#068: Embedded Insurance Is The Next Big Wave, Stuck In Peter Thiel's Elevator, Vertical SaaS 2.0
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One ‘How To’:
Embedded Insurance is Taking OVER
If you’re a vSaaS and you haven’t thought about adding embedded insurance into your product suite, the time is now to start thinking about it…
The embedded insurance market is forecast to grow to US$722bn in gross written premium by 2030 with North America and China combined accounting for over two-thirds of the global market.
I’ve seen numerous examples of it adding significant revenue streams for vSaaS providers.
One company spotlight that is doing this really well? Kayna.
They makes insurance easy for vSaaS platforms. Their software provides the tech & data infrastructure between Insurance Carriers, Brokers and any vSaaS platform to offer data-led insurance products to platform SMBs.
Embedded FinTech is flying. Embedded insurance is the next big wave. I see a massive opportunity here for Kayna to work as an expansion module for vSaaS.
The holdup to this point has been the complexity of platforms integrating with massive Insurance Carriers. You need to know what you’re doing. These are the tech guys that do this every day.
Integration is really simple and you can get going really fast.
What’s in it for vSaaS platforms?
New revenue streams
Easy integration through a simple low-code – takes a couple of hours.
Insurance products supported by regulated Carriers and Underwriters without the complication of integrating with them.
A supported customer experience within the platform to SMBs who get pre-filled forms, automated quotes, renewal and claims support process for the lifetime of the policy.
A US-based Field Service vSaaS platform with 750 SMB users could potentially yield a gross insurance revenue of US$1M in Year 1 growing to US$3.2M in Year 5.
Bear in mind that…
40% of SMBs in the USA have no insurance,
75% are materially underinsured so platforms can fix this protection gap!
Here’s an example of potential product lines big SaaS providers could offer:
So, the only question now is, “Do you want insurance with that?” If so, I reccomend talking to my friend Paul Prendergast, the CEO over at Kayna!
One Biz Story:
Stuck In Peter Thiel’s Elevator
I got stuck in Peter Thiel’s elevator.
True story.
You can’t make this stuff up…
In 2015 I was in San Francisco at the annual @thielfellowship summit. A get-together of the ‘final 50’ young entrepreneurs competing to win the Thiel Fellowship, a 2-year, $100K program to drop out of college and build a business.
The event started out looking like all Thiel Fellowship Summits: Young folks nerding out on the future, sharing their business concepts across crypto, SaaS, VR, etc. But also all competing with one another to be knighted a ‘Thiel Fellow’ at the end of the weekend.
But this time, it was different, it all changed in an instant.
11 other fellowship hopefuls and I wrapped up our business pitches and hopped in the Founders Fund elevator, on our way to a sunset boat-ride and networking event. Out of nowhere, completely unexpected, a loud BOOM!
Elevator breaks.
AC shuts off.
10 of us jam packed in an elevator sweating like hookers in church.
We had two options at that point, panic or take it in stride. Ten of us chose to take it in stride, one of us chose to panic. We’re not going to talk about the one today…
We had an opportunity to learn so much about each other. And we did. We all were in a challenging situation. We were all nervous in a totally different way. But the mishap snapped us out of business mode — and we became vulnerable with one another.
I learned about @jbrowder1's ambition to create the world’s first robot lawyer fighting for consumer rights
@christianbowens goal to help SaaS companies with payments and compliance
And many others...
We were doing elevator pitches inside of a broken elevator.
You have to recognize the serendipity in this! But it went beyond the typical elevator pitch. It became an incredible illustration of the journey of entrepreneurship.
Ups and downs, high and lows. It became so obvious in that situation that no matter what you’re planning for as a founder there are always roadblocks you can’t predict. You have to keep pushing, you have to take setbacks in stride.
About an hour later, we were rescued. We missed out on the networking event, but what we did was no less valuable. I could have panicked that day, but instead I met lifelong friends from that elevator ride and the Thiel Fellowship in general. Now I have friends to call when things get tough -- individuals who I know can help me power through a challenging situation.
The broken elevator ended up being such a symbolic moment that has allowed me, and the others stuck there, to overcome obstacles.
Through the support system the Thiel Fellowship brings, I’ve seen folks build inspiring companies, all in a short time at a young age—
Dylan Field of Figma.
Austin Russel of Lumineer.
Joey Levy of Simplebet.
Sohail Prasad of Destiny.
The list goes on!
Take challenging situations in stride. You’ll learn so much more from them then you ever will the easy ones.
I sure did in that creaky, broken elevator…
One vSaaS Breakdown:
Vertical SaaS 2.0?
Vertical Software 1.0 put simply:
Build a wedge product that digitizes a key workflow.
Build a secondary product that digitizes another key workflow.
Build a third, fourth, and fifth product that digitizes more key workflows.
Layer in FinTech - payments, lending, payroll, etc.
Is this Vertical SaaS 2.0?
Buy an SMB
Build & integrate AI-Powered vSaaS
Buy more SMB's, run the same playbook all while selling your vSaaS to other companies in said vertical
Seeing more and more of these. A few examples include Metropolis for parking lots and Splash Ventures for pool routes.
Have a product or service that could benefit our community of thousands of vertical SaaS founders, investors, and operators?
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