A little while back we told you about the Startupbootcamp Insurance Accelerator Programme, launched with the support of JSE-listed MMI Holdings.
The accelerator programme, is open to startups from all over the world, with the only caveat being that they focus on different areas within insurance, including consumer, re-insurance, back-office efficiency and new risk models.
The insurance programme comprises Fast Track days, an Insurance Hackathon and an Insurance Lounge. Fast Track days are sessions that take place over a six-month period where ten startups in various venues across 12 countries are given five minutes to pitch their insurance related business idea to a panel of judges.
At the 48-hour Insurance Hackathon, the insurance industry will challenge talent to come up with innovative and practical solutions to some of the questions they face as sector. The Insurance Lounge will provide later-stage startups an opportunity to engage with executives and present their innovation idea to the Startupbootcamp investors.
The ten successful startups sourced from the 12 countries will then go into a three-month accelerator programme where they will be provided with resources necessary to birth their startup idea.
As the deadline for entries draws near, Ventureburn caught up with with MMI’s head of disruptive innovation strategy Jaco Oosthuizen, to talk about the competition, disruption, what startups can do for big corporates and what industries are likely get a big shake-up in the near future.
Ventureburn: What motivated MMI to get involved with the Startup Bootcamp movement?
Jaco Oosthuizen: MMI identified a potential threat from disruptive technologies and business models to its long term sustainability and that of the industry in 2014 and decided to create a strategy to mitigate this risk. We appointed Accenture to assist with the development of this strategy to “future proof” MMI. A critical component of this strategy is investments in horizon 2 and 3 businesses that could potentially become the future leaders in the financial wellness space.
We identified that StartupBootcamp will launch the first Insurance related Accelerator programme and given the excellent track record of Startupbootcamp over the last five years with its Fintech Accelerator programmes, decided to become part of this world first initiative. We believe that technology can play a major role in revolutionising the insurance industry and we want to be part of this revolution. We decided to become investors in the programme and not only sponsors. This means that we will have a small equity stake in each of the start-up companies (around 30 over three years) and we can selectively decide whether to increase this stake as we see how the potential of these companies evolve. This is just the first of many potential opportunities that we identified to enable MMI’s vision to make people, businesses and communities financially well.
VB: What would be the most pleasing side-effect of the relationship?
JO: We see this specific initiative as a big learning curve for us to get close to the way that start-ups operate (lean, fast, entrepreneurial etc) and to understand how the landscape is changing at a grassroots level. We also hope that this initiative could be a catalyst to make the existing MMI business even more innovative. The most pleasing side effect is if we can detect a business or ecosystem that could become bigger than our existing business or and be globally scalable. Think we all hope we can identify the company that solves the next big customer problem.
VB: What lessons do you think there are for big corporates from the startup space?
JO: The biggest challenges that creep into large corporates are inertia, legacy systems and processes, bureaucracy, low tolerance for risk, slow to market etc. Big corporates can learn a lot from the start-up space by reverse engineering the entrepreneurial spirit into the business, creating a higher tolerance for failure and agility, reducing unnecessary red tape, etc. Start-ups do not have time to waste and large corporates need to move quickly to ensure that it remains relevant and create a mutually beneficial relationship with start-ups.
VB: Do you think there’s enough space for people of an entrepreneurial bent in the corporate space?
JO: I think most corporates stifle true entrepreneurship. To achieve this, leaders must be truly ambidextrous and bold enough to establish businesses that could potentially cannibalise their existing empires and cash cows.
Our philosophy is that we want to create the best of both worlds. The new unit we created will give entrepreneurs the freedom to operate in a fast and agile, lean way while creating the bridge to the mothership to give them scale and resources on an arms length basis as and when required. This new unit’s focus will hence be on external innovation. I believe there are a lot of entrepreneurs hidden inside the walls of MMI as well and we have a programme called MMI Ignite that gives them the platform to innovate from within. If the right internal opportunities arise, we might also spin them out to ensure that we do not loose the entrepreneurial spirit. Over time, we need to make sure that the whole business has an invigorating entrepreneurial flair.
VB: What can corporates do to encourage entrepreneurial-style innovation among employees?
JO: It all starts with leadership, strategy, culture and way of work. Leaders have to lead by example and think like entrepreneurs. Employees has to be empowered and be allowed to experiment, make mistakes and learn from these. You need to enable a culture of thinking about solutions and not problems. You need to create platforms for employees to be innovative and remove redtape that inhibits free thinking and time to create minimum viable offers.
Practically, we are building relationships with a number of incubator and accelerator programmes, like StartupBootcamp, Alphacode (the recently launched incubator of our holding company RMI), Grindstone in Cape Town, etc. There are over 10000 of these incubators and accelerators around, so we are not building our own, but leveraging off those that are already available. We will create the opportunity for our employees to potentially incubate their own ideas in these environments.
VB: How difficult is it for a big corporate to disrupt itself when it’s become obvious that it needs to?
JO: The short answer is VERY. You need ambidextrous leaders that can think outside the human species’ cognitive biases and make bold decisions. People tend to fall back into their comfort zones as soon as they face difficult decisions. Disruption is not a comfort zone. It needs guts and not everyone has it. It obviously comes with higher risk than the status quo and hence very few large corporates has the appetite for this level of risk taking and rather take the “safe route” which in the end will be the route to obsolescence. To remain relevant, you need to continuously disrupt your thinking and your business model.
VB: We’ve seen that access to markets is a major challenge to startups. Can corporates help with that in a mutually beneficial way?
JO: Definitely, in a number of ways:
VB: Which industries do you think are ripest for disruption right now?
JO: Most industries are ripe for disruption in various ways. The financial services industry has been very slow to respond to the new network economy and is extremely vulnerable for disruption. The industry has been heavily protected by regulation in the past but there is a strong movement from regulators and consumers to create more trust and customer centricity in the industry. Financial services is the least trusted industry and hence at the highest risk to be disrupted by new client centric models that commoditise products and create realtime and trustworthy value to clients.
VB: Are there instances where it’s in a company’s best interests to resist disruption?
JO: It is all about timing. A number of the new technologies and business models are still in fermentation stage and you do not know which horse to back. Some companies hence decide to rather wait until a dominant design was formed and then decide how to best deal with this threat (buy or build or ignore). Sometimes this strategy can work for you, other times you will become a dinosaur. As the pace of change increase though it gets more risky to have this wait and see strategy. There are hence in my view few reasons for companies to resist disruption. You either need to disrupt, or be disrupted.