Start-Ups Are Sold, Not Bought
Ever heard the saying, Insurance is sold, not bought?
In health and employee benefits, it couldn’t be truer. So, when I hear from start-up after start-up that they are struggling to break through to brokers and employers it’s no surprise. They don’t understand where their solution is actually sold which means they aren’t selling it to the right people and they aren’t utilizing the right value prop.
Many start-ups I meet introduce their solution as a standalone offering. In every situation I can think of, this has been the first mistake. Last week, I had colorful discussions with Lisa Wardlaw, Sabine VanderLinden, Stephen Goldstein, and Greg Larkin hearing their points of view and some eyebrow-raising data points.
Here are 3 crucial takeaways to help you get your solution into the market:
Is the Carrier Your Buyer?
You must demonstrate that you will make incumbent insurers win more sales, reduce costs and more effectively reduce risks. Literally, nothing else matters. – Greg Larkin
Does your solution materially do any of these for a carrier? No? Then stop because they are not your buyer. Health & benefits are like onions on super growth hormones – the layers are massive and endless. While the point of sale for customers may be at the insurance carrier, your solution might fit better within a disease management program, a wellness platform, an Employee Assistance Program (EAP) or any myriad of embedded services packaged up and sold along with insurance. Some of these offerings are almost as old as insurance itself. Your solution might be what will shake the dust off them (imagine an EAP with 65% utilization!). Your value prop is much stronger to these companies, you can help them win more, you can increase their stagnant margins.
Don’t believe me? Point Solution Fatigue is the newest pandemic of the benefits industry. If you thought carriers were old and slow before, watch them try to move with hundreds of standalone solutions bogging them down. The carriers have learned their lesson and are not the least bit eager to meet another “solution” (unless you have a cure for PSF).
The Carrier is Your Buyer!
You know what value you provide to carriers. Now, it’s time to go meet with them. Wrong. – Stephen Goldstein
Hey, great news! Your solution does materially help a carrier win more sales, reduce costs and / or reduce risks. Now call your buddy at the carrier and have them introduce you to folks. No. Please don’t do that. Even if your friend is in the C-suite, you have some investigative sleuthing to do before you’re ready to present your solution.
@StephenGoldstein wrote a great article “An Insurtech start-up’s guide to navigating an insurance carrier”. In it he details how you can prepare your pitch to the carrier efficiently and effectively. To sum it up:
Find out who holds Profit & Loss (P&L)
Help them understand how you bring value directly to THEM
Remember, time is money, and you don’t have much of either. Know who you’re going to meet with, know why they are the one you should be meeting with, know how your solution will make them successful.
Who the Hell is My Buyer?
It is all about the impact on the P&L. - Sabine VanderLinden
It’s all about the money, money, money!!! If you do not affect the top line growth with good margin then you are not helping solve a problem! - Lisa Wardlaw
Follow the value and operational chains of your solution. Let’s say you have a digital solution for TPAs to adjudicate medical claims. Think carefully about all the processes and procedures that flow in and out of that transaction. Who are all the stakeholders potentially impacted by the solution? Who financially benefits most from your solution, enough to move the needle? Follow the dotted line to where your solution generates the most wins - both quantitatively and qualitatively - and you’ll uncover exactly where to position your solution. That’s your Buyer. Now go get ‘em, tiger!
