Start up your insurance business the lean startup way Mateusz Maj Brussels, 12/12/2017

Actuary +7 yrs experience working for insurers

Researcher PhD in Math & Economics

Entrepreneur insurtech & mobility startups since 2013

About Mat

Insurance is the main way for businesses and individuals to reduce the financial impact of a risk occurring.

Insurance companies sell protection against risk and cultivate risk-averse culture that reduces incentives to take additional risks and to innovate.

What is insurance?

Traditional insurance is broken

Commoditization No Trust No Engagement

Insurtech on the rise Products

UBI – IoT - Drones

Processes AI – SaaS – Blockchain - Mobile

Data IoT – Predecitive - AI

Touchpoints Social – Mobile - Shared

Startups

A startup is a temporary institution designed to create a new product or

service under conditions of extreme uncertainty.

What is a startup?

Startup =

Experiment

What is a startup?

Source:www.cbinsights.com/blog/startup-failure-post-mortem

The Lean Startup is a method for creating and sustaining innovation

in all kinds of organizations.

The lean startup – a scientific approach

There are three areas in which a startup typically faces a very high degree of uncertainty

Product Risk

Customer Risk

Business Model Risk

Can we build this thing at all?

If we build this thing, will people use or buy it?

Can we create a way for this thing to make us money?

Main risks

Validated learning

The lean pyramid Product

Strategy

Vision

What?

How?

Why?

The lean pyramid – why?

Source: Running Lean, Ash Maurya

Qualitative: Why do you exist? Quantitative: How will you measure this impact over 3 years

The lean pyramid – how?

Source: Running Lean, Ash Maurya

Build roadmap Scale in stages every 3 months

The lean pyramid – test

Source: Running Lean, Ash Maurya

“If it disagrees with experiment, it’s wrong.” Richard Feynman

Test with 3-week lean sprint iterations

Source: Running Lean, Ash Maurya

Build – Measure - Learn

Only 48 sprints

to go!

MVP

The smallest thing you can build that lets you quickly make it around the

build/measure/learn loop

MVP ≠ Beta

At every release the user gets something she cannot test, until the last release when they get something they can use.

This is not MVP

Illustration by Henrik Kniberg

Users get something at every release that they can test and use

Real MVP

Illustration by Henrik Kniberg

MVP – B2B2C SaaS

1 Experiment

- Interviews – B2B - Interviews & user surveys – B2C - Market analysis – B2B & B2C

Community-driven approach in collaboration with Mobile Vikings

MVP – B2B2C SaaS

2 Offer

- Slide Deck – B2B - Landing Page – B2C

MVP – B2B2C SaaS

3 1st MVP

- Clickable mockups – B2C - B2B partnership program – B2B

MVP – B2B2C SaaS

4 Product Development

- User flows - Feature prioritization - Usability testing

MVP – B2B2C SaaS 5 Full launch

In collaboration of Mobile Vikings, KBC, Vlaamse Overheid

Big PR success – our app was covered in every major news program in Flanders – radio & TV + 2000 registered users in first 12 hours

Funding from iMinds, ESA, H2020, IWT

MVP – Hardware startup

A very high-end type of MVP. But it worked!

MVP – Hardware startup

Hardware products usually have 2 MVPs:

•  A prototype built to validate the technology

•  A video campaign used to validate the market

A Minimum Viable Product is not a Product, it's a Process

Tools

Lean Canvas

It’s an actionable and entrepreneur-focused business plan that helps

you deconstruct your idea into its 9 key assumptions.

Lean Canvas Project Name 12/12/2017 Iteration #x

Cost Structure Customer Acquisition costs Distribution costs Hosting People, etc.

Revenue Streams Revenue Model Life Time Value Revenue Gross Margin

Problem Top 3 problems

Solution Top 3 features

Key Metrics Key activities you measure

Unique Value Proposition Single, clear, compelling message that states why you are different and worth paying attention

Unfair Advantage Can’t be easily copied or bought

Channels Path to customers

Customer Segments Target customers

PRODUCT MARKET

Case Study: Metromile

Pay-per mile insurance for low mileage drivers

1. Customer segment

1) Low-mileage urban drivers

2) Sharing-economy drivers e.g. car-sharing, car pooling, Uber

2. Problem

1) Too high car insurance premiums for low-mileage, urban drivers

2) No insurance coverage for on-demand car services

3. Unique Value Proposition 1.  The only real Usage-Based Insurance

– pay per mile 2.  The only personalized insurance for urban

drivers and millenials who use car less regular and less frequent

3.  Metromile app with superior user/customer experience

4. Solution

Pay-per-mile car insurance and a smart driving app that monitors driving behaviour and vehicle safety aims to make

car ownership less expensive, more convenient, and as simple as it can be.

5. Channels

1.  Website 2.  Appstore/Playstore 3.  Agents 4.  Social Media

6. Revenue streams

Pey-per mile is a type of usage-based insurance, where users pay a base rate along with a fixed rate per mile. Base rate ($30.00) + per-mile rate (3.20 ¢)

7. Cost Structure

1.  Cloud system 2.  Software development 3.  Wireless technology (OBD box) 4.  Operations & Maintenance 5.  Other (Offices, Staff, Help center, Legal, …)

8. Key Metrics

1.  Customer acquisition cost 2.  Customer retention 3.  Insurance metrics – Loss ratio , combined

ratio 4.  Viral reach

9. Unfair Advantage

1.  Collaboration with Uber 2.  $191.5 million in funding from

top funds

Game

The lean startup in a corporate world 1.  Build a risk-taking culture 2.  Willingness to really change 3.  Eco-system thinking 4.  Lean is a mindset not just a process 5.  Implementation at all levels,

especially management

mat@vivadrive.io

Mateusz Maj

Let’s innovate together