An interview with Nikolaus Sühr, CEO and Co-Founder, Kasko
How did you get involved with the insurance services industry?
The short version is that insurance is the family business.
The longer version;
My family’s business is an insurance MGA specialising in vintage and high-value cars. Insurance has taken a larger lead in my upbringing than most – and I had to show an interest somewhere – cars wasn’t my thing but insurance was.
My path to co-founding and running an InsurTech startup was a bit different. Having helped my sister with her own startup idea, a project that started as a ‘localised Tinder’ and morphed into an events app called Buzzly – I got a taste for starting my own business.
From here, I reached out to my now co-founder Matt. We had rather fortunately ended up in the same halls at University. Quietly, that is because I chose the wrong campus… So instead of being at business school, I ended up living with friends majoring in engineering, English, philosophy and economics. Anyway, we were good friends, but as so many startup stories will tell you, that doesn’t mean we were fit to run a business together. Being pragmatic people, we formulated the plan of a practice run. Whilst still working full time on our consulting jobs, ‘real jobs’ as we called them at the time. Matt, a few friends and myself, set up “Quotes of Glory”, a small content app. We were not in this one for the money (and a good thing it was as we sure as hell didn’t make any), but to see if we could work alongside each other and be both friends and business partners. Several months later, we were the only ones still standing and we decided to start working on something substantial.
In January 2015, I took a three-month sabbatical with the aim of working out how to take this new-found partnership to the insurance world. The idea we went with was to build an application for short term car insurance products. Instead of building it out properly, we started applying for startup competitions and grants. Our plan was to have an idea after three months as to whether we were in a place to quit our jobs and go full time. “KASKO Drive” won the three day pitch at WHU – Otto Beisheim School of Management and that was our moment of realisation that we had to put all of our efforts in. We quit our jobs and pushed on, just two weeks into the sabbatical.
Later the same year, we were convinced by Seedcamp that London was the place to be – so for the third time in about four months, we were on the move again. In August of 2016, we had been working on our B2B2C intermediation model with very little fiscal success. Sales cycles took too long and getting traction with the big banks and retailers was a lot harder than we had ever imagined.
Fortunately, we had met with Baloise CH. The Swiss insurance giant liked the tech we had built and they had the network reach that we desired – a match made in insurance heaven. The team from Baloise decided that Matt and I were worth a shot, so offered us a license per product model and a small setup and success fee – KASKO’s “InsurTech as a Service” was born.
How do you compete with the insurance firms of old?
In essence, we don’t. Our goals have changed from the early days when we wanted to be the all encompassing insurance providing startup – and we are happy to say that. By partnering with the traditional firms, we enable them to compete with the newer InsurTech providers claiming to take them out of the game and existing competitors alike. We give them market leading flexible technology, they use the reach and brand they have spent decades building to push our technology further and wider than anyone else. It is the perfect win-win.
What are the main challenges?
As a startup there are several challenges – the first being the toughest, convincing the old established firms in our industry that there is opportunity for change with modern flexible technology like ours. The good news is that the business has been growing and we have an ever expanding product range and partnerships with the likes of Baloise, Allianz, AXA, Zurich, Swiss Re and many more.
The other is staying lean whilst we grow – KASKO has managed to prove its value as I mentioned, but in doing so we have proven that there is a market for companies like ours. I have been keen to grow the company whilst developing our offering, not leaving space to be filled. From the start, our USP has been to produce products for insurance companies in a fraction of the time that they used to take – meaning turning around new products in around four weeks, not 18 months. Whilst we increase our size, we have been aware of what makes us unique to our customers, so with every hire, we look to slash the time of turnaround for partners.
What does the future hold?
I think to turn to the future we have to look at the past briefly, we have come so far in a very short space of time, so I am going to take some rest over the holiday period. It has been a crazy year. At the moment our focus is P&C insurance there are fewer long-term risks involved (it is simpler from a regulatory development perspective).
But as next year progresses, we will branch out into life and health insurance, expose our internal tooling to create and manage insurance products to external developers and roll-out a partnership license model to IT-consultancies and large system vendors to improve their capabilities to bring products to market for insurers quicker.
DIFFERENTIATION – THE KEY TO THRIVING IN A SATURATED MARKET
Graham Glass, CEO of Cypher Learning
What has enabled Cypher to continue to grow in an increasingly saturated market?
Recognising opportunities for growth around the world is actually one of the things that has helped us grow. We realized that there were so many opportunities outside of the U.S or Western Europe and actually, a lot of our revenue comes from outside of these regions. For example, with our education based LMS, NEO, we have schools and institutions in the Philippines, Latin America, Norway, Australia, and more. The way we have created the product allows the flexibility for it to be tailored to each educational institution’s exact needs and because of this process, we can provide different languages, different elements of learning and really help the teachers in each country make the most out of the system.
You have recently expanded into four more locations: Australia, Indonesia, Malaysia and Russia. What was the reasoning behind deciding on these locations?
The growing popularity of our learning platforms has made it possible for the company to expand quickly and cover more of the market around the world. The selection of the new sales offices came as a natural move, as we started to get more and more customers in those locations, and we wanted to seize the opportunity to expand even more. We also wanted to provide local support to our customers, which is an important aspect in our strategy. Since we already had an office in The Philippines, opening new locations in Indonesia and Malaysia was essential. In the case of Australia, since we launched the APAC version of our platforms, with servers hosted in Sydney, it was also vital to have a sales office as well.
What is different about your products compared to your competitors?
CYPHER LEARNING is currently the only company on the market that provides a learning platform for each e-learning segment: academic, corporate, and entrepreneurs. Our products are built on the same core platform. They share some functionalities and the overall design of the platform, but they’re targeted towards different markets. NEO is an LMS for schools and universities, MATRIX is an LMS for businesses, and INDIE is an LMS for entrepreneurs. For each of our products, we have created special functionalities that address the needs of each market.
Our platforms are very intuitive, easy to use, and visually appealing, which makes the whole experience more engaging and enjoyable for all users. The navigation is simple, and you can customize the platforms to match your brand and fit your needs.
Our platforms are built to ensure a smooth implementation and they’re easily adopted by students, teachers, trainers, and entrepreneurs. We offer support for 40+ languages, mobile apps for all devices, and accessibility features so all users can enjoy the platform.
CYPHER LEARNING products provide complete solutions with powerful features for managing all teaching and learning activities for schools, organizations, and entrepreneurs.
We’re also focused on bringing innovation through our platforms, by creating cutting-edge features that other systems do not support such as automation, adaptive learning, and competency-based learning.
How do you see the e-learning market changing and developing in the future?
I’m very excited about the future of the e-learning market. Machine learning and artificial intelligence hold great potential in terms of making learning truly personalized. We’re already on that path, taking steps forward with automation, multi-layered neural networks, feedback algorithms, amongst many other developments. And things will advance on a massive scale, rather quickly. With AI in online education, we’re not talking about 20 years until it will become the norm. Some of these technologies are going to be available and mainstream in the next few years. Keeping up with these changes and making sure the incredible amounts of learner data will be used correctly will be challenging, but I have high hopes of what the future has in store for us.
What advice would you offer other individuals and businesses in the e-learning industry?
We’re all in this together so we need to stay true to ourselves. In order to provide the best tools, the best solutions and the most memorable experiences that support people of all ages to learn new things, we need to keep on learning ourselves. That’s the only way to continued growth, both personally and professionally.
IPO: WHY GO PUBLIC?
By Sandy Campart
The main objective of an IPO – Initial Public Offering – is to raise capital in order to allow a company to grow. However, during a global economic slowdown, investors are increasingly cautious. In times like these, how should you prepare to go to the market?
Reasons for an IPO
A company’s motivation for going public is often linked to the idea of “creating one’s own currency” in order to fund internal and external growth, to diversify future sources of finance and strengthen the financial structure of the company. Listing a company on the stock exchange results in tradability and liquidity, allowing previous shareholders to exit, realising a gain on their capital. It also creates a valuation for the company which will be useful for future succession plans. At a strategic level, an IPO can enable the company to clarify its strategy, refocus its activities, increase its visibility and credibility, and ultimately differentiate itself from competitors.
Nonetheless an IPO will significantly change the way a company operates. Corporate governance has to be overhauled, support functions professionalised and financial communication must be made transparent. All studies show that, when information is withheld, the negative impact on the share price is greater than if the bad news had been announced.
2019: a mixed bag
In 2019, newly listed companies have seen their share price grow by almost 13% on average. However, the figures vary greatly. Software and IT security companies have performed the best with an average of nearly 40%.
Nevertheless, the stock market performances of SmileDirect (dental aligners), Peloton (exercise bikes and fitness) and even Uber attest to the increased scepticism of investors for unrealistic or exaggerated levels of profitability. Uber’s price has been particularly disappointing since the latest results presented were well below the expectations of the investors. In the second quarter of 2019, the turnover was more than 5% lower than expected and the profit – or rather the deficit – per share was 53% greater than expected. Uber’s growth has been slower than that of rival app Lyft, and the restructuring costs associated with many departures, lay-offs and resignations do not seem to be controlled. Additionally, Uber’s CEO, Dara Khosrowski, told his employees that the teams were too large to be compatible with the pace of growth needed, while Uber’s CTO, Thuan Pham, believes it could take decades for Uber to achieve its “vision”, suggesting there could be a later than expected ability to turn a profit.
Towards a better year in 2020?
For a company wishing wanting to maximise its initial flotation price, there are two strategies to pursue: the first is to float when the company is performing exceptionally, the second is to wait until the stock market is in a more favourable position.
In the context of a global economic slowdown, investors have for several months been moving towards “safe haven” shares in order to protect their assets. This, combined with the chaotic path of some recently introduced companies and the abundance of private financing, makes it difficult to see an acceleration of operations in 2020.
Even though the flotation of Airbnb remains topical, Postmates (delivery service) and Endeavor (talent agency) have paused their entry to the stock market. It is possible they are prioritizing interest from venture capitalists and risk capitalists. Palantir (Big Data) and Stripe (internet payments) could also look for private funds instead.
The WeWork failure
WeWork is the most prominent example of our current inability to distinguish a unicorn from a chimera. Investors have to learn – or re-learn – how to resist those appealing equity fairy stories and to see beyond the innovative nature and rapid growth of a concept. Cash flow, debt level and governance remain key decision-making factors. In the WeWork prospectus, the word “technology” appears more than 120 times. The Coué method of repetition is here being used to suggest that traditional valuation models should not apply to this business. There is little doubt, however that WeWork is more of a property developer with an innovative business model than it is a technology company.
About Sandy Campart
Sandy Campart is a lecturer and researcher. He is a member of the Centre of Research for Economics and Management (CREM), part of the French National Centre for Scientific Research (CNRS). M. Campart is director of IUP Banque Finance Assurance de Caen – a finance school in Normandy – and author of “If we dared to invest in the stock market”.
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