Reversal of Fortune: How One CEO Went From Behind Bars to the Front of Insurance Technology

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By Russ Banham

When entrepreneur Louis Ziskin says, “My best days are in front of me,” he’s not kidding. Ziskin had spectacularly built an eight-figure business in a scant four years and then lost it all in an instant. A crafty, highly capable businessman in the wrong game, he was busted for the largest-ever U.S. government seizure of the drug 3,4-methylenedioxymethamphetamine, more commonly known as Ecstasy.

In 2001, Ziskin and two associates were convicted on charges of smuggling millions of doses of Ecstasy, which they had acquired in Europe and shipped by overnight courier to Los Angeles. Following the verdict, he was incarcerated for 12 years at the U.S. Penitentiary in Lompoc, Calif.

A changed man since his release in 2012, Ziskin has parlayed his estimable business chops into the launch of DropIn Inc., one of the more talked-about startups in the fast-growing insurance technology space dubbed InsurTech.

Founded in 2015, DropIn markets on-demand live video streaming services over live feeds to insurance companies for claims processing. Using DropIn’s technology on a smartphone, a driver in a car accident can contact and communicate with a claims adjuster using video conferencing. Or the adjuster can be visually apprised of the damage in real time from a “droperator”—DropIn’s term for a contracted smartphone user who sends on-demand video. This instantly shifts the claims payment mechanism into gear.

That’s just one value proposition. Quite fantastically, DropIn’s technology can be paired with a video-equipped drone that can remotely inspect and evaluate the damage to residences and commercial buildings. The concept reduces the possibility of claims fraud, speeds up the lethargic claims process and makes the filing of a claim a less dispiriting experience for policyholders.

Like the squadron he now commands—a crowdsourced independent contractor network of 60,000 droperators and more than 1,100 drone pilots—Ziskin is again soaring. His life is the classic tale of redemption: the smart kid enticed by fast dollars in the riskiest of all businesses. At the zenith of success, he fell hard. But rock bottom became the foundation for rebuilding his life.

The Designer Drug

Ziskin grew up modestly in Los Angeles’ West Hollywood neighborhood, an affluent area today that was grittier during the recession-plagued 1970s. He was a quick learner, did very well in school and was accepted at the University of Southern California, majoring in business. Eager to cash in during the waning days of the “Go Go” Reagan era, he dropped out after his freshman year. “I felt I already understood the fundamentals of business and had what it took to make my mark,” he said.

All businesses thrive or wither depending on supply and demand—the availability of a particular product and the desire of buyers for this commodity. In Los Angeles and elsewhere in the country in the 1990s, the commodity for a certain class of buyers was Ecstasy. The designer drug also known as MDMA, X and Molly created intense feelings of euphoria and empathy. Ziskin sensed opportunity. “The demand outstripped the supply,” he explained.

He started small, selling a few hundred pills at a time. “My plan was to sell the best and most reliable product at the least expensive price, gradually building market share—the secret of any business,” he said. “It was basic Business 101.”

To feed rising consumer demand, Ziskin had to expand his supply. In 1998, he connected with a drug dealer in Amsterdam who knew some chemists who could make Ecstasy in large quantities. Ziskin reportedly purchased about $50,000 worth of the drugs and shipped them to the U.S. via FedEx and other courier services. On another trip to Amsterdam the following year, he built the supply chain infrastructure for what would become a major transcontinental drug smuggling business. The profits were enormous in no time, in the tens of millions of dollars.

“Louis Ziskin established himself as a major Ecstasy importer in the Los Angeles area, participating in and leading a large and sophisticated operation that imported the drug from sources in the Netherlands by way of other countries in Europe,” court records state.

“It certainly wasn’t my lifetime ambition to be a criminal; it was all about the money,” Ziskin confided. “I saw an opportunity and had the connections to make the opportunity manifest itself. I was in way over my head, but I figured if I wasn’t greedy and was extremely careful, I’d be safe.”

He figured wrong. Law enforcement agencies on both sides of the Atlantic caught wind of the enterprise and made a few low-level arrests. These operatives informed on their higher-ups, the dominoes falling. A series of raids quickly brought down the drug ring and Ziskin. He was arrested, convicted and sentenced to Lompoc Prison for a term of 30 years. He was 29 years old.

Locked in the Box

While in prison, Ziskin did a lot of soul-searching, struggling to grasp the character flaws that had led to his risky behavior. “Prison is an absolutely unbelievable place for reflection,” he said. “I recognized the depths of my depravity. I was able to understand what had motivated me. The truth was very enlightening.”

He worked assiduously on a court appeal to his case, firing his attorneys to successfully represent himself in reducing his sentence. He became a sought-after jailhouse lawyer, helping other inmates with their appeals. All the while, he read voraciously—business books, novels, the classics. And he waited. Like Ludacris raps, “If you locked in the box keep makin’ it through. Do your time; don’t let your time do you.”

After his release in 2011, Ziskin spent four months in a halfway house, followed by six months in home confinement. “I was fortunate,” he said. “Most people who get to that level in the drug business end up dead or in prison the rest of their lives. But I got out alive with nobody looking for me. I owed no one and no one owed me.”

On July 26, 2013, Ziskin’s federal parole started. So did the rest of his life.

A Career Beckons

A compact man with a shaved head and impressive build, Ziskin has an almost Zen-like demeanor. He’s very still and listens deeply. When he responds to a question, his comments are precise. He’s extremely articulate. “Louis is a born leader,” said Jen Friel, DropIn’s chief revenue officer. “He has the rare ability to inspire others with his plans.”

Ziskin has many steadfast believers in his potential, like Charlie Ebersol, a well-known Los Angeles producer and CEO of The Company, a TV and film production company. “The people who succeed in business take what happened to them in the past and learn from it,” said Ebersol, son of Dick Ebersol, former chairman of NBC Sports. “Louis is the very definition of this evolution.”

Ebersol met Ziskin through Friel, a mutual friend. “We got together for a one-hour lunch and spent nearly five hours together; it wiped out the rest of my day,” the producer said. “Leaving aside his backstory, he just captivated me with his ideas. Plus, I’m a big believer in second chances. I had mine.”

In 2004, a private chartered jet carrying Ebersol, his father and younger brother Teddy crashed, killing Teddy along with the pilot and a flight attendant. Charlie rescued his dad from the wreckage. “You go through something like that and you change,” Ebersol said. “You realize a renewed opportunity to do more with your life. You just come out of the experience willing to work harder than ever before to overcome whatever deficits you perceive in yourself. Louis understands this.”

At DropIn’s headquarters a few blocks from where he grew up in West Hollywood, Ziskin regularly puts in 12-hour days, conjuring new ways to enlarge the company’s market. In September, he inked several key deals, including a strategic partnership with Majesco, a global provider of cloud-based insurance software solutions used by approximately 150 insurance companies worldwide. Majesco’s DigitalConnext platform will be pre-integrated with DropIn’s solution to streamline the claims process for insurers.

Earlier that month, Ziskin signed another strategic deal, with Infinilytics Inc., a provider of insurance claims analytics software services. Infinilytics will incorporate DropIn’s live video interaction technology to better detect and evaluate possible instances of claims fraud, assisting its insurer clients to fast-track genuine claims.

Interestingly, the idea for DropIn initially had nothing to do with insurance. Ziskin had read an article about proposed Federal Aviation Administration (FAA) regulations governing commercial drone pilots. “I recognized that the increasing use of drones presented the opportunity for all kinds of interesting new businesses,” he said.

As he pondered these possibilities, he had a light bulb moment. “I did some research into live streaming over YouTube and realized that with two-way VOIP (Voice Over Internet Protocol), a drone pilot and another party could communicate in real time to direct a drone’s path of travel,” he said. “I then started thinking about the different businesses that could benefit from these two-way interactions.”

Insurance was at the top of the list, given the snail’s pace of claims processing and the high risk of claims fraud, estimated to cost insurers $80 billion a year. Ziskin contacted a software shop to build the application and hired a programmer to create a demo. For seed money, he relied on funds from friends and family. He’s now making the rounds of venture capital hubs to raise larger sums. He’d like to extend the use of drones to other insurance applications, such as geo-mapping for underwriting. Will his checkered past prove an obstacle in Silicon Valley?

Ebersol doesn’t think so. “It would be a gigantic mistake if the VC community turns up its nose,” he said. “Only two things matter in business: loyalty and commitment. In everything that has been written about his past, no one ever questioned his loyalty or commitment. He’s only blamed himself for his decisions. I’ve never met anyone more honest and self-aware.”

Sri Ramaswamy, CEO of Infinilytics, shares this opinion. “When you present yourself to investors, they’ll certainly question your past, but they’re mostly interested in your ideas,” she said. “I think they will look at Louis’ background and measure him in terms of how far he has come. He’s made mistakes, but who hasn’t? He’s a very genuine person. I have nothing but admiration for him.”

Can someone turn a worthless past into a worthwhile life? “I’m a true believer in redemption,” said Ebersol. “In our society, we’re constantly complaining about recidivism. Well, the key to overcoming it is to support the people who are trying to do the right things. Louis is doing that. He has visionary ideas on how to save insurance companies money and make all our lives easier. He is just the kind of person that should succeed.”

Onward and Upward

Ziskin is undoubtedly a different man today than he was 15 years ago. Despite his punishing schedule, he speaks regularly at local schools about his life experiences. Rabbis send troubled youth to his doorstep. He has little use for the trappings of success. “Even when I was in the drug business, I was more interested in making money than enjoying it,” he said.

Correction: The print version of this article mistakenly reported that DropIn has more than 60,000 drone operators. DropIn actually has 64,000 “droperators”—contracted smartphone users who provide live video feeds to insurance claims adjusters.

He knows his notorious past will remain the backdrop of everything he accomplishes in the future. The “world’s biggest Ecstasy bust” is just too tantalizing to file away. “Regardless of the mistakes I’ve made, no one ever said I was stupid,” he said. “I’ve always had a head for business. Figuring out real-world, hard economic facts is the best part of my day. Now I get to do it without fearing for my life.”

He counts his blessings all the time. “I was caught in traffic on the way to my office today, and I looked over at the guy next to me, who was fuming,” he said. “I just enjoyed the liberty of being able to sit there, moving up inch by inch.”

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