St. Pete x Podcast with Paresh Patel, HCI Group

Opportunity over fear: Paresh Patel shares his fascinating professional evolution, entrepreneurial philosophy and thoughts on diversity

On this episode of SPx, Paresh Patel, CEO of HCI Group, joins Joe Hamilton in the studio. In this wide-ranging conversation, Patel shares his introduction to Tampa Bay in 1985 with tech company Paradyne, his professional evolution through the years in tech, real estate, banking and insurance, and the various opportunities that have presented themselves at unexpected times. Patel talks business philosophy, values and diversity at HCI Group.

Key Insights

  • Paresh Patel is chairman of the board of directors and the CEO of HCI Group.
  • HCI Group was founded out of Homeowners Choice, one of the larger insurance carriers in the state of Florida for homeowners and property.
  • HCI Group has a number of initiatives under its umbrella, including Greenleaf Capital, a real estate operation; Exzeo, a technology division; TypTap, an insurance company; and Clauddaugh, a reinsurer based in Bermuda.
  • As Patel explains, his rise in the insurance industry was not a manifestation of any dream he had, but rather the realization of opportunity.
  • It all started during the 2005-06 insurance crisis, when major insurance companies were pulling out of Florida. When others saw fear, Patel saw opportunity. That was the genesis of Homeowners Choice.
  • A few years later, during the Great Recession, real estate was selling for a fraction of what it was selling for a few years before. That started Greenleaf. Now, HCI Group owns Tierra Verde Marina and Gators Saloon on John’s Pass.
  • Patel takes some business wisdom from Warren Buffet. For example, he doesn’t look at quarterly numbers, and he plans for the long-term.
  • Patel came to Tampa working for a tech company called Paradyne in 1985, eventually he moved to consulting and then became employee no. 40 at Global Crossing. That company grew from 40 to 15,000 in the span of two years.
  • On choosing where to spend time: “About five, six years ago I actually sort of sat down and looked at it. And I was chairman of two publicly traded companies, I was chairman of a local bank, and a local chamber of commerce … And so, at some point it just seemed like this was eating up all your time.”
  • Patel enjoys the process of building. When he began at First Home Bank, it had a zero-star rating. When he left, it was a four-star bank. “What isn’t me was to say now that I’m chairman of a four star bank or eventually a five star bank then I will do this for the next 30 years. It was time for somebody else to enjoy the fruits of that and that’s why I stepped aside.”
  • HCI Group used the same principles that Apple did when building the iPhone, they didn’t want residual expectations from previous platforms to influence TypTap’s creation. Patel chose the team for TypTap intentionally for that purpose.
  • Patel started his first bank with local entrepreneur and lawyer Marty Traber. They started North Star bank with no banking experience, raising $18 million and opening in 2007, right before the financial crisis.
  • On diversity: ” what you can do is create a platform and then lots of different people show up and add their own special sauce.”
  • Board diversity: “If nobody ever invites you to the table, how do you get the experience? So, that’s why we started this program and we bring two observers on every year, but we make them act and behave like they’re full-fledged board members. And the reason for that is the best way of teaching somebody is making them walk the walk, right? And it’s worked out spectacularly.”

Table of Contents

(00:00 to 01:10) Introduction

(01:10 to 04:53) About HCI

(04:53 to 08:35) Patel’s Journey Through Careers

(08:35 to 12:35) Review On Personal Time

(12:35 to 14:00) Mapping the Future

(14:00 to 19:15) Culture and Brand Risk

(19:15  to 20:56) Challenges With TypTap

(20:56 to 23:49) The Business of Banks

(23:49 to 28:26) Patel’s Life Experience and Company Values

(28:26 to 34:52)  Diversity

(34:52 to 38:40) HCI’s Board Program

(38:40 to 40:49) Conclusion

Full Transcript:

Joe:  Joining me on SPx is Paresh Patel who is the chairman of the board of directors and the CEO of HCI Group. Welcome.

Paresh:  Thank you.

Joe:  HCI is known as an insurance company, but it’s got some more things going for it than that. There are four, four and a half divisions. I think it would be great to lay those out before we dig in so we know what we’re working with.

Paresh:  Absolutely, so HCI was originally founded with one insurance company called Homeowners Choice, it’s one of the larger insurance carriers in the state of Florida for homeowners and property. And after that a few years later we started what became Greenleaf which is a real estate operation. We own various amounts of real estate around town some of which you’ll probably know. Then we started Xeo which is our technology division which writes all the software and all those kinds of things. And because it made such great products we needed somebody to see it we started TypTap which is actually built entirely on Xeo products, which is our insurance company and then finally we also have is Cloud which is a reinsurer based in Bermuda that reinsures some of the insurance companies. 

Joe:  That’s a lot of interesting things to dig in there. Let’s start with a jump from Homeowner’s Choice into real estate. So, what was sort of the internal workings that led you- I mean, it’s pretty straightforward just to start the insurance piece of it. Did you know when you started that, that just because of a division that you had that a lot of these other pieces would eventually fall into place or was that more of an opportunity based move?


Paresh:  My life has been a series of opportunities, right? I wasn’t growing up someday going, “You know, someday I want to run an insurance company.” It was never in my planning horizon. How actually the insurance company originally came about was the insurance crisis of 2005 and 2006 when Allstate, State Farm, Travelers, were all pulling out of the state and everybody said this is terrible. Well, you live in Florida, you sit and you go people will have to do insurance here, somebody will have to provide it. So, if nobody else is going to do it, why don’t we start a company to do it? And that’s what the genesis for Homeowners Choice was. And back to this opportunist thing a few years later the great recession is upon us and there is real estate selling for a fraction of what it was selling for a few years before. And we needed expansion space so we bought an office building. And when we bought it was 85% vacant. No bank would lend you a dime on it. And then a few months later we bought Tierra Verde Marina. It was at a bankruptcy auction. A year after that we bought what’s basically the Gator’s Saloon on the south side of John’s Pass. And same kind of thing, it was a distressed sale. We sort of ended up buying things because we could see opportunity where everybody else saw risk and that’s really been the story of the company.

Joe:  And that’s a great side benefit of having a healthy financial station where you have this cash that you can then when the economy is in rough shape then cash is more powerful because the prices go down and you can really take an advantage of it. 

Paresh:  Absolutely, Warren Buffett said, “Be greedy when everyone is fearful. And be fearful when everyone is greedy.” We try to live by that.

Joe:  And since you mentioned Buffett I know that he’s been someone you’ve turned to and watched and how he’s done business. What are sort of the key takeaways in how Buffett conducts himself that you’ve tried to emulate?


Paresh:  A couple of things, and one is in terms of the company itself. We don’t worry about quarterly numbers. And we do worry about them, but we don’t let them drive our actions any more than they necessarily have to because we’re in this for the long haul. So, when we bought the real estate for example it wasn’t what people thought about what that value was today, it’s what it will be in the future 10 years down the road. So, we always try to take that long vision of everything and it prevents us from doing what’s the phrase, short-termism.

Joe:  Right, we were talking about the opportunity earlier, one thing that jumped out at me is obviously you’re coming into a place where other insurance companies in Florida are leaving and you said, “I’m going to rush into there.” Which is sort of along the lines of Buffett’s advice. Before that you were an employee and doing process work and things like that if I read correctly. So, this was your first foray into being a founder and actually starting something. So, could you sort of dig into how that rolled? 

Paresh:  For my career at HCI Group, what had happened was I came to Tampa working at a high tech company called Paradyne back in 1985. I was there for about five years and then a small number of us went off to be entrepreneurial and start companies. And along the way we ended up with this one company called Tech Force. And if you bought a PC in the 90’s and it broke under warranty we would be the guys who would come out there and fix it. I think we did every manufacturer one time or the other except for Apple and Dell at one time, right? That’s what we used to do. That company went public in 1994, I believe and by then I’d left and I was busily consulting around the world working on telecom companies and that kind of stuff. And then I ended up in 1998 at the start up called Global Crossing which I eventually joined as employee number 40. To put this into perspective what incredible days those were that was the summer of 98′ I left in May of 2000, the company had gone from 40 to 15,000 people in under two years. It just was crazy.

Joe:  And what was your role there?

Paresh:  I used to run their customer care and billing and basically the back office.

Joe:  Got it.


Paresh:  So, I’d gone from being an engineer at Paradyne through all these different career changes to now I was your administrative expert in various processes and things of that nature – pushing paper. 

Joe:  When the first group of you left Paradyne, was it a situation where you were just really tight with the group and you knew you wanted to do something together and you were looking for business? Or the business presented itself and the group formed around that was most appropriate for the business?

Paresh:  No, actually we didn’t leave as a group, we just happened to individually leave. And then everybody is out there trying to do their own thing and occasionally somebody would need help and they would call, “Hey, can you help me out with this buddy?” And you’d go help somebody out. And somewhere along the way the whole tech force thing evolved, but there were half a dozen people but there was never a vison of this it just gelled into that as life went along.

Joe:  That’s amazing that it went all the way to a publicly traded company.

Paresh:  Yeah, so if you sort of think about it HCI was my third bite of the cherry because it was Tech Force as a start-up that became public, then Global Crossing was a little tiny operation, became public and huge at one point, and then HCI is the third one. 

Joe:  And so, you know, moving from engineering to a tech company to back office and administration to insurance to real estate, you know, it seems that you have a pretty robust business acumen, you went to school in Cambridge. How would you sort of describe your openness to opportunity or how you go about choosing where you are going to spend your professional time?

Paresh:  In terms of now where I choose professional time at one time about five, six years ago I actually sort of sat down and looked at it. And I was chairman of two publicly traded companies, I was chairman of a local bank, and a local chamber of commerce. And then you sit there and you go and what do you do in your spare time? And so, at some point it just seemed like this was eating up all your time. And so, over the last few years have stepped back from most of those things, HCI being the one thing that still continues. And it was partly also to open up to new ideas and new opportunities. But it’s one of those things of if you’re going to do something different you have to let go of some of the past, yeah?


Joe:  And so when you went through that reflective process a lot of times people do that when they’re coming into things, there’s an excitement, a possibility of anything or just seems like a place with great gravitas that it’s an asset to be connected to. And then once you process it and have it under your belt and you’re there than the actual nuts and bolts of the meaning of it, you know, it’s always on a decline for the most part. And so, how did your sort of meaning as it’s attached to time professionally change when you went through that review period?

Paresh:  Actually you end up almost in the reverse, right? So, let’s talk about the bank, First Home Bank. When I became chairman of the board, banks have a star rating, right? Five stars which is the most healthy bank, zero stars means that people are worried about you, extremely worried about you. So, when I started at First Home Bank and became chairman of it, it was zero stars. And there was a lot of work to be done, there were a lot of people to lead and work through all the bad loans, etc. But every year I was there we got one more star, and then we finally got to four stars and now it’s a regular bank and I enjoyed the challenge of getting it there. What isn’t me was to say now that I’m chairman of a four star bank or eventually a five star bank then I will do this for the next 30 years. It was time for somebody else to enjoy the fruits of that and that’s why I stepped aside. Most of these endeavors I talked about when I joined were very challenging situations. By the time I left they were hopefully in much healthier places. If you’re doing team sports, you don’t want to leave your team when they’re in a deficit, that’s the difference that you get into. But unless you’re going to be for the team forevermore, the only other time you can leave is when they’re in the positive, yeah?


Joe:  So, digging into the challenge one thing I find when people move up through their careers the challenge of going from a negative situation to a neutral or positive situation can be great and meaningful and fun, and it sort of gives you a path to walk down, right? You know you can just get from here to there. And then after a time of doing that the mindset shifts where what becomes more valuable is taking someone who is in a good situation and trying to build them to an extraordinary situation which is a lot more amorphous, right? It’s just a more open-ended where you almost have to define what extraordinary is when you have a rating that’s zero and you get to five that’s a path that’s laid out for you. But to go from five to a theoretical seven or eight is an undefined path. And it feels like that’s maybe where HCI has come into play for you where you can mix the different products and bring in and use technology to start expanding. 

Paresh:  Absolutely, that’s exactly where life has been very fortunate because it’s multiple dimensions, right? One, I’m getting older and I will tell you we have people who as I look at them and I go I wish I were that smart when I was their age. We have people that are amazing, right? But they need to be developed, they need the experience, they need to be given the opportunity. And I end up trying to help mentor them along those lines. And because you can see the possibilities of how far they could go, you roll back 30 years where I was starting out, this is where we are now, it’s not where you would start the journey, it’s where you finish. And people have potential, tremendous potential. So, yes, there’s a lot of my time these days that goes into mentoring because you’re trying to go for that superb outcome. The other thing is, you know, HCI is perfectly healthy and everything else, it gives you the luxury of stepping back, looking up and saying what if? What could we do bigger? What could we do better? And that actually pays back, it keeps you young and trying there’s always the next mountain to conquer. But the other side is that it inspires and motivates all these other people that are also in your charge to aspire to a better tomorrow. And ultimately you could sum up mankind throughout history that way, everybody is always striving for a better tomorrow, right? Columbus didn’t sail across the ocean because he thought it was going to be worth something at the time, he wanted a better tomorrow. Everybody migrated to America for a better tomorrow. 


Joe:  And part of that, you know, there is a saying that everybody says if you don’t innovate yourself somebody will innovate you and part of that mindset is led to TypTap which is first moving into technology and then using technology to further your reach into consumer facing things. So, can you walk through the process of concepting that you needed this new thing and this new way to exist and how that ultimately led to building a flood insurance front end? 

Paresh:  Yeah, absolutely. So, I guess this originates from my tech background in a really weird situation. The first company I went to work for was called Paradigm and they were in the Tech 25 in 1983.

Joe:  There were only 27 at that time, right?

Paresh:  Yeah, well not only that the funny thing is there are only two survivors out of that 25 companies, right? I think it’s like Apple and IBM, everybody else is gone. It’s an interesting thing you sort of talk about doing things in the long haul, etc. Almost all businesses go away within a lifetime. And so, you sort of sit there and have that thing, and why do they go away? Because they decided to go away, technology changes, you know, Atari was a great computer, nobody buys that stuff anymore, right? It’s just a toy now. Those kinds of things sort of come and go. And so then you look at any business you’re in, you can kind of come to that conclusion. And so, the question is oh, do I just want it to be around for a little while? Or maybe we can have some fun. Maybe we can see what’s possible. And if you have the luxury of being able to afford the resources for that why wouldn’t you try, right? You know, back to that what if?

Joe:  Sure, and so when you thought about going this direction and making this new brand and investing this money, beyond the standard business risk what were sort of the culture or brand risks that you considered? 


Paresh:  Well, actually, there are several risks that always show up. And this happens in all companies, right? When a company is in a bad situation nobody believes in the company and all employees feel like we’ll never succeed, right? Become chairman of a bank with zero stars and you kind of have a lot of that. The other thing that happens is when you do succeed and you’re doing well you have the reverse situation occur, oh, we’re doing so great, why would we change, we know everything, right? Which also isn’t true either. So, how do you oscillate back and forth between that? And that’s what some of these issues lead you into is you’re comfortable doing what you’re doing but why don’t you try to do something bigger, better, right? And in order to promote that culture how do you actually implement and actually make that transition happen. Luckily I had a tech background rumored stories about Apple. So, when Apple made the Macintosh because they were known for the Apple II at the time, they took a group of people and they marched them across the parking lot that was the Macintosh theme, they left behind juggernaut that was Apple. It worked out very well, and when we were starting Typ Tap we kind of did the same thing so that we leave behind the Homeowner’s Choice mindset, the stuff that we already knew that worked, not that it was bad or wrong with any of that, but if you’re going to think of a whole new thing you can bogged down by your past mistakes or your current successes both of which tend to make you want to do more of the same. And by the way, Apple repeated that several years later when they were making the iPhone they wouldn’t hire anybody who had worked at Motorola or Seaman’s or those kinds of places because those engineers all came with ideas of how to make a phone. And actually if you asked any of them the first thing you do when you design a phone is put a number pad on it, right? Innovation of an iPhone is that there is no number pad on it, yeah? 

Joe:  Yeah, so how did you go through that process of choosing who to march across the parking lot or who not to? And how did that impact the team?


Paresh:  Actually, you know, we as you always thought with these things you had one person and then you added a second and then you added two more. And it just slowly grew from that. And again, it’s one of those things because I guess my value added in the mix was making sure I added the right people to the team, but we also kept a lot of the other people away from influencing them, yeah?

Joe:  So, when you started with that one person was the idea of a consumer facing flood insurance quote system or homeowner’s insurance quote system there or was it an intention at that point and the rest came later?

Paresh:  Well, here’s the thing, right, and in terms of how far we’ve come along in TypTap, think of it like Uber. You know, everybody uses Uber, everybody gets it, right? But in order for Uber to exist you need smartphones, you need GPS, you need Google Maps, right? You need cellular data networks. There’s a whole slew of underlying technologies that build up and then suddenly you have Uber and you go I invented Uber, well you needed all the other stuff. We kind of had that challenge, so we step-by-step started building the blocks. So, we’ve really been at it for about eight years building databases, building Mongo program code and everything else, right? So, as we’ve sort of come alone it finally came together about three or four years ago. But then you have to decide does it work?

Joe:  Right, and those would have been useful for the parent company as well and just by adding the customer facing element to it, was that the big innovation internally?

Paresh:  Actually the customer facing an item, think of again with Uber. If you’re working in 1990 to build Uber, when you finally actually let somebody order a cab, that’s the customer facing one. It’s the tip of the iceberg, it’s the iceberg below it that’s really the engineering challenge, right? And so we worked on all of those things for several years and then suddenly when we put the piece of the iceberg on top, wow, the world took notice.

Joe:  We had a conversation about this previously, but it’s a real success story, you know, it sort of goes under the radar at least in Tampa Bay because it was internally funded and it came out of a publicly traded parent corp. But in and of itself as a stand-alone start up that was funded and grown it’s just one of the top performers in the area. 


Paresh:  Yeah, no absolutely. And by the way, we’re also not known nationally either because we didn’t go about doing all of the normal things a start-up would do. And no disrespect to any start-ups, normally when you do a start-up, you have all these issues of why you need additional funding and a capital raise. So, you end up devoting some time to marketing what you’re doing and someday to change the world and all those things you have to do. We took a very different tact, it was a let’s make sure it works. Unless it works- Well, we also don’t want to be embarrassed, unless it works we are not going to go tell the world how great this is going to be and then go well, it didn’t quite work. So, we had to wait till it worked before we said anything to anyone.

Joe:  Well, there are a lot of great technologies that work that are better still underutilized. And given the things that a lot of back office stuff that you had done you say in the last 15 to 20 years, how have you found the challenge of playing in the same space as the geckos and that sort of things to get consumers to the site? Has that been harder than you thought or about what you expected? 

Paresh:  Actually, it’s been about what we expected. In some ways because we’ve gone our independent road and had when we started TypTap, right? And Kevin Mitchell who is president of TypTap and we gave him quite a challenge when we started the company because he took the challenge anyway which was we’re starting a new insurance company, we’re going to call it TypTap which it’s not called Old Liberty, or any of those kinds of nice solid insurance company names, something really different, TypTap. You have no agents, you’re going to go build up your own agents from the start. Your main competitor is the NFIP and they pay these agents 20% commissions, we’re only going to pay 10% commissions. And oh, by the way, we have to make a profit, and good luck.

Joe:  And he still took it?

Paresh:  He still took it and he succeeded, right?


Joe:  Yes.

Paresh:  That’s the whole point that you didn’t have a company where you had oh, we’re starting a company and State Farm is backing it and you know we pay the highest, this, that, and the other. We put a lot of handicaps along the way to the company because if the technology worked it would still work. You know, if it didn’t work then all of the marketing dollars behind it doesn’t suddenly make it successful, yeah?

Joe:  Sure. And before we get too far down the road, jumping back you mentioned the bank and I’ve always been a little bit fascinated. I know lots of people who invest in real estate and there are sort of normal things, you know, buy into a restaurant or whatever, but there are a select few people who open banks as sort of a business endeavor. So, can you sort of coming in, because the first bank, North Star, you were a founder of and you came onto the other board later, but as you were contemplating this move kind of walk me through the process of how you saw a bank and what your intentions were with it and just how you go that route?

Paresh:  Yeah, absolutely. So, how the first bank North Star came about was I had retired in early 2000. And I was around Tampa Bay socializing with people and I had a friend Marty Traber and he was a lawyer well known around town. And we used to sit around and talk about things. And then we used to go to this chamber of commerce, this was a chamber of commerce I mentioned I became chairman of in the U.S. Chamber of Commerce. And was sitting there one day and we looked around and we said there’s lots of young successful people that we see around here, these are our friends, why don’t we start a bank and it will be a bank for us. So, the two of us had this idea and this is like 2004. By the way, neither one of us knew anything about starting a bank, but we thought it would be a great idea and we thought it was a good business. So, systematically we went after it and we had time. And eventually we raised 18 million dollars, got a license, and we opened in August of 2007. So, you learned all the items that you needed to do to do a bank. And of course we were doing this in the context of no bank in Florida had failed since 1991. And typically you will do a bank and you’d sell it in about seven years, seven to ten years at about four times the amount of money you started with, right? So, it seemed like a good investment. And low and behold we start and the great financial crisis shows up and then it got to be really interesting. That’s how we got into the banking business.


Joe:  And so, as you gained expertise in the business, what jumped out at you as the most interesting pieces of having a bank?

Paresh:  Banks are actually a very difficult business because they’re very highly regulated. In good times they look fantastic, it’s running a bank in a bad time. I learned more being the chairman of a zero star bank then I ever did being a five star bank, right? Because the problems are few. The other thing that’s really important to know about being involved with a bank, especially on a bank board and etc. is that if you are on a board of a bank and that bank fails you are presumed guilty and part of the problem. “So and so is making these bad loans, I didn’t know about them.” Well, you were the board, it was your job to know, right? So, most things in life you deal with you’re innocent until somebody finds you guilty. If you are sitting on a bank board, and even if you leave and it fails two years after you left, it will never let you be on a bank board ever again. So, a squeaky clean reputation, fantastic credit history, all those kinds of things are prerequisites. And it only takes, you know, the slightest stain to cause an issue. And we started we weren’t aware of any of these things and then you suddenly release as to the standard you’re being held to, which is actually, you know again, learning and expanding. 

Joe:  Sure. You were born in Nairobi, Kenya of Indian descent, educated in the U.K. and then to America. Let’s talk about just sort of that overarching journey and having that international experience how that’s shaped how you formed your companies from a diversity standpoint. 


Paresh:  I guess I’ve grown up in a world where I’ve always been the minority, right? And even in times when I shouldn’t have been the minority, somehow I managed to achieve that, right? But that’s just life. The other side of that is what that also means is that you- And by the way a lot of kudos go to my parents about this, they’ve always encouraged the middle ground, right? And what I mean by the middle, there are parents that will tell you just be in your own culture and that’s all you do and you don’t want to know anybody else, right? And then there are other folks who say oh, this is bad, let’s try to become whatever the new place is and you leave the old country entirely behind. My parents took the middle approach that there are good things and bad things in both the old culture and the new one and you have to embrace them. So, you know, growing up in England they don’t have separation of church and state, so you sing hymns and Christmas carols and whatever in a church and whatever. As a kid I’m a Hindu, going home and saying, “Mom they want me-” Go do it. There’s no excuse, it’s the word of God, go sing Christmas carols and learn a few things. 

Joe:  Yeah, what’s interesting about that is for most people culture acts as an anchor. It’s sort of a way or a mooring that you have as you develop as a person that gives you a roadmap. And you’ve shown that some of that to some extent is arbitrary, it’s where you happened to be brought up. And through your parent’s urging you sort of were able to cut that anchor in a specific culture and then apply it to a logic that overarches all cultures, so it’s sort of a meta understanding of a culture. But when you build a company a lot of the people in that company are still attached to the anchor and you have to sort of put the chess pieces of the chest board to get the most innovation, the most ideation, the best working environment. And so, how did you navigate that?

Paresh:  Well, I think leadership helps, right? So, if the senior person in the room doesn’t behave a certain way, and communicates that behaving that way is not okay, it permeates throughout the organization. I’ll give you a totally different one that’s really kind of never talked about but it’s kind of big. At HCI we generally have a no nepotism rule, right? Now, it’s an interesting thing, being of Indian origin I only have two sisters and theoretically by that definition three nieces and a nephew. But in practice I have 28 cousins. So, I have seven aunts and uncles on one side and five aunts and uncles on my mom’s side, right? And they all had kids and they all had grandkids and so we’re a large family. 


Joe:  And they all want jobs.

Paresh:  They would like jobs. And hey, wouldn’t you like to be… You know, right? All those kinds of things. But there are no relatives of mine working in the company and it’s not by accident. And the reason for that is because if you’re all going to create a meritocracy, nobody in the company should feel that, you know, me and Joe over here are doing the same job, but because of his bloodline he’s going to get to be CEO, it’s a given, you get the whole nepotism thing, right? So, to avoid that, that’s what we do. And it becomes much easier to implement if that applies to me, it applies all the way down the chain, yeah?

Joe:  Right, and so meritocracy then would be a North Star essentially for the company and if meritocracy trumps family, how then does it play into other factors that might pressure you to not go on a straight merit-based action?

Paresh:  There are always things, right? And back to that whole thing of there are always pressures to do things a certain way and there’s always convenience. You know, do this and do that and whatever, right? It would be very convenient to hire nieces and nephews, it would make my Christmas and Thanksgivings much better, right? But you have to sort of stay the course. And the merit stuff we do from time to time get asked all kinds of questions. And this may be politically incorrect, but I was recently asked about a year ago I was asked how many LGBTQ employees do we have. And my answer was I haven’t a clue. The reason we don’t have a clue is because what does that have to do with somebody showing up to work and answering the phone and doing the job, right? It’s not part of our selection criteria, it’s not how we select people or anything else. So, I hope we have some LGBTQ people, but they’re there because of the merits. They’re not there because they’re filling a quota, nor are they not being there because we said we said, you know, right? And it’s just one of those many areas that people want to tick people and it’s just not what we are.


Joe:  Yeah, you know, being merit based and not knowing I think is interesting- You know, there’s the standard thinking line is that different people because of these different attributes have different experiences. And those experiences then lead to different types of thinking and then that should lead to innovation. But experiences aren’t necessarily a good thing or a business-related thing. So, it’s to say that if you pick some attribute, say race or whatever, and you have x number of these and you say you want to balance that number or bring in diversity then the people that you bring in you’re essentially saying by this specific attribute makes them a different thinker than the rest of them and that is almost a sort of reverse version of the problem, right?

Paresh:  Actually, you know, look in terms of large scale endeavors, this actually gets kind of interesting, right? We celebrate individualism, right? And I get that. But when you have an army, you can’t have individualism when you sort of say we’re going up that hill everybody goes up that hill. You don’t have a thousand people going, “Well, you know, I’ll do it tomorrow.” Or everyone making their own, you do need some conformity, right? Now in terms of the diversity of thought it’s creating the environment and then letting it just play itself out because you’re running a business. Diversity or thought could be that, you know, I like to work from midnight to 8:00 a.m. Well, that’s very good to know, but our office hours are from 8:00 a.m. to 5:00 p.m. That diversity doesn’t work, right? 


Joe:  Right.

Paresh:  There is diversity that works and diversity that doesn’t work. But what you can do is create a platform and then lots of different people show up and add their own special sauce. I’ll give you a perfect example, last week was Gasparilla, right? There’s 120 floats. Now in the old days it used to be Crewes and they had their own criteria and that’s all they would do. Having expanded it  there’s a 120 crewes, those crewes don’t look alike in any shape or form. They all celebrate different things, different parts of the religion, but collectively they make for a much better parade then if somebody had said oh no, they all have to look just like this, right? It would be like an army marching down the road, right?

Joe:  Right. Yeah, and I guess the question is in that specific instance the variety that’s an attribute that is craved for that environment and then it comes down to talking about what are the attributes. So, when you talk about a group of people getting together and coming up with something collectively creative you’d hope I guess in the Utopian world that’s just a bunch of brains working together and there aren’t physical attributes that drive that because I equate it to there were times when left-handers were not-

Paresh:  I’m left-handed.

Joe:  Yeah, me too, and that’s why I know this. Left handers were- There was whatever negative thing. And so they would tie their hands behind their back and try to make them right-handed. But if you go into a meeting today no one notices if someone is left-handed or right-handed and it’s sort of an invisible attribute. And we’re seeing that obviously I think that you’re starting to see that in the gender equality where a lot of the women are saying I don’t want to be known as the woman x, y, z of the year, I just want to be known as the x, y, z of the year, right? And I think that’s again moving that same direction where when non-brain powered attributes are invisible that’s actually the ideal place for diversity. 


Paresh:  So look, I think you touch on a very important thing, right? We have this thing about diversity because of our sins of the past, right? Once upon a time we used to have collectively as a society believe only if you look like this will you be of the right mindset to contribute to our common mission, right? So, that’s why only people you will look at certain attributes, whatever, were allowed into the club. And the club had a mission and the bad thing about that is when you do it that way you’re excluding a lot of talent, right? Speaking politically, you look at the Middle East, you know that women are second class citizens and are not allowed to drive, etc. Look at it differently, half of their labor pool is effectively marginalized by making that one decision. Only men can think, very simple. America has a great advantage over them because we say even women can think, absolutely, right? But you get the thing, you just marginalized half your population by making this one simple physical attribute conversation. And that’s the sins of the past, we sometimes try to overcompensate for it because where we live now is the old organization had a mission, so does the current organization. There is a mission of what you’re trying to do. You’re just enhancing the labor pool, or people who can add to that mission. But just because our mission is to improve how insurance is done may not be the same mission of everybody, hopefully it isn’t the mission of everybody in the population. 

Joe:  You’d have a lot of competition. 

Paresh:  Well, not only in the company, but other people’s mission is to make the best restaurant in town, other people want to be the best football player in town. Everybody has a different mission or a different team. You just make sure you’re not narrowing your talent pool by attributes.

Joe:  And I think we’re probably somewhere in between the two in that there are sins of the past or if not even sins of the past but infrastructure created by the past that need to be addressed and opened up. And your examples is a good one for that, it’s just a thing that’s been around that is changing and will continue to change, but is also important to understand what the end of the path looks like and that it is once the infrastructure is open to everyone then the ultimate goal at that point would be that the attributes just become irrelevant and everybody is just accepted on ideally maybe the perfect board a hundred years from now is a philosopher, and engineer, a poet, a cook, or whatever because that’s true diversity of thinking. 


Paresh:  Yeah, I think true diversity happens when nobody notices different attributes, right? You brought up people being left-handed, whoever takes a survey on how many of your board members are left-handed versus right-handed, it doesn’t matter because nobody uses that to make the criteria. That’s the equality that we really should be striving for. 

Joe:  I agree. And so as we move through these topics philosophically you’re actually there’s some tangible action that you’re taking to further this. Can you talk about your board program?

Paresh:  Yeah, absolutely. Look, so in terms of people wanting to check boxes, sins of the past, etc. A few years ago being a public company, in fact it’s still going on, there’s quite a push that you should have female members on your board, at least two, and if you do that everybody is happy and so on. And by happenstance we have happen to have nine board members all male, right? Now usually when that happens you might be guilty of the sins of the past that you specifically don’t want women. That was not how we came about this. How our board was composed was when we were raising the money to start the company we generally told everybody that if a certain pool of investors said collectively for us this is how much money we’re putting in and we would like so and so to be our representative on the board, we will make him a board member, right? We didn’t specify who it would be, right? And nine people were- Five people were nominated and they were all male hence we ended up with an all-male board. But this became a problem because we were diverse in lots of other ways, there were people of color, there were people of different ethnic origins, there were all kinds of other attributes we were diverse in, but this one box we weren’t checking. So, at first you go well, you’re just picking on us, it’s not fair, we didn’t do anything. But then said all right, let’s go try and find two women board members. And you immediately come to- Actually, because I know them both you immediately think of Alex Sink and Betty Castor, and I think they have been on a lot of boards.


Joe:  Hundreds. 

Paresh:  Yeah, and it would be really good, and I know them, and hey, can you do me a favor? They would be there. But, you know, that doesn’t change anything, it keeps the people who are telling you that you should be more diverse at bay because you’ve ticked the box, but if you really want diversity, it’s marginal improvement because at some point you sit there and you go back and you look at this and you say half of the world’s population, three billion woman are women, right? And you can’t find two of them to add to your board? Does that say something about them? Or does that say something about you, right? And then you suddenly realize that one of the reasons you can’t is because of the places where you look at. It’s so male dominated and it’s again one of the sins of the past kind of thing. So, if you were a country club member we’d have you join the next club, but you’re not a member so we can’t. And that became an item. So, we said how do we not just tick the box but try to do our little part in saying this should be a problem that disappears over time. And so this is why we started the board observer program was every year we will give two people the opportunity to participate in the board, part of board meetings, etc. 

So, being a board member, like what I was telling you about earlier being a bank board member and the issues and items that show up, these are things that you know because you sat at the table. If nobody ever invites you to the table, how do you get the experience? So, that’s why we started this program and we bring two observers on every year, but we make them act and behave like they’re full-fledged board members. And the reason for that is the best way of teaching somebody is making them walk the walk, right? And it’s worked out spectacularly. The first two people we hired, the first two observers were women and then actually as we had the capacity to if we’re going to have to add two women why wouldn’t we add these two fine people that we have. And so, that’s what we did. And then right after that we got two new ones. This time it’s a guy and a girl, or a male and a female I should say, and they’re halfway through their term so they’ll rotate off this October. And one of the original board observers, Sue Watts, is in charge of selecting the two board observers for the next board cycle. We want to keep doing this because eventually having people who have the experience of being in boards and doing their things lets you have a much better talent pool. And we have lots of conversation in tech and everything else about how Tampa could broaden its talent pool. A different way of doing it is that the people are here step up. 


Joe:  That’s great. I’ve enjoyed the conversation, I’d like to finish up. You’ve had such a nicely varied business career, a lot of success. So, as you’re sort of turning from looking back to looking forward professionally, what else still inspires you? Are there any more things you want to accomplish or what meaning do you seek to dig into as you finish out your career?

Paresh:  Well, what my hopes and aspirations at this point are, and this goes back to the people, the young people in the company, and the young people at First Home Bank, etc. as well is I hope someday to be 85 years old because the alternative is terrible, right? So, someday I hope to be 85 years old. And when I’m 85 years old and they’re talking about whoever is the hot star in Tampa Bay or the movers and shakers of Tampa Bay at the time, I’d like to know that we gave them a start in their career, or somewhere in their career they intersected with one of our companies because that they can go, “I knew him when…” Right? There’s no greater pleasure than that. 

Joe:  That’s great, thank you. 

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