Trevor Burgess was the founder and chief executive officer for C1 Bank, which went public on the New York Stock Exchange, in 2014, the same year he was named the American Community Banker of the Year. C1 Bank eventually was sold to the Bank of Ozarks for $402 million, in 2016. That same year, he left C1 to travel the world with his family.
Not one to stay still for long, he resurfaced in the Tampa Bay business world with Neptune Flood Insurance.
Bridgette Bello, president and CEO of Tampa Bay Business and Wealth, interviewed Burgess in front of a live, sold-out crowd at the University of South Florida St. Petersburg. This interview has been edited for length and brevity.
What is it like being Mr. September for TBBW?
Let me first address the elephant in the room, or the mask in the room. I’m going to tell everyone two things you don’t want to hear. One thing about myself and then something to be hopeful for. The first thing you don’t want to hear is that given the state of positivity in the state of Florida, and with this many people in the room, you know what the chance of someone having an active infection of COVID is? 99.97%. We’re a data science risk company, so I pay attention to these things. The second thing that absolutely nobody wants to hear is that COVID hurts your immune system [and] that actually helps destroy your T-cells. While I was lucky enough to escape it, being a gay man and coming out in the 1990s, I faced another pandemic called HIV/Aids. So, I have this pretty imprinted on my brain, being really afraid of viruses that screw up your T cells. I’ve successfully avoided getting COVID and I want to keep being that way and my advice to everyone is to try to get it as few times as possible. Now, the hope is, being a science-oriented person, I will say that help is on the way. We have help with HIV/Aids and great antivirals that work. With COVID, we’ve got a mediocre antiviral called Paxlovid. It does make a big difference. Masks work, filtration works. You come to my office, every single office has HEPA filters in it. We’ve got UV overhead. It’s about the safest place, other than the clean room. So, help is coming. There will be vaccines that are much more effective in the future. There’s great help on the horizon. But, for now, you get me in a mask.
I’m going to go back and ask you my original question again. What’s it been like to be Mr. September on TBBW?
So, something really interesting happened with this article which was that, without fail, people who know me really well; my friends, my family and even myself, read that article and said, that’s the best article that’s ever been written about me, and I’ve been featured in the New York Times, the Wall Street Journal. This is the best at capturing who I am, as a person, that I’ve ever experienced. And so, all I can say is thank you for doing such a wonderful job.
The timing of your story was right around when Hurricane Idalia was heading straight for us. Talk about the impact on our community, from a flood insurance perspective, and what that hurricane could have looked like if it had hit us the way it was projected, at one point.
Hurricane Idalia created the largest surge that’s been seen in Tampa Bay in decades, probably the second largest in recorded history. So, it wasn’t a nothing event, ask anybody in Shore Acres. We’ve built a big, artificial intelligence engine that selects which properties we’re going to provide insurance for and then provide a price for them. And most of the time, that’s cheaper than our competitor, which is the federal government or the NFIP, if any of you have heard of the National Flood Insurance Program.
The reality is that a lot of Florida is just built too low. I’ll say we got lucky with this one. Ten, 20, 30 miles closer to land, we would’ve had another two, three, four feet of surge, right? We’re just playing odds here. We’ve been really lucky.
We run something called stochastic modeling, or a Monte Carlo simulation, which just pretends that there have been 100,000 storms that have taken place, and in a big model it runs them and says, okay, what kind of events can happen and what kind of damage can those events do? There are plenty of events that completely flood all of Pinellas County and Tampa Bay. Go back to the early 1900s hurricane that went straight up Tampa Bay, all of South Tampa is under six feet of water. These things can, and will, happen.
I learn something with every cover story, which is a big part of what I love about my job, but I am in a flood zone and I thought that I was covered because I had the National Flood Insurance Program, which is what you’re recommended to get. And, when we sat with Trevor and we did his interview, I learned that basically what you get with that program is coverage for $250,000, regardless of what your house is worth. What you do, if I understand correctly, is what’s referred to as supplemental and that can be purchased for what your house is actually worth. Is that correct?
We compete with the NFIP and we’ll cover from dollar zero, so not just above the NFIP. You wouldn’t buy a Neptune policy and an NFIP policy, you’d buy one or the other, whatever’s going to meet your needs. We’ve discovered that most people, about 65%, have chosen to buy more coverage than is offered by the NFIP. We go up to $4 million of coverage, so we’re able to ensure a lot more houses.
You seem to really love this community. You left, you traveled the world with your husband and your daughter, you could have gone anywhere and, yet, somehow, for some reason, you came back to St. Pete. What do you think is so special about St. Pete?
I always say that St. Pete is to Florida as Austin is to Texas. And that means a couple of things. To me, personally, this is a great arts community. This is a community that cares about the arts, has great music and it has great events that are constantly taking place. We’ve got an amazing mural scene, an amazing glass scene and just the museums that exist here. We do not deserve to have these museums, right? We are way too small a city to have this many absolutely, world-class art collections.
I think what comes along with that arts community is a workforce that is very open to entrepreneurship and technology. We’ve been able to do a great job recruiting people, right out of college, and right out of business school, including many from the Florida state systems, including [the University of South Florida], who have come to work with me at the bank or come to work with me at Neptune. Having this sort of workforce who’s attracted to all the other fun things that are happening in St. Pete makes it a really attractive place to grow a business.
In terms of coming back here after the bank, and after traveling, by the way, if you ever sell a bank, it’s great to take nine months off and go to 13 countries. I highly recommend it. Take your kid out of school for a year. She didn’t appreciate it then and doesn’t now. But she’s 14, so maybe when she’s 30, she will. But, I came back in part because there were several team members here. We had built something great at C1 Bank and I wanted to get the team back together to do something again. A number of my top executives at Neptune came from the bank and I’m super lucky to have them.
How were you able to recruit them to go on this next crazy adventure with you?
I think one of the things that has really set me apart as an entrepreneur is that I had never worked in commercial banking before being a commercial banker and I had never worked in insurance before entering insurance, and those things you can learn, are learnable. What’s much harder to learn is how to think about a business, how to have product/market fit and how to solve problems that consumers are facing.
And, for me, as an inventor, I have 14 patents. I like thinking about how we can use technology to solve problems. In the case of Neptune, I’ve taken an industry that traditionally does what’s called underwriting. So, selecting and pricing risks with humans. And humans have been doing that forever. As long as insurance has existed, from Lloyd’s of London to today, most insurance is underwritten by humans who have come up with technology.
There are some things that machines are better at than humans. There’s a classic study that’s done in insurance where you have a human underwriter and you have a very ugly house. Let’s say it’s purple and it looks really disgusting. The underwriter would say, I’m not interested in that house, but this white picket fence one over here with shutters, it’s beautiful, I’ll ensure that one. Guess what? The hurricane cannot see the color of the house so that has no impact on whether there’s going to be a loss or not. So, by removing what’s called “noise,” which is human brains, from the system, we’re able to have better results. That has made a huge difference in how we operate.
Humans are great at some things, like selling and communication, but more and more, I think, we’ll find as our lives progress here, as AI is doing more and more, humans will be for good human functions. And there are a lot of things that machines, fortunately or unfortunately, can do better. In the case of protecting us from climate change, and flooding, I would say good, the better we can do that, the better.
Speaking of AI, one of the things you talked about in the interview that I found fascinating was this personality test that you make everybody take before they apply [for a job]. You swear by this test. You will not talk to somebody until they take this test. Tell us about it.
So, there are two tests that we give every single applicant. The first is an IQ test. I am way too annoying to work with people who I can’t work with. So, we have set a bar and you have to get a certain IQ to come to work with me. We set that at about 15% of the U.S. population. It’s a big group of people, but you need to have the raw horsepower. The second thing we do is give this personality test to really understand what motivates people. And it’s called the Culture Index. And, for anybody who hasn’t done it before, I really recommend it because it’s scary. It’s like holding up a mirror to your face to really understand who you are from this crazy test. The consultant who ran it for us, when I took it, he looked at my results. He said, “We knew that it was theoretically possible for someone to get this result. We had just never seen it.” I’m not sure if that was a compliment or not. Didn’t really seem like it.
The reason we do this is because humans discriminate. So, before we meet anyone in person, see their resume or anything else, we give them these two tests. And guess what? You hire a lot more women, you hire a lot more gay and lesbian people, you hire a lot more people of color. It just happens, naturally. The face of my business has always looked more like the face of my community because we do a sort of blind hire now. We do some interviewing, but those two tests probably make up about 90% of the decision.
I started out by saying Trevor was really intense and my personal opinion is that he’s so smart that everything that is coming out of his mouth has been processed in his head 15 times. But, a little birdie told me that you actually have a person on staff whose job it is to make you nicer. Is that true?
For the record, I asked him if any questions were off-limits and he said, “No, I’m an open book.”
I think it’s really important that all leaders understand what their failings are. And I have many, this is one of them. I can come across as a little intense and a little condescending if somebody is not getting it as fast as I am. But not everything operates the way my brain operates. I’m the only one in a room of 200 wearing a mask and I’m comfortable with it. So, it’s like, there’s a screw loose somewhere.
He means with all of us, not him.
You should ask my husband of 27 years, and he will tell you, it’s me.
Ten years ago, at C1, we started a management training program. We did a public/private partnership and did a management training program. I wanted to take kids right out of college, and MBA programs, and teach them about banking, even though I had never been a banker before. But we were going to teach them about banking, finance and economics. It was an intense program, like a mini-MBA, in a very short amount of time.
If you passed that [program], then we were going to give you a permanent job. And one of the guys [from the program] who we gave a job to was named John Carlon, who’s now been my business partner for 10 years, and he was my chief of staff at the bank and then left the bank when I left and worked with me on every venture along the way. A big part of his job is to help take the edge off a little bit. So, he’ll tell me, “No, let’s tone that down. Let’s communicate this a little differently. Let’s think about these people who we haven’t thought about.” It’s helpful to me, to have that added perspective and [it] has made me a better person. I’m very thankful to have him.
Based on what I know about you, you have never failed at anything.
I think what’s different about my outlook on failure is that it’s a necessary part of business. But what I believe in is to fail fast and course correct from there. We’re a software development company. We’re building this artificial intelligence engine, constantly. There is not a release that goes out without bugs. We do not operate to 100 percent. We’re trying to operate to 95 percent and then fix. We’ve done 152 versions of the system in the past five and a half years. So, almost deliberately, we’re trying to go so fast that it’s not perfect.
I don’t have some grand story where I’ve completely failed, in part, because I work too hard. I will make it right, right? We will get there. We will correct it if we are heading down the wrong path, we will find the right path. We’ll do micro-correction after correction, after correction to get there.
The best advice that I ever give to anybody is if you want to get ahead in the world, work five hours more. And people always say, well, five hours more than what? And I say five hours more than you’re working now. And, if that’s not working, add five hours more. It is an effort game.
I think it came from my childhood, being raised by a single mother who had nothing, who had food stamps to feed us, who sold her engagement ring to put food on the table. When you’re hungry as a kid, you grow up not wanting to be hungry and willing to do whatever the hell it takes to win. And I think that’s been the story of my American dream. The willingness to do whatever is necessary, ethically of course, to win. That’s what I recommend. Work five hours more. ♦