanted.
Okay. I mean, let's touch on the team for a second because I know that, you know, Seth put a lot of emphasis there, put a lot of work in, and was very focused on, you know, winning the war for talent, I guess you would call it. Are you concerned about, you know, any of your senior leaders, you know, becoming impacted by developments and and thinking about moving on, or just how do you feel about that?
I'm not. No doubt Seth was devoted to building a strong team and winning the war for talent, and he was a force when it came to recruiting. But there's probably a few, a few things worth noting. The first is that the the the team that we've recruited and and installed, particularly in the leadership levels over the last year or so, Seth and I kind of jointly recruited and and and got those people to join the team, and most of them have reported to me since joining. So there is some continuity for the vast majority of the senior most leaders in the company in that regard.
We're also at a point in our growth where I think our senior most leadership team is largely in place. We have done quite a bit of recruiting over the last couple of years. We've made some great hires, and we feel really good about the team that's in place today. And I think that team is devoted to each other and devoted to EverQuote. And in some ways, you know, Seth the the the the tragic passing of Seth has has drawn the team closer together as we kind of rally to to to build his legacy.
Well, one thing that occurred to me, you know, the just having talked so much with Seth and Tomas over the years is, you know, they are, you know, very technical founders. And, you know, I I think you came up on the sales and marketing side within the company. And does that impact how you think about managing the technical side of the business?
I would say the way that I think about that is it's all about the team I'm surrounded with. And I'm fortunate to have really great partners on the tech side of the business, beginning with Tomas, but extending to Dave Brainard, who's our EVP of Engineering. I mean, they've done an incredible job of building out the senior ranks of our product and engineering teams over the last couple of years with leaders from, you know, the likes of Amazon and Wayfair and so on. And Dave specifically has really emerged as like, he was he is to Tomas as I was to Seth. Right?
So he's like the spirit animals. And and Dave and I work very closely together and get on very well. So so that's, you know, that's one piece. The other is, while I it's true, you know, I may not have come up through the tech organization. I am surrounded by business leaders who many of whom did.
So we have people who report to me who run various parts of the business, like Jay Watt, Shivi Shankaran, who report to me and all have decades of experience in tech heavy roles. So those two specifically spent spent time at, quite a bit of time at Amazon, and and I lean heavily on them. So, it's a known, you know, it's a known gap and one that I think is well complemented by the team that's around me.
Do you need to backfill a new COO? And can you maybe just touch on any hiring plans you have for the coming year?
Yeah. We don't feel a near term need to appoint a COO. You know, when I was, again, when I was promoted to president, it was with a an expectation that I would be stepping into some of the responsibilities that I, you know, that now have been sort of thrust into. And so as part of of that, at the time I was promoted to president, we promoted Nick Graham to chief revenue officer. And in in that, he took on a good chunk of responsibility that I had as COO.
And since, you know, we have shuffled, some some incremental responsibility and pushed it out to various members of the senior most leadership team. So we feel actually pretty good that that, with where we're at right now, we have no near term plans to hire a COO. I don't think we need to do that.
Okay. Sounds good. On the business front, you know, it's always a tough question to ask, but I'll throw it out there, you can deal with it, you know, as you want to. But any comment on how business is going, currently? And, you know, one thing that I also am really curious about is any insights from the Crosspoint, you know, acquisition now that you I think you're done with your first open enrollment period.
So, any comments on how that's going?
Yeah. So I guess I'll say, we're very pleased with how the quarter is progressing and the performance of the business and feel like we have some good momentum going into the new year. And with respect to CrossPoint specifically, we are very happy with how that acquisition has panned out, both in terms of our ability to integrate it and drive some value through the open enrollment period, But also in terms of some learnings and foundation setting that I think will come out of it that will enable us to really, induce some distance in health and Medicare in the years to come. I think we're very optimistic about the opportunity in the vertical. Mike, I think you're
Sorry, I had a dog barking, so sorry about that. Okay. That's a helpful comment. Thank We definitely noticed two quarters ago when Crosspoint was announced, there was just a lot of questions and possibly some confusion with investors around the DTC push, maybe, you know, some concerns that going direct to consumer, would create some channel conflict. You know, what are your comments about balancing the DTC efforts with the marketplace model?
And I think one big question that's on a lot of folks' minds is, do you think, we should expect to see a DTC effort in auto and home as we get into the coming year?
Yes. So at the end of the day, Mike, our customer promise is, if you really boil it down, is to get consumers the right coverage. And one of the limitations of a third party only marketplace is that your ability to deliver on that customer promise is in some cases impaired by your inability to control third party providers fully. And so I'll give you an example. 65 year old shopper comes to EverQuote looking for a final expense insurance policy at 6PM on, like, a Tuesday in Miami, Florida, and they wanna purchase that policy by phone.
If we don't have a third party provider available in that place at that time who has good final expense coverage, who is set up to sell by phone, we wouldn't be able to effectively deliver on our promise to that shopper. So what we can do with our agency is really cover gaps in the marketplace to provide shoppers with a better experience and improve our coverage and monetization on traffic that in many cases we're already paying to acquire. So I think over time, our view is that this a hybrid model of third party marketplace supplemented by direct to consumer agency that we operate is the best way to serve both consumers and carriers alike, especially in verticals like health and life. I think the consumer benefit will be higher likelihood of getting the coverage they need. The provider benefit as the provider will benefit as well because as we plug holes in our coverage and we boost overall monetization, we can take that and drive more traffic, which benefits all of our third party providers.
And so we feel that hybrid is kind of the right thing to do for the future. In terms of competitive concerns, I can appreciate the concern or the questions around channel conflict. In practice, we have not seen any negative reaction from our DTC efforts among the provider base. And actually on the contrary, I think it's opening up new partnership opportunities that some of which we didn't quite anticipate with carriers as we roll out these capabilities. I think you asked a question there at the end about auto and home.
With respect to auto and home, the coverage gaps in the marketplace are less pronounced because our third party distribution is so robust. It is possible we would pursue a DTC strategy for specific segments of auto and home where marketplace coverage lacks. But we haven't made any investments in this area yet, nor have we made any affirmative decisions to do so at this point.
Okay. That's helpful. Thank you. I wonder if you could spend a minute talking about, you know, a little more deeper into some of the other verticals outside of auto. I think, you know, those verticals grew 55%, if memory serves in q three and, you know, much faster in q two.
So there was a little bit of a slower growth rate in q three, but it was still, you know, much higher than the auto growth rate, which grew, like, at at 30 or 31%. And those other verticals now, which are growing roughly twice as fast as auto, are now 20% of revenue. So to me, when I just think about the revenue mix, you know, there's a really positive dynamic with that revenue mix pushing the growth rate of the whole company higher. I just wonder, would you expect to see the growth rates between auto and other verticals continue to converge? Or do you think we're going to get a faster faster difference growth in growth rates as we get into next year?
So we expect to see continued growth in auto, but I would say we do expect non auto verticals to continue to outpace auto over the next several years. I think we see great potential in health and life, especially as our DTC efforts take hold and scale and we begin to realize the incremental revenue per quote request and some of the LTV benefits of that, that we can bring to bear in our traffic operations. And again, these verticals specifically, our move into DTCA has substantially increased the immediately addressable TAM because we now have access not just to the digital advertising and provider marketing budgets, but we're able to tap directly into the commission dollars as well. And I think you know, frankly, I think that's an important point that was, maybe not very well understood or perhaps not well communicated by us, frankly, when we first announced the DTCA initiatives.
Yeah. Okay. That makes sense. I mean, I think the commission TAM is so, you know, large relative to the advertising TAM. So we we that resonates with us as well.
There have been some some other IPOs in the sector, and that's raised some investor questions around the level of competition. And, you know, we we see just such a big long term secular shift, you know, coming that it feels to us like it's more about that than it is about you know, it's more about the pie than it is about the pieces of the pie. But, you know, what what are your thoughts on competition? And do you think there have been any changes in the landscape, you know, from a from a business perspective?
Yeah. So I I agree with your point about, you know, more about the pie. But I will go further to say that there have been some changes in the landscape undoubtedly, but it's funny. I think what a lot of people would think of as competition, we view as really great high potential partnership opportunities. For instance, if you take the rise of digital carriers, companies like Lemonade, like Root, both of these companies are great partners and customers of EverQuote.
And we're genuinely rooting for them because they will enable an acceleration in the digitization of insurance. And so what I mean by that, Mike, is they're creating insurance buying experiences that are digital friendly. They're literally creating insurance product that is meant to be purchased online. And as you think about EverQuote as an online marketplace for insurance, we absolutely love this. One of our challenges is the need for us to hand consumers from an online shopping experience into an offline buying experience.
And there's some friction in this, right? But it's a requirement imposed on us by the industry and by how many carriers are just set up to sell insurance. And so I think the more players that build digital capabilities like Root and Lemonade, the more opportunities there will be for us to integrate more deeply and build great online purchase paths and ultimately just reduce a lot of that friction that exists today. And those companies like working with us too. I mean, we're a very efficient acquisition channel for them.
They tend to focus as all insurance companies do on specific segments of risk of market and we can really help them target and right price for more efficient acquisition spend. So we think all the activity in the space is great. We and we sort of play nicely with all these companies. We think the rising tide will lift all our boats and we can benefit from each other's expertise and what each of us bring to the table.
Okay. Great. We have just like a minute left, but I want to I'm going to slip in a two part question and let you work with it to close it out. The first one is variable marketing margin was really helped by RPQR. You mentioned revenue per quote request earlier as something that you've been working on.
Do we still think like when we think about the growth in VMM going forward, do we expect it to continue growing faster than revenue? And what drives that, if so?
Yes. So I'll sort of reiterate what I think I've heard Seth say many times. The North Star of the business is variable marketing margin dollars, right? And so we did see some VMM expansion in percentage terms that I would attribute to a number of things, including enabling better targeting for traffic by our carriers, continued progress with integrations and also it was a favorable year for carriers from a loss perspective. And so I think there are a number of factors that contributed to that.
Some are sustainable, some we will see. What I will say is over the long run, I think VMM as a percent will continue to expand. Quarter to quarter, I personally we don't over steer for that metric, right? I expect it will ebb and flow based on what new initiatives, traffic channels, etcetera, we're investing in at a given time. So for instance, we may make a decision to invest in a new traffic type or channel that runs at lower VMM while in testing or even in perpetuity, that might weigh down VMM for a period of time.
But as long as it's contributing more VMM dollars and it's accretive to adjusted EBIT, then those are investments that we would make.
And can you just please add a final comment on how you're thinking about balancing growth versus profitability in 2021?
Sure. I think probably the simplest answer is the long term model remains unchanged at the moment. I think it's 20 plus percent revenue growth with 100 to 200 basis points of adjusted EBIT. And as we progress and continue to make progress, we feel very good about our ability to achieve and exceed that.
Okay. Excellent. Jamie, I know you've got a busy schedule, so we'll end it there. Thank you so much for joining us. Really insightful comments.
Appreciate you making time for us, and and I'm sure we'll be talking again soon. Good luck.
Thank you, Mike, and thanks thanks to everyone who joined. Alright. Bye. Bye.