Eric Frazer & Richard Seaberry on Startup Benefits & HR

Eric Frazer & Richie Seaberry of Decisely - Podcast Transcript

Scott:	Welcome to Founders and Friends podcast with Scott Orn at Kruze Consulting. And before an excellent podcast with Eric and Richie at Decisely, quick shout out to our sponsor, Brex. Brex is a credit card for startups, the first one ever. It’s fantastic. They don’t require a personal guarantee by the founder. That is a huge, huge deal. Also, has great integration with QuickBooks, which makes life easy for your accountant. And finally, they have really good rewards. They do start up centric rewards, so like bonuses on ride sharing, and travel, and eating out and things like that. All things that’ll appeal to the whole team at a startup. So, check out Brex, and if you go through their signup and type in Kruze, you get a discount. Hopefully you enjoy Brex, and thanks so much guys for sponsoring the podcast. Now on to Eric and Richard at Decisely. Thanks. Welcome to Founders and Friends podcast with Scott Orn at Kruze Consulting, and my very special guest today is Eric Frazer and Richie Seaberry from Decisely. Welcome guys.
Eric:	Thanks Scott. Appreciate it.
Scott:	Our pleasure. So, maybe tell the audience what Decisely does.
Eric:	Sure. Decisely’s core foundation is startup health insurance brokerage. But we really cover the gamut from recruit to retire, the human capital equation for small business and startups.
Scott:	I think one of our amazing team members, Kevin Houk, found you guys because we had a very discreet need, which was, we needed benefits provided for companies that were two, three, four people big. Because we have a lot of seed stage companies coming to us. You guys do every sized company, and indeed tons of startups. But that was how he found you guys. Maybe talk about your solution, how easy it is to use, how companies get started with you. The whole service offering.
Eric:	Yeah. Actually, the way you did find us was through Kevin, and Kevin’s mom used to work on my team [crosstalk].
Scott:	Oh, no way! I didn’t know that. Oh, small world.
Eric:	Small world. And I think Kevin had reached out, is my understanding, to his mother, for solutions because she’s at a different insurance firm. But that firm works on all mid to large market business. So really wasn’t a solution for startups.
Scott:	Yeah.
Eric:	She reached out to me because she knew that we were the customized solution for this startup space. And that’s how we connected.
Scott:	Awesome. Yeah. And maybe kind of tell the founders out that are listening like what you guys do, because benefits is a little bit of a scary and opaque world for them. Like how do you guys operate? What’s the service offering?
Richie:	Yeah, so one of the things when I started in the benefits world, not so long ago, about six years ago, and Eric can attest to this even longer, it’s very difficult for startups to be able to get all of the services that the big guys have. You know, once you hit a hundred employees, it’s on.
Scott:	Yeah.
Richie:	Every insurance broker is going to be calling you-
Scott:	You’re a good client, you’re a lucrative client.
Richie:	You’re a lucrative client. But quite often in the small business … Or the startup space.
Scott:	Yup.
Richie:	You have your founder, maybe your COO, and one other person. And guess what benefits, and administration, and hiring and all that falls onto is the CEO.
Scott:	Yeah.
Richie:	You know, you’re a CEO and you’re trying to secure funding. You’re trying to do this that. You’re trying to keep your company afloat. And then someone comes to you and says, oh hey, you need to fax this benefits paperwork to this insurance carrier. Oh, and by the way, they misspelled their name, so you’re going to have to wipe that out and fix it.
Scott:	Yeah, you nailed it. They’re so busy and yet they get asked to do a lot of minutiae. And that’s why we love automated processes like you guys offer.
Richie:	So our service offering is a joint combination of technology and advising. Not only do we make it very simple for employees to onboard, so W2’s bank information, tax information, selecting their benefits, signing employee handbooks. We do that all digitally. But woven throughout that entire process is a dedicated, knowledgeable advisor that your employees have access to. For instance, I have a six month old at home. We’re going through our open enrollment right now. My company offers three insurance plans. I want to know what’s the best plan for me. I’m in the industry. I think I know what’s best for me, but I still reach out to our advisor and say. Hey, is my thought process correct? Is there something I’m missing here. And they helped me out and they make sure that I’m comfortable when I can go to sleep at night knowing I selected the best plan for my family for the following year.
Scott:	That’s awesome. So the combination of the technology plus human capital, people actually know what they’re talking about. Awesome. And then how do you guys get involved in the company? What is the sign up flow? How do they reach out to you guys? Go to your website. What’s the flow like?
Eric:	So we each have unique stories and I’ll let Richie talk to his. I worked for the larger firm that we were incubated under, which was epic insurance brokers and consultants here in San Francisco.
Scott:	I didn’t know that. You guys were incubated under them?
Eric:	Yeah.
Scott:	That’s amazing.
Eric:	Yeah.
Scott:	Yeah they’re huge.
Eric:	Yeah. They’re top 20 on the country, and they incubated us as a solution internally for them and their startups and small business needs, realized that it wasn’t just a solution for Epics and Epics customers, but a solution for the entire marketplace.
Scott:	Yeah, that’s really smart.
Eric:	And spun us out. And we have private equity funding from Two Sigma and Segway Capital out in New York. And we moved our headquarters to Atlanta from San Francisco, and our west coast operations got established in the Sacramento region.
Scott:	Ah, nice.
Eric:	I’m 16 years in the retail consultant brokerage space for mid and large market companies, and I transitioned over to Decisely from Epic with the opportunity to build the west coast here.
Scott:	That’s fantastic.
Eric:	So that’s my story.
Scott:	So you have the big company oomph behind you, but maybe a little more nimble than the big company can be?
Eric:	Absolutely.
Scott:	Awesome.
Eric:	Yeah. I started at a boutique benefits brokerage firm in San Francisco, so in Telegraph Hill. And that was my first job straight out of college, just like anyone else who talks about benefits. Most people just fall into it. And that’s how I got started. And one of the things I quickly realized is the startup space is huge in San Francisco and the bay area. So that was our primary client base. One of the things that we also were very successful in was we were a B Corp, and this is permeated throughout our Decisely relationship. We can go into more of what a B Corp is later, but essentially it’s a company like Patagonia is a B Corp, Ben and Jerry’s. Any company that takes their employee’s happiness, their client’s happiness in the environment, into their mind, and with very cost conscious-
Scott:	That was one of the attractions of Decisely for you?
Eric:	Yeah, it was. So there’s certain rules. So you have to go through a B Corp audit. And under that audit, part of it is how you treat your employees, how many holidays you get, what they contribute to your 401k, what they contribute to your benefits. And then also too, there’s the environmental piece. So one of the biggest taglines when we first started was, we’re going to help you go paperless.
Scott:	I never thought, I was wondering [crosstalk] how you guys play in the environment.
Eric:	And how is the environmental thing.
Scott:	Yeah.
Eric:	And it was huge. But we were a bootstrap company, and right around this time there was a little company that I’m sure all your founders completely familiar with, called Zenefits, that came out into the marketplace.
Scott:	Yeah.
Eric:	And they were doing something similar in a technology space, where they were supplying this technology for businesses to go paperless, do all their onboarding, pretty much everything benefits online. And we are competing against them on a primary basis. I think everyone knows where that story went. But about two years ago, I was on the benefit side with this company we were acquired by epic to incubate their-
Scott:	Oh no way!
Eric:	Their startups their small business space, and just offer a technology to those clients. And I’ve been here ever since.
Scott:	That’s awesome. And it’s working out for you?
Eric:	I love it.
Scott:	Nice.
Eric:	Yeah. It’s been … Lots of pivots. And it’s something that I would never trade for because I have all of this experience, of really going from a traditional brokerage firm to being completely spun out as an entirely new company. I’m technically employee number one.
Scott:	Oh Wow!
Eric:	So if you look at the tax ID [crosstalk] looking at numbers there, that’s me. But at one point it was me, the CEO, the COO, the CPO and a handful of other folks, around 10, 15 people and now we’re at a hundred.
Scott:	Wow, that’s amazing. And I think you guys … I mean I can tell you guys are doing well, because there’s a lot going on and every time I talk to you guys, you’re super busy. But you have really felt the need for us, and that the small companies boom right away. We send you leads, and you convert them really quickly which is fantastic for us. Maybe talk about how those companies start with you guys. Is it a phone call? Is it through the website? How do they get going in the process? Do they go to decisely.com?
Richie:	Companies can find us and go to decisely.com. Decisely largely does not sell or work direct, we work through channel partners.
Scott:	Oh okay.
Richie:	Whether it’s VC Firms and Funds, whether it’s the Kruze Consulting of the world, accelerators, various associations, et cetera. So in the case of Kruze and your customers, you have found a partner in us, and on the several that had been sent over that we have had success on so far, it’s an introduction via an email or a call.
Scott:	Yeah.
Richie:	And we really dive right in from the human aspect because technology doesn’t do everything. And so.
Scott:	Well it’s also like you’re talking … Almost every time we’re introducing you to the CEO and they’re kind of quick. They need something very fast, they’re trying to hire, and this is a blocker for them to be able to hire good people. So I know they’re always motivated to talk to you guys too. And how does that partnership program work? You’re going around to the venture capital funds and other big … I don’t know if we’re a big player, but people will have a lot of [inaudible] that work for a lot of startups. And kind of signing them up for the partnership.
Eric:	You know, it’s a big world, but it’s a small world.
Scott:	Yeah.
Eric:	And that small world has certainly grown to really give us introduction and referrals and kind of handoffs within the space.
Scott:	Yeah.
Eric:	Because everyone’s connected, or partnered and related in some capacity. But when you do things right and you’re doing well, you tend to get.
Scott:	More referrals.
Eric:	More referrals. And I think it’s quickly prospered, mostly due to Richie quite frankly here in the room.
Scott:	Oh wow.
Eric:	But we share the same philosophy as you guys. There’s nothing better than getting a client referring another client, because it tells you, you did a really good job, which is the ultimate feeling of satisfaction. I love it.
Richie:	And just to piggyback on what Eric was going to say and part of the value of Decisely is, there’s not a great way to make this startup space work. Like we said earlier, once you’re a hundred employees, you’re a lucrative client to most of the larger brokerage firms, and even the smaller boutique broker firms, that’s what they’re going after. If you’re a two, three-employee company, it’s difficult to get the assistance you need. And more importantly, you don’t have the time.
Scott:	Yeah.
Richie:	You don’t have a full time HR person. You don’t have the time to understand benefits. You need someone who’s going to help you be an expert right there.
Scott:	Yeah.
Richie:	But without having to do all the work required to be an expert.
Scott:	Yeah. That should be on your brochure. That’s really good. Well, maybe there are some signature clients that you worked with that you’ve solved their problems for, or is there maybe like a use case that you guys … Maybe you can’t name your clients on a podcast, but are there are some situations that people come to you broken and you guys have been a little [inaudible] in a tough situation?
Eric:	Well, I would just segue into that. Yes. In terms of a significant, I guess name client that we can name that people would know, maybe not a tech startup, but it probably is a place that people eat a lot of food, which is Chick-fil-A.
Scott:	Oh Wow. No way.
Eric:	So Chick-fil-A is a customer of ours and a very good partner.
Scott:	Wow. And they’re national, right. So you’ve got to be very, very good to do that yeah.
Eric:	Yeah. And they benefit quite a bit from not just our benefit expertise, but we have a recruiting module as part of our [crosstalk] technology platform.
Scott:	Interesting.
Eric:	So in an economy that we have such as right now with essentially full employment.
Scott:	Yeah.
Eric:	The ability to recruit and retain, and make that process efficient in whatever industry and space you’re in is significant.
Scott:	Yeah. You got a good tagline earlier you said recruit to retire. Maybe we talk a little bit more about that.
Eric:	Yeah. So that is our tagline that we have assist startups in the human capital space from recruit to retire. So just to quickly list off the components that you get with Decisely. You get on the front end, recruiting talent management, job posting, being able to, you know, post out there to the universe and manage that entire process. That goes into our onboarding system where an employee can onboard paperlessly on their own and do all the necessary activities that come with that, including e-verify and other things that companies may do. They can then go into the bin admin site, and actually elect and learn and be educated on the benefit offerings. They also have access to our benefit advisor during that time for questions. We do integrate with payroll companies and so the payroll component and the tax filing and all of that is part of it. We also do have an HR services component. Which is an online efficient HR consulting and kind of education.
Scott:	I didn’t know that. That’s really useful. We use something called Think HR which is good, but do you guys bundle that into your service offering?
Eric:	Absolutely. Yeah.
Scott:	Ah man, that’s really good. Okay.
Eric:	And then beyond that, we do have brand new. The tagline would be an association retirement plan, otherwise known as a multiple employer plan, which we do nationwide now. And it allows startups to significantly reduce their costs and fiduciary liability, and still offer IRA’s and 401k and retirement solution.
Scott:	Oh interesting.
Richie:	And something else that we’ve also gotten into is our Decisely individual market. So in order to be a group, you got to be two people. And then even then, it’s not always the best decision to set up a group health insurance policy when you’re that size. Sometimes it does make sense to wait until you’re five or 10. But hey, you still have people that need benefits, right? And the old way of doing things is you just say, hey, on your salary, I’ll give you an extra x amount of dollars [crosstalk] that’s going to cut. Yeah. And you’re going to go out and buy that.
Scott:	Yeah.
Richie:	That’s great. But it doesn’t really create any ROI in my opinion.
Scott:	Yeah. [crosstalk] You also don’t know if the team member’s doing that or not. And so they may have a catastrophic health event or something like that they aren’t covered for.
Richie:	Yup. And what has recently we’ve done is we’ve created this, qualified Que Sera account. So what it gives the companies the ability to do, let’s say I have three employees, I can say as a CEO, I can set up what’s called an HRA, health reimbursement arrangement, on our account. And I can say x amount of dollars are going to go into this account, for you to go and spend that on health insurance. Whether that’s premium, or hey maybe you want to just use it for a doctor visit a year or whatever. You can set that up. And that’s all facilitated through our program. So when you really think of the spectrum that startups require for insurance, we hit every single one and it’s a logical flow. So it’s like, all right, just me and my founder now it’s me and my five employees. Now it’s me and my 50 employees, and now it’s me and my a hundred employees. And Decisely has a value for each one of those subsets.
Scott:	That’s amazing. And you guys work with all the different insurance providers, and health providers and everything, right? When they go into the Decisely dashboard, they’re able to pick the programs they want, or the policies they want to do and everything.
Eric:	Yeah. So we are at our core and foundation in insurance brokerage and so there’s not a carrier company that we’re not licensed to work with around the country. But that’s where the custom part of the process comes in. So one of the differentiators for us is we still … And our customers, the startups have the ability to customize all these components that Richie and I just spoke to. So you can turn on and off some of these, you don’t have to use them all.
Scott:	Oh, yeah.
Eric:	In addition, because of the brokerage advisory services you’re getting from us, we’re going to walk you through what it is your needs are. Maybe what you had prior at an organization before your startup. And we’re going to use that to then build the decisions and offering that you’re going to begin with.
Richie:	You’re constructing a timeline. So if you’re a founder with two employees, the first question I always ask; what are your growth projections? We’re looking at you for the next five years, and how do we structure this.
Scott:	Yeah.
Richie:	Most of the time, there’s a bunch of insure tech companies out there that are doing some offshoot of this, but most of them don’t supply a live advisor that you get access to. You as the founder it’s your job to go on and say, hey, I’m going to do this, this and this. And when you’re just two employees, very easy to do that.
Scott:	Yeah.
Richie:	But when you’re five employees, 10 employees, how are you constructing a cost-effective plan? I mean, it’s your second largest reoccurring operating cost. How are you going to make sure that you’re saving money and also ahead of the curve? Because, not only in San Francisco, but as Eric mentioned, we’re in full employment. So how are you utilizing strategic initiatives, and new ideas to help retain and attract your employees? And one of the things that we also do different, so I did want to hit on the advisor thing a little bit more. So like not only as your advisor, someone that’s there to help structure the policy, they’re there all the time. So I’ll give you a little scenario. So, you have a kid, you got to … So imagine if you are going to the doctor’s office and this happens quite frequently, and I’m sorry for anyone who has experienced this. But where you go to the doctor, and they say, you’re not showing up is insured. Your group numbers aren’t me here. And you’ve got a 10 month old whose maybe got a runny nose, not feeling well screaming, and you’re trying … You’re like, what? And you go to your brokerage firm, and it says, call this 1800 number or here’s a support app.
Eric:	We’ve gotten a lot of these phone calls. [crosstalk] .
Richie:	And you’re like, what? I don’t want a 1800 number that I’m going to call, and I’m going to talk to someone, and they’re, you know, going to transfer me, or they’re going to whatever. You want to talk to someone that’s in charge of your account. That’s gonna actually be incentivized to make sure this gets done for you. And that’s what Decisely offers. So, it’s not just the advisor during the setup process, or the open enrollment period. It’s year round.
Eric:	Yeah, I love that. So for those listening, this happens a lot. And oftentimes the CEO, they … So what they usually … The employee usually will call the CEO, and the CEO doesn’t know, so they’ll call us. So we actually get a decent amount of these phone calls if the company isn’t set up properly. This is a little bit more like, three years ago Kruze consulting. Now we’re a lot more like … We educate the CEO’s, we make sure everyone’s on benefits, that kind of thing. Where some … In the early days, some of the CEO’s didn’t want to have benefits or for whatever reason, and then all hell would break loose when someone got sick. But it does happen. People break their arm, and they show up in the emergency room. Or the kid breaks their arm, and they show up in the emergency room and they need help, and they can’t get service until they get their insurance information in there.
Richie:	Insurance is one of those things that no one understands how to use it until they’re here.
Eric:	They have to. Yeah.
Richie:	Well, and unfortunately the health insurance system in our country is broken. That is a fact.
Eric:	It’s very convoluted.
Richie:	Yeah. And honestly the best we can do, is to help navigate, especially the people that need it through the system in the best possible.
Scott:	Yeah. I love the fact that you guys provide … You’ll do the individual plans too because you’re actually … You nailed it Richie, in that. A lot of companies early on will just say like, hey, we’ll reimburse you, and that used to be illegal under Obamacare for a while.
Eric:	Correct?
Richie:	Yeah.
Scott:	And now it’s coming back, because I think another law passed. But it’s very confusing to everybody, and in settling on that amount of money, you’re going to give the employees an extra stipend it’s confusing. And like I said, you don’t know if the person is actually buying the insurance. They may just be pocketing the money. In which case you didn’t accomplish anything. The person’s not covered.
Richie:	Sure.
Scott:	So that’s really cool that you guys offer that.
Eric:	And it’s still a tax advantage.
Scott:	Yeah.
Eric:	But it also simplifies things for that startup. They may have made a business model decision that they’re not going to be in the business of health insurance at the moment. They can still fund in a tax-advantaged way, something for the employer- [crosstalk]
Scott:	And give them something. Yeah, you’re totally right. I do find that almost all … You’re exactly right. Those early stage … The super duper early stage companies that are trying recruit always have this benefits problem or question, because anyone they’re trying to hire who’s good is going to want health insurance, right? And so they have to have a solution for this. And this again, this is how we met a while back, and it’s been awesome working with you guys. What are some of the other things, like are there companies that have come to you where it wasn’t working out and you took them off in an old line broker and put them on a Decisely platform … Or some success cases?
Richie:	Back to my original point, a lot of our clients felt like small fish, to their are other brokers, and probably quite frankly they probably were.
Scott:	Yeah.
Richie:	So they’re are not a high profile client. So I think everyone knows that mediocrity is something that comes over a long time period of comfortability. So as you get more comfortable, you’re going to get the best service from your broker, probably for the first six months [crosstalk] that you’re working with them. And then it’s going to slowly year after renewal, it’s just going to be put on autopilot. And so most groups have mistakes that are made on it. And especially if you’re a CEO. So one of the big ones that I’ve seen is employees not being canceled off the insurance card.
Scott:	Oh. And they keep paying for it.
Richie:	They just keep paying for it.
Scott:	A client came to us a couple of years ago with that problem. Their prior CFO had not done it, and they were paying something like $10,000 extra a month. It was a pretty big company and it was insane.
Eric:	I’ve, I’ve seen that happen time and time again, and it’s a bummer because it’s such an easily avoidable mistake. That’s one of the great things about our technology is you literally click a button and all that’s completed. So the old process was, I’m going to either send an email to my broker, or I’m going to do it direct with the insurance carrier. And you add … It’s like a game of telephone. You add multiple people into it. More mistakes are going to happen. And if you don’t know to audit your bill … And also too what’s even more confusing is the way the insurance carriers do billing.
Scott:	[crosstalk] Yeah. [inaudible] back a month later.
Eric:	And they’re like oh, they’re going to be on this billing cycle and then we’re going to reimburse you. And they’re humans over there too. It’s not robots. So mistakes get made, and if you’re not someone who’s on top of that, and if you don’t have the time to be on top of it, mistakes get made. So one of the things that we always, and I typically do. So when you bring on a new client of ours, to the Decisely platform. They have to be in, and they have to be set up on our platform, takes five minutes, but it still requires a census of all your employees. And so one of the ways that we get that done is we take that census and we apply that up against the bill. And if there’re any discrepancies there, it’s what’s going.
Scott:	You know someone’s overpaying.
Eric:	Yeah. And then you can go back to them. And then we actually are the ones that on your behalf go to the carriers, and we fight to get every last penny back that we can possibly do.
Scott:	Yeah. That’s amazing. Yeah, I’ve definitely seen that one before. Wow.
Richie:	It’s also understanding the marketplace for startups. You’re in what we call the small group market place, which is the ACA. It’s regulated and filed and it’s for lack of a better term, it’s a race to the bottom in terms of coverage. Coverage is going to consistently decrease. Prices are going to consistently go up.
Scott:	Why is it a race to the bottom just because the pool’s getting smaller or it’s just so regulated?
Richie:	Well we set the compliance and the regulations, and a bare minimum standard.
Scott:	Oh, I see. Yeah.
Richie:	And so if we’re going to target that standard then you’re going to have a lot of companies that are looking to be in compliance but not have to do anymore.
Scott:	Yeah. They’re going to offer the lowest.
Richie:	They’re going to target that. And so it is a race to everyone at some point being on a high deductible plan, and the lowest amount that an employer can pay to some extent. A lot of startups don’t necessarily do that, but that’s where the marketplace is headed. And understanding the marketplaces again, another big piece of Decisely because every single quarter, all of the health insurance carriers in this ACA marketplace are changing their strategies. They’re changing their rates and their filings. Some of them are the best thing that you can find because they’re buying business and they’re being competitive. And then the next quarter it flips and it switches. And your average startup and founder who’s focused in a particular segment that they’re building, they don’t know the machinations of the marketplace.
Scott:	Yeah, I totally get it. Yeah. That’s fascinating. Well, what, are there any other high level advice you can give startup founders, aside from obviously using Decisely and reach out through a partner network or … Can they still go to your website and add something or maybe they get funneled to Richie or.
Eric:	They can always go to our website. We do have intake and interest on our website for the western part of the U.S that comes to Richie and myself through our partner channels like Kruze and others. Those introductions come to our team here from the West. They can find us on Twitter. They can find us on LinkedIn. All of those avenues as well.
Scott:	Yeah.
Eric:	To wrap up in conclusion, is Decisely is a true hybrid of a traditional insurance brokerage focused on startups, focused on really the backbone of our country.
Scott:	Yeah.
Eric:	The smaller businesses out there. We are advocates for that segment and technology. Technology is never going to replace a very human business, but it can make things a lot easier, and more efficient, and more understood for these startups.
Scott:	Yeah. Those are said very well. What’s decisely.com, is where I can find you?
Eric:	Decisely.com.
Scott:	Well, let me just say you guys have been a pleasure to work with, and you’ve been awesome for our client base and we look forward to many years of referrals to you guys and you’re also just nice people, easy to work with. So that also makes it a lot better. So everyone check out Decisely, it’s awesome for benefits. Was it recruit to retire Eric?
Eric:	Recruit to retire
Scott:	Awesome. Thank you Eric, thank you Richie. Thanks for coming. Bye guys!
Eric:	Thanks Scott, thanks Kruze.
Scott:	Hope you enjoyed that episode of Founders and Friends podcast. Quick shout out to Brex. The first startup credit card. Brex is our sponsor and we really appreciate their support. Brex has no personal guarantee for founders. That’s a really big deal. It integrates really nicely to QuickBooks. Great rewards that are startup-centric. It’s a really nice little tool, and we are seeing it all across the crews, portfolio of clients. So check it out. And again, if you go through the signup flow and typing Kruze, you get a discount. So hopefully you’ll check out Brex. Thanks again for the support on the podcast. Guys. Take care

Eric Frazer & Richard Seaberry of Decisely on Startup Benefits & Human Resources

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