By Nikolaus Suehr, CEO and Co-Founder of KASKO.
Wouldn’t it be great if you knew who was single when sitting in a bar? This was my sister’s idea for a localised Tinder in 2014. Far away from InsurTech, but what paved the way to where I am as the CEO and Co-Founder of InsurTech as a Service company, KASKO.
Having always wanted to run my own company, this inspired an events app, making recommendations based on attendees like you, pulling Facebook data. This was enough for me to contact Matt Wardle, my now CTO and Co-Founder, to see if we could get a product off the ground.
Before we worked on that though, we needed to see if we ‘fit’. We had known each other for years, but had never worked together.
We created ‘Quotes of Glory’, an app that curated “stupid” celebrity quotes. This was the test we had needed, it didn’t take off, but we knew WE could work.
We moved to the insurance market as my family and I had massive amounts of experience in it. My dad founded an insurance agency for classic cars in Switzerland, Austria and Germany. And I had studied Insurance and Risk Management, followed by working for a large insurance broker. Lacking the car passion, I moved into strategy consulting for banks and insurers, expanding my skill set whilst keeping options open.
First, we founded Kasko Drive, a solution for short-term car insurance. We won some startup competitions, and moved from Hamburg to Berlin to London. Thanks to high customer acquisition costs, it didn’t gain the desired traction. So we pivoted to finding niche insurances and connecting them to digital marketplaces… That failed too.
One day, one of our insurance partners asked if it would be possible to create digital products to sell through their website. Something they couldn’t’ do internally due to IT issues that would hold everything up. This was our move from being an intermediation service, to our current service model. That was 2017, and we’ve to scaled up to working with leading insurance brands like Allianz, AXA, and Zurich.
KASKO is far from the initial conversation I had with my sister. But the wonderful thing about the journey of building our InsurTech service, is the ability to look back and learn lessons retrospectively:
Test the founding team and keep it small
Scale your team once you’ve won your first customer and proven your MVP. Bring in someone technical, or someone with business and sector experience.
Testing the team is more than just working together, it’s also about expectations and why you’re doing this.
- Are you exiting? If so, when?
- Align both your personal and business finances. How much do you need to earn? Is bootstrapping possible?
- Will one person be under more pressure than the other?
Be transparent
Cash in the bank is the lifeblood for startups, but insurance is highly regulated and there are long sales cycles. The upfront investment can be higher.
Being transparent with your team should play a role in company culture too, which you should invest time in early on. To us this means treating colleagues as you would want to be treated and being fair.
Be wary of mercenaries
Being in a VC-backed startup may be sexy but the winds change, will your team stay when shit hits the fan? When possible, promote internally, reward hard work and loyalty. Be wary of rock stars that don’t play well with others, and keep the African proverb in mind: if you want to go fast go it alone, if you want to go far, go it together.
Sell from day one
There is a huge amount to learn about sales cycles, you won’t know all the ins and outs – even with an industry background. You need to understand the entire value chain and get feedback early.
Network
Priorities within insurance change. Be open to teaming up with other players in the ecosystem to make sure you are there when the time is right. If the tech giants compete and collaborate, so can you. Be humble, don’t just think about your service/product, think about who the right partners would be to do this 100 times over. This means not doing everything that you could be doing (and getting paid yourself) but building partnerships on a use-case basis.
A prime example is to get your company, leaders and products in front of the right people – at KASKO, we are attending numerous events in the coming months and are very much excited to connect with the perfect crowd, InsurTech Hub Munich is a prime example.
Be conscious and wary of product pipelines
You need to create a scalable product portfolio whilst listening to insurance customers’ requests. Get comfortable providing your core service/product while exploring new services, listen to your tech team so you don’t dilute your platform strategy.
Make sure you identify target customers and the willingness they have to pay you, before scaling into the wrong direction. Pivots will happen. Don’t be afraid of change.
Bootstrap
When financing your company, bootstrap from friends and family for as long as possible. If you cannot ship your first MVP and convince your first customer without self-funding, be cautious. Raising money pre-product, esp. in Europe is very dilutive. You might ruin your cap table and have a hard time pivoting later – trust me, you will pivot. If you decide to focus on a consumer offering, think hard. Most companies – even those with excessive venture funding – also offer their tech to monetise assets – customer acquisition is excessively expensive, we found this early on, and have seen it reflected by Lemonade, Trov, Slice, Ladder, Clark, and WeFox.
KASKO like every startup has had it’s ups and downs, directional changes, it is still a journey for us all. The great thing about startups is being able to consistently learn, problem solve, and push yourself to try things you may not have considered yet. The Insurance industry is poised for disruption, good luck!