Growing up in an impoverished immigrant family isn’t what you’d expect from a startup genius. However, John Henry, co-founder and CEO of Loop Car Insurance, did just that. Henry is among the most prolific young founders in the space today, and his success grew out of necessity. His main aim in founding his first business was to care for his family.
Getting a Wake-Up Call
Henry’s first job was as a doorman, but he got fired pretty quickly. Yet his start in business came from someone he met while on that same job. He ran into a dry-cleaning business owner who taught him a little bit about what he knew.
This learning experience made him realize that school probably wasn’t where he wanted to be when there was so much to do. He opened up his first-ever business in dry cleaning and slowly started to catch customers who passed on their experiences to others.
Entrepreneurs Make Lousy Employees
One of the earliest things that Henry realized was that entrepreneurs were terrible at being employees. They would spend a lot of their time building a business for someone else and quickly realize they can do better on their own.
For Henry, what he learned about dry cleaning from his mentor was far more than he had learned about anything business-related, either from his job or any school he had been to. He knew this was what he wanted to do.
Growing a Business Through Networking
He started doing dry cleaning for the company responsible for the outfits for the movie The Wolf of Wall Street. From there, he made more and more contacts within Hollywood that opened the door to many more opportunities.
The networking potential of working for a select group of clients was immense. After he was in the business for around three years, he sold it on to one of his clients for $1 million. Yet selling his company for such a vast sum wasn’t the end of the story.
Opening A Non-Profit
In 2014, Henry opened a non-profit that focused on helping individuals of Harlem realize their dreams. Aside from guiding other potential entrepreneurs into the halls of business creation and management, he also netted a lot of networking clients and a podcast from eBay.
By 2019, he was making waves as the host of Hustle on VICELAND. He founded Harlem Capital with three other millennial men of color, a venture capital firm that aimed to invest in businesses from their own communities. Yet, in 2020, he left this life behind because he needed a change.
Doing the Impossible
When asked why he stepped down from Harlem Capital, Henry cites his lack of zeal for the project. The spark that had fueled his aim to run something that could bring about real change seems to have shifted gears, and it was no longer a VC firm.
However, it wouldn’t be fair to say that he didn’t achieve his goals with Harlem Capital. When he and his peers had envisioned the company, they wanted to get $25 million to invest in black-owned businesses. When he left, they had already surpassed $40 million.
Not Suited For a VC Role
Leaving was hard to accept for Henry, but he knew he was stifling his own innovation by staying at Harlem Capital. The business was suited to fund managers and investment people, not for entrepreneurs looking to change the world.
As Henry himself says, he’s not a fund manager. He’s not an investor in other people’s ideas, as much as he can tell a good idea from a bad one. No, he’s a builder that likes to get his hands dirty. When he left the VC in 2020, that’s precisely what he intended to do.
Searching For Something Impactful
Quitting Harlem Capital left Henry uneasy. Where could he go next? He was pondering this when the George Floyd situation blew up, leading to riots nationwide. At the same time, he was doing research into auto insurance and its unspoken bias.
He learned how insurance premiums unfairly hurt people of color. According to the numbers he was seeing, traditional auto insurance would cost between 50% and 80% more for colored individuals as opposed to white ones.
A Penalty For Everything
The more he looked at the numbers, the more he realized that insurance firms were simply tacking on extra charges for everything. You could get penalized for being unmarried or even for having a low education.
These insurance companies also segregated people by the districts they lived in. Zip codes right next to each other could have two vastly different premiums; why would you have to pay extra for coverage in the same area? The discrepancies were insane and disheartening.
Transforming Auto Insurance Through Technology
Loop Car Insurance took the traditional insurance company and flipped it on its head. Using new technology like big data and artificial intelligence, the company sought to offer affordable premiums for everyone.
Most competitors to Loop would use legacy tables, but those were the same tables that suggested ludicrous premiums for people based on certain factors. Loop’s AI model sets premiums based on their clients’ road safety and driving behaviors.
Focusing On The Core Clients
What sets Loop Car Insurance apart is that its customer base is largely ignored by traditional firms. Instead of seeking a fair way to insure those clients, they simply tried to make as much money from them as possible.
Henry realized this wouldn’t just change how people saw car insurance; it would level the playing field for many thousands whom traditional insurance firms wouldn’t serve. The idea quickly exploded into popularity, and it continues to be a force of change in many neighborhoods today.
Aim Big And Win Big
Henry believes his guiding principle is knowing how to aim for the big leagues. He understands the importance of disruption, and this business has taught him the best way to do it. As someone who wants change in his community and country, he doesn’t believe in playing the short game or aiming at the small victories. He’s all about aiming big. If it succeeds, it wins big; if it fails, it loses big. No matter what, it makes a big impact.
