#RVoSU — Zego, Harry Franks
The Real Voices of Scale-up Series.
In 2016 Harry Franks, Sten Staar and Stuart Kelly set out to reinvent commercial insurance for self-employed people. They launched Zego and their first product was an hourly policy for scooter drivers which meant that drivers no longer had to pay for insurance they didn’t need. Instead they could get flexible cover for the hours they worked.
Zego has since launched plenty more products, all designed to enable gig economy workers make insurance work for them.
We sat down with Harry Franks, Co-Founder and CCO to hear his views on disrupting the traditional insurance industry, building a world class team and empowering gig economy workers to do more.
Listen to the full podcast here.
What motivated you to leave Deliveroo and start your own business?
I’ve always had the determination and drive. I think that comes down to my Dad, he ran his own business for many years. But really it was while at Deliveroo that I saw a problem and I looked at ways I could solve it. People are being poorly served by traditional insurance so I set out to change that.
You don’t have a background in traditional insurance. What are the challenges of that, and are there any benefits?
Insurance is quite an interesting industry, in one sense it’s quite simply assessing risk, trying to work out what the financial impact of an issue might be and trying to get enough premium to offset it. At the same time, it’s entrenched in years of tradition and huge amounts of interpersonal relationships. Trying to break into that was very hard.
Not having previous experience in insurance has been beneficial because I question everything. I think why has it always been done this way, why shouldn’t it be done this way, and that’s something I’ve really built into our company values.
One of Zego’s values is that if it’s important then it’s important enough to be challenged.
That value has helped us a huge amount over the last couple of years — constantly challenging, iterating and striving to be the best.
How did you get your first insurers onboard?
It was a struggle. We had what we thought was a really simple and good idea, we had a vision for where the business could be, we had a market that we knew we could sell into but we had no experience. Insurers love new products, so long as they have 5 years of past history!
We camped outside insurers offices, we drank gallons of coffee and we talked about the vision.
We had to persuade people that we had the vision but also the capability, drive and determination to deliver it.
Eventually, probably through sheer belligerence we eventually got there and I’m hugely thankful to the first underwriters who allowed us to effectively take some risk.
Zego recently launched public liability insurance. Could you tell us about that?
When you look at the gig economy it’s very easy just to think about taxi drivers or scooters but actually as a portion of the wider freelance economy that’s relatively small, about 16%. The freelance economy is actually made up of lots of different variations of trade, low duration, high frequency trade so carers, construction workers, therapists, part-time doctors etc. We want to be able to service anyone who wants to work on a flexible basis so we launched public liability insurance. Our tech team has made it so easy for people to sign up and use it that it’s got off to a flying start, we’ve got out first few thousand customers using it within a couple of weeks.
What are the biggest challenges you’ve faced so far?
For us, there are two clear challenges:
- Dealing with traditional insurers. Insurance is steeped in history and insurers are very good at what they do but also quite set in their ways. This means that the way we work and interact with large financial institutions is quite conflicting and that’s been quite hard. It’s been a real learning curve for us to work out how we fight through the layers of bureaucracy and some of the traditional systems and thought processes that they have.
- Building and nurturing a world-class team. Similar to the other scale-ups, Zego is absolutely built on the team and making sure that we’re getting the right people in, looking after them and developing the right culture around them so that we can continue to build with them.
You oversaw a period of really significant growth while working at Deliveroo. How do the scale-up challenges you faced there compare to those you’re facing now?
Deliveroo is a great place, the team there have incredible determination and energy to grow and to be absolutely ruthless in their expansion. They’ve acquired some absolutely fantastic senior team managers. While I think some of the actual scale-up challenges are not quite compatible, just by the nature of the business, I think some of the themes I learnt while there, and indeed in my previous companies before that are things that we’ve really used here. For example, hiring. How do you make sure you’re hiring the absolute best people, that you’re giving them the autonomy but also the direction to make sure that they are the ones who are driving the business forward? It’s mostly around how you can develop people and help them to develop the business.
How have you scaled your operations?
I think the key here is again in hiring. Hiring the best people that are going to really hire good people below them. So that is people that they want to work with in the teams that they are creating.
For our Senior Management Team it’s also about creating the right culture.
We focus a lot on culture and try to make sure we’ve got the right balance of transparency and team work. That means we think less about ping-pong tables and more around things like a mental health programme for the whole company.
We want to really make Zego a formative place for people so when they look back at their working careers they can look at Zego and say that’s where I really learnt a lot with people that I wanted to work with, where I was able to express myself and develop as an individual. It takes a lot of work but I’m really pleased with the structure we’ve put in place and I’m looking forward to growing the team with the culture as we move forward.
How have you prepared the company for sustainable growth?
I think that really comes down to what we’re doing with our proprietary tech platform and how we’ve thought about scalability from the outset. We’ve built everything ourselves because we’re a business that focuses on fractioning of real-time data. If we were reliant on too many third parties that could create bottlenecks for us.
Your tech platform provides you with huge amounts of trends and insights to the gig economy. What trends have you identified?
Traditionally the gig economy has been this black hole of uncertainty for insurers. It’s difficult to determine what people are doing because they’re completing a high variety of roles. We have a much more in-depth understanding of what people are doing so we get some really interesting trends and insights. Some of the main things that we’re starting to see is that the gig worker is a lot more mobile than we originally thought.
30% of our customers now work across different platforms using the same vehicle.
We’re starting to open up with our public liability products so our customers can now work in 84 different trades. What we’re looking to start see is the ability for one individual to go and work across a whole range of different work types and actually leverage everything that the gig economy has to offer. That’s something that I’m really excited about, for me it takes insurance back to what it should be. It should be this thing that empowers you to take on more risk, it empowers you to work more and to trade more. So by creating flexible and fractionable insurance we’re able to really promote that capability.
You’ve recently launched in Ireland and have plans to expand across Europe. Will you need to alter your model for new markets?
Each market is different. There are nuances in the buying process, there are differences in demographics therefore pricing, and there are different regulations but in essence, the product and what Zego offers won’t differ in each market. We’re really focused on creating flexibility so that our customers can have the right type of insurance exactly when they need it and that won’t differ in various markets.
Do you have any concerns about Brexit and the impact that it might have on your expansion plans?
I think I won’t be the only one that says Brexit is challenging for us. What we want for the most part is a decision, we want to know what’s going on so that we can plan for it. We’ve done everything we can in the way that we’ve structured the business so that we can react as quickly as we need to as soon as we have a firm decision.
Zego has won numerous awards in the past year (including FinTech50, Evening Standard Business Awards, Virgin Media Business Disruptors). How much of your success would you attribute to good luck versus hard work?
I’m extremely proud that Zego and the team here have been acknowledged for some of the great things that they’ve done over the past couple of years but there’s a huge amount of work that goes on in the background to get everything prepared for being acknowledged for those sorts of things. It makes me think of a great golfing quote from Gary Player, he said, “the more I practice, the luckier I get”. The awards are a great acknowledgement of all that work, so in short it’s down to hard work but i’ll never say no to a bit of good luck!
If you could have a conversation with your former-self, what would you say?
I am very logic and process driven, so if I was to look back a few years and talk to myself now, I’d say not everything goes quite to plan but really, it’s about how you react when those challenges come and just to keep calm, to stay positive and to really believe in yourself. It’s when those hard moments happen that you realise whether you’re really up to the task. It’s having the confidence and being able to deliver (during those hard moments).
Other than to make money, for what reason does Zego exist?
When we started we saw it as a problem-solving platform. The more that we see and engage with our customers the more we become quite mission driven because we can start to see the way in which creating flexible insurance and giving people the ability to pay less or only pay for what they actually use, we start to see how that is actually benefiting the individuals. We hear from customers all the time about the fact that without this type of insurance they wouldn’t be able to do this type of work. So it’s been more eye opening than we ever expected. How much insurance can actually benefit an individual, not just in savings but in fact it can help them to do more.
What are your 5–10 year goals?
We want to continue to expand. We think that what we offer is needed, we think that the change in the labour market from traditional 9–5 into more freelance work is going to continue and we want to be there to support it across Europe and beyond.
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Zego is backed by venture capitalists Balderton Capital and Local Globe, and works with a range of work providers including Deliveroo, Uber Eats and Quipup. To find out more about Zego, go here.
To learn more about the Real Voices of Scale-up series and listen in to other episodes, go here.
