‘Within the weeds itself, I'm not in there – I'm trusting their judgment’

Car insurance CEO John Henry learned early on how to give up control as his business grew. Without this skill – which involves delegation and trust in your staff – the main roadblock will always be you.
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Auto-insurance company Loop is a small fish in a big pond. Even so, the biggest brands are taking notice. At the beginning of 2021, Loop had just four employees; it now has around 40 and hopes to have 100 within six months and 250 after a year. 

Traditional auto-insurance companies tend to use data like credit score, income and education – all of which are typically influenced by socio-economic status – to calculate often unfairly priced premiums. Loop uses things like crash data, weather stats, traffic volumes and telematics to paint ‘the most robust understanding possible of our customers’, says co-founder and co-CEO John Henry

Loop is a registered B Corp, which means it considers its social and environmental impact as much as its profits. John says that the company's approach benefits communities and demographics that have historically been discriminated against, like immigrants and elderly people. 

Unconventional beginnings

John isn't your typical insurance CEO – he's 28 and doesn't have any industry experience. Raised in New York by Dominican immigrant parents, he started out as a doorman after dropping out of college. He bootstrapped and sold a dry-cleaning business for $1 million when he was 21; co-founded a non-profit business accelerator that offers mentoring and funding in 2014; launched an early-stage venture-capital firm in 2017; and appeared as host (and co-creator) of a business show called Hustle on VICE's TV channel in 2019. 

‘I was completely new to insurance, and it feels really naive to want to go up against [the major providers],’ he says. ‘But I don't give a fuck about what they think. I care only about what the market thinks.’

A delegation of authority

After raising $21 million in October 2021, John realized that ‘grind and execution really only take you so far’. Building a strong team beneath him to help share the load was critical. 

‘We have engineering teams, data-science teams, product teams, technology, communications, marketing, people ops. But what we're finding is that if you have really strong front-line team managers, you just have to worry about making sure that your generals, so to speak, are really tight. They typically come with networks, they also bring great people, and then it kinda goes from there.’

He adds: ‘What you quickly learn is that, especially as the rubber meets the road and your product hits the market, you simply can't be everywhere at once.’

One common trap that business owners fall into when giving up control is micromanagement, but John says that this is simply an outsourcing of ‘execution, not judgment’. ‘It's really critical for your team leads to develop their own judgment,’ he says. ‘Even if they're wrong. If you step in every time they're wrong, you're not really allowing them to see their decision all the way through, acknowledge the mistake and improve upon it.’

He adds: ‘We've created a delegation of authority that vests each team lead with the exact parameters of what they can decide on their own, like what budgets they control. Then, within the weeds itself, I'm not in there – I'm trusting their judgment. So, although it can sound fluffy to say trust your team, there are real, practical, compounding advantages to trusting your team. It translates into tremendous operational speed.’

For our ‘25 big lessons from small business’ series, we scoured the world to find inspiring people to share the lessons they've learned from running their own companies. Click here to read the other stories.

This special feature was first published in Courier issue 45, February/March 2022. To purchase the issue or become a subscriber, head to our webshop.

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