API-first companies have modernized eCommerce, but extended warranties are still ripe for improvement...
For too long, only the biggest retailers have offered extended warranties. That’s because the process of creating, selling, and servicing these protection plans is too complex for merchants to manage on their own, and because it hasn’t been worth the investment for large insurers to bring these smaller accounts onboard. This has left a huge segment of the retail market unserved and left customers with limited choices and a lackluster user experience.
It’s time for purchase protection done right — with Extend. As an API-first company, Extend makes extended warranties so simple that any merchant can offer them — driving incremental revenue, increasing purchase conversions, and creating loyal customers with an elegant customer experience.
If you know me, you’re probably not surprised to hear that I’m launching a new company. Startups are what I love to do — especially if it means challenging the status quo and not taking “that’s just the way things are” as a valid explanation. I started my first company, InStadium, in 2000, right after I graduated from the University of Wisconsin–Madison when I was enrolled in Law School at Chicago–Kent. After InStadium, which is still going strong, I launched Riverbank Trading, an equity options trading firm that grew into a 200+ person operation with offices in Chicago, New York, and Philadelphia.
Next came BringIt, a skill-based gaming company that enabled people to compete against each other for money. BringIt was acquired by International Game Technology, and led to my position on the Board of Directors of DraftKings. After BringIt, I started a cloud-based storage solution company called EstateAssist which was bought by DocuSign in 2015. After DocuSign, I followed my passion for crypto and launched 3.0 Capital, a multi-strategy crypto asset fund.
But let’s talk about Extend, and how we are going to modernize extended warranties and protection plans.
Just about everyone has had some experience with extended warranties. Maybe you’ve purchased AppleCare to extend the warranty on an iPhone, or been offered a protection plan by a sales associate at BestBuy to go with your TV or tablet purchase. Extended warranties can give you the confidence to buy when purchasing virtually any item, especially when the coverage includes accidental damage and handling (ADH). With ADH, even if you drop your phone, or your kids spill cereal on your brand-new Beats headphones, you can get a replacement for free right away.
Extended warranties have become a big business. More than $40 billion in premiums are being paid every year for extended warranties on consumer electronics, home appliances, furniture, sports & fitness equipment, jewelry & watches, and more. The extended warranty market for consumer electronics alone is expected to grow to more than $50 billion by 2026. For big retailers, offering extended warranties boosts profits, drives more sales, and increases customer loyalty. In 2017, more than half of Best Buy’s profits — $680 million — came from the sale of extended warranties. Research shows that consumers who purchase extended warranties and service contracts are twice as likely to recommend the retailer where they made the purchase.
Even though consumers and retailers are benefiting from the purchase and sale of extended warranties, there are some key problems that need to be solved. First, there is a distribution problem. Only the top 1% of retailers are able to offer, and benefit from, the sale of extended warranties. Until now, there has been no API-driven solution that could enable merchants of any size to offer extended warranties to their customers. Similarly, there was a time when many online retailers struggled to integrate with and maintain connections to payment processors, making it onerous to accept credit card payment. Stripe, and others, solved the problem by providing a gateway to the payment processing ecosystem that any merchant could connect to through one simple set of APIs. Extend is doing the same thing for extended warranties by building integrations into leading eCommerce solutions including Shopify, Magento, BigCommerce, Salesforce Commerce, WooCommerce, and others so merchants can be up and running quickly with no technical requirements. We will also provide custom integrations through our APIs and SDK for larger merchants who have their own eCommerce platforms.
On the merchant’s website our intelligent decision engine uses machine learning to optimize the warranty offer in real-time. This improves warranty and cart conversions and generates the most revenue for the merchant. We are using technology to offer better extended warranties and protection plans, while also up leveling the overall experience for each individual consumer.
Ultimately, the most important focus for us at Extend is to provide a modern, delightful customer experience that turns what could be a negative product interaction (damaged or defective product) into a positive one. For too long customers who have purchased extended warranties have gotten the short end of the stick. Plans have been full of ‘gotchas,’ and filing and getting claims serviced has been an arduous task. Extend solves that by letting consumers interact with claims representatives any way they want — via text, phone, or through our web portal. Also, because we co-administer every claim, we can enforce service level agreements that require phone calls to be answered in 30 seconds or less and claims to be adjudicated within 48 hours. And consumers don’t have to worry about finding receipts or remembering the date of purchase — Extend stores all of that information, so there is never any hassle.
I’m especially energized about the opportunity to build Extend with a core group of co-founders I have worked with for years.
I have worked with Joe for the last nine years across two successful venture-backed startups. He is a deliberate and critical thinker who can move seamlessly between business, engineering, and product. I joke with him that over the past decade he has probably spent more time with me than his family. I’m not sure if he loves that fun fact ☺.
Michael is our Head of Engineering, and I worked with him from the beginning of Estate Assist all the way through our time at DocuSign where we built DocuSign Payments. He’s an outstanding engineering leader who can always figure out a customer-focused solution to any problem.
Our final co-founder, Rohan, is taking point on Business Development. I’ve known Rohan for 3+ years when we met through some mutual friends at a 49ers game. He is an incredible self-starter with deep connections across the technology and retail sectors. Rohan combines the drive and motivation to get things done with experience leading product roles at Boston Consulting Group’s Digital Ventures.
I’m excited about the opportunity to transform the extended warranty and protection plan space, as it is one of the few segments of retail that has not yet evolved with online commerce. Extend is aligned with merchants as well as consumers to offer easy integrations, material financial benefits, and the kind of customer service experience we all deserve. I know there is a lot of work ahead, but the team and I are excited to take on the challenge of building the next great eCommerce solutions provider.
We are already signing up merchants so if you would like to learn more, please get in touch. We are also actively hiring engineers, data scientists, and customer success agents to work with us out of our San Francisco based office - visit our website to learn more.
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