Sean Harper CEO of Kin: “To develop resilience ask someone for something, even if you think they will say no”

Ask someone for something, even if you think they will say “no.” I get a lot of practice with this when raising money from institutional investors. You never know who your story and vision will resonate with, but rejection is a big part of being an entrepreneur. It’s important to build up an immunity to rejection, so you can keep putting yourself out there.

I had the pleasure of interviewing Sean Harper, CEO and co-founder of Kin. Sean is the CEO and co-founder of Kin Insurance, an insurtech startup and licensed insurance carrier that leverages technology to simplify homeowners insurance. Previously, Sean founded FeeFighters, a payments company later bought by Groupon, and TSS-Radio, an ecommerce company that was an Inc. 500 fastest-growing business. Before becoming an entrepreneur, Sean was a consultant at the Boston Consulting Group and an investor at Longworth Venture Partners. He earned his AB and MBA at the University of Chicago.

Thank you so much for joining us! Our readers would love to “get to know you” a bit better. Can you tell us a bit about your ‘backstory’?

I grew up in Wisconsin and started programming at an early age. Programming actually got me interested in business because once I made something, I wanted to figure out how to market and sell it. I was never a good student, but I got into the University of Chicago on the strength of my programming projects and my performance in science fairs.

At the University of Chicago, I became increasingly interested in business and economics — the economics faculty there is amazing, and it was easy for me to get drawn into the subject. At the time, my internships were all focused on finance and economics. I worked for a couple of investment banks, a hedge fund, and a government regulator. When I graduated, I got a job at the Boston Consulting Group (BCG).

Working at BCG exposed me to a lot of different businesses and taught me the benefit of keeping a “beginner’s mind.” In business, it’s easy to assume that everything is done for a reason, that it makes sense, and cannot be changed. At BCG, we were taught to go into a business and analyze everything without any preconceived notions. As a result, we often came up with incredible insights.

Approaching a problem from scratch without the baggage of industry biases is a very important skill for an entrepreneur and one I still practice.

Can you share with us the most interesting story from your career? Can you tell us what lessons or ‘takeaways’ you learned from that?

One of the hardest things as an entrepreneur is deciding when to change direction and when to keep going. It’s our job to be stubborn in the face of adversity, but if we are too stubborn, we can miss out on new opportunities.

In my second company, we had a business that was working pretty well, which allowed us to raise a small amount of money ($1.5 million) and get a lot of press. But it wasn’t taking off the way we wanted. After listening to a lot of customer feedback, we figured out a new direction, but it required us to shut down the main business, put all of our chips into a new direction, and build an entirely new product from scratch. Our investors were not happy with those changes in direction, and even though a lot of people didn’t understand it, we knew it was the right thing to do. It was a lot of work, but eventually, the new product took off, and we successfully sold the company.

It taught me that resilience involves changing direction and not being set in your ways.

What do you think makes your company stand out? Can you share a story?

Legacy insurance companies are slow, and today’s customer expects speed and convenience. That discrepancy between the product and customer expectations drives low customer satisfaction — net promoter scores show only about 30% of insurance customers would recommend their insurance company to a friend. In other words, these companies run on old and inflexible software that is difficult to change.

Because my insurance company Kin is built from scratch on modern software, it’s the opposite. For example, in October, Kin saw a market opportunity to begin providing manufactured (or mobile) home insurance in Florida. Manufactured home insurance is an underserved market — in Florida, there are about 30 homeowners insurance companies while there are only about five mobile home insurance providers. One of those companies went out of business recently, leaving about 100,000 customers in the lurch. So, we put together a team of software engineers, actuaries, lawyers, and operations folks, and were able to get regulatory approval, develop the software, train our staff, and get the product launched in less than two weeks. I don’t think there’s another insurance company on the planet that can ship a product that fast.

Kin has built infrastructure that allows us to be fast in a market where our competitors are slow. Our technology and infrastructure coupled with our business model has proven to be a big advantage to our customers and our financial results.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

I owe a huge debt to my very first co-founder Taylor Mitchell for teaching me to try things without fear. Taylor and I grew up together, and I always admired how scrappy and entrepreneurial he was. He was the kid in the neighborhood who would sell things door-to-door; he even had a magic show he charged money for.

A few years into my career, I had spent a couple years at BCG, joined a VC firm, and got back in touch with Taylor. Unsurprisingly, he convinced me to start a business with him. That business, TSS-Radio, began as kind of a pet project, but it ultimately became very successful, with hundreds of thousands of customers. It’s still around 12 years later!

The hardest thing about doing anything new is to take the first step and get started. I had a successful corporate career — it would have been easy to keep doing that and not take on the risk of starting a business. Taylor taught me that sometimes, you just have to jump in and get started without fear of failure.

Ok thank you for all that. Now let’s shift to the main focus of this interview. We would like to explore and flesh out the trait of resilience. How would you define resilience? What do you believe are the characteristics or traits of resilient people?

Resilience is the ability to keep hacking away in the face of adversity, to keep going when other people say you are bound to fail, and to come up with a plan B when plan A doesn’t work then a plan C when plan B doesn’t work. There are 26 letters in the alphabet for a reason.

When you think of resilience, which person comes to mind? Can you explain why you chose that person?

He’s not a real person, but I try to model myself after Rocky Balboa, the fictional boxer played by Sylvester Stallone. Rocky wasn’t the biggest, the strongest, or the best, but he won in the ring because he could take more punches than anyone else and always kept fighting.

Has there ever been a time that someone told you something was impossible, but you did it anyway? Can you share the story with us?

When Lucas, my Kin co-founder, and I were first researching homeowners insurance, almost everybody from the industry told us it was impossible to create what we wanted to create from scratch. As we kept disproving the doubters, they kept changing the reason why it was impossible to create a technology company like Kin.

First, they told us that there wasn’t enough data available about homes to automate homeowners insurance. It took us a couple months of research and testing different data sources to prove that our vision was possible. In fact, we learned the legacy way of getting that data (asking the user or an insurance agent) was remarkably unreliable. Our data is more accurate because it’s not just a best guess or an industry-standard data point.

Second, they told us nobody would sign up for homeowners insurance online, that retail insurance agents control all the customers. We developed an MVP (minimum viable product), and with a bit of clever marketing, we were able to get people to sign up for even a very incomplete product.

Next, they told us that all the customers we were signing up were bad because good customers don’t use the internet and that our loss ratios (the amount we pay out in insurance claims) would be too high. We plowed ahead anyway, and when we looked back at the data a few years later, we were significantly better than the other insurance companies in our geography.

Until that point, we had been a virtual insurance brokerage, using a license owned by another insurer. We wanted to move faster and remove that dependency, so we set out to form our own insurance entity. They said we couldn’t do it, that regulators would never trust tech guys to run an insurance carrier, and that we would never be able to raise the regulatory capital needed to start one. It took the better part of 2019, but we hired the right people (very experienced insurance executives), raised another $47 million, and we got it done.

We love when people tell us things are impossible because doing hard things is fun. Where’s the fun in doing something easy?

Did you have a time in your life where you had one of your greatest setbacks, but you bounced back from it stronger than ever? Can you share that story with us?

I almost didn’t get into college, and that was a big setback. I never applied myself in school, and just assumed college would take care of itself. Getting rejected or waitlisted from the colleges I wanted to go to really forced me to grow up. I eventually hustled my way off the waitlist. I did everything I could — submitted projects I had done, got additional recommendation letters, and crushed my grades in my last semester of high school — to show I could earn my way into their programs.

Did you have any experiences growing up that have contributed to building your resiliency? Can you share a story?

Learning to program taught me a lot about resiliency when I was a kid. My parents were supportive but didn’t work in tech or anything. My dad was a police officer, and my mom was a teacher, so I had to figure out a lot of stuff myself. This was before the internet, and I had to learn from books that weren’t sold at normal bookstores. I would ride my bike to the nearest university and sit in their bookstore for hours reading the books I couldn’t afford. I eventually got my first job refereeing soccer games, so I could buy those books.

Computers were also expensive, so I learned how to build them from parts. Even when the internet was available, my family didn’t have it, so I got Linux from a friend on maybe 50 floppy disks. I remember staying up all night, plugging floppy disk after floppy disk in to install it.

Because resources weren’t readily available back then, I spent a ton of time learning through trial and error. I remember one time, I wrote a program I thought was cool, and I installed it on all the computers at school, only to learn it had a bug. It crashed all of my school’s computers. As you can imagine, I got in big trouble.

Resilience is like a muscle that can be strengthened. In your opinion, what are 5 steps that someone can take to become more resilient? Please share a story or an example for each.

1. Do things you know you will be bad at. Sometimes, I take on a lower-level project at Kin that requires me to get into the details, such as taking on a marketing project or writing some SQL for reporting. In that context, I have to learn something new and am always worse at the task than my employee. It improves my mental flexibility and also helps me have empathy for my employees.
2. Make sure you have other things in your life that make you happy. If you aren’t dependent on just one thing for your self-esteem, you will be able to take more risks. For me, I really enjoy raising my two sons, angel investing, and being a board member for companies I believe in.
3. Ask someone for something, even if you think they will say “no.” I get a lot of practice with this when raising money from institutional investors. You never know who your story and vision will resonate with, but rejection is a big part of being an entrepreneur. It’s important to build up an immunity to rejection, so you can keep putting yourself out there.
4. Practice a sport — it’s a great chance to practice resilience. I personally love CrossFit because it has a lot of variety of movement. Some movements I’m naturally good at, but many I’m naturally bad at, and that’s okay. There’s always room for improvement, and the peer pressure helps encourage me to put in the effort, even for an exercise I don’t like.
5. Help somebody else bounce back from a bad turn. Recently, I helped a friend raise financing for his company. I wrote the first check for his new round and talked him up to other investors. I think as a successful entrepreneur, your job is to help open doors for someone else.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

I want us to adopt true competition and capitalism as a means of solving inequality and spurring economic growth. I think true capitalism, not corporatism, provides a better solution and promotes efficiency as well as fairness. In a true capitalist economy, consumers have the most power and influence.

We are blessed that some very prominent leaders read this column. Is there a person in the world, or in the US with whom you would love to have a private breakfast or lunch with, and why? He or she might just see this, especially if we tag them :-)

Bill Gates — I’m super interested in his work to combat global poverty.

How can our readers follow you on social media?

Readers can connect with Kin on Twitter, Facebook, Instagram or LinkedIn. Our Twitter, Facebook and Instagram are @kinsured and our LinkedIn is Kin Insurance. Check out our website at www.kin.com or Kin Insurance Medium Channel to learn more.

This was very inspiring. Thank you so much for joining us!