This story is part of series highlighting the best quantitative trading experts who have left Wall Street to build startups.
To some, it may have seemed like a strange move: to leave Jump Trading, a leading name in proprietary trading, and join a startup that didn’t even have a name.
But Danny Jachowski had his reasons. First, he had worn out nearly a decade of Chicago winters, and the Maui-raised Stanford-trained machine learning expert wanted a less hair-raising climate.
More importantly, Jachowski was getting bored with the lucrative yet Sisyphean world of quantitative trading and eager to tackle something that could have a bigger impact on society.
“You go in every day and you solve the same problem. You try to predict where the price of X will be on a time horizon,” Jachowski said. “It just got a little stale.”
Initially, he found the work energetic. He had joined Jump in 2010 as an algorithmic trader and attended fellowships at prestigious machine learning labs at the University of Michigan and Stanford. While the nature of success in academic research was fuzzy, Jachowski was pleased with the fast, real-time feedback loop in high-frequency trading.
He dropped out of his master’s degree, a few courses before graduation, to join Jump.
“That’s what got me into business. There’s an opportunity to measure your success in a real way,” he said. It didn’t hurt that his older brother already worked for the fledgling trading company and could vouch for it.
But after success in various roles in development, research and operations, he decided to retire in 2019 and look for new challenges.
A robotics enthusiast, autonomous driving intrigued him. But the stakes were serious – one mistake could mean blood on your hands.
He then linked up with an unnamed startup that would eventually come to be called BlueNote AI.
Based in Austin with the support of Thomas Tull, the billionaire businessman and founder of movie studio Legendary Entertainment, BlueNote was looking for a modern platform for determining business insurance risk.
In theory, identifying new and more accurate risk characteristics by applying machine learning techniques to alternative data caches could yield savings and efficiencies. But insurance companies are heavily regulated and don’t have as much incentive to rock the boat with innovation.
They needed an AI expert and the opportunity resonated with Jachowski.
Place? To check. Austin’s welcoming weather and startup scene met the criteria for Jachowski and his husband, who also worked in tech.
New challenge? To check. Jachowski should leverage the full range of metrics and technical capabilities to help develop pricing models that outperform insurance actuaries.
“I believed in the view that the insurance industry is outdated and there isn’t much momentum to change,” said Jachowski, who joined what would become BlueNote AI as the head of artificial intelligence in early 2020.
It turned out that the name of the company was short-lived. BlueNote’s first client was insurance broker Acrisure, who liked the startup’s prospects so much that it acquired the company, along with another insurance subsidiary of Tull, in July 2020 after just eight months in operation.
“They wanted to build their technology division and I think they saw us as a reasonable target,” Jachowski said.
As with Jump, Jachowski has taken on several roles at Acrisure since the acquisition. He recently returned to his Wall Street roots and helped build asset portfolios as chief of AI at Acrisure Capital Management, a new investment advisory subsidiary.