For our 18th episode of Full Throttle, we are joined by WarrCloud Founder and CEO, Jim Roche. Topics of discussion include how Jim came up with the idea for WarrCloud, the process of creating the company, and much more. Subscribe and don't miss our upcoming automotive industry interviews!
0:00 Intro
4:56 What WarrCloud Does
10:23 The Unexpected Aspects of the WarrCloud Journey
14:29 How Can Dealer's Ensure that Vehicles are Safe
18:08 WarrCloud's Quarterback
Check out The Presidio Group on Linked In - https://www.linkedin.com/company/the-presidio-group-llc/
And The Presidio Group's Website - https://thepresidiogroup.com
For our 18th episode of Full Throttle, we are joined by WarrCloud Founder and CEO, Jim Roche. Topics of discussion include how Jim came up with the idea for WarrCloud, the process of creating the company, and much more. Subscribe and don't miss our upcoming automotive industry interviews!
0:00 Intro
4:56 What WarrCloud Does
10:23 The Unexpected Aspects of the WarrCloud Journey
14:29 How Can Dealer's Ensure that Vehicles are Safe
18:08 WarrCloud's Quarterback
Check out The Presidio Group on Linked In - https://www.linkedin.com/company/the-presidio-group-llc/
And The Presidio Group's Website - https://thepresidiogroup.com
This is episode 18 of Full Throttle, The Presidio Group's automotive industry podcast. I'm your host, Jason Stein Presidio's managing director. On a monthly basis Full Throttle serves as the industry's meeting point for great conversations with leaders across the automotive world.
Installing new technology at a dealership is really significant. Changing human behavior is incredibly hard. And so you know, you had to come in and you had to figure out the dealership network. And then you had to get them new equipment that had to be installed and you had to make sure it worked. And then you had to get people to watch videos to get some preliminary learning and then you had to send people in and they had to train them, then you had to go back, right, because there's turnover in dealerships. And that just the process of change is so significant. And dealers, you know, especially nowadays, they really want to see a quick benefit to their technology investments.
As most know it isn't easy being a serial entrepreneur. There are the ups and downs of identifying the need for a hole in the wall, versus designing the drill that will fix it. Jim Roche, founder and CEO of Warrcloud knows the process and understands the dynamic. He's discovering his own method for solving problems. And it all started with a stack of paper in a dealership. Warranty processing after all isn't new, but the process of handling those claims was a world ripe for disruption. Jim knows disruption having spent time working on the solutions provided by the XTime team before it was acquired by Cox automotive. Now he's firmly in the business of using artificial intelligence to help the industry navigate tremendous change, especially with warranty providing the fastest growing component of the dealer service business. Dealers are looking for new technology services to capitalize on rapid change and driving top and bottom line growth. Warrcloud is attempting to deliver. And judging by the activity at its booth in Las Vegas during NADA people are taking notice. Today Jim talks about the 18 months that turned into seven years on an odyssey to build a system as well as his learnings along the way. What are the guiding principles for Warrcloud? And where will the industry continue to see accelerated advancements in technology as it changes? And how is Warrcloud increasing warranty billings and reducing claims expenses. Jim Roche today my guest on Full Throttle.
Hi,
Hi, this is Jim Roche, CEO of Warrcloud. Welcome to Presidio's podcast Full Throttle.
Now he's fresh off NADA, which means he can finally feel the bottom of his feet. And he also spent some time with a celebrity and in his booth, which we will get to at a certain stage. But Jim, welcome into the program.
Thanks, Jason, it's great to see you and appreciate you having me.
How was nada for you, Jim?
You know, it was fantastic is the short answer. I've been going I've been to many NADAs. And I'd have to say that for my personal involvement, this was the most excitement in terms of the amount of booth traffic, the engagement by the dealers and just the overall energy of the show.
How many years for you at NADA? Just a few, right?
Yes, yes, just a few. Actually, I think this would have been my 37th
I missed one. Because my daughter's birthday was February 3, so I missed that one in 97. But other than that I've been going since the late 80s.
But Warrcloud though, relative infancy for Warrcloud.
Yeah,
Yeah, Warrcloud. This was our second NADA. Last year was good. And this year was great.
Why did you decide to build this business? Jim?
Yeah, great question. You know, I'm a serial entrepreneur in the automotive space have always worked with dealers and particularly in, in fixed operations. And I noticed over the years that if you know, opened enough doors in the dealership, eventually you'd find a little room, and there'll be stacks of paper up to the ceiling, that was the warranty clerk's office. And to me as an entrepreneur who's always looking for ways to bring technology to bear on a problem, stacks of paper indicate inefficiency. But it was an astute service leader friend who was talking about this, my observations. And and he said to me, and I quote, you know, dummy, that's not a stack of paper. That's a stack of uncashed checks. And that was really the epiphany of oh, this is a significant problem. I looked into it, saw no one was working on it, and thought that would be a really good way to leverage technology to bring dealers efficiency and out of that came Warrcloud
Which, for those who don't know, it is basically providing fully outsourced warranty claims management for dealers via an artificial intelligence driven technology platform. AI is everywhere, including in the warranty business.
It is now. It's exactly right, we essentially take what has been for 80 years a manual function performed by one or more employees in the dealership. And we outsource that. And we leverage, you know, cloud based AI technology to bring the the efficiencies that you get from that, which is additional revenue, because we we are know where to look for all of the ways to optimize dealer revenue legitimately, we reduce the cost of claims processing by over 50%, because we're, we're leveraging technology, we improve cash flow, because claims get paid within 24 hours. And we improve all the standard dashboard metrics that the OEM have on the dealer. So it's wonderful, because last time I checked, nobody ever got fired for faster, better, cheaper.
and
That's right. And most might not know that your earlier career was spent with the Xtime team. What did you learn there that you're applying now?
Gosh, well, it's sort of an anti-learning, if you will. So Xtime was a great experience, I joined Xtime when it was a smaller Silicon Valley startup. And then eventually, as I think most No, it was acquired and still as a part of Cox automotive. But what I observed with Xtime is wonderful experiences that were was was that the installation burden on installing new technology at a dealership is really significant. Changing human behavior is incredibly hard. And so you know, you had to come in, and you had to figure out the dealership network, and that you had to get them new equipment, and that had to be installed, and you had to make sure it worked. And then you had to get people to watch videos to get some preliminary learning, and then you had to send people in and they had to train them, then you had to go back, right, because there's turnover in dealerships. And that just the that process of change is so significant. And dealers, you know, especially nowadays, they really want to see a quick benefit to their technology investments. Well, I brought all of those learnings to Warrcloud. Warrcloud as an outsource doesn't need any of that it's a relatively light implementation. You know, we need some credentials, we need to have a couple of conversations with the dealership, but we do all the work. And then very quickly, the dealership is up and running. So that was that was one of many learnings from Xtime and Cox.
And how did you make decisions around let's say, your go to market strategy? In other words, direct sales versus distributor?
Yeah, so I mean, that comes from having done this for over 30 years across multiple companies. But you know, at its heart, the dealership business is still a relationship business. And, and, you know, you can you can find people who will work for you as an agent, or a, or a contractor who have relationships with dealers, but they're your one of many things as they represent. I've always felt that having a direct sales force that knows your product, knows your company, and has those dealer relationships is the best way to to build dealership volume quickly. And so we've invested in a number of people who have that expertise in those relationships. And so far, it's working out wonderfully.
And what are the guiding principles that you're using to build the company or that you use to build the company?
Well, you know, I've got a variety of let's call them management sayings, that I tell my team all the time, just in terms of, of how we want to operate the company. The first one that always makes me smile, I heard this from Keith Jezek, who used to be the president of Cox Automotive, he'd said, You always got to remember that nobody goes to Home Depot to buy a drill. They go to buy a hole in a wall.
Yeah.
And I always took that to mean you know, always remember that we got to solve a problem, right? Don't get enamored of the technology just for the technology's sake.
Another one that is a personal one of mine is lead from the front. You know, I love to be out talking to customers. I love to be in the marketplace. I loved meeting all the people at NADA because that's how you that's how you stay in touch with the reality of what's happening on the ground at the dealership, and that helps you inform how you lead your company. So lead from the front.
Another one, I think it was Woodrow Wilson. Maybe it was Calvin Coolidge, one of one of our former presidents. They said it was a long saying, but the essence of it is that persistence and determination alone are omnipotent. In other words, don't give up. If if, if, after you analyze something objectively, if it looks to be the right thing, keep going. Because eventually, you will get it right. And you will, you will reap the benefits of those things. So those that's a couple things that I sort of tried to instill in the team. They know technology startups are not for the faint of heart. But But keeping those principles in mind help us deliver great, great product and good customer service.
For the faint of heart, not for the faint of heart, what what are you learning? Or have you learned on this journey? That maybe is has been unexpected?
Gosh
Every entrepreneur goes through that cycle of feeling that they have the great product, and then the, you know, it's the valleys and the troughs
I'll tell you the thing that was, so, I had the idea over a number of years, we incorporated Warrcloud in 2014. And we expected to take 12 to 18 months to build it. And it took seven years. So that was certainly the unexpected. It's deceptively simple to describe, it's actually very, very complex to stand up a technology solution. But sometimes ignorance is bliss. So, you know, we kept at it, we were persistent. We built it. And we came to market in 2021. And happily, it's really seeming like it's one of those right idea, right time kind of products. So pretty happy about that. But the that was certainly one of the unexpected. Nobody builds something for seven years.
And how many iterations do you expect you that you'll go through in the next seven years?
Oh,
Oh, I mean, we it's a cloud based, it's a SAS system. So yeah, it's constantly iterating. You know, it's not like, you know, the days where, you know, you did version one, version two, version three, we have multiple versions every week, that mostly invisible to the customer, because we're, you know, we're, we're using it internally, it's an outsource. So other than we have an app that the dealership uses that's sort of the window into war cloud, if you will. But as as a piece of application software, the dealer doesn't interact with it, we handle all that for the dealer, they, they hand us the keys, if you will, to their warranty processing, and we take it over for them. Which they seem to really like.
I guess my question is more around, how can how can Warrcloud change going forward, in order to address needs that maybe you might not even be aware of right now? This certainly is not a static philosophy or, or a static solution. So how far out as technology improves, do you think Warrcloud can get?
Well, so let me answer that in two ways. First of all, you know, we're very close to our customers. And one of the things that they told us early on, was, hey, you're doing a great job, you know, you reach into the DMS, and you get the repair order, but there is supporting documentation that we need to get to you sometimes. And so we developed the app that I mentioned, which we call Chirp, and Chirp is a way for the dealer to, to take a picture of a document and get it to us seamlessly and without a lot of effort on their part. So there's something that we didn't start off that was in the vision. But by listening to the customer, we quickly developed that. And it's, it's turned out to be so popular that we're adding all kinds of features and functions to it. So there's one sort of feature add, if you will, and then thinking forward, what we've come, and again, this is just through conversations with the market, Jason, is our dealers have said, love your what you're doing with OEM claims processing, hey, can you do extended warranty? Extended warranty is a little bit of a it's a different animal. But we're looking at how we extend Warrcloud into doing that. And then through these conversations, again, you know, just listening to the market. We have people who come to us and say, Well, I see what you're doing in automotive, could you do that in heavy truck? Could you do that in power sports? Because these this problem of, of manually processing warranty is everywhere. So as we go forward, I think that you'll see us penetrating more and more of our dealers and doing more services for them but then eventually stepping into other areas of transportation as we grow.
How do you think gym dealers can play a larger role? Maybe in ensuring that their customer via their vehicles on start that question again? I'm sorry? How do you think Jim dealers can play a larger role in ensuring that their customers vehicles are safe? And how might dealers benefit from focusing on let's call them outstanding recalls?
Yeah, you know, the best thing to do with with to keep your vehicle safe number one is maintain it, make sure you get it in regularly for all of the service. And two, as you allude, get the safety recalls done. I mean, they're they're called a safety recall for a lesson, right Jason for a reason, right, Jason, you know, and most of them are issued by NITSA. So make sure that you're paying attention. You know, there's lots of websites where you can go out, you put in your VIN, Kelley Blue Book is one, and it will tell you if there is any outstanding recalls on your vehicle, don't wait for that postcard, or whatever it is, be a little bit proactive about your vehicle safety. Those are the two things that I do. And I'd recommend every consumer do those.
As we go forward, we talked about technology and AI driven technology that you're using on your platform. So we see more of those advancements and even EVs coming on in a larger way. How do you feel technology is going to impact maybe OEM and warranties and maybe recalls in the future?
Yeah, well, AI is is you know, becoming prevalent, or at least in terms of how many people are talking about it. I think the actual adoption of it in automotive is slower relative to maybe other industries. But that's been my observation over the decades is that the automotive industry, when it comes to technology, adoption, is usually a step or two behind other vertical industries. But then the momentum builds, and we really get after it. And AI is really, really good at at recognizing patterns and replacing human behavior for repetitive tasks. And the dealership is and and the OEM, are filled with, you know, administrative, heavy, repetitive tasks. So I think there's low hanging fruit there. So particularly in the back office functions warranty is one, but there are many others, where AI can bring significant efficiencies to dealership operations. And that brings cost savings at a time when dealers are really looking for cost savings. Going forward, I think AI helps in a couple of ways with recalls, and just generally with with vehicle safety and repair. And that is again, they are really, really good at looking for patterns. So AI can help us find when you have a vehicle that has a recall, it can help find you, right, because vehicles change hands, and sometimes that gets lost in the chain. That's really the key, is being able to let you the consumer know that there's there's an outstanding recall on your vehicle. And the second is, is really accurate of both maintenance and failure prediction, right? I mean, we know I can tell you that, hey, your vehicle is due for a 30,000 mile service. But depending on your driving pattern, you may be at 22,000 miles or 42,000 miles. So being able to predict when those need to be done. But even more importantly, hey, your timing belt is a 78% chance that your timing belt is going to fail in the next five months that would leave you stranded. AI is really going to be really, really good at helping predict those so that we can be proactive. There's less accidents, there's less people stranded on the side of the road.
Final thing at NADA Jim, you have a special guest in your booth and it's actually an individual who will be with you for the rest of the year. Tell me a little bit about your quarterback, if you will.
Well, thank you for asking. Yes, we've partnered with, with legendary quarterback, Kurt Warner. He was in our booth at NADA for two hours. He was signing footballs. We did a lot we videoed a little interview with him. And the audience may know not only is he you know, legendary quarterback, Super Bowl winner. But he's also still provides NFL kind of color commentary, had a movie made about his life a couple years ago, and he was the NADA keynote speaker on Sunday. So you know, he's been right in front of a dealer audience and he's a wonderful man. Just a delight. Really great attitude, obviously a winner attitude. He's, he's very philanthropic. So he has a lot of charities that he's involved in. And as we go through 2024 He's just working with us on on motivation. Focus on quality, focus on winning, and he'll be speaking to our customers and the rest of the market as we go throughout 2024 just on his views on that. Really, really exciting.
That is great. Congratulations on that partnership and congratulations on a great NADA. I know that relative to your first NADA, you were, well, let's just say you scored a touchdown a few times.
I saw what you did there.
Yeah
Yeah, our our booth traffic and our interest in Warrcloud was up about 300% year over year, which is just fantastic. And again, kind of Warrcloud's sort of feeling like one of those right idea at the right time things. Sorry, I didn't get to say hello to you but as you know, I saw some of the other team from Presidio. And that's always an eye opening conversation, and I love to hear your guys's insights on what's happening in the market.
Yeah, we appreciate hearing your insights today on the program. Thank you for being a guest. And I know that we'll talk again soon.
Jason is great to see you. Thank you.
Thank you.
Thanks again to my guest, Jim Roche of Warrcloud. And thanks for listening to Full Throttle. Come back to us later in the month for our next interview on this platform. Email me with suggestions JStein@thePresidiogroup.com or go to the website, ThePresidioGroup.com Follow us as well on LinkedIn. Thanks again for listening to the program. We'll see you next time.