SPIXII is a London-based tech startup, founded by Italian-born Alberto Chierici (Alberto C.), French engineer Renaud Million, and Italian-born computer scientist Alberto Pasqualotto (Alberto P.).

Our aim? We want to redefine the relationship that exists between insurers and their customers, and make the process of dealing with insurance simple and transparent.

How are we doing this? We are working with insurers to build an automated digital agent, supported by artificial intelligence technology and behavioural economics. This will help insurers provide a seamless digital experience for their customers.

We all know that we need insurance. But when insurance has been sold from a place of fear, insurers often become the villains rather than the heroes in helping customers live more safely and securely. As SPIXII navigates its second year as a young startup, here are some of the lessons we’ve learnt while building a company whose core premise is to revolutionize the insurance industry.

Defining the Target

Our adventure began in 2012 with friendship. Renaud, my co-founder, was convinced that the current approach used to sell insurance was outdated, and should start with a clear understanding of the customers’ needs. He, in agreement with many of his friends and other digital customers, felt the pain of buying insurance. Renaud started to explore a new concept, which gradually materialized when he discussed the idea with me, Alberto C.

Renaud and I were both training to become actuaries when we met at an actuarial insurance tutorial. We clicked immediately. Renaud explains:

Alberto C. was the first person I talked to, who shared a similar passion for insurance and a belief that insurance products could be sold differently. For the next two years, we bounced ideas off each other. Yet, it wasn’t until 2015 – when insurers were beginning to prioritize digital initiatives through transformation projects and explore trends otherwise only seen in Silicon Valley – that we knew it was time to act.

Reality hit. I realized that, even though we were just about to qualify as young actuaries while working respectively for one of the top five consultancies, we had to take this opportunity by the horns. In order to do that, we had to drop out of one secure career and move into a far riskier one.

In May 2015, while participating in a Hackathon weekend in which we won an “Incubation prize”, Renaud and I named our first idea “Safer”. Despite declining the offer to move to Munich to develop it further, we believed this offer showed us we were going in the right direction. After being accepted into a startup accelerator in December, we left our jobs. And in January 2016, we registered the company. Our first real defining moment was when we left the office and began talking to people.

Renaud would tell you that “as tech-oriented people, it wasn’t easy to start conversations with strangers. But after interacting with individuals in coffee shop queues and on the street, we found that people gradually understood the value of our offer once we touched upon their pain points.”

During those highly engaging discussions we identified our first target segment: young professionals. This segment quickly expanded to “digital consumers”: people who buy almost exclusively with their smartphones and whose first reaction when buying insurance is to message a friend or family member for advice. We realized if we were able to create technology that acted just like this, we would be onto something big.

So, my first piece of advice is this: before developing technology for a specific customer segment, talk to them so you can understand their concerns as much as possible. Identify their pain points; what problems do your customers face in day-to-day life? How can your technology help? Your business has a far greater chance of success if it can articulate these pain points clearly and compellingly. Only then will your target audience be able to gain awareness of your value.

Establishing the Working Charter

Right at the start of our journey, we decided to establish a working charter: a set of principles that would guide us in all aspects of the business. Renaud, Alberto P., and I met in Milan in December 2015 to discuss what it would take to start SPIXII. We discussed our likes, dislikes, strengths, weaknesses, and core values: namely, friendship, professionalism, a sense of family, openness, trust and respect, as well as entrepreneurship and constant curiosity. These values became benchmark principles, to be encapsulated by everyone in our team. From this point on, we felt like and acted as a family. As Alberto P. described, “we were three brothers with a shared father: our common vision for SPIXII”.

We found that once we agreed these brand values with such clarity and transparency, it became easier for us to attract talent that fitted within these attributes. As Renaud points out, “in a young startup, there’s no time for comfort or stability. The connection you have with the people around you is vital to manage the ups and downs of startup life.”

Ask any founder and I’m sure they’ll say the same thing: your first hires are incredibly important for the future of your business. We found that by using our shared values as a foundation, we could attract like-minded individuals who fit our company culture.

Our First Hires

Our first strategic hire was Johannes Windus, who joined our team as Business Development Manager. After studying insurance at university and working in sales, Johannes shared our frustration with the way insurance was sold: out of fear rather than trust. While working in Germany, he wrote a paper on how digital agents could transform the insurance industry. And when he read a review in The Financial Times – “Ten fintech start-ups that are causing a stir in insurance”¹ – he sent us an email the very next day. Three days later, we met him in Munich. A week and a half later, he was in London to help us with our business development efforts.

Friedrich Roell is SPIXII’s back-end developer. After meeting Renaud through mutual friends, he resigned from his job to join the company. While based in Munich, he spends two to three weeks a month in London, and describes working with SPIXII as a highly rewarding “intense and emotional adventure”.

The Importance of Adapting, and Saying “No”

Integrity underpins SPIXII’s working charter. Yet, when budgets are tight and the future uncertain, it can be a challenge to stick to these underlying principles. For Renaud, “one of the biggest challenges for a startup is to balance its long-term vision with its short-term survival tactics. The decisions to say ‘no’ are always the most difficult to take.”

As many young startups know, our ability to drive traction is often linked to our ability to raise funding. Very early on during our startup journey, an incumbent company presented us a contract with terms that were difficult for us to accept. They wanted us to run a proof of concept for very little financial returns in exchange for a three-year exclusivity agreement. While the incumbent would have helped SPIXII become a recognizable brand, it was clear that our company values were completely misaligned. The combined exclusivity and lack of financial reward meant that this contract could have put our business into jeopardy.

So, How Can Startups Afford to Say “No”?

To my mind, the answer is simple. You have two ways to go about it. First, accept a bad deal in exchange for very little money and sink your business a few months down the line. Or, risk sinking your business quicker, but based on a decision made from calculated gut instinct. This is similar to betting on the great product you have built, as well as the relationships you’ve established in the industry over the years.

Another one of our life-changing decisions was not to raise capital. My belief is that there is a myth fuelled by questionable press, venture capital, accelerator ecosystems, and business schools that the road to success must always be the same: an entrepreneur has an idea, assembles a team to develop that idea, acquires angels or venture capital funding to bring the idea to market and scale, then goes and builds “the next big thing”.²

However, not all founders are born equal. Some want to jump onto the funding bandwagon, aspire to create a business that delivers shareholder value, fund it and sell it to the highest bidder, then move onto the next venture. Others genuinely want to create a successful business that creates value for customers.

Did you know that less than 1% of businesses are venture fundable?³ In both of the above scenarios, entrepreneurship is a requirement; value must be delivered to customers to generate revenues and profits. We’ve found that the best way to finance your business is through the revenues you generate from your customers and their feedback, at least at first.

In addition, once an investor takes a chunk of your business at seed or pre-seed stages, it’s likely that they’ll ask you to stick to your original plan. Of course, good venture capitalists are always happy to back startups that pivot if this makes sense. But, as extensive research by Dr John Mullins shows, this is rarely the case.⁴,⁵,⁶ You risk losing your investor’s support, particularly in today’s risk-averse European seed capital market (as compared with the more mature US investing market).⁷ As a startup it is essential that you aim to remain agile.

For insurers, we understand that fragmented operational environments have created challenges to fully embed a customer-first culture. High operating costs and low margins are the status quo for today’s insurers. However, we also know that digital experiences powered by intuitive digital agents yield significant benefit for those who want to take advantage of it.⁸

Ultimately, your business is only as strong as the people behind it. It is thus vital that you outline your values early, then use them to attract talent and create a team that operates in sync, without losing the values and passion that brought it together. Powered first by the friendship built among the co-founders, then by the values shared across the team, we find a people-first approach to business mirrors our mission to put the human back into insurance.