You are reading the headline correctly. If you follow these tips, your insurtech will either fail or will be heading toward failure.
#5 - Get too much feedback.
I truly believe that feedback is the breakfast of champions, but, if you are focused too much on customer validation and discovery, you will fail, as you haven't executed. To avoid analysis paralysis, I recommend doing enough exploration to test your use case. If you are getting five people telling you directionally the same information, then you are good, and it is time to act. Go Execute! If you are getting five people who are telling you totally different things, then revisit or take your hypothesis and break it down.
Also, keep a watch on who is your feedback base. Are you talking to decision makers or industry experts? Remember: Insurance is a very old and broad industry, and change is difficult. Ensure your feedback base is made up of industry personnel who face the pain that you are going to solve or have knowledge of it.
As a serial entrepreneur, I meet folks every day who are an expert in everything. Really? Getting false confirmations from someone you won't be serving or, on the flip side, someone who doesn't believe you are addressing a real problem can be dangerous for startups. BEWARE. Learn to let the feedback go in one ear and out the other. Here comes the best tip ever: RUN from such advice. (j/k. Be respectful of everyone and develop a filter.)
#4 - Form an imbalanced team.
If you are a technology company with no tech, you have a problem. If you have a product but lack industry expertise in your team, you have a problem. If you are the type who wants to be in every conversation, not only will I say you have a problem, but your team will have problems. The list can go on and on. Having the right team can make or break an insurtech and requires much TRUST.
See also: The Failures and Successes of Insurtech
As an insurtech, having the idea and perhaps the technology is fantastic. Having a team that can implement the product in a frictionless way is the key to more clients and more money. Don’t take shortcuts for implementation. Hire the right people: project managers (ensure they have startup experience or come from a Lean/Agile background), DevOps, QA, etc. Also, ensure you either have a team member or a mentor who specializes in change management to ensure smooth implementation.
If you aren’t from the industry (like me), get completely immersed and surround yourself with mentors, go to events such as Insurtech FastTrack from Startupbootcamp, Global Insurance Accelerator, Insurtech Week and NAIC events (especially if you are doing work that affects regulators).
#3 - Bootstrap.
Most startups fail because they run out of cash. Developing a product is one piece of the puzzle, but how to market and sell takes capital: $$$s and resources. There is a lot of testing and strategy within marketing and sales to get the leads that may convert to customers -- and I haven't even touched on customer retention or operations.
It is a great time to be a startup in the insurance industry. There are so many companies that have created a VC arm to their company or are partnering with accelerators to boost startup activity. Some don’t even take equity in your company, like Hartland.
But don’t take fundraising lightly. If you want to sustain, you need to start the process of understanding the investment landscape during the idea stage. Even if you have someone who is interested in funding, you are not going to get a check the next day miraculously. Due diligence takes a long time - anywhere from three to nine months, sometimes longer. Also, finding the right lead investor or VC company is critical. Don't get desperaten and sign with whomever; be strategic, as you are forming a marriage. Find the partner that aligns with your goals and can open doors with future customers and investors.
#2 - Attend a lot of networking events.
For insurtechs, go to the conferences that will get you exposure. We have been very thrilled with NAIC events as we do have a module that needs regulators' feedback. Also, Insurtech Rising was the very first conference we attended back in May, and we were grateful for the outcomes. We can’t wait to attend InsureTech Connect in Las Vegas in October.
But have you calculated the time you have spent on your business vs. about your business? (Thanks, Action Coach!) Don't get me wrong, networking is AWESOME, but if it doesn't help your company, your clients or you on a personal level (thanks, Brent Williams), you are wasting time. Might as well take a nap or, even better, go work out!
See also: Touching Customers in the Insurtech Era
#1 - Solving all the world's problems.
If your product serves everyone, then you will most likely fail if you don't pivot, focus on a segment or market it correctly. Even Facebook started with a focused audience initially before it took over the world. It is incredible to solve problems for various industries, but go deep into one industry first. Having focus and clarity is critical for startups. As an example, Benekiva as a platform solves problems for any organization that maintains beneficiaries. But, rather than being generic and solving everyone's issues, we decided to focus on the life insurance industry so we can have pinpoint focus and go deep in the organization.