Interview with Neil Mitchell, Insurtech co-founder, investor and advisor
Neil Mitchell has over 30 years of experience in insurance brokerage and risk management. From 1991-2017, Neil served in various leadership and management roles with Marsh Canada, focusing on business development, client management, product development and program management. He is a co-founder, Seed and Series A Investor in Players Health, providing insurance solutions to athletes and sports organizations. Today, Neil advises and invests in early and emerging-stage ventures, with a particular focus on Insurtech ventures and provides product development and capacity origination consulting services to insurance organizations.
What inspired you to become an investor and a co-founder in the insurtech sector?
My interest in insurtech was first piqued in 2010/2011 while working at Marsh. The term insurtech was not broadly known and any interest in this subject was embedded in the broader fintech sector. At that time very few insurance organizations had made any serious investments in creating and scaling digital road maps particular with respect to digital collection, analysis, and use of data at scale to optimize underwriting operations and improve the customer experience. I tend to be a curious person and as I met more and more entrepreneurs, individual investors, and VCs the opportunities for investment and co-founding an insurtech venture became clearer.
What were you in search of when you invested in Players Health?
While at Marsh I had developed an interest in the emergence of Insurtech and had the opportunity to attend numerous Insurance and Technology conferences in the US, UK and Canada. Those events afforded me the opportunity to meet Insurtech entrepreneurs, technologists, Angels and VCs, re/insurers, re/insurance brokers and subject matter experts who had a shared interest in all things Insurtech. Through many meetings, conferences and interactions with like-minded professionals, I began to see an opportunity for an Insurtech that digitally captured and collected risk and exposure data and to use that data to generate information and create risk insights. All of which would enable a Property and Casualty insurance MGA and its capacity providers to better identify risk, manage risk and mitigate risk, segment risk, select risk, underwrite risk, transfer risk and price risk. At the time I didn’t have a particular niche in mind. Rather I was seeking the pieces to what could form a part of a worthwhile venture. That idea became real when many of those pieces came together while I attended an OnRamp event in Chicago. At that event, I met Tyrre Burks and was introduced to a company he had founded called Players Health. In the months that followed we began to chart a new course, a pivot, for Players Health, from being a youth sport injury management application to a specialty insurance organization focused on the sport, fitness, and recreation sector.
What advice would you have for a start-up founder/cofounder?
The start-up journey is literally the business equivalent of an endurance activity like an Ironman or an Ultramarathon. Your venture will ebb and flow, evolve, and pivot to find a path forward. That path forward must be towards reachable, achievable, and measurable goals, namely a growing stream of annual revenue and profitability. Your journey will require resilience, resolve and a mindset that is prepared to accept the unexpected and above all keep pressing forward. It will require your sweat, hard work, consume all of your time and a significant amount of your personal financial capital to fund your start-up until other capital providers (angel investors, VCs) become involved. Some of the best ventures fail simply because someone gave up – had they pushed for one more month, one more client, one more investor meeting – just maybe they would’ve made it. Having said that it is equally important to have perspective, and a high level of self-awareness to fail fast, and if necessary, fold and move on and start again. Often our best and most valuable lessons are learnt through our failures. Start-up endeavours have a very high fail rate, even higher for first timers. So, while start-up land can be an extremely rewarding experience it is definitely not for the faint of heart.
How do you determine whether you will or will not become involved in a business opportunity as an investor and/or an advisor?
I tend to focus on the problem that the founder is intent on solving. Is it a niche that is scalable? What is their secret sauce, differentiation? Has the venture achieved any form of product market fit? Is the venture generating any income, if not when will it? What is the experience of the Team members? Who is on the cap table? Is the founder a first timer or a serial entrepreneur? I’ve learned from my own experiences to be cautious and leery of founders with little to no previous domain and or business experience. Sometimes it’s tempting and very convincing if a first-time founder has exceptional presentation skills (good on their feet). Even if they seem to have answers for every question and some good optics (great data room, perhaps a stacked board/advisory council) you still must keep digging. Regardless of the founder’s experience or lack thereof it is critical and important to engage and consult with a network of experienced and successful executives, investors and entrepreneurs. Their insights, experience, and advice are integral to assessing and determining whether to invest or not to invest in an early/emerging stage venture.
How has the insurtech sector evolved for startups?
The sector continues to evolve, it is much more informed, measured, and mature than in its early days. There is a focus on a path to profitability versus “ifcome” hypothesis, collaboration versus disruption, teams comprised of outsiders and insiders versus just a team of outsiders. Investors are less inclined to fund shiny objects with little to no revenue, no reasonable path to profitability and no re/insurance industry experience. Today’s investment environment necessitates start up founders/co-founders to be creative yet pragmatic in the hypotheses and use cases they pursue. The successful startups will be those that have teams composed of young, smart, and creative innovators and seasoned, experienced industry professionals who bring their wisdom, “been there done that, seen it before, don’t do it” experience, and who possess deep domain experience, industry relationships and networks.
With the rise of more insurtech ventures, how do you view the competitive landscape evolving, especially concerning traditional insurance organizations?
The increasing number of insurtech ventures underscores the importance for incumbents to digitize their business operations. Some insurance organizations are well on their way however many are still struggling with implementing practical use cases. That said I see the marketplace as being more about collaboration, not disruption. We’re seeing more partnerships, and service contracts between insurtech ventures and incumbents using new technologies and business models. Incumbents are seeking to build, buy, partner, invest in these ventures, they are less concerned about a competitive threat. Together these two groups are developing, using, and scaling mutually beneficial digital-first solutions. This coopetition is bringing significant improvements and innovations to products, distribution, operations, and consumer services. With the dawn of Generative AI we’re going to see greater interest and demand by incumbents to collaborate with emerging insurtech ventures to access highly trained, and skilled talent, new business models and innovative technologies to in turn accelerate their own technological adoption, adaptation and advancement.
What advice would you give to aspiring founders/co-founders looking to launch an insurtech venture?
My advice is to test your hypothesis with industry professionals, successful entrepreneurs, and prospective investors well before deciding to leave your day job. Seek and welcome constructive criticism. Test and retest your hypothesis. Are you really addressing and solving for a problem, a pain point that has scale and can generate recurring client revenue? Is there is a practical path to profitability? If all you are hearing are platitudes and affirmations you are likely not receiving good advice and insights. Avoid the shiny object syndrome and do not broaden your operational scope or focus! Too much scope will dilute resources, slow execution, increase execution risk and result in disappointment and significantly increase the risk of failure. Make yourself vulnerable, teachable and expose your self to smart successful people whose experience, advice, insights, and network will sharpen your approach, save you time and money and increase the probability of revenue growth, profitability and ultimately create a successful outcome for all involved (founder, co-founders, employees, shareholders, investors).
