brad cor­dova had deeply per­sonal rea­sons to start a com­pany to com­bat dis­tracted driv­ing and tap into the new mar­ket for data-driven in­surance.

Forbes - - CONTENTS - By Su­san adams

Brad Cor­dova had deeply per­sonal rea­sons to start a com­pany to com­bat dis­tracted driv­ing and tap into the new mar­ket for data- driven in­surance.

Street smarts: At True­mo­tion, Brad Cor­dova built a mo­bile app that can tell whether you are tex­ting while driv­ing.

In early 2014, Pro­gres­sive in­surance held a con­test to choose the best cell­phone app to play Big Brother to its pol­i­cy­hold­ers. The na­tion’s fourth-largest auto in­surer wanted to track driv­ers’ mileage, time of day on the road and whether they were slam­ming on the brakes. Eleven com­pa­nies en­tered. One was True­mo­tion, a Bos­ton-based startup co­founded by Brad Cor­dova, now 27, an MIT grad­u­ate school dropout who had taught him­self to code at age 7. He had $3 mil­lion in seed fund­ing but no pay­ing cus­tomers.

Be­fore the con­test kicked off, Cor­dova thought his team had per­fected their app—only to re­al­ize it was drain­ing too much bat­tery power, which meant they had to reengi­neer it from scratch. “It was like climb­ing a moun­tain with a gun to your head,” he says. They worked 18-hour days feed­ing data into ma­chine-learn­ing al­go­rithms, then test­ing mul­ti­ple ver­sions on thou­sands of driv­ers they re­cruited through Ap­plause, a Bos­ton user-test­ing out­fit. That Septem­ber, Cor­dova learned that True- Mo­tion was one of three fi­nal­ists, but Pro­gres­sive wanted fur­ther re­fine­ments, like the abil­ity to track whether users were tex­ting while driv­ing.

Cor­dova’s ten-per­son team got lit­tle sleep for the next four months as they ground through thou­sands more data tests. In April 2015, True­Mo­tion tri­umphed, sign­ing an eight-fig­ure deal with Pro­gres­sive that has helped it land eight new cus­tomers and another $10 mil­lion in ven­ture fund­ing. Forbes estimates True­mo­tion’s 2017 rev­enue will ex­ceed $15 mil­lion.

True­mo­tion is hop­ing to pull ahead of a pack of star­tups cap­i­tal­iz­ing on a tec­tonic shift among auto in­sur­ers. For decades, in­surance com­pa­nies re­lied on ac­tu­ar­ial cat­e­gories like gen­der, age, ad­dress and past ac­ci­dents to size up pol­i­cy­hold­ers’ risks. Now they’re re­al­iz­ing that “us­age-based” data on in­di­vid­ual driv­ing habits are more re­li­able. Safe driv­ing scores, says Pro­gres­sive man­ager Dave Pratt, “are the best pre­dic­tor we have of who will get into an ac­ci­dent.” A high score can earn a 20% premium dis­count from Pro­gres­sive while bad driv­ers can see hikes of 10%.

Pro­gres­sive pi­o­neered the field when it started col­lect­ing driver data in 1998 with a gad­get in­stalled un­der the hood, then switched to a dash­board plug-in. To at­tract more users and save on hard­ware, it wanted a mo­bile app that didn’t have to be turned on and off. The app would also have to de­tect whether the user was be­hind the wheel and not rid­ing in a pas­sen­ger seat. In ad­di­tion to

GPS re­ceivers, cell­phones have sen­sors like ac­celerom­e­ters and gy­ro­scopes that can mea­sure speed and move­ment. Among the in­di­ca­tors Cor­dova’s team used to de­ter­mine that users are driv­ing: sen­sor read­ings that show they’ve swung in or out of the car from the left-hand side and that the phone is se­cured in a dash­board mount.

For Cor­dova, who sets his alarm for 4 a.m. and spends two hours read­ing re­search pa­pers on ma­chine learn­ing and ar­ti­fi­cial in­tel­li­gence, the chal­lenge was nir­vana. “If I’m not solv­ing dif­fi­cult prob­lems,” he says, “I’m not happy.” He sleeps on a sen­sor-equipped mat­tress pad that logs his tosses and turns and rates his moods through­out the day on a scale of one to ten us­ing an app he de­signed. “If you can’t mea­sure it,” he says, “you can’t im­prove it.”

He traces his pas­sion to track and im­prove driv­ing habits to a day 11 years ago in his home­town of Be­len, New Mex­ico. A driver on a cell­phone rammed into his Hyundai, smash­ing Cor­dova’s head through the driver’s side win­dow. So much blood flooded into his eyes that he thought he’d gone blind. A se­vere con­cus­sion caused in­tense headaches, dizzi­ness and con­fu­sion for the next year. “It re­ally scared me,” he says. “My big­gest fear in life is some­thing hap­pen­ing to my brain.”

Nonethe­less, he won a schol­ar­ship to Notre Dame, where he ma­jored in physics and math. While work­ing to­ward a PH.D. in com­puter sci­ence and elec­tri­cal en­gi­neer­ing at MIT in 2012, he took an en­trepreneur­ship class where he met Joe Adel­mann, now 35, a for­mer Air Force engi­neer whose fa­ther, like Cor­dova’s, worked as a truck driver. They bonded over their in­ter­est in driver safety, and af­ter learn­ing that auto in­sur­ers were track­ing pol­i­cy­hold­ers’ driv­ing habits, they de­cided to start a com­pany that could col­lect safety data through a mo­bile app.

The pair lucked out when Jon Mcneill, 49, a for­mer Bain con­sul­tant and vet­eran of six star­tups, heard their idea at a pitch ses­sion hosted by Har­vard and vol­un­teered to in­vest. Mcneill pulled in Scott Grif­fith, 59, for­mer CEO of short-term-rental com­pany Zip­car, who agreed to serve as True­Mo­tion’s CEO, tak­ing eq­uity but no salary. Af­ter Grif­fith tapped con­tacts at ven­ture firm Gen­eral Cat­a­lyst (early in­vestors in Kayak and Snapchat), Mcneill scored the rest of True­mo­tion’s seed cap­i­tal from for­mer col­leagues at Bain Cap­i­tal Ven­tures. Seven months af­ter launch, Cor­dova aban­doned his doc­toral pro­gram. Last May, the com­pany moved its grow­ing staff, now 39, into a 7,000-square-foot space on the sixth floor of a con­verted leather fac­tory in down­town Bos­ton. (McNeill, a True­mo­tion board mem­ber, joined Tesla as pres­i­dent of global sales in late 2015.)

Pro­gres­sive has rolled out True­mo­tion’s app in four states, with plans to go na­tion­wide by year-end. Thomas Hal­lauer, a con­sul­tant for Ptole­mus, a com­pany that ad­vises in­sur­ers and their ser­vice providers on us­age-based strate­gies, says only 7.5 mil­lion of the 200 mil­lion in­sured driv­ers in the U.S. par­tic­i­pate in vol­un­tary driver-safety pro­grams. But with com­pa­nies like State Farm, the na­tion’s largest auto in­surer, of­fer­ing dis­counts of as much as 50% to driv­ers with high scores, the num­bers are es­ca­lat­ing. Hal­lauer says Cam­bridge Mo­bile Telem­at­ics, which says it has some 36 cus­tomers in 14 coun­tries, is the U.S. mar­ket leader, but “there is plenty of busi­ness to go around.”

Last sum­mer, True­mo­tion, in part­ner­ship with one of its in­surance cus­tomers, ran a test on 2,800 driv­ers. Among those who used its app for six weeks, dis­tracted-driv­ing scores im­proved by an av­er­age of 20%. In July, True­mo­tion re­leased a free app that lets driv­ers know when they mess up. When Cor­dova tried it, he lost points for hold­ing his phone. “I had for­got­ten my cell­phone mount in the of­fice,” he says. “My score was a hum­bling re­minder.”

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