Twins Matthew and Michael Vega-Sanz dropped out of Babson College in 2018 to build a car-sharing app—then Covid-19 totaled it. “We had negative $2,800 in the bank and a dead startup. We felt like absolute failures,” says Matthew, the startup’s CEO. But the setback was just a detour to a bigger business. Their new startup, Lula, helps almost 5,000 logistics and car rental companies build flexible insurance packages to reduce premiums, such as offering pay-per-day insurance for trucking fleets, car sharing and daily rentals. Coming soon: AI to sell the insurance. They count Flexport, the unicorn shipping company, among their customers and have $45 million in funding from folks like Founders Fund and Khosla Ventures. The first generation Americans see it as their duty to take big risks. “Founders, especially here in the United States, have the privilege to be crazy,” Matthew says. “I think about our family in Cuba, where being crazy gets you locked up as a political prisoner.”
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LifestyleTranscript
00:00 [MUSIC PLAYING]
00:03 Matthew, it's so wonderful to be here with you today.
00:06 Thank you for having me.
00:07 It's super dope.
00:08 Let's start right now by you telling me
00:10 what exactly your company does.
00:12 So we build software for big buyers of insurance
00:15 to manage your insurance workflows.
00:17 So picture a company like Uber, Airbnb, Lyft.
00:21 You need to run, essentially, background checks
00:23 on all your drivers and all your hosts.
00:25 Every time there's a rental or a trip,
00:27 you need to have some sort of insurance policy
00:29 on one of those.
00:30 And if there's ever an accident or a claim filed,
00:32 you need somebody to manage it for you.
00:34 And so we build the software for companies
00:36 like that to essentially manage all of their insurance
00:39 workflows.
00:40 [MUSIC PLAYING]
00:43 How did you come up with this idea?
00:45 So it goes back a number of years.
00:47 My brother and I started a company out of our dorm room
00:50 that would essentially let college students rent cars out
00:53 from one another.
00:55 And crazy enough, out of our dorm room,
00:58 we ended up launching it September 1, 2018.
01:01 It became a top 100 app on the App Store.
01:04 Members on more than 500 campuses in all 50 states.
01:07 It was really funny because people thought
01:09 it was this big company, and it was two kids out of a dorm room.
01:12 And when COVID shut down college campuses,
01:15 it forced us to shut down that business.
01:17 Because it was in the middle of a global pandemic,
01:19 we took a different route.
01:22 How did those initial investors react then when you said,
01:25 hey, we're going to switch gears and do this new company?
01:28 They were super salty.
01:29 There's no other way to put it.
01:30 They're like, we invested in a car sharing app.
01:32 Now you want to do something with insurance.
01:34 And we told them, look, college campuses are closed.
01:38 There's nothing we can do with this old app.
01:40 But insurance is actually a bigger deal
01:44 right now than ever before.
01:46 Because if you think about it, insurance
01:48 is that one cost you can't afford to eliminate.
01:52 We actually, before we ever spoke to investors,
01:54 we went out and we got contracts signed.
01:57 And then once we had about 23 letters of intent,
02:00 we took that to investors.
02:01 And we're like, hey, look, people
02:03 are willing to pay us for this stripe for insurance.
02:05 [MUSIC PLAYING]
02:09 So talk to me now about the scale of your company.
02:14 How many customers do you have?
02:15 How are sales doing?
02:16 Anything you can share with us?
02:17 Yeah, so we started actually on this new version of the business
02:22 towards the end of 2020.
02:23 And then we went out to market with a real product in 2021.
02:28 And that first year, we were able to hit the $1 million
02:31 ARR mark.
02:33 And then in the past, I'd say, 16 months,
02:37 it's just gone gangbusters.
02:38 We've grown almost 45x in the last 15 months.
02:43 We'll be the fastest insurance startup
02:45 to hit $100 million ARR.
02:48 We'll also hit profitability next year.
02:50 So not only will we be one of the fastest software companies
02:53 to hit that revenue mark, but we'll also
02:55 be one of the only ones to have done it in a super
02:57 capital-efficient way.
02:59 [MUSIC PLAYING]
03:01 What would you say is the most challenging part
03:04 of running your company?
03:05 This was my first job, my first real job.
03:07 The only job I had before this was selling women's shoes
03:10 at Nordstrom for like two months and then
03:13 working on my family's farm.
03:15 And so the hardest thing for me was,
03:17 there's a bunch of articles that tell you
03:19 how to make your first $10,000 or your first million dollars.
03:24 Nobody ever tells you what it's like to go from a million
03:27 dollars in revenue to $50 million in 15 months
03:31 or anything like that.
03:32 And so just having to navigate all those different things
03:35 on your own is super tough.
03:37 And of course, we have investors and advisors.
03:39 But again, they haven't even gone through that.
03:41 And so dealing with life changing so fast,
03:45 I'd say that's probably the toughest stuff.
03:49 What's it been like to work with a family member?
03:52 And how has your history shaped what you're building at Lula?
03:55 I think one of the big things is because we're twins,
03:58 we grew up so close.
04:00 We have an unfair advantage when I
04:02 think about other competitors.
04:03 We go to the gym together.
04:04 We live in the same apartment.
04:06 We drive to work every day on the same.
04:08 And so one of the things that's really cool
04:11 is I never have to guess his motives.
04:13 And a lot of times, founders don't
04:15 know if somebody's on the same wavelength as them,
04:17 if somebody has the same character,
04:18 if somebody has the same ambition.
04:19 So while most companies are fortunate,
04:22 they just have one elite founder,
04:26 I think we're in a really good spot because we have two
04:28 of basically the same person.
04:30 Founders or entrepreneurs, successful people,
04:35 the worst thing you can ever tell them is you're lucky.
04:38 And to a certain extent, I used to hate when people say that.
04:41 But looking back on my journey, I'm
04:42 the luckiest person in the world.
04:44 [MUSIC PLAYING]
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04:55 [MUSIC PLAYING]
04:58 (upbeat music)