February 21, 2017

Separating the wheat from the chaff


Toward the end of my days as a reporter at the Wall Street Journal, some friends started calling me Dr. Death, because everything I covered seemed to shrivel up. IBM was the most important company in the world when I started writing about it in 1986 and was having a near-death experience by the time I moved off the beat in 1993. Mexico was the darling of the developing world when I moved there in 1993 but pretty much fell apart in 1995 following a devaluation of the currency. When I moved to Silicon Valley in 1996, an acquaintance who worked in PR at Intel called me and said, “I will pay you money to not cover my company.” I did, in fact, get assigned to the semiconductor industry, which went into a two-year recession. 

Now, I’m not trying to scare anybody. I’ve been involved with ITL for almost 3 1/2 years now, and so far, so good. The insurance industry’s potential seems to me to be boundless. But my time as Dr. Death convinced me that we don’t focus enough on the possibility of failure. That conviction led to my book with Chunka Mui, “Billion Dollar Lesssons: What You Can Learn From the Most Inexcusable Business Failures of the Last 25 Years,” for which we had 20 researchers spend two years looking at 2,500 failures. That conviction has led to quite a bit of work since then, too, on failures and to the belief that, as we look at the bounty of innovation appearing in insurtech, we need to keep this in mind: We want to believe that every tree grows to the sky, that every startup will be Uber, but more than 90% of startups fail.

The question is: Which are the 90%, and which are the 10% that will thrive, transforming the industry? The best analysis I’ve seen on the issue comes from Nick Lamparelli, who has given us “A Simple Model to Assess Insurtechs.” We at ITL continue to build out the capabilities of The Innovator’s Edge, which not only tracks the more than 850 insurtechs we’ve identified but which has been gathering the sort of information that providers tell us will help them find those they want to buy from, those they want to form partnerships with and those they may want to acquire. (Side note to insurtechs: If you haven’t yet filled out our Market Maturity Review, please contact us at; a half-hour spent on the MMR will help you gain visibility within our community.) We’ll continue to do our part to help you separate the wheat from the chaff.

For now, I mostly want to remind you that there really is a lot of chaff, so be careful. When I was at a personal computing conference in 1987 and retired to the bar—where the real work was done—I sat next to a guy who told me about his tiny startup and a product it called Presenter. I knew immediately he had a winner and wrote about the product in the Journal. You know the product as PowerPoint. But it’s usually a lot harder to know who the winners will be.


About the Author

Paul Carroll is the editor-in-chief of Insurance Thought Leadership. He is also co-author of Billion Dollar Lessons: What You Can Learn From the Most Inexcusable Business Failures of the Last 25 Years and the author of a best-seller on IBM, published in 1993. Carroll spent 17 years at the Wall Street Journal as an editor and reporter; he was nominated twice for the Pulitzer Prize. He later was a finalist for a National Magazine Award.

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