How Chapter achieved 10x revenue growth while keeping corporate headcount flat for 2 years | Cobi Gantz

Most companies are just dramatically overstaffed. You actually don't need nearly as many people as you think. (upbeat music) Our guest today is Kobe Blumenfield Gantz, co-founder and CEO of Chapter. Kobe, thanks for being here. Great to be here. Looking forward to this conversation. So as I was preparing for this, I see that you testified in front of the Senate. So I wanna go back to that morning, you wake up, what's going on in your head before you go and do that? It's really nerve-wracking. We had spent, my team and I had spent a fair amount of time to expire preparing, writing up a lot of different scripts. We weren't sure how friendly or unfriendly frankly the senators would be towards what we're doing because Medicare brokers for good reason have a pretty bad reputation. So a lot of what we were focused on was making sure we were explaining the real truth of what's happening in the market while trying to share how we as a company are doing things in the right way. Did they end up being friendly or was it hostile or was it a mix? It was a mix. There's a ton of hostility so to speak. There were gradations of friendliness. One thing that was really apparent to a few minutes in and I started to try to play the game a little bit was that really all of these testimonies are just a platform for the senators to make a speech about whatever is on their minds and whatever they want to make a speech about. So a fair amount of it was just understanding the political game and trying to express the points we wanted to express without complicating the issues too much. If you ever had to do it again, what would you do differently the next time? There are a few political motivations of each of those senators, which I think if I had better understood at the time, I think we could have directed some of the topics in a slightly different way. But broadly, it was actually quite effective. We were able to get a law passed or regulation passed at least to protect seniors from it, which was really cool. And also elevated the status of the company quite significantly. So overall, it was very successful for the company and I think a great life experience for me. A lot of fun. How do you get a law passed? Can you take us behind the scenes of what that looks like? The lots of different ways to get regulations passed. Sometimes it's a much more formal process. Sometimes it's a less formal process. In this case, we wanted to make it harder for people to sell seniors data and cult call them. So the way that this works today is, and it's not just in Medicare, it's a lot of different insurance and other types of products. But if a company puts up a lead form, for example, before this regulation was passed, that company could then sell that data to 100 or any number of third parties to basically take that data and call the senior. That creates a lot of cult calls for seniors or perceived cult calls. It creates a really bad experience and it reduces trust in the internet writ large. So it's actually quite problematic. And leads to a lot of scams and frauds. So we were trying to make it such that you can only share that data with one party. So the party that is putting up the lead form has to be transparent. And if I put my information into a lead form, that is only going to one party. And so the way that we got that passed was sharing with the Senate and with the House as well the impact of the current status quo, how there's no one who really opposes this. It's a pretty uncontroversial view that seniors shouldn't be taken advantage of. And because of that, we were able to get it into the regs. - Yeah, that was gonna be my question. Is there anyone that is strongly against the SEC? - No, let them flood. Let the cold calls go. - No, but in politics, prioritization is really important. So even if there are a lot of really obvious policies or government should pass, but if it's not someone's priority today, it probably won't get passed. So it's both explaining the issue and helping people understand why it should be their priority. - And I know from your time at Palantir, this was your world, is that where you learn how the political world works? Or where did that come from for you? - Yeah, part of it is just spending time with the government, I worked on the US government team at Palantir, spent a lot of time with the federal agencies, with Congress as well, just understanding how dynamics work, how the politics work. I'm certainly not a Max Burke, but I knew more than an average person probably and building relationships. And through that process, I've just gotten to be able to get into the room with a lot of interesting people who can make decisions. And then I have brought that over to chapters, well. - For the founders listening in, who don't know how government works and yet they're in industries, like we have a lot of defense tech founders that are listening in, we have a lot of cybersecurity companies that are selling into the government, like what should they know about that world as they try to navigate that themselves? - One of the most common mistakes I see founders make is they go spend a lot of money in time with consultants, with lobbyists, and all these people who are selling to them. And that is the biggest mistake. The reality is especially early, you have to do it yourself. You have to craft the narrative yourself, you have to go into the room to yourself, you have to convince people directly because you as the founder of CEO are going to be way more effective than any consultant or lobbyist. I think it's okay to use intermediaries to get into the room or to build a relationship, but the work is still 95% going to be on you. And that's one of the biggest things. And people just assume that you don't have access, but you do. I've cooled emails, a chapter I've cooled emails, pretty high level government officials, and I've gotten meetings through cold emails, which I think people just don't even think to do. - I did that back in 2014. I was doing a lot in Bitcoin and I spammed every congressman and Jared Polis, who's now a governor of Colorado. He answered, and we met. And I remember just going there as a 23 year old kid, like this is so crazy. - Amazing. - You just emailed them the answer and you walk around and it was a cool experience. But that was one response, and he could work that day that I was there and it worked. I got a bunch of responses and that completely blew my mind how accessible these people really were. I didn't think that's how this stuff works. So it's good to know that that's the case. - It's a bet. It's not always that direct, but it's great when it does work. And the same way that we as people who operate in tech probably have this weird, almost idealistic view of what it means to be in government or in policy, they have that same view of us. Like it's a grass is always greener situation. So there is this aura about people who work in tech and especially founders that you can use to get access to these rooms. - How does it compare to like an enterprise deal? So maybe you think about like the complexities of like going down that path, that you know, going to a congressman, like how does that compare to an enterprise deal in terms of the complexity, the touch points, the general philosophy going into it. - It's a great question. I think that's exactly the right way to think about it. I think founders and CEOs should think about building relationships with the government and getting something done with the government in the same way they think about an enterprise deal. Exactly. It often takes navigating the bureaucracy. It takes knowing whose motivations lie where it takes understanding overall prioritization. It takes a lot of touch points. It can take months or years. So it's exactly the right in the lock. Like I think if you use that mindset of this is an enterprise deal, you are much more likely to execute on it with the rigor that it requires. - Is there anything that you see other companies do or maybe just know about where it's like, no, like don't do that. Like whatever you do, do not do that. - I hesitate to say that because sometimes crazy things work. Often they don't. Probably more often than not, they don't, but sometimes crazy things work. So I hesitate to say there's like one thing never, I mean, the only thing I can tell you absolutely do not do, do not spend a lot of time and money on consultants and lobbyists. That is quite obviously not going to work. - It's a good, good hard rule. Now let's take a step back and talk a little bit more about what chapter it does. So you mentioned a few minutes ago that in your industry, there's not a very good reputation. Like why is that? And what's the status quo? - The status quo for seniors today, when they need to choose health insurance when they retire, they pretty much have to engage with the Medicare ecosystem, Medicare is health insurance for seniors. And today most Americans have anywhere from 100 or more options to choose from. Unlike when we choose insurance coverage from an employer, we have two to four options and we have an HR department to help us. These individuals have no one to help them and many more options. And they're living on fixed income. And so often their financial implications are even more stringent. So what chapter does is helps people navigate this process as an unbiased resource to get people into the right Medicare plan for their needs. And then crucially, we help them throughout the year to get all the resources they need, whether it's finding a doctor, appealing a bill, or claim, understanding what benefits are in their plan to make sure that they have the most out of their coverage that they can possibly have. The reason that the industry, or one of the reasons that the industry is so pernicious today is because most brokers are incentivized to push plans that pay them more, especially the big call centers and these big like large marketing organizations that are basically doing seniors into buying insurance products they don't want and don't eat. This show is brought to you by Frontlines Media, a podcast production studio that helps B2B founders launch, manage, and grow their own podcast. Now, if you're a founder, you may be thinking, I don't have time to host a podcast. I've got a company to build. Well, that's exactly what we built our service to do. You show up and host and we handle literally everything else. Just let it be called to discuss launching your own podcast. Visit frontlines.io/podcast. Now, back to today's episode. What was going on in your world that you observed that this was a problem that was worse going out and dedicating what, five, 10, 15 years of your life. Now, however long this journey will be, what was it about this problem and how do you know that this was a problem that was worth solving for you? I first learned about the Medicare ecosystem, seeing my grandfather and my parents try to navigate it and have a terrible experience working with a local Medicare broker. And then as I tried to help them and get exposed to the system, just peel back the layers of the onion more and more to understand how bad the incentives are, how bad the products are, how bad the technology is. And how archaic the whole thing is. And I don't have a background in healthcare, working at Palantira. I don't have a background in Medicare, but just seeing the dramatic implications of people's health and finances in this phase of life when they should be having much more joy and purpose really bothered me. And so what I'm most excited about over time is building what we like to think of as the future of retirement for Americans and then for the Americans. Western worlds. And the way we do that is we build the trust layer between seniors and AI. And that's really how we think about building the company over time. We've already built what has become the market leader in Medicare navigation using a lot of AI, using a lot of really cool technology to be extremely efficient in a old school tech enabled services world where now our financials look better than any SaaS company actually because we're so good at using AI. But we can apply a lot of these same models of trust and really good user experience to help people reimagine what it means to be older. Have you seen a shift in terms of investor interest around tech enabled services? I feel like a couple of years ago that was not a phrase that most VCs would be very excited about. I think they really wanted pure play SaaS. They didn't want services. But it seems like there's a big shift right now. And it seems like tech enabled services is a, you know, kind of, I guess we could say a category that there's a lot of interest in. Have you seen that shift as well? Or was there always interest in what you were doing or how you were doing it? I think there's a category of investors who have always been fine with tech enabled services and a category of investors who are still not fine with tech enabled services who still just want typical enterprise SaaS which in my opinion is kind of a dying category for a lot of reasons. We can talk about it if you're curious. But generally what happens is you have to prove a lot of things over time and prove that things start to work. So we got more and more interest as we proved more and more worked. That's I think independent of the category we operate in. And why is enterprise SaaS dying? Give us the top three reasons that are top of mind for you. Software is easier and easier to build. So it's still hard to build good software products, but it's easier and easier to build. And so as it becomes easier and easier to build, defensibility goes down and it just becomes harder to build a massive enterprise software business just on good technology. Go to market is certainly still hard. And I think pairing, go to market and software can work well. But again, as the cost to build really the software goes down, just the defensibility goes down. And the ability for higher touch experiences that people might consider more concierge and more premium to do that in a cost efficient way becomes much easier. And so things like tech and enabled services that are actually better user experiences become easier to build and have much better financial profiles. And that's where I think most of the winnings will happen. I was telling you pre-interview that I had on one of the founders of pilot.com. Not sure if you know about them, an accounting unicorn. And how he was describing is no founder that's like their ICP. No founder sits there and was like, oh, I just want a better quick books. They're sitting there saying, I want this problem solved. I want bookkeeping solved. And that was the shift for them. We're not the shift. That was the reality for their businesses. They are selling to someone who wants the problem solved. They don't want a software to help solve the problem. They want to solve the problem. And it seems like that's the trend that's happening more and more as well. Yeah. And if you just take a step back and look at the financial profile of most AI heavy companies, the financial profiles actually look a lot more like tech and enabled services than like old school SaaS because LLM costs are not immaterial cogs. So you have lower gross margin businesses in these LLM heavy companies. And so like tech and able services and the best AI companies are actually conversion to similar financial outcomes. So early on you take us back through maybe the first six months. What did that look like given that you didn't come from this world? I'm sure there's a ramp up to learn it. But like take us back the first six months. We had no idea what we were doing. It's the trouble. In the first few months, we started by just understanding the market, understanding all the products that existed. It's been a lot of time with users and understanding what is hard about Medicare today. What is hard about retirement with large today and trying to really gain empathy for our users because we are not the user of the product. Very few people who work a chapter are actual users of chapter's product, which creates a set of challenges. So overcoming that was one and then two just trying to get users. So the first year was me giving and a couple members of my team giving educational seminars at religious institutions, local Senegal, social churches, just saying here's how Medicare works. If you're talking to us, give us a call. And that was actually pretty good. It wasn't scaled to hundreds of millions of dollars of revenue, but it was pretty good to get started to get a lot of good feedback and just get in market quickly. When did you start to transition away from that? That seems like one of those, what's the door dash founder always say, things that don't scale? That seems like the ultimate thing that doesn't sell or scale is you're going around to Senegal and churches. When did you start to shift outside of that? The scaled version of that is you go to mega churches, you go to broadcast networks that are very religious heavy. So there are sort of analogs that do scale, but yeah, just going to Senegal and churches doesn't really scale. The predominant way that people reach seniors in this country across pretty much any product is directly consumer ads, whether it's direct mail, TV, radio, Facebook. We tried that and realized very quickly that it's hard to build trust there because seniors are in a data with a lot of ads, some some scale, some not scale. So we really shifted to what we know well, which is enterprise sales. Like from my time of Palo T. I got pretty good at working with and selling into larger organizations and that case government, but it's really the same thing. And so when we realized that the direct consumer model, at least at that time would be pretty expensive and hard to build really the trust we wanted, lean back into what we know well, which was enterprise. And then what does that look like? If the end customers are the seniors themselves, probably a dumb question asked them like, who is the enterprise that you're selling to? Is that the healthcare company? What does that look like? We work with three archetypes today predominantly. One is health systems and hospitals, so can think of them outside and I or an HCA. They want to make sure that their patients have the best experience in everything they do, but particularly they get a lot of questions about Medicare. They're not allowed to answer them and they have a very short number of people in terms of staff who are able to answer those questions. So we reduce the admin burden and we create a really good user experience so people can get all their Medicare questions answered. So we work with a lot of health systems. Second category is financial services firms and wealth managers. Their clients have a lot of questions and needs when it comes to Medicare and they're not equipped to answer it, so they recommend all their clients to us. And then finally, more and more YouTubers and influencers have a lot of trust with the end user. You mentioned before the interview, Don Lemon. It's a great example where people like Don have a lot of trust with their audience and we're able to sometimes work with these individuals to explain how Medicare works and provide a lot of value to their audience. Take us behind the scenes on what that looked like. Not Don Lemon specifically. We can talk about that specifically, but what did you call that? Was that a PR strategy? Was that an influencer strategy? How did he end up? What program was Don Lemon part of internally for you? To separate this from him for a second, but broadly, we didn't realize that influencers, I mean, none of us come from that world. We didn't really understand the influencer category. The reason we started working with influencers was because we got an introduction to Dave Ramsey's team. I don't know if you're familiar with Dave Ramsey. The memes. A lot of memes about that, right? Yes. He has built one of the most sophisticated and impressive organizations I've ever seen. It's way bigger than you probably realize. We've been fortunate to work with their team and that's been a really great growth channel for us. Their fans have such high trust in them. After that, we got imbounded from a couple of YouTubers who have a lot of trust with their audience. They reached out to us saying they have a lot of people who ask them about Medicare because they talk about Medicare and social security. We started partnering with them. When those channels started doing really well, we started thinking about, is there more of a real motion here we can build around partnering with influencers and YouTubers? That's how that was inception and then was grown. It turns out to be a very strong channel when there's good alignment of trust with the talent, with the creator and with the audience. This show is brought to you by the Global Talent Co, a marketing leader's best friend in these times of budget cuts and efficient growth. We help marketing leaders find higher, vet and manage amazing marketing talent for 50 to 70% less than their US and European counterparts. To book a free consultation, visit globaltalent.co. And is that always you as the spokesperson coming in? So obviously, we've done a lot of them and that was featuring you, but are you doing ads in these channels as well or is like the ad, the long form interview with you? Generally, the long form interview is less technical. Generally, we have the creator read or talk about chapter. Often it's their personal experience if they're on Medicare or their family's experience who have actually tried chapter. But again, we really think about this like an enterprise sale. It's not easy to convince these creators to work with us. They are very skeptical again for good reason because most Medicare organizations are pretty sunny. So we have to convince them that we're different and good and we have to provide a really good experience. They hear from their audience all the time. So they'll hear good things and if we mess up or if they have a bad experience, they'll ask us. So it is much more like an enterprise partnership where we have long form relationships. We're usually exclusive and we have to do a really good job in terms of the product and the experience. So really the value is help make the audience understand how we can help them with this journey. And for the creator, we they care a lot about doing right by their audience and building their brand because that's their entire live. And that's what they've been spending some of them decades doing. So they're going to sacrifice that just for an extra dollar. So it really is first and foremost about trust and brand alignment and then sacking to about economics. Roughly speaking, what percentage of your marketing budget goes into influencer, would you say? We sort of recategorize that. We don't do much marketing, at least the way most people define it. We do have these enterprise partnerships. Actually, most of which are unpaid. So of our paid partnerships, almost all our influencers, but only half of our enrollments are from paid partners. So the vast majority of our partners are unpaid. And when we look at our overall volume, actually this past year, it was really cool for the first time user referrals were the largest single source of volume, which are also unpaid. So there's no marketing underway for the enterprise side of things going after health systems. For example, I mean, there's people. We have a very small lean, very strong team that spends time going after health systems and try to work with health systems and build credibility and help them understand how we can support them. But we don't to any thought marketing to them. - What about on the influencer side, any big learnings that you've had? Yeah, I think a lot of the people listening in, a lot of our audience, most of our audience, like they are B2B influencers. You're definitely emerging now as this discipline that used to be in the consumer world, but now it's happening more in B2B. So do you have any lessons that you've learned from building out and scaling that influencer program that you have? - There's a bunch of lessons on influencers. One is, again, it's actually treating influencers in many ways the same way you treat enterprise sale is a helpful mental model, but there are a couple of key distinction. So one is the entry point matters a lot. In the same way in an enterprise sale, if you go in through the C-suite, it's very differently going through someone junior and going up. So going in through the talent or through the right person matters a lot. They're also often different weird incentives with different agents or managers that you have to be careful of because some of them get different cuts and they can all make sure we're weird. So if you really mind, if you're talking to and what their incentives are, and then I think being willing to test things is really important. The influencers, it probably won't work with every influencer and sometimes it's obvious why and oftentimes it's not. Sometimes it just doesn't work. And so having a model where you make it really low stakes for them to test and for you to test and just very open and honest that if it works, it's amazing and we can both do very well. And if it doesn't, that's totally fine. It's a valuable mental model. - For you, what's top of mind from a go-to-market and a growth perspective as we make our way through 2026, which we're already 20 days into, 19 days into, it's moving fast. - Wild, yeah, coming up on the one of your work. - Yeah, I think for us, we have really figured out a bunch of our go-to-market last year. It was a lot of learning. Last year was our first year working with influencers, which is actually wild, how much they've grown for us. This year it's doubling down on what works and making sure that we're getting as much as we can out of each of our partners in the sense that we want to support as many people as we can to drive as much value for seniors as we can. And then starting to open up a couple additional archetypes of channels that we think should continue to support the growth. But the really cool thing is a lot of the initial work of, can this channel be successful? We figured out last year and now it's like half quickly, can we grow it? Which is pretty exciting. - And what's that team look like that you're gonna be building out there? Are you hiring people who have experience in this industry? Are you hiring people who have experienced influencers? Like, how do you think about that? Especially given that you said, like the industry is kind of a bad reputation. Like, how much do you want to pull people in from like competitors or people that are in this space who may have developed, you know, some of these kind of bad habits? - I have an atypical talent philosophy and some of it is lessons I learned from volunteer. We have never hired someone who's ever worked in healthcare. We have never hired someone who's ever worked in influencer sales if that's what you call it. So no, generally we look for very smart and hungry people who we think are good at their craft but have never done it in the industry that we're doing it in because there aren't any great companies in this industry. So there's not really a talent pool to draw from. But broadly, so your second question, like how are we growing the team? We're not actually growing the team much. So we have two sides of our company. We have our sort of corporate team, which is product, engineering, growth, et cetera. And then we have all of our Medicare advisors. But for our corporate team, our head down has been almost flat for two years as we've over 10X the company in terms of revenue. That's because we hire really good people. We use really good technology and AI to grow. And I think most companies are just dramatically over staffed. You actually don't need nearly as many people as you think and hiring more people often slows you down more than speed to up. - I always see that joke about DocuScience. I think they have like 5,000 engineers or something like that. People always just joke like, "What are these 5,000 people doing?" It seems like they're a little bit over staffed. - Yeah, yeah. I mean, I know nothing about DocuScience, so I don't want to comment specifically. But yeah, that would be my intuition. - And a final question for you. Let's talk about your big picture here. So where do you go from here? Maybe let's go out three years, five years, 10 years. What's the big picture of vision for everything that you and the team are building? - We want to change the narrative of what it means to be older, first in this country and then in the Western world. The way that people conceive of retirement, whatever that means to them, hasn't been updated since the 1960s. And society views our elders as needy and greedy as people who need support. And I think that's a really antiquated and frankly dangerous way to look at this population. People who are 65 today are actually quite young. They are going to have very long life spans. They can use technology in different ways, but very capable ways as you and I can. And there's a massive opportunity to build a new platform to help people across a variety of meaningful aspects of their lives. Today we help them with Medicare and financial implications. We're going to be helping them with a lot more of their financial lives over this coming year. And then eventually we want to help people find purpose, find volunteer opportunities, figure out how to spend their time. How do they spend more meaningful time with their family and friends? How do they create community? That's really where we want to go over time, but we think the right strategy to get there is focusing on health and finances first to enable the purpose. - Amazing. I love it. - It's a fun conversation. I really enjoyed it. We'd love to have you back on in a year or two just to talk about all of the progress that you've made. Before we wrap for anyone that's listening and it just wants to follow along with you, where should we send them? - Ask chapter.org is our main website. You can find me on LinkedIn or send me an email coveagadchapter.com or ask chapter.org. By the way. - Amazing. - Thanks so much, coveag. Appreciate it, man. - Thanks for having me. (upbeat music) (upbeat music)