At our most recent company retreat, SpatialKey Chief Product Officer, Doug McCune, shared with us his vision for the future of SpatialKey. As a jumping off point, he talked at length about Elon Musk’s Falcon Heavy space launch and the number of iterations, failed attempts, tweaks, and tests that went into making it just right (and ultimately, successful!). Doug inspired all of us to think deeper about what companies like ours can learn from the Falcon Heavy launch. Turns out, there’s quite a bit! From failing fast to breaking up a major initiative into smaller, more achievable goals, here’s how SpatialKey is using Elon Musk’s Falcon Heavy launch as a template for success, and how you can too.
The SpaceX Tesla Roadster launched into space on Feb. 6 with the dashboard inscription "Don't Panic!" Image from Newsweek .
When Elon Musk recently launched the world’s largest rocket, the Falcon Heavy, it was a big (freakin’) deal. We’ve all seen rockets propelled into space before, but this one was somehow transfixing. I mean how often do you see a cherry-red Tesla Roadster—no less one launched into outer space (with a dummy named Starman forever listening to David Bowie’s “Space Oddity” on repeat)? While this feat was odd yet spectacular—and a critical step in launching a new class of payload into space for the purposes of discovery (or maybe someday even inhabiting Mars)—it was just that, a step. And, it wasn’t perfect. The Tesla payload overshot its target and the middle core broke apart when it crashed into the water. So, what can we (the insurance community) learn from Musk’s Falcon Heavy launch? There are definitely a few parallels:
Ground Control to Major Tom...Take your protein pills and put your helmet on
Lesson 1: InsurTech is a race. So buckle up and find some partners to help fortify your journey.
The Falcon Heavy was developed using about $500 million of SpaceX’s own funds. While that sounds like a ton of money, it’s a drop in the bucket compared with the billions spent on other rockets. Musk said, “I think it’s going to encourage other countries and companies to raise their sights and say hey we can do bigger and better, which is great...We want a new space race. Races are exciting.”
Digital transformation is a race as well. It’s a race to deliver more value with better solutions that enable the entire industry to aim higher. And, it’s accelerating competition like never before. Those who don’t keep up will be left behind. From my position at an InsurTech company, it forces us to do better. To push ourselves to think outside the box, reimagine, and engineer innovative solutions (that’s exciting for tech companies, but can be intimidating for incumbents). The industry saw about $136 billion in global insured losses in 2017 ($65 billion in the U.S. alone), and those losses, while devastating, have forced insurers (and commercial solutions providers alike) to refocus on incremental changes and efficiencies that will drive results—without massive investment. In fact, Digital Insurance predicts, “Overall we’ll see a move from ornamental products that change consumer experience, to core solutions that will bring greater efficiency to an industry with $5 trillion in premiums in the U.S. alone last year. Even a 1 percent increase in cost savings translates to a multi-billion-dollar opportunity.”
Just as SpaceX is building the technology to explore a new world of space, insurers are currently in the discovery phase of what will be a new world of insurance—new opportunities, but also challenges. And, they’re quickly finding that collaboration brings the expertise needed to get (or stay) in the game. SpaceX didn’t launch the Falcon Heavy alone, they had NASA there to help them. Even with some of the most talented people in the world, SpaceX still needed NASA to help, because the sharing of knowledge is what brings innovation forward. The same is true for incumbent insurers and rising InsurTech stars—we need each other to succeed. As such, the trend toward collaboration is at an all time high with new research from Celent showing that more than 60 percent of insurers surveyed are turning to InsurTech partnerships to accelerate innovation in 2018.
Ground Control to Major Tom...Your circuit's dead, there's something wrong
Lesson 2: Shoot for the stars...but first, an MVP.
Just prior to the launch of the Falcon Heavy, Musk was reportedly “brutally honest about the possibility that the Falcon Heavy could totally just blow up.” He stated to CNN,“Whether the rocket succeeds or fails, it’s going to be exciting. People came from all around the world to see what will either be a launch or the best fireworks display they’ve ever seen.”
Musk’s remarks reminded me of recent comments by Dawn Miller, CEO of AXA Insurance Company who was quoted saying, “Fail fast, I say. You will have setbacks but learn from them and move forward.” This statement rings true of the atmosphere in insurance right now. You can count on failing, and it’s better if you save time and fail fast—so you can correct mistakes (like overshooting Mars). Her statement is also evidence of how insurance is changing and becoming more technology and product focused. It’s consistent with an MVP, or Minimal Viable Product philosophy—an iterative approach meaning build what’s needed, then perfect. For Musk and SpaceX, the Falcon Heavy (although spectacular) is arguably just an MVP. It’s a step in Musk’s plan to produce the Big Falcon Rocket (BFR), a giant booster rocket capable of shuttling hundreds of humans to the moon or Mars.
“At SpatialKey we’re always focused on building the minimum viable product and gathering early feedback,” says Doug McCune, our Chief Product Officer. “At the moment this is especially notable with our underwriting solution under active development. We aim to be in a constant feedback loop with our customers. Our assumptions about what customers want can’t be validated until we get the product in people’s hands, so we strive to release early, release often, and change course along the way. Being wrong about your product assumptions isn’t a bad thing if you learn early enough in the process. Building an organization nimble enough to adapt to this feedback loop is hard, but at the end of the day absolutely essential.” Which leads me to the next lesson...
This is Major Tom to Ground Control...I'm stepping through the door
Lesson 3: Baby steps...break your vision down into achievable goals with incremental results.
According to Thomas Edison, “Vision without execution is delusion.” Imagine if Musk tried to go straight to the BFR without several launches of the Falcon Heavy first? Maybe it would be possible, but the end result would likely not be pretty. For P&C insurers, in particular, digital transformation can be complex, costly, and a massive resource-consuming endeavor. Sometimes looking at the end goal is overwhelming—paralyzing even. But if you break it down into incremental milestones (baby steps), the path becomes achievable. And, that’s just what insurers are doing.
The latest Willis Re Quarterly InsurTech Briefing found that “72 percent of company innovation resources, on average, are devoted to incremental technologies (instead of disruptive or radical ones).” Likewise, according to recent Celent findings, “Most industry efforts today concentrate on incremental changes that offer little risk. More than 40 percent of insurers surveyed report their organizations spend 90 percent of their resources on incremental change.”
Initiatives like AI, automation, and machine learning won’t happen quickly or without significant investment. Fixing legacy systems won’t either. There’s no “easy out” when it comes to transformation, but there are steps insurers can taken now for incremental results, such as modernizing their data and analytics. As Novarica’s Jeff Goldberg, SVP of research and technology, stated, “From a strategy perspective, you can’t stop caring about iterative improvements of data analytics just because there’s a possible future where everything is automated by machine learning.”
It’s clear the Falcon Heavy is one giant step toward Elon Musk’s vision of democratizing space. For SpatialKey, our vision is to be the essential hub of insight for insurers—essential meaning what we provide, insurers can’t get elsewhere (kind of like hitching a ride to Mars on the BFR). We’re executing on that goal now through collaboration with our expert data partners. We know we’ll falter at times along the way, but that doesn’t stop us from aiming for the stars.
So what has Musk’s Falcon Heavy taught us?
Have a vision. Be prepared to fail (repeatedly and fast). Take it in steps, not giant leaps. And now, thanks to Starman and his cherry-red Tesla Roadster, David Bowie is (forever) timeless.