This Startup Saved Itself From Bankruptcy With A Brilliant Idea To Change How Auto Insurances Work

In late 2011, Brad Weisberg's first startup, BodyShopBids, was just a few weeks away from running out of cash. At that point, Weisberg had made up his mind to drastically cut costs.

"We're pretty much out of money," Weisberg told his employees. "Only one of you will get paid this month."

BodyShopBids, a mobile app that provided estimates and auto shop contacts to users who sent in their car wreck photos, was clearly a dying business.

Although a novel idea - Groupon founder Eric Lefkofsky was an early investor - it only focused on people paying out of pocket, which is roughly 10% of the entire auto repair market. Drivers usually get into car wrecks only once every 7 to 10 years, so there was almost no repeat customer, either.

Weisberg got desperate and did all he could to save BodyShopBids. He drove around with postcards of his app and pulled over whenever he spotted a car with a dent. One time, he ran up to people arguing over an accident to give his postcard. "They looked at me like I was crazy. But that's how motivated and all-in I was [to turn it around]," he told Business Insider.

Still, that wasn't enough, and BodyShopBids was on the brink of bankruptcy. To look for anything that could save his company, Weisberg went to insurance conventions and held last-minute meetings with auto insurance companies.

From those meetings, Weisberg quickly realized one thing: insurance companies were way behind in technology. "It would take them years to build something like [BodyShopBids] in-house," he said that he thought to himself at the time.

That's when Weisberg spotted an opportunity for his business. If he could license his technology to insurance companies, and let them offer it to the tens of millions of insurance customers, he knew there would be a real business.

So in 2012, he decided to pivot and turn BodyShopBids into a licensing business. He changed the name of the company to Snapsheet, and started selling his technology directly to insurance companies instead. Insurance carriers would label it as their own app and offer it to customers who wanted to get inspection done quickly, without having to wait for an agent on site.

With a Snapsheet-backed app, users can send 6 to 10 photos of the car accident, and within 3 hours, receive an estimate of the damage. Users can opt to receive a direct deposit within 24 hours to the bank account they register on the app. They can also book an appointment with the thousands of auto body shops listed within the mobile app to get the car repaired.

"We have a customer service team, a call center, professional estimators, and auditors in-house. There's a lot that goes into closing a claim in a few hours from start to finish," he says.

In less than two years, Snapsheet has been able to completely turn around its business. And just last year, it raised $10 million in a Series B funding. It is now processing almost 100,000 claims a year through 14 of the top auto insurance carriers, including MetLife, Farmers, and Hartford. Weisberg claims his business is growing 450% a year.

Looking back, Weisberg says making the pivot was one of the toughest decisions he's ever had to make in his life because he was so committed to BodyShopBids. But being willing to make that change is what made the difference.

"I had convinced myself for years that BodyShopBids was the next billion-dollar idea," he says. "But if I had stuck with it, we would have gone out of business, and I wouldn't be where I am today."