Huckleberry: business insurance, guts, and the art of the pivot
As a founder, it takes guts to admit that your company isn’t working. It’s all too easy to believe that with just another month of cranking things will improve — your sales conversations will convert better, your margins will improve, or your marketing channels will start producing. Too many founders wait too long to hit pause, often because they still believe it can work. Just a little more time, more funding, more something.
We invested in FirstLine Medical, an on-demand urgent health care provider, at the end of 2015 for a number of reasons — strong leadership with a deep personal connection to the space, healthy margins, good growth and glowing customer reviews. However, within nine months of investing it had become clear to Bryan, FirstLine’s CEO, that sustaining the early growth and margins was going to be incredibly difficult — demand remained strong but finding enough doctors to supply the service was proving hard. Their early providers loved the freedom of working on-demand but it turned out they were a rare breed — most doctors wanted the comfort of a home base and fixed schedule.
A year after our investment Bryan made the tough call to halt to the service. His (somewhat legendary Irish) frugality — and the business’ positive gross margins — meant that the company had burnt very little cash and therefore had the luxury of time as they considered their next move. Alongside our friend and syndicate partner, Crosslink’s Omar El-Ayat, we spent the next few months digging into various options for the business. Could we recycle the core scheduling technology into another on-demand business? Should we ditch on-demand altogether given the increasingly difficult nature of fundraising for that business model? What were other areas Bryan and team were passionate about?
We spent a lot of time talking about the remaining frictions in setting up a small business in America today. Legal, payroll, accounting and benefits seemed like mostly solved problems, but Bryan had been frustrated by why his business insurance had been such a pain to set up. Such paperwork. So time consuming. Many delay. Very archaic. Wow.
Fast forward another year and I’m thrilled to announce that after a huge technical undertaking Huckleberry Insurance is open for business and actively writing policies. Unlike many other B2B “insuretech” companies which are simply building a marketing layer on top of the existing inefficient system (i.e. a fancy website instead of a dodgy salesperson), Huckleberry is building an end-to-end insurance company that uses modern technologies and data science to provide a better experience *and* to take cost out of the system at every level.
They’re starting out with the most boring and unsexy (as regular readers know, boring and unsexy is my jam) business insurance product, Workers Compensation. It’s required by law (not purchasing is a criminal misdemeanor), underwriting can leverage the complex company data held in payroll and on the public web, and to date has been unfairly overlooked for being too complicated for digital distribution.
Huckleberry takes a paperwork-heavy process that can take from one week to several months and turns it into a delightful sub-seven minute (and 100% online) experience. The insurance is underwritten by Markel, a 90 year-old publicly-traded insurer, so you can be certain that claims will be paid.
A big congratulations to Bryan, Steve, Andrew, and the team on launch. And while workers compensation is a huge market, this is just the start — the team’s vision is to build another great vertically integrated, modern digital financial services brand in the same vein as Affirm, Robin Hood or Lemonade — so expect to see more small business insurance lines available in the coming months.