The last several months have given me more exposure to the machinations of innovative insurance ideas, details, and outcome to the point where one must wonder how there are hundreds of legit, active ideas making their way through incubators, plug and plays, sandboxes, sprints, tech fests, virtual pitches, and so on. Insurance is a $5 trillion global enterprise and all one needs is to capture is 2/10,000th of a percent of that pie and you are a billionaire.
Patrick Kelahan is a CX, engineering & insurance consultant, working with Insurers, Attorneys & Owners in his day job. He also serves the insurance and Fintech world as the ‘Insurance Elephant’. image source
The innovation success flow chart is easy to follow:
Easy peasy, lemon squeezy, as my kids used to say.
Of course, the chart is sorely missing all those aspects of business, creativity, engagement, reality, law, customer needs, etc., that reside within the black box. The recent rollout of a new insurance company in Germany, Futuro Vorsorge, designed and devised by insurance and InsurTech veteran, Frank Genheimer, was intro’d to the industry through a series of ten video presentations titled as, “Lockdown Challenge”. Frank compiled a wonderful recounting of his start to almost finished journey to creating a product the industry needs. Certainly not a solo trip (as his video explanations tell the viewer), and an apt explanation of many of the challenges an insurance startup encounters.
There are hundreds of similar examples that have played out over the past several years, some very public (Lemonade), but most not so visible in all markets. There are now insurance innovators that while their presence was virtually unknown five years ago, are now ubiquitous in their markets:
- Shift Technology
- Oscar Health
- Acko General
- Zhong An
By the same token there are innovators that have simply not gained traction and have disappeared, and sadly, there are many unknown to us ideas that did not reach the light of day and remained seeds of progress that simply never germinated at all.
With the opportunities that the Covid-19 insurance environment brings (yes, in relative chaos there is opportunity) it’s a good time to revisit some of the requirements or challenges an eager startup might consider or encounter. A disclaimer- the following itemization is in no manner a comprehensive list and should not be considered so. (Please consult with your legal advisor and anyone who will serve as a devil’s advocate to your plans before proceeding.)
Fleshing out the flow chart and exposing the black box’s contents:
- Clever concept– a raison d’etre that your target market agrees is a pain point, or something they would pay good money for. The correct idea that is also a right idea. AKA a ‘eureka moment’ thought or realization.
- Seriously question your clever concept– is the initial concept the real root resolution to the customers’ needs, or is there a need to find a root cause/root outcome beyond the initial blush of the eureka moment?
- Competence to support the idea– is the concept in your wheelhouse or background? If not, do you have innovation co-conspirators in whom there is a level of industry competence?
- Energy and motivation– ideas seldom are harvested without cultivation, care, and worry.
- Blinders to the naysayers– almost everyone has an opinion about a clever idea, and most are eager to share the outlook whether it’s an informed perspective or not. Are you committed to your good concept/plan/idea? This is also known as the ‘courage of one’s convictions’ aspect of innovation.
- Ability to take advice– the corollary to the Blinders aspect. There will be persons who can legitimately advise you, counsel, warn, encourage, constructively criticize, and will advocate for you. Can you differentiate between the two?
- Accepting the fact that you don’t know everything about your clever idea– this will be manifest at every meeting and discussion.
- Continuous wondering why someone else hasn’t thought of the clever idea– also known as the “you won’t find a $20 dollar bill on the sidewalk because someone else would have found it before you” principle. Are you that clever compared to everyone else?
- Every good idea needs an emotional ‘hook’ that will engage the market– logo, marketing gimmick, value, engagement, need fulfillment, etc., that people will not only grasp but will pay you money to enjoy, consume, or utilize.
- Go to market path– somehow the idea needs to get to the street. Your whiteboard brilliance and post-it forest will not serve this role. The end of the development rainbow does not have a pot of gold unless you create the marketing plan where others are giving you their gold in exchange for your product.
- Legal and regulatory compliance simply must be considered at every step– no short cuts as the path back from legal missteps is fraught.
- Staff are more important than you- they know things you don’t, they know persons you don’t, their network of supporters well exceeds yours. It’s their backs upon which the load of development is being carried.
- There is no quid pro quo balance for effort and ‘credit’- ties in with how staff are considered, or co-founders, or investors, or board members. The end result has no double entry accounting for pluses and minuses of daily activities.
- A perfect idea will probably impact a current market player- a good idea for you might be a bomb for some other company. It’s an indirect barrier to entry as the adversely affected org (or orgs) will tend to fight for survival. Be ready for that, and be empathetic in your delivery.
- A good idea for the market may not be the same good idea for investors- yes, an odd concept but pitches need to be built individually for the respective recipient.
- Higher purpose- if the effort you make is simply focused on material outcomes, and not on making the industry a better place for customers, vendors, staff and the market, please focus your efforts on card counting or other quicker paths to potential riches. Even unsuccessful ventures that keep societal improvement as a goal are in many ways still successful.
And all those other mundane factors- always be legal, moral and ethical, a need to confirm funding, practice public relations, include industry knowledge on one’s board or C suite, apply financial planning to ensure one’s business flight does not outrun its cash flow runway, have an athlete’s ability to pivot and a soothsayer’s ability to know when to make that move, and so on.
The path to successful innovation that supports a business model is certainly technically complicated and I have not noted any of that, as typically success comes from the softer KSAs (knowledges, skills, and abilities) that are secreted within the black box of magical solution. Don’t be shy- your idea is the one the industry is waiting for.
Lastly- a shout out to Erika Kriszan and what surely was the most successful virtual conference of 2020, Magic of Innovation, Insurance Innovation Days that concluded August 18 and 19. Erika has a good idea of what is in the black box- magic!
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