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THE KEY TO UNLOCKING GROWTH IN YOUR BUSINESS LIES IN ‘GO TO MARKET FIT’

Tae Hea Nahm is the cofounding MD of Storm Ventures, which invests in tech and SaaS start-ups all over the world. He’s the author of the book series Survival to Thrival: Building the Enterprise Startup, which provides B2B entrepreneurs with all they need to know to grow and then thrive. His latest title in the series, Change or Be Changed is out in April. Here he tells us the secrets to growth and the lesser addressed topic of how to manage it.

 

What business problem for entrepreneurs do your books address?

The first book was all about unlocking growth – the thing that every start-up wants to address. We came up with a concept which we believe is the missing link to unlock enterprise growth. It’s called ‘Go-To-Market Fit’. Many start-ups will know about finding ‘Product-Market-Fit’ (PMF). But even when they find PMF, they still often find it hard to transcend from survival mode to thrival mode. The bridge between these two modes is finding your unique ‘Go-to-Market-Fit’.

 

Tae Hea Nahm

The first book also helps founders anticipate their start-up journey from founding to $1 billion company.

Book two is about what happens after you’ve unlocked growth. Why is change so hard on the team, including the CEO? Our book looks at how the whole company from the team up to the board needs to change their roles as the company grows.

 

So why exactly is growth so hard on the team once it’s underway?

Finding the growth formula is hard to start with. Then once you have the growth formula (i.e. GTM Fit), the company must change its strategy, execution, organization and even its people to scale and succeed.

 

Here’s why: As the company grows, roles change. Yet there is little institutional knowledge passed down to help start-up leaders understand how their jobs change, and therefore how they must change themselves to succeed. Some of what makes people successful in the early stage ironically must be unlearned for the next stage. This theme ofunlearning’ is what I focus on in my second book. Unlearning is an invigorating and transformational experience, yet painful and turbulent for the team, the CEO and the board. Common company culture becomes more important during this stage and the thing which holds the team together.

 

Can you give an example of how growth can be hard on the team?

A classic example would be when the CEO hires the first “Grade-A” role such as a VP of Sales. Adding this is critical to company growth, but it can make a CEO and others uncomfortable. The VP will push everyone in the company—the CEO, the product team, the marketing team—to the next level. They may point out that early customer-acquisition processes that were the pride of the company were actually a one-off, unrepeatable sale, and will demand that the company develop a repeatable sales model (a playbook). Everyone realises that the old ways of making decisions and doing business will have to change. But the good news is discomfort is normal. Embrace it.

 

What sort of companies do you invest in and why the interest outside of Silicon Valley?

We invest in early stage B2B companies all over the world. Many VCs stick to the Bay area but we want to invest outside Silicon Valley, because i) you don’t have to be in Silicon Valley to access the best technology (Cloud, open source etc are available everywhere), and ii) Silicon Valley has a fundamental cost and retention disadvantage. Most importantly, we have seen huge success for our investments outside Silicon Valley.

 

What are the trends you are seeing in the tech SaaS arena?

Rewriting SaaS architecture to leverage AI. Traditional SaaS (like CRM) was architected for automating workflow and built on transactional data models (like Oracle). Companies have been trying to bolt on AI to SaaS. We believe that the application should first be built for AI and then add SaaS. AI is architected to predict behavior and is built on behavioral data models (like Google and Facebook).

 

 

Considering you invest in tech services for enterprises, does your company use super slick apps on a day to day basis – if so, which are the must-haves?

As a small tech office, we find that we must communicate with everyone everywhere. So we use WhatsApp for Europe, and Kakao for Korea, FaceTime for apple users, Google Hangouts for some video, zoom for basic video conferencing. We are constantly adding new communications apps

For our base deal workflow, we use copper as our CRM and Google Drive for document sharing.

 

Tae Hea Nahm’s first book The Company Journey can be found at the following link: https://www.amazon.co.uk/Survival-Thrival-Building-Enterprise-Startup/dp/1684014905

 

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Interviews

EVOLUTION OF THE LIFE INSURANCE INDUSTRY

by Samantha Chow, LAH Markets Lead at EIS

1.  What problems does the life insurance industry face when it comes to data?  

The most significant problem that life insurers face is how they use data and how it is spread amongst multiple legacy systems.  Sometimes the data is split over at least 25 different legacy systems all through the business.

This data is also typically defined differently between disparate systems. For example, in one system of record, the policy number may be the key identifier for a policy, and in another system, it could be the national insurance number. This makes it extremely difficult to pull data together to get a clear picture of an individual’s policy life cycle or journey.   

Without understanding what the entire journey looks like, tools like AI and ML are only superficial. These tools can only work in situations when it has unhindered access to all the information, during the underwriting and onboarding process, for example.   

With modern core technology, life insurers are able to integrate legacy systems through open API architecture and provide an all-around view of the customer. 

2.       Why is data quality an extensive challenge for the life insurance industry?  

The data is often fragmented and stored in separate blocks for each piece of software being used. For example, claims need access to a data centre in order to access underwriting data for the claims review process. With this data often being disparate over various areas, most of it is recorded manually. 

We are now starting to see the automation of applications and a movement from paper to electronic, but this isn’t happening enough to improve the not in good order challenges (NIGO) that life and annuity providers experience.   

The amount of manual data entry that still occurs creates immediate challenges and challenges that arise later down the line. The mistakes made in the application process will haunt the insurer down the road when it comes to the likes of billing, payments and claims.   

However, life insurers can use solutions such as LexisNexis Risk Solutions or Equifax to help with the onboarding process. These are great solutions and can check for any potential inaccuracies in the customer’s address, telephone number and finances. With that being said, insurance carriers’ archaic legacy systems will still leave space for manual errors, with some even leading to fines. 

3.       How has technology impacted life insurers?   

With 59% of insurers upping digital transformation spend this year, it is clear that they understand how important technology and automation are. However, insurers tend to have outdated legacy and modern legacy solutions, which slow down the insurer’s response to product development and changes.

Insurers will need the technology platform that follows the coretech model to enable an ecosystem to meet customers anywhere, any way they wish, with the products that are fitting for their personal needs, and predict and act quickly in the face of unforeseen circumstances. The emergence of insurtechs, spurred by the development and capabilities of new technology, has enabled insurance firms to future-proof their businesses and provided them with the opportunity to create new value propositions based on the modern customer’s needs.  

Achieving large-scale cost reduction is a significant aim for life insurers and automating manual tasks and simplifying processes will help them reach that point faster. This way, life insurers can achieve substantial advantages and reduce errors caused by human intervention.

4.       Does an ecosystem help life insurers to build their business for the future? If so, how?

Becoming part of a partner ecosystem can help life insurers offer a portfolio of different products and services. This includes capabilities from adjacent industries, technology giants, and the emerging insurtech community. Ecosystems allow insurers to create their own unique fingerprint in the industry while being more flexible to change and evolving as their customers do.

A strong ecosystem provides insurers the opportunity to be proactive, rather than reactive. It gives them to tools that provide the insurer the opportunity to personalise their business to the individual customer and product level and build relationships with their customers. If insurers want to become more innovative, they must continue to produce new products and services for their customers. Transitioning from the “one-and-done” sale to a more interactive, always-on relationship will create expanded revenue opportunities through long-term relationships and brand loyalty.

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Interviews

‘GLOBAL TRADE IN 2008 VS 2021: GLOBAL IMPACT, DIFFERENT CHALLENGES’

A Q&A with Nawaz Ali Head of Insights at Western Union Business Solutions who draws comparisons between the financial crisis of 2008 and the coronavirus pandemic and provides some insight into how businesses can better plan for the year ahead.

 

2020 has been a tumultuous year for global trade with many drawing comparisons to the financial crash of 2008, how do you think the two crises compare?

Though both crises were global in nature and had far reaching impacts worldwide, it is important to note that the dynamics of today’s global trade have shifted in the past 12 years. Today, faster digital transformation can help enable the global services trade to counterbalance some of the impact of the protectionist policies, which we typically witness in times of crisis, on the global goods trade.

Even so, the recovery of global trade could still be very gradual as these more protectionist behaviours could also keep trade activity near to its lowest level over the past 10 years.

Unlike in 2008, this time both global supply and demand factors are at play, so the effects could last longer. Furthermore, this time around the crisis is broad and impacting all sectors whereas in 2008, the crisis was more concentrated in the banking sector.

The recent vaccine developments have been an important turning point, and we’ve seen an immediate positive impact if, for example, you look towards the recent spike in commodity prices. However,  global demand could still remain distressed  in 2021 due to  corporate insolvency risks and weaker purchasing power of consumers.

Similar to 2008, global interest rates have been cut to new historic lows by central banks which should underpin investment and support the recovery. However, the key factor for any recovery actually lies more in the mass development and distribution of the COVID-19 vaccine, and it is that uncertainty which spurred governments into also launching record amounts of fiscal stimulus.

Nevertheless, by putting the right plans in place for 2021 businesses will be able to better equip themselves to recover from the pandemic.

 

When a crisis hits, typically investors rush to safe-haven currencies to minimise their losses. Could this have a different impact today when compared to 2008?

Yes, the geopolitical differences between now and 2008 are stark. Today, the first signs of a capital rotation into risk-prone assets are emerging. With the US-Sino trade war, domestic mismanagement of COVID-19 in the US, and rising global geopolitical tensions, now could be the beginning of a major multi‑year global FX regime change as investors start to look for alternatives for the greenback.

Despite the fact investors have failed to find a credible substitute for the dollar since 2010, in this volatile environment it is critical that businesses ensure they understand their FX exposure and have plans in place for every potential scenario.

There is a disconnect between stock markets and the economy. Investors remain optimistic about the economic turnaround on the horizon, but the reality is far from certain. If the risk of long‑term economic damage rises, this optimism will likely fade and weigh on risk‑friendly currencies, including Sterling, and boost safe-havens like the Japanese Yen and Swiss Franc.

In short, with global interest rates converging, proper crisis management and economic growth differentials could overhaul the balance of power on the world stage after the recession.

 

Aside from the coronavirus pandemic, what other marquee events should businesses be planning around in 2021?

Of course, there are many other seismic geopolitical issues that should be taken into account when planning for 2021, which will have significant impacts on currency markets, such as Brexit, US-UK trade negotiations and regime change following the US election result – a Joe Biden presidency could have a material impact on the global trade environment.

Analysing the Brexit example alone, in a world gripped by virus-related supply chain disruption and growth concerns, a no-trade deal Brexit could exacerbate the economic shock. There are currently no tariffs on trade between the UK and EU and if a  trade deal or an extension of talks is not in place by Dec. 31, 2020, resulting barriers to trade could significantly harm export and import business and further damage any economic recovery.

Herein, the importance of a business evaluating the risks and opportunities related to the ongoing disruption in global trade on a more regular basis cannot be understated.

 

How can companies be better prepared for these challenges going into 2021?

The rise of geopolitical themes such as trade wars, and the growing influence of political figures on financial markets, has significantly increased the complexity around judging future market trends and their implications for international business. We discuss how businesses can better prepare for some of the most topical challenges  in our Are you Ready for 2021? guide.

 In summary, regardless of a businesses’ goals, understanding their FX risk and exposure should be part of every businesses strategy so that they can better pivot at speed and at scale in times of crises and minimise potential damage to their business.

 

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