Episode 5: Full Transcript

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[00:00:01.04] KABIR SYED: So my personal belief is niche things don't solve problems, they just create more problems. That's why when VCs tell me, you have to just focus on this small problem, I'm like, no. There's a whole thing. You have to go for, right? Yes, it's humongous. Yes, it's-- but you've got to put your heart at it. And don't ask a client what they want. Say what is the problem and solve it.

[00:00:29.82] SPEAKER: This is the Insurance Technology podcast where we bring interesting people from across the insurance ecosystem to discuss and debate technology's impact on the industry. Join us each episode for insights and best practices from industry stewards and tomorrow's innovators. Now, here's your host, Reid Holzworth.

[00:00:50.19] REID HOLZWORTH: All right, we're back. In this episode, we talk to Kabir about what it's like to own an InsurTech, sell that InsurTech. Him and I go back and forth a lot on that as I obviously have some experience there as well. Now, it's really good though, because we get into some personal stuff as well about Kabir and some of the things he likes to do. Really good stuff there. And one of the things we get into is some of the people he's looking at, he's watching, and as he says, the rebels, not influencers. So I hope you enjoy it.

[00:01:28.55] All right, so tell us a little-- so one other thing, so a bunch of people are listening to this are InsurTech startups, right? We've both been there. We've done that, lived in that world. Any advice, simple advice, to anybody?

[00:01:48.27] KABIR SYED: Be optimistic, absolutely. People will say no. You just got to keep going. There is no such thing as a rosy road. Absolutely not. Nobody, whether you have enough money or no money, there's no road. Don't solve a niche problem. Look at the complete process of where the problem is, and what they're trying to achieve. Otherwise, you will just be a very tiny piece of it. Look at this holistically, and do things where you shoot for the star.

[00:02:23.79] So my personal belief is niche things don't solve problems. They just create problems. That's why when VCs tell me, you have to just focus on this small problem, I'm like, no. There's a whole thing you have to go for, right? Yes, it's humongous. Yes, it's-- but you've got to put your heart into it.

[00:02:44.22] And don't ask a client what they want. Say what is the problem and solve it. If you ask somebody what they want, if I don't even know that there is something else existing. We are all hampered or have blinkers in our experience, right? Like for example, I couldn't buy exposure data in 2013. It was very difficult to buy. Now you have it dime a dozen companies. So I can't say those things. So we have to say, if I have to solve this problem, what do I need, and how can I solve it so it's easier?

[00:03:17.13] And have different models. Don't follow where it has to be MKRR of this and MRR of that. Those are all very big words for people who are existing advisors. You're an operator. Think for the user.

[00:03:34.97] REID HOLZWORTH: I see a lot of startups get just caught up in shiny objects. And I would agree with exactly everything you just said. Honor your word. It's hard for people to just do simple stuff. Everybody goes through this kind of entrepreneurial stage where they want to get all the best technology and the best things and all this. And we're going to do that, and hire the best person, close frickin' deals, because at the end of the day, that's what matters. Me, personally, and this is just my thing, I love to bootstrap. I say bootstrap as long as you can to hold on to your equity. Get it going, get it out to market.

[00:04:15.44] KABIR SYED: You're absolutely right. What has happened now with InsurTech, the focus is on getting the largest funding or the most named resource. And people are saying, I'll get the most number of users or the most number of clients. That's not why you start a company. I mean, maybe people do it but that's not going to be a successful venture.

[00:04:35.09] REID HOLZWORTH: These guys-- like people don't understand too that you go down that road, you go down that whole alphabet road, starting wherever you start. I have a lot of buddies who have executed out, sorry, they exited out-- executed-- they exited out of the organization really huge multiples 8%, 9%, 7% equity. Founder, less than 10% equity at exit as a founder. And it just because you just get diluted down all the way. Now, they're taking chips off the table along the way, don't get me wrong. And I think that there is a lot-- there is advantage to having a big pile of cash in the beginning.

[00:05:16.32] But I don't know man, I really believe you got to get out there, and you've got to build something. You've got to do something. It's a little bit different if you're really seasoned at it and you have the network, and you've done it multiple times. You know who's who and everything, and you know what it's going to take. You just go raise the cash quick, and you're just paying that back in that way. But if you're really starting something from nothing, that's my advice on it.

[00:05:42.59] KABIR SYED: Now, you're absolutely right. And one of the other things I always say is, if you take somebody else's money, you're playing with somebody else's money. You'll spend it differently.

[00:05:53.07] REID HOLZWORTH: Yeah, and it's a different kind of pressure, man. People don't understand that. Yeah, absolutely. I know that's where you're going with it. Go ahead, please. Sorry.

[00:06:00.11] KABIR SYED: And the second part is you're going to be very creative when you have less. You will not have, you should not have the luxury of unlimited funds or whatever you think is unlimited. The focus is not on raising the biggest checks. The focus should be on solving the biggest problems, and that's how you get your client, and that's how they trust you.

[00:06:22.45] REID HOLZWORTH: And that's how you get the biggest check. The real check is by solving a real problem, right? Yeah, that's cool. So, all right. So big question, word on the street is that you're doing something. Nobody really knows. Been a little quiet. You're assembling a team, some amazing people that we know. So I don't know, anything for the audience like what you guys are up to? What you're working on?

[00:07:00.05] KABIR SYED: So broadly, what we're trying to do is we are trying to say, look, there is a lot of technology in the insurance industry, but it is very fragmented. We are creating the same problems that we had before, which is here's my CRM, and I gave them. Here's my AMS, and here's my whatever [INAUDIBLE], RiskMatch, and keep going on and on. If we are going to have an insurance stack like that, we are not going to win. Absolutely not, because if you look at the insurance stack and if you see when newcomers come in, look at all the ones that have done very, very well. They were not started by insurance people itself, because they were started by somebody who had tech savvy and learned insurance. My point is, can we as insurance people not start something and do this? Why is it that somebody from outside always breaks into something and makes it big? Why can't we do that?

[00:07:51.82] The second philosophy that we have is we are saying, look, we think brokers are important, but you've got to be much more agile and savvy in how much you touch things. Do what's good in terms of what you're good at and automate the rest. And I'm not saying take jobs out. We now have systems where people have to just update all the time. I don't understand that. Why is it now the job becomes more keeping the data updated than using the data and actually being with the client or being with the carrier or whatever it is? Because then you are not solving a problem. You just have this morass of data.

[00:08:28.33] So we are saying, can we build something or can we create something that is open enough to include other players? Can we say if production is one thing, who should you target? If placement is one thing, how do you place? And we don't have to build everything, and we put on other people who are good. There's new ways of targeting. There's new ways of communicating. Can we package it together? Because if I'm a sales-- so let's say I'm Kabir. I'm good at talking people's heads off, but I'm not good at research. Well, why can't somebody do research for me? Because as a producer, you have to first do a shot.

[00:09:04.76] A producer uses seven, eight systems, and I'm like, I'm shocked. Who has the time to go to seven different systems and pick here, pick here, pick here and then package it and send an email. Well, maybe my skills in research are not good. Or maybe my packaging skills are not good. Or maybe my placement skills are not good. So we're saying, can we build something that's an open platform that only helps distribution? It is not for any other industry, only for the distribution of insurance.

[00:09:30.33] And that's one part. And the second part is we've got to accelerate and take data out of the hands of people. So if you think of brokerages, take the 44,000 brokers. I can tell you I don't know more than 50 CIOs in the 44,000 insurance brokers and agents. We don't have that. So we're saying, well, why are we throwing technology at people and systems at people when they can't manage it? It's very [INAUDIBLE] for them, right? So it's like, hey, I have a three-car garage, but I'll give you five cars. Which car? I don't know which car to use. I don't know how to start this car. I don't know to-- so those kinds of things. We're saying we can't throw things at people where they can't solve the problem. Solve the problem rather than give a technology for it. And that's what we want to create to say can we let others play.

[00:10:24.87] Hey, there's somebody who is very good at-- like do you want to be an AMS? No, there are great AMSs. Let's use them. And we can meet with an AMS, partner with them and say, this is what we can do. This is what makes it easy, and hey, we can be part of an ecosystem? Do we want to do a placement? Yes, but hey, we don't want to be the stripe of insurance. We don't, because there are other people who are good at that. Let's use that and say, hey, let's partner together so that we solve a problem. We can be like how most companies see. Oh, I'll have a blue program, and I'll have an orange program or things like that and only include few people, because then you're not serving everybody. Again, I've learned that philosophy has to drive what you are doing, otherwise, you're just going to say it a website and not do it in your product.

[00:11:13.76] REID HOLZWORTH: That's awesome, man. Well, to be continued on that. So this has been really good. So a few more things-- one, who would you recommend I interview next? Maybe a good recommendation of somebody that I should go and talk to. Could be somebody I know, maybe somebody I don't know, either way.

[00:11:37.20] KABIR SYED: I think you should take a mix of rebel operators, progressive operators, and where is the money flowing into? So take up InsureTechs, because they are going to look at a huge array of landscapes. So if you think of rebel-- because otherwise everybody is doing the very similar things. And if you think of rebel operators or data analytics people like that, they're trying to do something. John Mollica at Alera is good, is a person to think of. Then an InsureTech which is actually on the carrier side, very new, almost a carrier. I don't know if you know Corvus Insurance.

[00:12:25.14] REID HOLZWORTH: No, not personally.

[00:12:26.64] KABIR SYED: Very interesting, they just raised a boatload of money. Reid Spitz of HDVI. It's a long haul trucking carrier, very, very different. Because I mean, think about it. Why would somebody start a carrier? It was started by the former CEO of Esurance-- and you get a very different combination. Then there's a very interesting data company that's changing underwriting. And if you think I'm outspoken, this guy's like eight times Kabir. He's smart and outspoken by the way. He drives-- oh my God. So the name of the guy's Hari, H-A-R-I, Sundram. The company is Verikai. So fundamentally, they are changing things in different ways. One is, how do you underwrite benefits? Because if you think of benefits, if you think BMC is bad, well you should just look at benefits--

[00:13:21.15] REID HOLZWORTH: Benefits is the last frontier, man. It is.

[00:13:23.25] KABIR SYED: --is painful. Well, I think that's how do you target? And data has-- and they help brokers and carriers. So these are different people. I always say I don't pay attention to influencers at all, because I'm like, well, it's easy to talk, but can you do something? You have run a company-- building a team, building a culture, changing behavior, selling it to somebody. I'm saying it takes a long time and constant effort. It's easy to put anything in words and say, well, this is my picture and this is what I say. I'm like, nah, it doesn't work that way. So I always go for rebels in each of those categories to say, how you're different? How do you look at it, and what are you achieving?

[00:14:07.98] REID HOLZWORTH: I think there's a big difference between social media influencers and people that actually influence the industry. And I consider you one of those guys.

[00:14:20.97] KABIR SYED: Oh, my God.

[00:14:21.87] REID HOLZWORTH: By the way, talk about outspoken. You've been very mild on this call. So you've been very, very good. On your best behavior, if you will. All right, the last couple of things. So what do you do for fun these days? What does Kabir do for fun?

[00:14:44.73] REID HOLZWORTH: And by the way, I get this same question and it's like, which one do you want to choose? And I know you're that way too, because we know each other that way. But for the audience, what does Kabir find fun?

[00:14:55.51] KABIR SYED: I love to travel, so it's been very tough the last-- but again I love to find loopholes. So first thing, I love to travel. So what did the CDC say? Hey, you can go and come back within 24 hours. I'm like, done. [INAUDIBLE] It's kind of dumb because you can catch it in five minutes, but I'm like, well, I've not got it so far, so I'm fine. So I travel a lot to different-- whether to meet former clients or buddies or just someplace where I can go and chill. The picture that I'd sent you, that was-- so I love that.

[00:15:28.48] Second thing is I got into drinking wine when I started RiskMatch. So I thought I will start collecting, but obviously like you know me, I don't collect. I just drink. So I've been drinking some very different kinds of wines, so that's the one part of it. And I love looking at cars. I love cars. I see you have a car collection. I don't have an extensive collection like yours, but I do trade cars constantly. And my wife says, what is wrong with you? Are you going with the midlife crisis? I'm like, no, I just like to change cars. That's all it is. So I drive cars a lot. And it's been fantastic the last year, because there's not much traffic on the road now. So you zip through and then you got to have a good radar system. But other than that, I love to go and do that.

[00:16:21.84] REID HOLZWORTH: Yeah. Well, I hear you're really into cars that are typically red in general, which will zip by some things in a very fun way. So that's all. So then, so the last question. What's your favorite drink?

[00:16:38.70] KABIR SYED: Ooh, it depends on the situation. So my favorite drink if I'm in the let's say the Caribbean or by the ocean would be a cold beer. I would be happy with a cold beer. However, and if I'm in the Northeast or in business meetings, I love a Cabernet or one of those heavy wines. Most people don't love wines. I'll drink it over here in the summer, but on the beach, I don't want wine. And I don't know why I'm wired that way, maybe--

[00:17:08.82] REID HOLZWORTH: I think that's pretty typical. I mean white wine on the beach and stuff like that maybe warm weather, white wine. But man, I've spent a lot of time in Florida and you just don't want red wine when it's hot out, but yeah so cold beer.

[00:17:25.53] KABIR SYED: But I like to have fruity drinks too, so with a little thing I'm like, Oh, this is great. I used to drink a lot of-- what's it called? The James Bond drink, but I realized I can--

[00:17:36.81] REID HOLZWORTH: Martinis?

[00:17:37.10] KABIR SYED: Martinis. But I realized I can only drink two or three and then I'm done.

[00:17:40.87] REID HOLZWORTH: I know. I love Martinis, but you can't do it, man. You can't do a bunch of them. It's not going to end well.

[00:17:50.42] KABIR SYED: I used to go to Vegas five times a year. I loved going to Vegas, because I would be-- when I was at Marsh, I was in San Francisco visiting an office, and I had to come back on Monday. And I would say, hey, Marsh, can you just pay for me to go to Vegas and I'll come back so I don't have to pay for the whole trip? They're like, done. So I went to Vegas all the time, and I loved it. So I don't do it anymore. It's been four or five years now since I've been.

[00:18:18.39] REID HOLZWORTH: Well, hey, this has been awesome Kabir. I appreciate your time, and yeah, you're an interesting individual, man. I'm sure the audience is going to find a lot of benefit throughout this. Yeah, so I guess we're done. That's a wrap. Cut it.

[00:18:37.02] KABIR SYED: That's great, man. It was always-- it's always fun talking to you. You have done such great things, and I love talking and chatting. And we are very similar in our mindset.

[00:18:48.99] REID HOLZWORTH: Wow, that was great. Kabir, what an interesting guy. I said in the first episode, if you listened to it, that Kabir is one of those people that not everybody knows. But the people that really know him, when his name is said in a room, people smile. They chuckle. They smirk, right? Because he has just such an interesting perspective on life. And you get a little flavor of that.

[00:19:13.98] But if you see Kabir out during an event, see him out on the streets, whatever you're doing, hang out with the guy and you'll see what I'm talking about. Buy him a drink. Buy him his favorite drink, which is anything, I guess. But hey, I'm the same way. Nice hot day, I love a cold beer. Nice cab, good Martini. I look forward to bringing you, like Kabir said, more rebels to The Insurance Technology podcast in the future. Thank you for joining, and stay tuned for more episodes.

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