The Costco Model: Sell Everyone Else’s Products Well, Then Slowly Build Your Own Kirkland Brand

Matt Sutika’s insurance career started before he had any say in it. His father was a 40-year State Farm agent outside Detroit, in a blue-collar town where most other parents worked in agriculture or for GM or Ford — his dad was one of the few white-collar professionals around. Matt watched his father build a genuinely good life as an entrepreneur inside a captive structure: hard work, real client relationships, and — critically for a kid paying attention — never missing a soccer game. That combination sold him on insurance as a path, and straight out of college he opened his own State Farm agency in Indianapolis.

What eventually pushed him out of the captive model wasn’t dissatisfaction with State Farm specifically — his framing is that he “outgrew them, not the other way around.” He wanted to control the technology stack, offer multiple carrier options, and build something closer to a genuine entrepreneurial venture. That led him to found Skylight Insurance, a brokerage built around embedding fast homeowners insurance into Century 21’s home-closing process — which eventually merged into Obie, where he became Chief Insurance Officer.

In Episode 83 of InsurTechTalk, Matt and I covered why Obie deliberately targeted the comparatively uncrowded rental dwelling niche instead of fighting in home and auto, how the company’s MGA build mirrors Costco’s Kirkland brand strategy, and hard-won lessons from merging two companies in April 2020 — timing he does not recommend repeating.

About Matt Sutika

Matt Sutika is Chief Insurance Officer at Obie, an insurtech focused on rental dwelling insurance for one-to-four-unit landlord properties, operating across all 50 states. Before Obie, he ran a State Farm captive agency in Indianapolis before founding Skylight Insurance, a brokerage embedding homeowners insurance into Century 21’s home-buying closing process. Skylight merged into Obie in April 2020. Matt oversees sales, distribution, independent agent and broker strategy, direct-to-channel partnerships, and operations (service, claims, underwriting, billing, renewals) at Obie.

Two Core Products: Instant Rental Dwelling, and Embedded PropTech Insurance

Obie’s business splits into two clear pieces. The first is a 50-state, fully instant one-to-four-unit rental dwelling product — a genuinely direct-to-consumer, DIY online experience: enter information, get a quote, bind the policy, comparable to an Amazon-style purchase flow. The second is embedded insurance built specifically for proptech platforms — companies like Roofstock, NestEgg, and Fundrise, where a client already managing or investing in real property inside that platform can get an insurance quote and bind coverage without leaving the platform’s own ecosystem.

Why Rental Dwelling, Deliberately Avoiding Home and Auto

Matt was direct about why Obie chose this specific niche rather than following the crowd into home and auto, where most insurtechs (and most legacy carriers) were already concentrated. Two reasons drove the decision:

• Structurally less competition. The rental space had meaningfully fewer carriers — legacy or insurtech — actively fighting for it, compared to the saturated, price-shopping-driven home and auto category
• His direct critique of home and auto economics: he described the category as largely a zero-sum churn game — “I get a million in new premium but lose a million to this person” — driven by pure price comparison rather than genuine customer loyalty, citing GEICO and Progressive’s multi-billion-dollar marketing spend fundamentally reshaping the category around speed and price rather than relationship value

His bet on rental specifically: landlords and property investors are looking for a genuine partner and advisor, not just the cheapest five-minute quote — meaning customers in this niche are structurally stickier than a homeowner or renter who will price-shop again at the next renewal purely on habit.

Riding the PropTech Wave Deliberately

Matt’s second strategic bet was recognizing that proptech and real estate tech platforms were already building large, engaged customer bases of people actively managing rental properties as a business — fix-and-flip platforms, property management tools, portals for listing rental properties. His read: anyone already comfortable using technology to find, manage, or invest in real estate is a natural candidate for a technology-native insurance experience layered directly into that same journey, rather than a separate, disconnected shopping process. He specifically flagged mortgage lenders as the next logical extension of this same logic — a natural channel wanting a fast, embedded insurance solution at the point of closing.

Obie as Costco: Distribution First, Private Label Second

This was the clearest and most useful structural analogy in the conversation. Matt described Obie’s evolution directly through the Costco model: Skylight (and early Obie) started, much like Costco itself, by selling other companies’ products through a better, faster distribution experience — connecting with existing carriers across all 50 states rather than building underwriting capacity from scratch.

Over roughly the year before this recording, Obie began rolling out its own MGA product, backed by Munich Re, state by state — with a target of 25-30 states within the following year. Matt’s explicit framing: this is Obie building its own “Kirkland brand” the way Costco gradually built private-label credibility alongside the name-brand products it already carried — starting with distribution and market trust, then layering proprietary underwriting on top once the volume and relationships justify it.

Dwelling Insurance 101: Homeowner vs. Landlord vs. Renter

Matt walked through the actual coverage distinction clearly, since the terminology (dwelling, landlord, renters) genuinely confuses people outside the industry:

• Homeowners policy — covers someone who personally occupies the property they own
• Landlord (dwelling) policy — the property owner no longer lives there but retains financial responsibility for the structure itself (fire, tornado, earthquake damage) while renting it to a tenant — this is where Obie’s core product sits
• Renters policy — covers the tenant’s personal belongings (furniture, clothing, electronics) that the landlord has no ownership stake in and therefore no reason to insure, plus a layer of personal liability coverage for the tenant

Trends Driving the Rental Market’s Growth

Asked what specifically convinced him rental dwelling was a durable, growing niche rather than a temporary gap, Matt pointed to observable structural trends rather than hard market-sizing numbers (which he deferred to his co-founders on): the continued rise of Airbnb-style short-term and investment rentals, the HGTV-driven cultural interest in fix-and-flip and rental property ownership, and — critically — the proliferation of proptech companies that have genuinely lowered the barrier to entry for individual investors to get into the rental business at all, sometimes handling contractor relationships and property management on the investor’s behalf entirely.

Lessons From Merging Skylight Into Obie — Mid-Pandemic

Matt’s account of the April 2020 merger between Skylight and Obie was candid about both what worked and the genuinely bad timing. His clearest, most transferable advice: once lawyers get involved in any acquisition or merger, ideas discussed casually in earlier conversations can start to feel like they’ve fundamentally shifted — and the discipline that matters most is remembering you’ll still be working closely with the other party after the deal closes, which makes genuine mutual benefit (not “winning” the negotiation) the only sustainable posture.

What made the specific merger work, in his view: he and Obie’s founders, Aaron and Ryan, had already worked alongside each other as separate companies for roughly two years before the merger, building real trust and mutual understanding of how each other operated before the formal transaction ever began. His pointed, deadpan advice on timing: do not merge during a pandemic — announcing the deal to the full team at a moment when much of the world felt genuinely uncertain about the future was, in retrospect, less than ideal, even though the underlying strategic logic still worked out.

His broader recommendation for anyone considering a merger toward something they’re genuinely passionate about: pursue it, because the opportunity to combine forces around a mission you actually believe in doesn’t come along often. Obie’s own merger was deliberately strategic on both sides — Skylight brought genuine insurance experience, existing premium, and licensing; Obie brought the YC pedigree, existing VC relationships, and brand — a combination Matt considers meaningfully different from insurtechs built purely on technology talent without deep insurance operating experience from day one.

Why the Public Market Correction Happened

We discussed directly why several public insurtechs saw valuations drop 80-90% after IPO. Matt’s blunt read, which I largely share: the public market simply concluded these were being valued as pure tech companies when they were fundamentally insurance companies — a genuine, necessary reality check on a category that had, for a period, been allowed to speculate on growth metrics disconnected from underlying underwriting economics. He was careful to note this isn’t a simple “they didn’t know what they were doing” critique — genuinely smart people built these companies — but the market correction reflected a real mismatch between how the business was being priced and what kind of business it actually was.

Series B, Raised on Obie’s Own Terms

At the time of recording, Obie was in active conversations about a Series B — but Matt was explicit that the company had genuine optionality about timing, specifically because of the premium volume and profitability already in place. His framing, a pointed contrast with companies forced into a raise purely to avoid running out of cash: Obie could pursue the round strategically, on favorable terms, rather than out of financial necessity — a genuinely different negotiating position than many insurtechs find themselves in.

What’s Next: Independent Agent Distribution

Obie’s next major push, launching around the time of this recording, is opening its MGA product to independent agent distribution — allowing agents in Obie’s licensed states to write Obie’s own policies for their clients. Matt’s underlying philosophy, referencing a LinkedIn exchange he’d once had with Lemonade’s Daniel Schreiber pushing back gently on the “kill the agent” framing common in early insurtech: roughly 86% of insurance clients still sit with an agent relationship, and the real opportunity isn’t disintermediating that relationship — it’s getting better technology and faster products directly into agents’ hands so they can serve the clients they already have more efficiently. His analogy: Tom Sawyer convincing others to paint the fence for him — Obie’s job is building a genuinely strong rental product that independent agents want to sell, channeling distribution through the relationships that already exist rather than trying to build every relationship from scratch.

Advice: Outwork the Smartest Person in the Room

Asked for closing advice as a relatively new father, Matt’s first recommendation was personal: if you’re considering having kids, do it. His professional advice, a principle he says he’s held since age 22: for most fields (excluding genuinely credential-dependent work like brain surgery or aerospace engineering), you can out-work intelligence. His own operating philosophy: he never expected to be the smartest person in any given room, but consistently chose to work an hour earlier, an hour later, and more aggressively than whoever was in that room with him — a discipline he credits directly for his career outcomes more than any singular strategic insight.

Key Takeaways

• Obie deliberately chose rental dwelling insurance over the crowded, price-driven home and auto category specifically because landlords and property investors behave as stickier customers seeking genuine advisory value, not just the cheapest five-minute quote
• The Costco/Kirkland model — distributing others’ products first to build volume and trust, then gradually layering proprietary underwriting on top — is a genuinely transferable strategy for insurtechs deciding how to sequence MGA buildout against pure distribution
• PropTech platforms represent a natural embedded insurance distribution channel because their users are already comfortable using technology to manage real estate as a business, not a one-off purchase
• Merger and acquisition success depends heavily on pre-existing trust built through prior working relationships, not just deal terms negotiated in the moment — and timing (pandemic-adjacent, in Matt’s specific case) matters more than founders often account for
• The public insurtech valuation correction reflected a genuine mismatch between tech-company-style growth valuation and the underlying economics of an actual insurance business, not simply poor execution by smart founders
• Fundraising from a position of genuine optionality (sufficient existing premium and profitability) produces meaningfully better negotiating leverage than raising purely to extend runway
• Independent agents still hold the large majority of insurance client relationships — the more durable insurtech strategy is arming those agents with better technology, not attempting to disintermediate the relationship entirely