“Having amazing leaders - That’s something we can never cut a corner on. Our main priority from day one was finding amazing leaders who have a ton of empathy, are incredibly smart, and have very high EQ.”
Niji Sabharwal is the Co-founder and CEO of AgentSync, an insurtech company he co-founded with his wife Jenn that grew from a valuation of $22M to $220M in just 8 months. AgentSync’s growth has caught the attention of well-known investors Marc Benioff, David Sacks, and Elad Gil who are now all investors in the company. In early 2020, Niji moved AgentSync from San Francisco to Denver where they have grown from a team of seven people to 75 employees in the last year and are continuing to grow and build on what has been an impressive last year and a half.
How did AgentSync start and how did you end up working with your wife Jenn?
We met at LinkedIn in 2011, back when LinkedIn was a small startup in Mountain View. We started dating pretty early on and kept it quiet. Jenn eventually left LinkedIn to join Dropbox then moved to Stripe, and I went on to join Zenefits.
I joined Zenefits when it was a hundred employees. We grew way too quickly. And throughout the hypergrowth, the right systems and processes weren’t put in place around insurance regulatory compliance and the company ended up getting into pretty hot water with state regulators. The CEO at the time had me join the general counsel and PR team to do damage control, put a plan together, then ultimately work with regulators to settle all the outstanding violations and get us back into good standing. It took twenty-two months and was very painful, but I got thrown headfirst into this super interesting problem. On the surface, it’s insurance regulatory compliance--not the sexiest thing in the world--but the problem statement and the fact that this issue is ubiquitous to every single insurance agency is kind of a new model. Anyone touching the distribution of insurance needs to be licensed. They need to be background checked, contracted, then individual state appointments need to be filed. It takes an insane amount of time and effort for an agent to get properly onboarded and to check the compliance boxes for themselves. There’s no technology out there to really support this.
After seeing this huge opportunity while at Zenefits, I decided to go tackle this head-on with Jenn.
Did you end up raising capital from the beginning?
We initially bootstrapped the business, and we were funding everything out of our checking account for the first year and a half - which was super stressful. But we were incredibly fortunate and privileged to be in a position where we had no kids, Jenn was bringing home a paycheck from Stripe at the time, and we could take that leap. She was full time at Stripe during the day while nights and weekends were spent on getting the proof of concept ready, and I spent way too much time every day sitting at our kitchen cold-calling people to learn about their day-to-day problems and talking to carriers and agencies. I talked to hundreds of folks before we started really fleshing out exactly what things were going to look like.
We bootstrapped the product to product-market fit and that quickly got us to cash flow positive. We started using customer revenue to hire more employees. By the time we got well over the first million in revenue, we realized that we were onto something really exciting and interesting.
So you had a million dollars in revenue before raising capital?
We were at about $1.5 million when we decided to go out and start the investor conversations. We felt like we could keep doing this—skiing close to the trees using customer revenue, paying employees, and making payroll since weren’t paying ourselves, but if we lost our biggest customer, we’d be in some pretty hot water. In order to make this work, Jenn left her day job to join us full time. At that point, we made the decision to raise capital and move to Denver to grow the business.
We ended up buying a house the first weekend we visited here, then found out that we were pregnant, and then the pandemic exploded. Literally all within a week or two of each other. It was an interesting journey, but we’re lucky and we came out the other side in a good place.
As far as fundraising goes, we found great seed investors and angels in the process. We raised $4.4 million in June of 2020. A couple months later, David Sacks of Craft Ventures led the following round of $6.7 million. Then we raised our Series A in early 2021, which was another $25 million. That’s $36 million total raised over a nine-month period. It was pretty fast. At that point we still had plenty of money in the bank, but we knew the market opportunity was huge and we wanted have capital available to make a few strategic bets while scaling up our GTM and R&D teams to keep up with customer demand. We’ve been lucky to have great customer traction which has allowed us to hit our revenue goals and offset most of our expenses. In hindsight, we could have raised a little less money, but it’s good to have that buffer in place in case something happens in the future.
You have some pretty incredible investors--David Sacks and Marc Benioff included. How do you leverage those investors for your business and not just be capital providers?
It’s something like 98% of our investors are ex-founder operators. They understand exactly what we’re going through and have gone through it themselves. They understand what we need and where the mines are hidden as we navigate different stages of growth. It’s been incredibly important to find the right folks to help guide us through these stages of growth. My hair might be on fire over some issue on a Friday night at 10 p.m. but I can pick up the phone and call one of them and say “Hey, how would you handle this kind of thing? What should we do?” and get their advice in the moments I need it most.
With Craft Ventures specifically, they have a network of operating partners: experts on legal, communications, regulatory affairs, sales, marketing, and operations. They have all these folks that are at our disposal to lean in and help us and get things done. For example, we launched a really exciting new data product in the early days, but we didn’t have any data engineers. They leaned in and paid for this firm that they’d worked with before to find great contract data engineers while we filled those full-time roles. We were able to get the product to market really quickly. It’s been incredibly helpful.
Our investors have also introduced us to other angels and other investors that we didn’t have a connection to. Our Series A lead investor has a huge network of founders and CEOs from every discipline that we’re going to need a perspective on. So now I have a go-to list of five angels that are currently running companies, and I leverage that at least once a week.
You’ve had some rapid growth in the last year. What do you attribute that to?
Product-market fit and team. You can have the best team in the world, but if you don’t have a good market to sell into or to engage with and buy your product, you’re dead in the water. I’ve even seen cases where terrible teams have a great market, go on and succeed. We’re lucky to have a great team and to have also found a great market. Our customers are screaming for change. They’re craving a better way of handling this problem that’s been plaguing the industry for quite some time.
Jenn and I are proud of the amazing team around – they really get things done.
In this next stage of growth, what are you focused on as the founder? Where are your priorities at?
I think the key focus for any founder is always going to be recruiting.
Right now, we’re seventy-five employees. That’s 10x growth in the last twelve months. We’re continuing to grow throughout the rest of this fiscal year, and that is a huge focus for us right now: building the right team, highly functional teams across each part of the business. I’d say 60% of the teams we have are in that good place where we built those processes. We have great leaders, and we have focused on getting all those individual teams to really start humming. We grew really quickly, and some teams still need seasoned execs or leaders, and that is a big focus of ours so we can continue to innovate and push the envelope.
You mentioned earlier that at Zenefits you moved too quickly and didn’t have all the right things in place. What are the things that you’ve, because of your experience, been very careful to say, “Even though we’re moving rapidly, we need to have certain things in place”?
Having amazing leaders - That’s something we can never cut a corner on. Our main priority from day one was finding amazing leaders who have a ton of empathy, are incredibly smart, and have very high EQ. We also want to make sure that we have great culture while everyone’s working really hard and marching in the same direction. At the end of the day, we’re a bunch of people trying to build a business together.
So that’s number one and dovetailing on that is having very clear vision for what we’re doing. Every single person in the company should be able to answer the question - Where are we going to be twelve months from now?
How do you communicate that vision and all the things that need to be done?
Every two weeks we have an all-hands meeting where we go through a lot of these updates. It’s a really interesting thing to go from seven to seventy-five people in twelve months, and the ground’s constantly changing below you. And doing it all remote --that’s the challenging part. So we are making sure the leadership team is meeting regularly and that everyone understands what’s going on across the board - including what the challenges are and what’s working really well, making sure we celebrate wins all the time, and ensuring that folks have exposure to other sides of the business. That’s key. And that can be very difficult when you hit a certain stage.
You’re still in the early stage of the story for AgentSync but any advice you’d give to other founders that you have learned in the last couple of years?
First and foremost, don’t hold on to anything too tightly. That’s number one. There are guiding principles and steel threads that you want to make sure you never mess around with, such as the larger vision. But as you go from ten to twenty-five to fifty to seventy-five to a hundred employees, the company is completely different in a lot of ways. We’re constantly gathering data points and learning about use cases, different markets that we can go into. You’ve got to be really flexible to be able to say, “I felt so strongly about this thing yesterday, but now with this new information, that doesn’t make any sense. Based on what we know now, we need to go do this other thing over here.” I’ve learned to be really comfortable being uncomfortable. Just getting out of your comfort zone and knowing you’re not gonna know anything but you’ve got to trust your decision-making abilities and the folks around you to make good decisions and keep marching forward at all costs. That comes back to flexibility. What worked really well two months ago does not work at all now.
How do you get out of your comfort zone? Is it an intentional thing for you?
You just kind of get forced out of it. And you’re forced to make pretty heavy decisions with little information. And once you live in that area for a while, it feels more natural, assuming you’ve gathered all the data you can. It’s always better to make a bad decision than no decision. That’s assuming you don’t keep making bad decision upon bad decision, but you keep moving forward with the data you have available and make sure that you stay flexible and listen to folks around you. I haven’t been forced to make a decision where I had zero support from our leadership team. I’ll probably have to do it but trusting your team and making sure that anybody can convince you to do something different or to change your mind if they bring the right kind of data points is important.
With your wife as a Co-founder and with a newborn baby, how do you create some level of separation from the business, or is that even possible?
Honestly, we don’t have a ton of separation. I think it’s pretty challenging to achieve. I know the look on Jenn’s face when I’m trying to figure out a problem and I’m talking too much about it. That one look says okay, we’re done talking about insurance regulatory compliance for now. And that goes both ways. But at the same time we’ll wake up in the morning, 6:00 a.m., and start the day with “Okay. So how should we tackle this one issue that we’re having?” I think because we haven’t been doing this forever it’s okay for now. If you’re ten years into the busines, it probably wouldn’t fly. Also, when we’re around our daughter, everything’s out the window. She’s the one thing that can immediately take everything out of your head. One giggle and you forget about anything stressful at work.
Any favorite books for you?
Not as it pertains to the business, but the most recent book I read was The Emperor of All Maladies by Siddhartha Mukherjee. It’s a book about cancer and the way that different societies thought about it, the politics around it, the funding, and the evolution of treatment. Really, really interesting.
Do you have a favorite quote?
Jeff Weiner, LinkedIn CEO, said something at the time that I was there that made everybody stop and lean in when he delivered it -
“Happiness is being excited to go to work in the morning and also being excited to go home and finding that balance.”
There were times in my life where I’ve been obsessed with working fourteen-hour days, and nothing else was going right in my life. And work was very rewarding, but everything else was kind of falling apart. And then there are times when you might be in the same job for years; you’re just kind of phoning it in, and your personal life is going great, family’s going great, relationships going great, but work’s just not very inspiring. Having both of those together are equally important in my eyes. I’ve never been happier than I am right now because I feel I have found that balance where I can’t wait to go pick up my daughter from daycare but I’m also raring to go in the morning.