Why Building In-House Tech Proved Critical for This Insurtech's Multi-Channel Strategy

Most venture capitalists advised Mark Morissette to focus solely on direct-to-consumer channels when building Foxquilt. But he had a different vision - one that required complete control over their technology stack to serve multiple distribution channels simultaneously. In a recent episode of Category Visionaries, Mark shared how this conviction shaped their go-to-market strategy and eventual success.

"Ten out of ten folks were on the venture capital when you're meeting with them, are like, you really should just focus on the consumer one channel, not all these other channels, just distracting. They're so wrong," Mark recalls. This resistance to conventional VC wisdom would prove prescient, as Foxquilt's embedded enterprise channel now accounts for roughly half their business.

The key to enabling this multi-channel strategy was building their entire technology stack in-house. "It's all ours. We've never used a third party vendor," Mark emphasizes. While this approach required more upfront investment and development time, it gave Foxquilt the flexibility to rapidly adapt their offering for different channels - from direct-to-consumer to broker networks to embedded enterprise solutions.

This technological independence proved particularly valuable when pursuing enterprise partnerships. As Mark explains, "When you're not handcuffed to go knock on a vendor's policy min system or any other vendor's door, which takes... it's very expensive to do that. Time consuming. We're in control." This control allowed Foxquilt to customize their offering for large platforms in ways that legacy carriers couldn't match.

The company's first laboratory was direct-to-consumer in Canada, where they could optimize their product and technology without the complexities of U.S. regulatory requirements. "Your first lab is getting closest to the customer, direct to consumer," Mark notes. "What it does is that if you get your product resonating with that consumer, where they're coming in and you're basically getting end to end through the machine in the journey in less than 5 minutes to a layman."

This initial focus on direct consumer engagement provided valuable insights that informed their expansion into other channels. The data they gathered helped shape their broker and enterprise offerings, creating what Mark calls a "seamless journey to the end result" across all distribution channels.

The multi-channel strategy also proved vital for their expansion into the U.S. market. "This is one of the largest trading partnerships in the world, US and Canada and SME businesses and mid market businesses trading back and forth. No legacy carrier has created a cross border vehicle, facility or product to support that trade," Mark points out. Their proprietary technology stack enabled them to build solutions for cross-border commerce that legacy carriers couldn't provide.

For founders building regulated products, Mark's experience highlights the importance of maintaining control over core technology. "We had to stay very disciplined to our approach around the integrity of the architecture," he explains. This discipline extended to their go-to-market strategy, where they focused on optimizing their baseline verticals around general liability offerings before expanding.

The results speak for themselves. Foxquilt has scaled to "writing like a couple, almost a couple of million dollars a month in revenue" with over 8,000 clients, while maintaining strong underwriting fundamentals. Their focus on building proprietary technology and pursuing a multi-channel strategy from day one has positioned them to serve markets that larger, legacy carriers can't effectively reach.

The key lesson for founders? Sometimes the conventional wisdom about focusing on a single channel misses the bigger picture. As Mark's experience shows, having complete control over your technology stack can enable you to pursue multiple channels simultaneously, creating competitive advantages that would be impossible to achieve while relying on third-party vendors.

This approach requires more upfront investment in building core technology, but it can pay off in the form of greater flexibility and the ability to serve markets that competitors can't effectively reach. For founders building regulated products, it's a reminder that sometimes the harder path - building proprietary technology and pursuing multiple channels - can be the most rewarding one.