Jason Wilby, co-founder and joint Chief Executive at Open speaks with Morgo Podcast's Jenny Morel on scaling a high-tech company, building the future of insurance and the highlights and challenges along the way.
Podcast transcription
Jenny: Hi, this is Jenny Morel of the Morgo Podcasts, where we talk to people who are building tech and other high-growth companies from New Zealand and Australia out into the world. Growing businesses is hard work. Everyone has setbacks and the entrepreneurs who grow these companies are a relentlessly positive group of people. They're going to succeed no matter what, they're risk takers, they work crazy hours, they're obsessive and much of the time and embattled. Every now and then there's a wonderful breakthrough. Morgo is bringing you these stories to share with you the trials and tribulations of being an entrepreneur. Today's guest is Jason Wilby, who's building a business called Open. So over to you, Jason, tell us about Open and what does it do?
Jason: Sure. Thanks, Jenny. So Open as a digital insurance company and we sell car home and travel insurance. We've been going in Australia for about five years now. We're about to bring our products into New Zealand, which is really exciting, and also heading off to some new markets as well.
Jenny: So when you say you, you do the sort of retail insurance as it were, are you direct to the public?
Jason: Yes. Well, we, we actually did two things, so we, we have a brand called Huddle. So Huddle insurance.com is our consumer brand where we sell direct to the public. We also, what we found as we were growing this business, is that the better that Huddle became, we actually had lots of existing brands approach us and say, "Hey, we like your insurance. Can your insurance be our insurance?" So we also over the last couple of years started to white label our products as well for brands that share our focus on great customer outcomes
Jenny: Brands like telcos and people like that?
Jason: A really good example is Medibank in Australia. So Medibank is Australia's largest health insurer, but they also now sell car and home insurance to their customers. And that car and home insurance is, is our products.
Jenny: Fantastic.
Open's founding story
Jenny: So why did you start?
Jason: It's a good question, one we ask ourselves often. So I guess I'm one half of the founding team. So along with Jonathan Buck in Australia, back in 2016, we were doing a lot of management consulting at the time and we sort of fell in love with what we saw as the opportunity to do something really interesting in insurance. Two main reasons. Insurance is an information business. Insurance companies don't repair cars and homes, they actually just make millions of decisions. And yet it has the lowest levels of digitization and technology investment of out of any category. So, yeah, you've got this amazing sort of opportunity. It's almost like an oxymoron, but it's got like, hang on. It is it's the original information business. And yet it's not really leveraging the capabilities to run an insurance business.
And I think that coupled with quite an interesting customer experience problem. Insurance, when you really stop and think about it is, is one of the most purposeful, I think business models that there is out there. It's literally people putting money aside to help each other out when things go wrong. Yet, it's got this really bad rap, you know, very few people talk about insurance as this kind of like wonderful business model. They've normally got a whole bunch of stories about how it went wrong or how they don't understand it and how expensive it is. So that's what drew us in five years ago to this glaring opportunity, both from a customer experience problem, and also from a business modernization and digitization opportunity.
Jenny: Let's go back. So having decided there was this market opportunity, how did you actually get going? Like what did you do first? Did you start to write policies? Did you start to write tech? Did you start to hire people? Raise money? Where did you start from?
Jason: that's a really good question. We did all of those things, in different orders and went back to the beginning a few times. Let me cast my mind back. I mean, insurance is heavily regulated. So in any market it's normally regulated through two lenses, one is all about distribution.
So regulators want to know that when you sell a product, you're doing it with the best interests of the customer in mind. You haven't got any sort of, shonky kind of commissions. You're not doing anything that's going to lead to a negative outcome for the customer.
The other lens is that a government looks at it through is, are you going to be there to pay claims? So if you sell all this insurance, have you got the balance sheet strength or the re-insurance strength to be able to pay claims. So there we were in 2016. Sort of saying, okay, we've got some good ideas. We put it all together in a slide deck like management consultants would. It turns out it's a bit harder than putting into a slide deck. And one of the things we were missing was obviously balance sheet.
So very quickly, we, we kicked off a process to start to engage with underwriters and find a way that we could, rather than build our own pool of capital to ride against - super expensive - could we partner? That was like a really big step for us. We sorted out our license so that we could distribute, we built some of our tech and we bootstrap the build of our platform for the first year. But the key to getting into market was finding an underwriting partner who would effectively expose their balance sheet and take the risk for us. That took us about a year all up, ready to find the right underwriting partner.
Jenny: Did you have to go offshore? Is that like the classic Lloyd's of London? Or how do you, where do you find these people?
Jason: We did go offshore, we looked at Lloyd's, we, we spent some time with some of the very large kind of onshore insurers and through that journey, lots of people kept telling us, you need to go and speak to Hollard. They're a 20 year old business, very entrepreneurial they built a $2 billion business. It's scale plus entrepreneurial-ism. Eventually we sort of caved and we're like, "Okay, we're going to find out who these Hollard people are." and here we are today. Hollard came on board. They were a great source of underwriting capital. They've also been really like a co-founder. Having a team there and a management team that had built from scratch quite a large insurance company.
Jenny: So where are they from?
Jason: So they've Sydney based
Jenny: So you went all around the world then you found someone [in Australia?]
Jason: Yes. We literally went to London. We had meetings with the Lloyd's guys and [Hollard] ended up right on our doorstep.
The start of Open's insurance journey
Jenny: Excellent. So at the beginning there was a bit of, of a platform, bit of tech and definitely the underwriting, you also needed customers.
Jason: Yeah
Jenny: Was it all, was it all retail? Did you, how did you start getting customers?
Jason: Our first product to market was travel insurance and we went straight to market with, with Huddle as our direct to consumer brand. Definitely we knew it would be hard. It's quite brutal. It's quite high acquisition costs in insurance, like any financial services products. So building can be quite capital intensive and you're constantly having to find, you know, some sort of edge, especially in the earliest days, especially when capital is so precious at the beginning. Yeah. So that was really tough, but by starting off with travel online yep all online. So our whole model is, is really an online centric model.
Jenny: I just wondered if you'd had to go to travel agents or something to get that started.
Jason: Yeah, we went straight to market online, which is brutally hard. Cause you sorta think it's going to be easier than it is to get customers.
Jenny: You've got to get noticed, Right. You've got to get found.
Jason: Yeah. And it's an expensive process. Right? The good thing about travel though, is that unlike car and home insurance, it was a great way for us to enter the market. It was quite a low consideration product. Travel insurance is normally about a $70 purchase. Car insurance is about a $700 average selling price.
So it was really nice way for us to get into the market with, as in a brand new brand with a new proposition, it enabled us to showcase some of our technology, things like instant claims, settlements, really meaningful when you're in Bali and you've got a hundred dollars of medical expenses to pay. So we're able to sort of showcase some of these innovations, but also get into market with quite a low ticket item.
And then, and then we eventually, we built our way up to car and home insurance.
Building a growing team
Jenny: So you've been going for what, like five years now. So tell me a little bit about building the team and how big is the team now?
Jason: We've got a lot of growth going on in the team right now. So, where are we now, we've just hit December, over the last quarter, big numbers for us, we've had 25 join us now that doesn't sound like a big number.
Jenny: No, it is a lot. So what is the total up to now?
Jason: 75, so yeah, 50% growth yeah.
Jenny: Huge. And what about in the early days? You know, how many people did you have to hire to get this moving, where they all marketing people, tech? What were you doing?
Jason: So, Jonathan, I both come from a product background and so. It's quite funny. I think that day one where there were probably about six in our team, all engineering and product people. And we did customer support ourselves for a little while and marketing and everything. There's a really funny period where we were.
So we had this travel insurance product in market, and we were experimenting with customer service and it's very digital, but we knew that we needed phone support. And so we had a partner that would look after emergency travel assistance for us. So if customers need help in an emergency, we'd outsource that to a really professional big, big partner. But sometimes customers would call through on the general inquiry line at the weekends. And this is a time where we had hardly any customers and a team of five. And we're experimenting with a service that will transcribe the, like, if the customer left a message, it would transcribe it. So there were often a Saturday off noon, it would ping on slack and it would say, you know, "hi emergency, blood, anger, moped, Bali." And so Jonathan, I'll be like racing around going, oh my goodness. We've got someone in trouble here. We need to get them to the emergency support line. It'd play back the message. And it was just really bad transcribing. It'd be like, "hi, just want to see if I can update my policy. I'm going to Bali next week." So we'd have these, like, you know, these awful kind of anxiety attacks thinking, oh my gosh, we've got, we've got to help a customer here and it was actually just this poor transcribing service. So we were really quite sort of scrappy bootstrappy right at the outset.
Expanding Open's insurance offering and digitising the claims experience
Jenny: So what did you move on to after the, I mean, I guess as well as the travel insurance, what did you move into?
Jason: So, yeah, we got, we got travel going and then car was sort of our, you know, our big ticket, let's prove that we can, do this at scale. What we really wanted to do is to be able to show that we could have a better digital sign-up experience, we could make sure the platform enabled customers to manage their policy with all the complexity, you know, changing address, all those sorts of things online as well.
But the holy grail for us was complex claims. Customers are used to transacting online. They're used to sending money across to other countries in seconds. Why is it the claiming is a process that has to be done on the phone between 9:00 AM and 5:00 PM? You've got to plead your innocence and you don't really understand what happens.
Our big goal was, let's digitize that claims experience make it more reliable for customers, but also make it more efficient for us to just process. And so whilst we were playing in the travel space, there were a lot of people saying, you know, travel is easy, but wait till you get to the big ticket items.
So we knew we had to get to car and home and car was the was the next one that we picked off.
Jenny: Great. So as well as car and travel insurance, what other kinds of insurance did you start?
Jason: Off the back of car, the next sort of big milestone would be to get into home, contents and buildings. So we, we first went into contents, really trying to create a product for younger renters actually, who we realized often didn't buy contents insurance but they actually had quite a lot of stuff. Young professionals, a bit of art, some computers, often quite lot in clothes and yeah, maybe you're starting to sort of spend a bit more on furniture and bikes and other things quickly adds up to $50,000.
And it's a market that was really, really underserved. So we went first into contents for renters and then continue to work our way up into four buildings, insurance which we launched. I think we started out yeah, 2016. Car in 2017 and we had home by 2018. So it was almost one sort of big leap per year through those early years.
Raising a $31m Series B
Jenny: Nice. And how did you fund the growth of the company? I mean, you've mentioned your underwriting partner, but you're also hiring staff.
Jason: Payroll definitely has sort of grown through the years. We bootstrapped for a little while. We were really lucky then Hollard came on board as sort of a cornerstone investor around sort of middle of 2016. Which kept us going for all the way through those early years of sort of proving product market fit. And then we did a series A in 2018. First time for Jonathan and I to really engage in that VC sort of world of, of raising capital. Spoiler alert, we've just done series B, but I'll focus on series A and that was much harder than series B you know, getting into that world for the first time required a really huge amount of effort from us, but we found very quickly that we had a solid business, good metrics. And then we ended up with a competitive round and we ended up with AirTree leading, and they've been a brilliant partner for us over the last few years.
Jenny: Great. And then as she said, you've just done a series B which was quite big.
Jason: Yeah. $31 million.
Jenny: That's big.
Jason: Yeah.
Jenny: Very nice. And that was led by Movac?.
Jason: That's right. Yeah. So it was about a year ago. We started to think about capital raising again. And at the time we knew that New Zealand was a really exciting market for us. Longer-term we knew we wanted to get to the UK and what we thought is if we could wave a magic wand, wouldn't it be great to have capital sources in each of the markets that we were moving into.
And it's exactly what happened. Series B was led by Movac in New Zealand. Really great to sort of align with our kind of plan to solve insurance for Kiwis, but we also had a fund come on board in the UK which is kind of our next market horizon and some follow-on funds, in Australia as well, which is still really important market for us.
Expanding to New Zealand and the UK, business growth and the future of Open
Jenny: Yeah, great. So, you know, you built up quite a big team or it's building fast at the moment and you've got money on board. What's next?
Jason: Probably team where we are right now at this minute team is, is key for us. Jonathan and I when we created this business back in 2016, sure there was the rational opportunity that we could see.
We also really liked working together and we knew that we liked creating value for customers. And we wanted to create a business that had some sort of like lasting, positive legacy or impact. By about 2017, we sort of discovered that there were other people in the world that could help us figure some of those concepts out.
And we became a B Corp, which is like an independent framework and body that gives us some governance to measure and improve our impact for customers, the environment and our, and our team members. And I think looking ahead now, we've got good products, we can develop great partnerships sort of growing quite well.
We're going to break a sweat, getting into new markets, but I think we'll be able to do it.
Jenny: So what sort of size are you up to now? Any sort of metric you like?
Jason: This year, we'll do $50 million in insurance premiums. And we'll continuing grow 2x year on year from there on.
But I think as we sort of bring on this team, our culture is becoming really important to us. And I think constantly thinking back to the origins of the business and going, what will be great is that we're more defined by our culture and our ability to solve these problems or on an unknown problems today, than defined by our products which is, which is a long-winded way of saying actually we're really focused on building a culture that's focused on innovation, customer outcomes, making sure that we, you know, how do we build a culture where we don't have too many rules?
We get smart people come and join us and empower them to build actually the next products that many of us probably can't yet imagine today.
Challenges and surprises of growing a scale-up
Jenny: So what's been the biggest challenge, you know, just thinking of all of those things that you've mentioned across the, the underwriting, the raising capital, the staff, the tech, what's been the most difficult?
Jason: All of the above!
Jenny: At different times. That's a very fair answer.
Jason: Yeah. It's I think every business is hard. Isn't it? You know, there are always moments where marketing is going well, and then suddenly something changes and it becomes harder and ditto for other parts of the business. I think, yeah, our kind of growth phase right now, where it is, you know, a lot of it is about building teams so that we can scale and get into new markets.
Like that's a real challenge. Talent is really challenging right now. I think every business is talking about that, but not just finding talent, but then also. All of the teaming and sort of leadership that we need to become greater as a business as well. I think that's, that's an area for us to lean into, I think, and, and continuously improve as well.
Jenny: Is there anything that has surprised you?
Jason: Yes. Pandemics are not just small prints in a PDS.
Jenny: That's a pretty fair point. And did that have an impact for you? Travel insurance?
Yes, it did. So not, not huge thankfully, but at the time there was a good wake up call for us. We're in our business really helping people manage risk. And so here we were suddenly having to deal with, you know, putting travel off sale, managing customers who are overseas. A lot of, you know, a lot of challenges came into play for us there. By that time travel wasn't a huge amount of our total revenue it's mostly in car and home. So it wasn't this emergency, I think that it created for some other businesses, but yeah, definitely threw some challenges in all the same. Also some opportunities we're one of the leaders in Pay as You Drive car insurance. And so. Most people are not driving very much in the pandemic. And even as we open up, people are aware of or much more acutely aware of how much they drive.
Jason: So our, Pay as You Drive products in Australia has been running for five years now, saving customers sort of 30-40% versus the average insurance policy.
Jenny: How can you tell how often they drive?
Jason: We have two models, a really simple self-reporting user mobile experience - tell us how much you're driving with the Odo in the car.
And we also have a connected car option as well. So enabling that data to be shared back to us as well. And we'll launch that in New Zealand, I think we might be the first Pay as you Drive product in New Zealand when that launches in February,
Big learnings, compensating for weaknesses and amplifying key strengths
Jenny: Very nice. So building up businesses is always a personal journey, as well as a business journey. What do you wish you had known earlier?
Jason: I think I feel very, very fortunate that it is a personal journey. There's lots of sort of highs and lows and lots of challenges. I feel incredibly fortunate to have a really strong co-founder. I get an incredible amount of support from Jonathan. I think vice versa. We speak and analyze decisions and analyze problems together on a really, really regular basis. I didn't know before we created this business exactly how we'd work together. And I think through A lot of luck. We tend, we we've sort of, we have this brilliant. I thought like said it's a brilliant working relationship.
There's good for our team. Good for the business. And also good for us on a personal level. I think there are so many, so many things I've learned through getting going and getting into the business that I would not have even imagined before doing it. And I think sometimes for myself and for others, you can sometimes be a bit hesitant to take those risks and if I was looking back, I'd probably be thinking, get going sooner. Just kind of get in, get, get going.
Jenny: And what have you learned are your key strengths
Jason: On a personal level? Gosh, I'm probably quite critical. I think I can talk about weaknesses.
Jenny: We'll come to those. Start with the strengths.
Jason: We spend a lot of time with our teams asking for feedback and often teams really seemed to rate our ability to paint a vision, paint a picture for where we're heading and create a sense of what is the opportunity? What's the value we can create for customers? And to help our teams understand how they can contribute to that. That's something we get quite good feedback on in our surveys. But yeah, I think that's something I've learned I wouldn't have known that had we not sort of started to develop a feedback culture, but that seems to be something that people value.
Jenny: And how about weaknesses that you've had to learn to compensate for?
Jason: I often describe our culture as a maker culture, I'm a product person and I like to create - that's great I think but there's also times to sort of consolidate and focus as well. I think over the course of the years, I've had fair amount of feedback that sometimes for our teams, it's often trying to, you know, I want five products launched in, in a period that perhaps one would be more feasible. I think one of my weaknesses is sometimes the, the enthusiasm to to lean into new problems and new product opportunities perhaps perhaps a little bit more quickly than we ought to.
Thinking fast and slow
Jenny: What about business resources? Anything that you find particularly useful to listen to? Read?
Jason: A book that we often reference and come back to - Danny Kahneman Thinking Fast and Slow
Jenny: I love that.
Jason: Yeah. Isn't it wonderful. Explaining the world and through so many, so many heuristics. Yeah. I think that influences a lot actually. Values that, you know, when thinking through marketing problems or even remuneration and how to sort of structure and build incentives all the way through to, I guess, trying to even improve our own decision-making and be a little bit more aware, aware of biases.
I said that to someone recently though, and they said, yeah, the problem is there's now a number of studies that show the more aware you are biases, the more you become biased because you discount the idea.
Jenny: But yeah, it's this very interesting insights there, right? Especially about jumping to conclusions. And then you need the thinking slow. When you have a day that just like nothing is going right, in fact, everything's turning to custard, how do you cope? Do you have a coping mechanism?
Jason: Well, one of the brilliant points of living somewhere as beautiful as Queenstown is the opportunity to jump on a bike, get out of the house, go for a run. I live just outside of Queenstown in a really nice village called Arthur's Point. And yeah, the ability to just kind of get back to nature. It's actually why I relocated here in the first place. In 2017 back then, it was clear you can work from anywhere in the world. Finding somewhere that works for you became so important.
Advice to budding startup founders
Jenny: And finally, what bit of advice would you like to give to somebody else setting out in business or thinking about setting up?
Jason: I think the thing that Jonathan I come back to so often is trying to be really clear on why we got started in the first place and it wasn't to sell insurance policies.
It was three reasons. I think I touched on them earlier. We enjoyed working together. We wanted to build a company where we can have some fun, where we could make some money. We're happy with capitalism and the reward for creating good outcomes. And we wanted to create a business that had a positive impact.
That was the true kind of origin of us deciding we were going to build something together. And I think we talk about that with our teams almost weekly, we sort of touch on these core ideas. You know, the business one day will be bigger than insurance in all likelihood. What makes us love it is the fact that we've ensured that it's a fun place to work, we enjoy it , whether that's fun through intellectual challenge or through just having, you know, crazy conversations or, you know, getting off topic and just having some fun for the sake of it. There's a lot of pride in our, in our company and teams to be building products that are well received and you're genuinely creating good revenue and there's good business there and we can make a profit.
Jenny: So to start a business you should have something to believe in?
Jason: I think so. Yeah. Something you believe in and just be really clear on your motivations. What is it that you want to get out of it? Because the product might change. The market may change, but you've got this company and you've got this team and that's the one thing that can be really constant. And if you understand when everybody's aligned on those core motivations, you can sort of adapt to everything else.
Jenny: Great. Thank you very much.
Jason: Thank you.
Jenny: So that's the end of today's podcast for Morgo. For more information, go to www.morgo.com. And if you're building one of these tech or high-growth companies yourself from Australia, New Zealand into the world, we'd love to see you at our annual retreats.
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