There has been no shortage of founders looking to transform insurance over the last five years, but turning innovative insurtech ideas into successful businesses is an incredibly tough challenge.
Jerad Leigh is the co-founder of Supercede, one of many companies we’ve worked with at InsTech London that have made the leap from 'early stage' to ‘established'. He joins Matthew on Podcast 151 to share his experience of that journey and some great advice on how to build a business.
Talking points include:
- How to test your idea before you quit your job
- Whether to build or buy your technology
- Where to look for seed funding
- Juggling day-to-day operations with fundraising
- Selling versus research? Tactics for getting your first clients
- The power of communities
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Continuing Professional Development - Learning Objectives
InsTech London is accredited by The Chartered Insurance Institute (CII). By listening to an InsTech London podcast, or reading the accompanying transcript, you can claim up to 0.5 CPD hours towards the CII member CPD scheme.
- Claim 0.5 hours for listening to Episode 151 of the InsTech London Podcast
The founder's journey: surviving and thriving as a start-up - Episode 151 highlights
Matthew: What does Supercede do?
Jerad: We are a reinsurance-focused placing platform, aiming to make reinsurance as efficient as possible for all parties. We tackle the pain points that I and co-founder Ben Rose saw when we worked in the industry.
Matthew: What has the company been up to recently?
Jerad: We added our analytics proposition a couple of months ago. Markel is our largest client for that. On the placement side, deal flow and broker adoption are growing.
Matthew: You set up Supercede when you were still working. Why did you decide to leave a safe job and set up a company?
Jerad: My advice for aspiring founders is not to hold too preciously to your idea. You do not want to leave a secure well-paying job with a fragile idea. It is better to stress test and potentially break or kill that idea while you still have a paid job.
Be willing to receive criticism and feedback on your ideas from people who understand the problems you are trying to solve. We had several early mentors who helped us stress test our idea.
Matthew: While you were still employed, how did you test your start-up proposition?
Jerad: It was a lot of evenings and weekends, picking the brains of various people. We are fortunate to be in an industry that loves being social, but you must find time for it.
You are never going to get investment whilst you’re employed. Some conversations turn into angel investments. If you don’t test the idea, you will not be prepared for challenges when you enter the market.
Matthew: What has your experience as a founder taught you about making the leap?
Jerad: Stress testing your idea is important. Finding your co-founding team is critical. Also, understanding your approach to building the business, and being flexible with that approach, is vital.
Matthew: What should people look for in a co-founder?
Jerad: A co-founder should be someone you respect regarding the quality of their work and their commitment. But you should also be aligned on your ideal outcome. Is it to build a business and take it public? Is it to do something for a few years and try to sell it as quickly as possible?
Matthew: For the CTO role, how do you ensure the person has the right technical skills, and that they accept the job?
Jerad: I see far too many (re)insurance founders who are outsourcing their technology. If you are going to build a technology company, you need to build a technology company. You cannot find development partners. You cannot outsource. This is essential.
A lot of aspiring teams make this mistake. They lose control over everything, and there is a divorce between the activity and the output. Bringing technology in house is fundamentally important to building a technology company.
It is important to divide the equity fairly amongst those three people. This is a journey you are going on together for 10-plus years.
Matthew: Does your advice about outsourcing technology also apply to MGAs, for example?
Jerad: No, in that case, it is not a technology company. When building an MGA, broker, insurance or reinsurance company, you should look for best-in-class technology to build that business on.
Matthew: Where should founders look for seed funding before generating revenue?
Jerad: Insurtech has grown over the last couple of years to be a significant area of investment. The perception is that it is relatively easy to get investment into early-stage companies. But a lot of venture capital firms are looking for revenue-generating ideas with product-market fit and proof points.
The best point of early engagement is angels. Finding angels who are underwriting or in your sector’s broking business helps validate the idea to future investors.
Matthew: You ran your own pitch night; how did that work out?
Jerad: It was an idea I received from another founder. We booked a room in central London for around 20 people. A few of those people invested in us and a few made introductions. It helped us close our £500,000 pre-seed round with both institutional investors and angels.
Matthew: How did you manage compliance when raising funds?
Jerad: There’s a company in London called SeedLegals, which does all the legal work to get early-stage companies off the ground compliantly.
It is like the movement of technology across other sectors. For example, we benefited from Amazon Web Services so we didn’t need to buy servers from IBM.
Supercede was also fortunate enough to win the Norton Rose Fulbright Insurathon. We have a good relationship with Norton Rose Fulbright, which we use for support as we scale the business.
Matthew: What tools do you use to run your business efficiently?
Jerad: When operationalising a business, you should always look a little ahead of where you are to ensure future transitions are as painless as possible. For Supercede, it was setting up Slack, getting GitHub aligned, building up a G Suite structure and a Confluence page capturing all our data. You do not want to end up with legacy data organisation issues.
Matthew: Once you had a team with some funding, what did you do next?
Jerad: We found early partners who believed in where we wanted to take the business. They wanted to help us build it out and give feedback, and they were willing to work with the tool in its pre-launch beta phase.
That part is tough because you do not get revenue from those partners. But it helps guide the roadmap. It is easier to do in a market with smaller and medium-sized businesses compared to enterprises because they are willing to work with you even when things aren’t quite as polished.
We also opened our beta early on, so anyone could sign up, test the platform and give feedback. That helped enormously.
Finding Partners and Networks
Matthew: How do you reach out to potential partners?
Jerad: When we reach out to potential client companies, we don’t reach out to them with a sales pitch and demonstration. Instead, we set up research calls to understand their business, what their ambitions and challenges are.
If there is an opportunity for these early potential clients for us to do something together, that is very helpful. If they do not align with where we fit immediately, that is also fine. We can circle back to those conversations later.
Another mistake founders make is that they go to clients saying, “here’s my thing, isn’t it awesome, don’t you want it?” The offering must align with the customer, where the customer feels a pain in their business and what the customer is currently doing to solve that. That can be used to guide the product development.
Matthew: Could you share an example of this approach paying off?
Jerad: Recently we had a discovery call with a potential client. We were not sure whether we were aligned over the first two calls on the third discovery-centric call when we reached the specific problem which needed to be solved. It is about patience and persistence.
Matthew: Any other tips for engaging with clients?
Jerad: There is value in getting to a ‘no’ quickly, whether in fundraising or with clients. Then the team can focus on the clients that are hot leads.
We have recently brought in a Head of Business Development to help improve the buying process. Within big organisations, (re)insurance companies and brokers, there are numerous stakeholders with various priorities. Navigating this is difficult.
We found that to be successful you need to get interest from people near the top, those who either have an internal project they are pushing or are trying to showcase the firm’s innovation and then understand and align with their ambitions.
We use that to get introductions down the chain to other decision-makers. We also ask upfront who else is involved on the client side going forward. We begin to build out a client map.
Matthew: What has been useful in building your network?
Jerad: We engaged with the Reinsurance Under 35s Group in London and the US Reinsurance Under 40s Group in New York and Bermuda. Tapping into pre-existing hubs of people in the space is a great strategy.
There are pockets of people who are already doing interesting things. InsTech London is a fabulous example of this. The speed at which InsTech has gained such a following indicates that there is a lot of people interested in these ideas and the future direction of this space.
Where there is no sufficient group in existence already, there is an opportunity to build communities up around various topics. We have spun up a couple of our own.
Matthew: You’re talking to us from the Lloyd’s Lab. From your experience, what is your view of the Lab?
Jerad: The Lloyd’s Lab has made substantial steps in recent years. Earlier on, it was about new and emerging companies with idea-stage propositions. People would get excited but find that the ideas were a bit underdeveloped.
More recently, the Lab has reached out to firms that have a live product and paying clients. This is driving engagement. We have interacted with a number of syndicates, a few of which are now on trials with us.
A lot of start-ups that go into the Lloyd’s Lab or other accelerators will arrive and wait for everyone to flock to them. But start-ups must reach out themselves and drive those conversations.
The mentors involved with the Lloyd’s Lab commit their spare time a couple of hours once or twice a week. You must give them a compelling reason to dedicate their time to you.
Matthew: Why did Supercede join InsTech London as a corporate member?
Jerad: We have been massive supporters of InsTech London from the outset. Ben and I were regular event attendees when we had our corporate jobs. It was immensely valuable to us as we got to understand the sector.
We met our Chief Actuarial Officer, Paul Bassan, at an InsTech event we spoke at. As we continue to scale, we believe there will be opportunities to find more talent and build relationships.
Matthew: What should we look out for from Supercede in the next few months?
Jerad: There will be some product evolution that we will be announcing. There will be large client announcements in the coming weeks and months. We are accelerating across a variety of verticals.
Matthew: How can people try out the Supercede platform?
Jerad: Supercede’s placement platform and network are entirely free. Anyone in the industry who wants to get involved can visit and sign-up at Supercede.com. They can set up an account, build a profile and respond to risks. Alternatively email me at email@example.com.