Insurance startups: 5 tips for partnering

     

I’m increasingly interested and excited to see the growth in partnerships between incumbents and startups. Here at Oxbow Partners we often work with people and teams that are on the interface between large incumbents and small startups. Two more different characters you could not meet. But I’m not here to tell you what the differences are, we all know those. No, I want to deal with how a misunderstanding of these differences can result in poor partner choices, particularly on the part of big business. I’ll also propose my 5 top tips that come from seeing those that do it well.

The misunderstanding all stems from the oft-heard statement: ‘These startups are so different, we need to be more like them’.

There’s clearly huge value in large incumbents becoming more agile and innovative, there’s no denying that. However, whilst seemingly wise this statement creates of risk of making poor choices. It confuses the difference between the cultures of large incumbents and startups with a measure of quality. These differences are also typically areas that big business is not set up to objectively measure e.g. how critical is sitting on bean bags in meetings to creating a quality product at speed?

My plea to incumbents is don’t mistake difference for quality. The companies and individuals that we work with that are being most successful understand this. They manage to successfully balance value in culture with true quality.

So what characteristics can we learn from those that partner successfully? Here are my 5 top tips from my experience at Oxbow Partners:

  1. Start with the similarities – partnerships always work best when there is a good cultural fit between the parties. Try to find similarities that can be strengths in the relationships. For example if your company attracts analytically minded people then a partnership with an overwhelmingly creative startup is unlikely to succeed
  2. Be clear on the differences that matter – work out the differences that are really important to long term success. I guarantee that if you really think about it ‘wearing jeans’ and ‘having a foosball table’ will not be on the list. Also make sure these differences can dovetail into your organisation otherwise you will struggle to make tangible change
  3. Look for evidence of sustainable value creation – don’t be fooled by snake oil. If you can’t find a true valuable product with a compelling and real business model then be worried. No matter how innovative they seem business models are critical
  4. Be true to yourself – I’m at risk of sounding like a self-help book here but it’s important not to pretend you are something that you’re not. If what you’re good at is global manufacture or distribution then that’s what your partner wants from you. Yes you need to make this accessible in a startup friendly way but you don’t need to pretend to be a startup. Leave that to them
  5. Spend time where it’s valuable and focus – on both sides there are a lot of potential partners. For startups this means kissing a lot of frogs before finding your prince. Be conscious of the time you are taking up on both sides. End discussions quickly if there is no value, startups will appreciate this. If you do get into action set short sharp and regular deadlines with clear outcomes

I’d love to hear from others about their experiences, please do get in touch.

Greg Brown is a Partner at Oxbow Partners an experience-led consultancy to the Insurance industry. www.oxbowpartners.co.uk

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