Jarvish is a Taiwanese company that is doing a lot more than making it easier to buy insurance. They are using hard technology innovation to reduce accidents and therefore reduce the cost of insurance, using smart helmets that can monitor your driving.
We are seeing the same thing in the West with sensors embedded into cars. Jarvish is doing this in the Rest of the World where a motorbike is the first automated transport that a family can afford. Rather than selling into a motorbike market in the West with tens of millions of hobby bikers (they also have a car but just love to bike for fun), Jarvish is selling to the hundreds of millions of bikers in the Rest who use motorbikes as their primary means of transport.
Rather than having to negotiate with car manufacturers, Jarvish simply make the helmet and sell it to consumers.
That is why Jarvish illustrates a megatrend we have been tracking for a while that we call “first the Rest then the West”.
In doing so they are solving a Catch 22 for motorbike insurance. If driving a motorbike is so dangerous then claims will be high so premiums will be high, so the poor people who rely on motorbikes as their primary means of transport cannot afford insurance.
First the Rest then the West
This is one of the big stories of our time. It is the end of what historians have called the Great Divergence, when the Western economies rose to dominance.
For most of the 20th century, technology was limited to the West. Countries in the Rest (formerly known as developing, then emerging, then rapid growth economies) were “tech deserts” until those economies started to open up (first China, then India, then Africa). Then technology adoption started to flow from the West to the Rest; the last decade has been a boom time for Western tech firms selling to the Rest.
Now the flow is reversing as technology adoption starts in the Rest and then goes to the West. For example, look at Xiaomi to see the future of mobile phones and Alibaba for the future of e-commerce or Paytm for the future of mobile wallets.
This megatrend is not limited to Fintech. Within Fintech, mobile payments and mobile e-commerce is the big disruption and that is happening first in the Rest and then will flow to the West.
Technology adoption starting in the Rest rather than the West is one of the big 21st century megatrends.
Note that I am referring to technology adoption. Where something is invented matters a lot less than where and how it is adopted, as Steve Jobs taught us after wandering around Xerox Parc and seeing the first graphical user interface and using that to create a PC with a much better UX. What really matter is innovative customers and customer innovation is driven by blue ocean markets with big unmet needs and lack of legacy technology constraining innovation.
If you need a smart helmet to keep your family safe, you have a big and so far unmet need. That is why we think Jarvish is a company to watch.
The Asia Inurtech story
We have already tracked Insurtech innovation coming from India, Korea, Singapore, China. This is the first we have seen from Taiwan. Asia has all the ingredients to become the locus of Insurtech innovation:
- Big blue ocean markets with lots of unmet needs
- Lack of legacy technology constraining innovation
- Hard core technology skills linked to manufacturing expertise (so they can build physical products and are not limited to digital innovation).
Technology innovation not just UX layer digital innovation
The idea of a smart helmet is not new, but like so many Taiwanese companies, Jarvish competes through technology innovation. This is not just another digital UX layer startup. Jarvish has invested years and lots of Ph.D level resources to create a smart helmet that does not require Bluetooth. Even more critical from a safety POV, the Jarvish helmet does not use lithium batteries (which can overheat and explode) and they use “military-grade ceramic anti-explosive batteries”. First do no harm – the helmet has to be safe.
The best way to think about the Jarvish smart helmet is like the black box system that crash investigators extract from commercial aircraft, except that this black box is tiny, cheap and cloud-connected.
Like Apple, this is innovation from technology to consumer marketing and Jarvish is not shy about making the comparison:
“Much like smart phones, at first they were only cool high-tech gadgets, but quickly became an essential part of everyone’s daily life. In the near future, smart safety helmets will definitely be as common as smart phones.”
Illustrating the “first the Rest then the West” megatrend, the Jarvish roadmap includes products we can envisage also getting traction in the West:
“all types of smart headgear, with such applications such as smart helmets for skiing, diving, firefighting, cycling, drones, extreme sports, and entertainment. All of which will include smart functions and module designs, as well as all the incorporated software needed. We also provide a cloud platform, and international-level third-party value adding services to users.”
The Art of the Chef – combining ingredients
You don’t need to look too hard to see a revenue model. Jarvish sell helmets to consumers with their smart helmet technology embedded. This is simple but powerful. It illustrates what I call the Art of the Chef business model in my book Mindshare to Marketshare. The chapter entitled Turn Secret Sauce Into Unfair Advantage describes how Fast Moving Consumer Goods (FMCG) companies grew to dominance by avoiding commoditization by combining commodity ingredients into a differentiated package. The book uses companies like Coca Cola selling sugared water at high prices or Gillette charging a premium for razor blades that cost very little to illustrate how to combine commodity ingredients into a product that is highly differentiated. The book then goes on to show how companies such as Apple and Visa used this in technology. Jarvish is on the same path.
I liken this art of combining to cooking. You have lots of components that go into a dish. You might even have a secret ingredient that defines it. Yet the whole is obviously more than the parts.
It gets more interesting when you move from FMCG to technology driven businesses:
”Consider the greatest entrepreneur the tech world has ever seen – Steve Jobs.
Steve Jobs innovated by combining multiple commodity ingredients into a very tasty dish. He was a technology chef.
At one level he combined multiple commodity ingredients to create unique devices such as the iPod, iPhone and iPad. He combined lots of commodity components sourced from all over the world into a uniquely beautiful and useful product by adding a touch of design magic. However, if he had only created “insanely great devices”, Apple’s business would be more vulnerable to competitors like Samsung and Xiaomi. The reason that Apple is so valuable is that Steve Jobs combined great physical devices with digital services like iTunes and AppStore into a combination that still mints money long after he died. That is why Apple has massive amounts of Unfair Advantage (aka moat, aka competitive advantage).
You also see this art of combining in payment network such as Visa, Mastercard and Amex. Yes, these payment networks have software at the core. Yes, they own the hardware servers that the software runs on. Yet they don’t license that as a SAAS product to banks. They wrap it into other services to deliver transactions to consumers via Banks. That is how Visa, Mastercard and Amex turn their secret sauce into Unfair Advantage.
What Coca Cola, Apple, Visa, Mastecard and Amex have in common is the art of the chef – to combine commodity ingredients into value.”
I see this same art of combining in Jarvish. At one level they combine their proprietary smart helmet technology with the commodity components and manufacturing process of making helmets to create their own differentiated helmet. They combine their own yeast with water, flour and salt to make bread. The next step, akin to Apple moving from iPods/iPhones devices to device hooked to iTunes is to create a digital product that reduces accidents and thus reduces insurance costs.
Bernard Lunn is a Fintech deal-maker, author, investor and thought-leader.
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