Why Corgi's Founders Shut Down a Working Startup to Become an Insurance Carrier
EO Korea
Corgi describes itself as an AI insurance company for technology startups. In this interview, CEO Nico Laqua and co-founder and COO Emily Yuan explain why they gave up a promising insurance brokerage during Y Combinator and spent years and tens of millions of dollars becoming a regulated insurance carrier. Laqua says the company will end this year at "several hundred million dollars in ARR" and calls it one of the fastest-growing B2B companies on the planet. The founders' central argument is that the hard, capital-intensive path was worth taking. In their view, reselling someone else's product would have made Corgi "a pretty boring company," while rebuilding the underlying infrastructure gives it a moat that competitors will struggle to cross.
Two founders, two temperaments
Laqua grew up in San Diego. He describes the jobs he held in high school as frustrating, with bosses who wasted his time, and says that at some point he decided he wanted to do something "big and important" with his life. Starting a company seemed like the best way to do that. Before COVID he spent a lot of time in startup and hacker communities building apps. One of them was an app for college clubs, which he now calls the kind of idea a 19-year-old who can program but doesn't know much about startups typically comes up with.
That app is how he met Yuan. She was running one of Stanford's entrepreneurship clubs, and he asked her to test it. Most people gave him weak feedback, he recalls, but Yuan came back with a Figma page containing around 100 comments. Yuan says Laqua wanted help promoting the app across Stanford, and she gradually became more involved. That work became a company called Picnic, which later turned into the gaming company Basket.
The two describe complementary strengths. Yuan says Laqua is very good at identifying good opportunities, and that her own skill is figuring out how to get complicated things done: "you can throw like a very complicated thing at me and I'll go and figure out how to like get it done." She traces this back to high school, when she and some friends started a nonprofit called Paper Bridges. It began by sending letters to orphans and foster children around the world and later, as it grew, donated medical supplies and face masks through centers in the US. She took from that experience the idea that a student without much funding or resources could still have a lot of impact: if she was able to do something, she should gather people and go for it.
Leaving Basket in search of something bigger
Laqua says Basket made "a lot of really great games" and that he got the company to where he wanted it, after more than four years there. But it did not feel impactful. Yuan says it was a very different kind of company from what the two wanted to spend the next ten years building. She wants to spend her time in the "highest leverage way possible," and they wanted to pursue "the biggest, most ambitious thing possible."
The case for ambitious, hard ideas
Laqua pushes back on a common piece of startup advice. Building a product you would use yourself is normally good advice, he says, but young founders often end up solving problems that are much smaller than they could be. Many people assume that shrinking a big idea into something small makes success more likely. He argues for the opposite: pursue the most ambitious version. His reasons are practical. An ambitious mission attracts smart people who want to join, investors are more likely to fund it, and if it succeeds it changes the world in an interesting way.
He admits it's hard to call any idea good or bad in advance, since things sometimes work out in unexpected ways. His general view is that good ideas tend to be difficult, and that doing hard things works out better partly because it makes the company harder to copy. Being "the 50th app for college students on campus" or "the 500th restaurant in the financial district" isn't a good business, he says, because it means being the same as everyone else. A good business does something unique and becomes "the company" in its category. He argues that a category-defining company can't be simple, easy and capital-light. It has to be the "craziest, the highest impact, the highest leverage" version of the idea.
A $60,000 policy and a broken buying experience
The founders came to insurance through their own bad experience. Laqua had to buy insurance for his previous company when it had little money. The policy cost $60,000, while he was earning roughly $1,000 to $2,000 a month. Getting it meant calling brokers, waiting several weeks for the policy, and going weeks without replies to his emails. "And of course, they never paid out anything," he adds.
Yuan was struck by how slow the process was even though they were trying to hand over money. Everyone took forever to respond, and it was confusing what they were even buying. Looking at how the industry was set up, she remembers thinking it was remarkable that such a large industry ran this way.
Laqua says he concluded "this stuff is a scam." He cites insurance as about 12% of GDP and roughly twice as large a market category as software. In his account, heavy regulation and a large regulatory barrier to entry, combined with the fact that most major insurers started 40 or more years ago, have made incumbents comfortable and complicit and allowed their product quality to keep getting worse.
Outsiders as an advantage
Yuan argues that people with 20 years in the industry have valuable experience but also a "solidified mindset" about how things are supposed to work. When they adopt technology, they tend to plug it into existing infrastructure. Coming in with a blank slate lets Corgi ask why something is done a certain way and whether there's a better approach, and to drop steps that aren't needed when building from an AI- and tech-native starting point. She says they didn't seriously consider other industries. Insurance seemed like the right place at the right time, and they believed they could build a team to do it.
The brokerage that worked, and why they killed it
Corgi entered Y Combinator already licensed as an insurance brokerage. The plan was to embed insurance within contract management companies, which Laqua calls just being a broker and "doing the normal thing." It was working. They had sold tens of thousands of dollars of premium, and revenue growth was good.
Yuan says that at first they misread where the problems in the insurance stack were. They assumed insurers simply weren't marketing aggressively enough. What they found was that brokers depended on old, traditional insurance carriers, which made it very hard to offer a good product. Laqua describes the day-to-day reality: phone calls to carriers for every single policy, and a fax machine they had to buy to send documents back and forth. He would look up these carriers, see they were $100 billion or $200 billion companies, and find that they still ran on faxes and phone calls. Assuming a better carrier must exist, the team checked every one. They say none were better.
That led them to conclude that the problem wasn't the website or the technology but the underlying product, the insurance policy itself. To control that product, Yuan says, the only real option was to become a carrier.
So they shut down a brokerage that was working. Laqua stresses that this was not an obvious decision and was quite controversial. He thinks that if they had kept going they might have been one of the top companies in their batch, if not the top. Their stated vision became not to build on top of, modernize or fix existing insurers, but to create "a new type of financial institution": becoming a highly regulated financial entity and rebuilding it from the ground up with AI. Yuan repeats the outsider theme here. She says it's very hard to untrain yourself from an existing paradigm, and being new to the industry let them say, in effect, "we'll just go and make an AI version of that."
Years of being "default dead"
Laqua is candid about the cost. You can't simply start an insurance carrier. Corgi went from a company doing very well in its batch to one doing poorly. They did not present at Demo Day and were "not one of the hot companies" in the batch. The process took several years, and he says the company almost ended "on many, many occasions" and was often "default dead." In total it took tens of millions of dollars. Laqua says they had to raise roughly $80 million almost before having revenue. Elsewhere in the interview, he says they had to raise over $100 million to make it happen.
He says they raised this money without ever making a pitch deck, going out to market, or running a competitive fundraise. His explanation is that they made themselves "a hard company to bet against." Investors from their Y Combinator period visited the office and saw it full every day of the week. In conversations with anyone at the company, they could tell the team cared deeply about the problem, wanted to win, and believed the end goal would make the world better. Taken together, he says, that made it easier for people to bet on them.
Living at the office
Yuan argues that an industry as large and complicated as insurance demands enormous time. She lives very close to the office. Laqua lives in the office, and many team members live nearby. Without "110% effort," she says, it can't be done properly.
Laqua frames this as the particular strength of young founders. They have a lot of time and energy, and the trade-off is that they don't have much money, which he acknowledges from experience is tough. In his view, that time and energy are worth a lot, and the hours they can spend on hard problems are very difficult for others to compete with.
Regulation: difficult, but not mysterious
The two founders describe regulation somewhat differently. Yuan, who says she has always been good at reading and understanding legal documents, calls regulation "not some mysterious thing." Regulators tell you what you can and cannot do. If you follow the directions and stay within the guidelines, she says, "it's all doable."
Laqua stresses the difficulty. "It wasn't for fun" that they raised over $100 million, and it wasn't for fun that it took two years. He also calls it "almost two years" of regulatory licensing before they could launch their first product. Still, he says that once they received their first set of licenses, revenue began growing very quickly, the company looked much healthier, and it inflected.
Why the moat holds
Laqua's growth argument is simple. People go to the easiest, most convenient product available, and if you are that product they will come without much extra marketing. He says Corgi is fundamentally a better product than the alternatives, and that unless someone builds an entirely new carrier for startups, there aren't many other options.
He admits that operating in regulated industries is very difficult and capital-intensive. But once the core infrastructure is in place, a great deal can be built on top of it. He sees the cost of getting there as the moat: it's hard for anyone to build "a Corgi 2.0" because of how much time and money the infrastructure required, and most companies can't do that. Getting the hard part done and out of the way, he says, is a major advantage for Corgi.
He closes by returning to why they didn't stay a broker. If all they did was resell someone else's product, he believes Corgi would have been a boring and unimportant company: "I don't think you can change the world if you're reselling someone else's product." So they decided to become the infrastructure. By his own account, it took much longer and cost much more than they expected, but in the end he thinks it worked out.
It's kind of hard for someone else to make like a Corgi 2.0 because we had to spend so much time and so much money like getting the infrastructure set up. Most companies just can't do that.
We would have been kind of I think a pretty boring company and I don't think we'd be an important company if all we did was resell someone else's product. I don't think you can change the world if you're reselling someone else's product. So, in our case, we decided to become the infrastructure.
Nico actually lives in the office and a lot of our like team members just like live close to the office as well.
That energy is something and that time they're able to spend on these problems is something that's really hard to compete with.
My name is Nico. I'm the CEO of Corgi. Corgi is an AI insurance company for technology startups. And we'll end this year at several hundred million dollars in ARR. We're one of the fastest growing B2B companies on the planet and we're just getting started.
I grew up in San Diego, California. In high school, I had a couple jobs. Anyone who works jobs while they're in high school knows that they suck. You have like a boss that's like an idiot that's like telling you all sorts of like things that are just like wasting your time. I think at some point I just kind of decided that I wanted to do something that was like big and important with my life. And it seemed like starting a company was a really good way to make a difference.
Before COVID, I spent a lot of time kind of in the startup hacker communities and I was working on making apps. One of the apps I was working on was an app for college clubs. It's the type of idea that I think a 19-year-old who knows how to program and doesn't know that much about startups typically does. Emily at that time, she was really interested in startups and she was running one of Stanford's entrepreneurship clubs and I wanted her to test out this app. And most of the people that I knew weren't like giving me that great of feedback at that time, but Emily came back with like a Figma page with like 100 comments about the app.
Hello, my name's Emily and I'm the co-founder and Chief Operating Officer at Corgi. Nico wanted someone to help like promote his app to like everyone at Stanford. So, I agreed to help and I kind of just became more and more involved. Eventually, that became the company which was Picnic and then it became the gaming company Basket.
Nico is very good at identifying good opportunities and I think that actually complements my skill set. I'm very good at helping make sure that we can figure out how to like get all these different things done. So, you can throw like a very complicated thing at me and I'll go and figure out how to like get it done.
In high school, I actually started a nonprofit with a couple of my friends called Paper Bridges. I think it was an area where there could be a lot of work done. I could make a lot of impact even like as a student without a lot of funding, without a lot of resources. We started off sending letters to orphans and foster kids around the world. As we grew and scaled, we started donating medical supplies and to donate like face masks through a lot of these centers in the US. If I'm able to do it like I should just go and like get people together and just go for it.
Basket, they make a lot of really great games. I got that company to the destination that I wanted to get it to. I spent over 4 years there.
But, it didn't feel like a very impactful company. It's a very different type of company than what Nico and I really wanted to spend the next like 10 years building. And one thing that I really want to make sure I do is that I spend my time like the highest leverage way possible. We want to do the most like biggest, most ambitious thing possible.
Oftentimes, the young startup founders try to make products that you yourself would use, which is normally pretty good advice. But, the problem is that problems that they try to solve are often not as big as they could be. And I think a lot of people think that if they take a really big idea and kind of scale it down to something very small, that that makes it more likely to succeed. But, actually I think that people should do the opposite and think of the most ambitious version. Because if you're doing that, then suddenly a lot of really smart people want to join you on your mission. A lot of investors will be more likely to fund those sort of ideas. And success actually changes the world in like an interesting way.
It's hard to say that something's a good idea or bad idea cuz sometimes things just work out really well in unexpected ways. But, generally I think a good idea tends to be really difficult and tends to be hard. And doing the hard things ends up working out much better. And that makes it hard for competitors to come out and try to copy our stuff.
Being the 50th app for college students on campus, the 500th restaurant in the financial district is not a good business because it's kind of being the same as everyone else. I think a good business means that you're doing something unique and you are like the company in that category. I think in order to be category defining, you can't just do something very simple and very easy and very capital light. I think you need to do something very ambitious and difficult and hard. Kind of the craziest, the highest impact, the highest leverage one of whatever their idea is.
Historically, it's been very difficult for tech startups to get insurance.
I mean, I had to get insurance for my last company. And we didn't have a lot of money at that time. And I remember the insurance policy was $60,000. And that's a lot of money to buy anything. I was making less than that in my salary. I think I was making about $1,000 or $2,000 a month at that time. So, this was a huge expense. But, my experience was terrible. I had to call these brokers. I remember it took several weeks to get the policy. Not answering my emails to them for like weeks. And of course, they never paid out anything.
And it was just shocking like how slow the process is. Like we were trying to give them a bunch of money to buy this product. And everyone was just taking forever to get back to us. Like it was very confusing like what we were even buying. We just looked at how everything was set up and we were like, "Wow, this is terrible. Like how do you have a $100 billion dollar that runs like this?"
So then I thought, you know, this stuff is a scam. If you look at it as 12% of the GDP, it's about twice as big of a market category as software. But I think that all of the regulation around it and the huge regulatory barrier to entry, coupled with the fact that most of these big insurance providers started 40 years ago or more, and that's led to them being very comfortable, them being very complacent, them to continually worsening their product quality.
I think a big problem with people who have been working in the industry for 20 years is like one, yes, they have a lot of experience, but they kind of like have this like solidified mindset of like this is how things are supposed to work. And okay, we'll use tech, but we're going to like plug the tech into like this existing like infrastructure. It's actually a big advantage for us because we can come in with a blank slate and we can look at things and if something doesn't make sense, we can question like why is it being done this way and is there a better way of doing it? We don't really need to do if we're building it from like an AI and like tech native point of view.
We actually didn't think about like too many other industries when we were kind of thinking about Corgi. It was just insurance just seemed like perfect like right place, right time and we thought that like we were able to build a team to do it.
And we applied to YC already licensed to be an insurance brokerage. Our idea there was to embed with contract management companies. We just wanted to be a broker and do the normal thing. That's what we started with and actually it was working pretty well.
Well, we sold a couple like tens of thousands of dollars of premium and our revenue growth was pretty good.
But when we first started, I don't think we understood like where the problems were in the insurance stack. We thought that hey, like these insurance companies just weren't being aggressive enough. Like they should just market more and promote their companies more. But in reality, what was happening was because they had to rely on these like really old traditional insurance carriers, it made it really hard for them to have a good product.
Really nasty to with the insurance carriers. Like making phone calls to them for every single policy. We had to get a fax machine and we were like sending faxes to them back and forth. And I would look up these carriers and I'd see they're like 100, 200 billion dollar companies and this is the way they work with faxes, with people calling them for every single policy. And I thought to myself, there's no way that like this is the way a huge part of the economy works. There must be like a better insurance carrier out there and we checked every single one out. There weren't any that were better.
And through doing that we realized that the problem wasn't like the website, it wasn't the tech, the problem was the actual underlying product, which is the insurance policy. So then we have to figure out like how do we actually go and be the company that is creating and has like control over the product. And the only way you can really do that is to become an insurance carrier.
So we decided to shut down what we were doing, which was working pretty well. And at the time that was not an obvious decision. That was a very controversial decision. I think we could have been like well regarded, maybe not the top company in our batch, but one of the top companies in our batch if we just continued to do what we were doing. But we shut that all down and we decided we're going to become the insurance carrier. It's our vision not to build on top of, not to modernize, not to fix what's already there. We're building a new type of financial institution where we actually become these highly regulated financial entities and rebuild them from the ground up using AI.
You just really need to come in with new and fresh perspective. It's just really hard to untrain yourself from the existing paradigm of like how things are done. At least in our case, being new to the industry really allows us to come in with a different perspective, questioning how a lot of these like traditional industries are run and just say, "Okay, like we'll just go and make an AI version of that and rebuild it from ground up."
And the problem is you can't just like start one. It's something that's very difficult to do. So we went from a company that was, you know, doing very well in our batch to one that was not doing well at all. And we didn't do demo day. We weren't one of the hot companies in our batch at all. It ended up being a very long multi-year process where our company almost ended on many, many occasions throughout this. There were a lot of times where we were very default dead. In our case, it ended up taking us tens of millions of dollars and several years. And we had to raise almost pre-revenue like $80 million.
We raised all this money. We never made a pitch deck. We never went out to market or anything like that. We never did competitive fundraising. I think we just made ourselves a hard company to bet against. Actually, like the initial investors we had during Y Combinator that came in, they'd visit the office, they'd see it full, you know, every single day of the week. They could see and sense in talking to anyone at the company. They could see that we deeply cared about the problem. We wanted to be winners and we wanted to win and that the end kind of destination would lead to the world being a better place. And I think when you kind of combine all of that, it makes it, you know, a bit easier for people to bet on you instead of against you.
If we're trying to tackle an industry as big and as complicated as insurance, you really do need to spend a lot of time on it. I live very close to the office, so I can get here quickly. Nico actually lives in the office and a lot of our like team members just like live close to the office as well. If we don't put like 110% effort and a lot of time and energy into it, like you just can't do it properly.
And I think the superpower that young people have is that they have a lot of time and a lot of commitments. The trade-off is they have like not a lot of money. And I've been there, you know, it's tough. But that time and that energy is worth a lot. That energy is something and that time they're able to spend on these problems is something that's really hard to compete with.
It was a very long process and I think something that I've always been pretty good at is reading legal documents and kind of like really understanding what goes into them. And I think regulation, it's not like some like mysterious thing. Like they tell you like you can do XYZ and you can't do XYZ. And you just make sure you follow the directions. If you can make sure that you just follow, like you stay within the guidelines of like what you're allowed to do, it's all doable.
It wasn't for fun that we had to raise over a hundred million dollars to make it happen. And it wasn't for fun that it took two years. Overall, I think regulation is something that's pretty difficult and pretty challenging. But once we got our first set of licenses, our revenue started growing very quickly. We started looking a lot more healthier. And I think the company kind of inflected after that.
People will just go to the easiest, most convenient product available. And if you're just that, then people will come. There's not that much additional like marketing we really have to do. That's just fundamentally a better product than what's available. Unless someone else goes and makes an entire new carrier for startups, like there just aren't that many other options.
Yeah, so I think operating in regulated industries, it's very difficult and is very capital intensive. But once you're able to actually get the core infrastructure set up, there's a lot that you can just build on top of it. I think it's a very good advantage and it's a big moat that it's kind of hard for someone else to make like a Corgi 2.0 because we had to spend so much time and so much money like getting the infrastructure set up. Most companies just can't do that. So, I think just doing the hard thing and just getting it out of the way and getting it resolved, I think is a really big advantage for us.
It's hard to say that something's a good idea or a bad idea. But generally, I think a good idea tends to be really difficult and tends to be hard. And doing the hard things ends up working out much better. Like for us, it's been almost two years getting regulatory licensing in order to launch our first product.
We would have been kind of I think a pretty boring company. And I don't think we'd be an important company if all we did was resell someone else's product. I don't think you can change the world if you're reselling someone else's product. So, in our case, we decided to become the infrastructure. And it took us a lot longer and a lot more money than we thought it would, but in the end I think it ended up working out.
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