This interview with Brian Hemesath is all about startups, innovation and insurance. Brian is the Managing Director at the Global Insurance Accelerator in Des Moines, IA. The Global Insurance Accelerator is an accelerator for startups that impact the insurance industry. I love the focus of this accelerator. Their investors are insurance companies. And they bring together over 100 mentors all focused on the insurance industry.
Before heading up the Global Insurance Accelerator, Brian was involved in a number of entrepreneurial endeavors which we talk about. Brian received his BS in Computer Engineering from Iowa State University.
Here are some other things we talk about:
-What types of companies and technology is the Global Insurance Accelerator looking for?
-What stage should the technology and companies be at?
-How does your mentor program work?
-What’s the advantage of having an insurance focused accelerator?
-Who are your investors?
David Kruse: Hey everyone. Welcome to another episode of Flyover Labs and today we are lucky enough to have Brian Hemesath with us. Brian is the Managing Director at the Global Insurance Accelerator in Dubai and Iowa. And so the Global Insurance Accelerator as you can probably guess is an accelerator for start-ups that will impact the insurance industry. So I love their focus and their investors are also insurance companies and they bring over 100 mentors all focused on the insurance industry to members of the accelerator. So it seems like a pretty good idea to me. So before heading up the Global Insurance Accelerator, Brian was involved in a number of entrepreneurial endeavors which he can share and I invited Brian on to Flyover to learn more about his background at the Global Insurance Accelerator and just where he wants to take it. So Brian, thanks for joining us today.
Brian Hemesath: Thanks for having me.
David Kruse: Definitely. And so before we jump into what you are doing now, can you tell us a little bit about your background?
Brian Hemesath: Yeah, yeah, I’m a native Iowan. I attended the Iowa State University in the late 90’s and my degree was in Computer Engineering, so I got a technical background and for anybody in the technical space around that timeframe, it was an exciting time with the doc com bubble. It was in full effect. A lot of opportunity and also the changes to make your mark I guess on that tech world and so in 1999 when I graduated I moved to Des Moines and worked for a couple of small companies and when that bubble burst, that was really ironical when my opportunities started to present themselves. So I’d consider myself an accidental entrepreneur and took advantage of the ability to build websites for people, started my own business in 2001 and my brother and I ran that web development company for about a decade. Along the way I got approached by people throughout my career that had ideas that they wanted something built and so I partnered up with several of those individuals, built a company called Catchwind, which is still around today. It sends and receives short codes, text messages and I sold that in 2012, but again it’s still here in Des Moines and doing well and another company I helped, got off the ground was called VolunteerLocal and it helps events manage volunteers. Today I am a passive role with that company. There is three full time employees. A young woman named Kaylee Williams leads that effort and has done a really great growth path and have got some really cool exciting customers that use our service; it’s a very rewarding venture. And so the journey through all these startup activities kind of helped built my reputation around Des Moines as a startup guy and now we are going to lead into the Global Insurance Accelerator, but I did spend some time at a incubator called StartupCity and that opportunity really introduced me further into Des Moines startup seen. So I’ll pause there because that starts to lead in to the GIA then.
David Kruse: Okay, got you. And then so in your past you know was there one experience that was especially interesting or a great learning experience for you that you look back on?
Brian Hemesath: Yeah, you know there is always several. I think for me the biggest lesson learnt was just how to interact with people. I’ve had several partners through the years and partnerships, some go well, some don’t and I’d like to think that I’ve learnt from each of those on how to work with partners, how to match the intentions and expectations. I’m a big fan of those two terms and as long as two sides of the table have the same expectation, the same intentions, great things can come from that. So it’s mostly been about just the people and communication.
David Kruse: Got you and was there one thing in your past where things did not go well as far as, you know – I don’t know if it’s a failure of something. Some situation like, wow! That did not go well and this is what I learnt?
Brian Hemesath: Yeah, you know there is a handful; I’ll tell you two of them. One of them was a startup we had called NotifyWorks and it was software for lawyers and with all respect to the company selling software to lawyers, it’s not something I would do again. I don’t know that that’s a, that’s a definitely sold not bought category, meaning the lawyers really need to be convinced. We gave it a good nine to 12 months run of trying to sell this software that would help the lawyers understand the content of their contracts, so they knew when to take advantage of certain events or when to remind people a thing. It was a ticklish system with some intelligence built in and we didn’t do enough market research. What we could have spent on a simple launch rack page or something like that for a few 100 bucks, we put a good I think 10 to 20 grand into the technology, another 40 to 50 into the marketing effort before we just really found out we didn’t have a product that they wanted to bye. We did get some early customer discovery feedback that said people wanted this, but you know as entrepreneurs would know, it’s a different field when you actually go to ask for the money. So a good lesson learnt there and then you know back to that, the partners and the communication, I had partners in the text messaging company and we learnt a lot about each other after we’d already gotten into business with one and other and one of the things that I now use as a toolset, there’s lots of tools for this, but StrengthsFinder 2.0. It was a book that I used, it’s been six years now since we used the book for the first time and in retrospect using a tool a like that to understand again to intentions, expectations, communication styles would have saved a lot of trouble frankly just to – and communications between partners. So certainly some failures along the way, but I would like to think that’s what has prepared me for the role that I am in now. You can’t give good advice without some failures on there.
David Kruse: No, that’s for sure and you sound like an ideal person to run accelerator with starting multiple companies, which is nice you know, because all these companies years very fresh and they have all those same people issues and market issues and you can share your expensive experiences.
Brian Hemesath: Yeah. It’s all about perspective. It’s about being able to apply your experiences where you can and knowing when you can’t as well. I think that’s a big part of being a good mentor, is knowing when you should not be mentoring and either pushing that person to someone else or letting them discover on their own.
David Kruse: That’s interesting, yeah we should – I would like to follow up on that a little bit maybe later.
Brian Hemesath: Sure.
David Kruse: Well actually we could just jump into that now; actually that’s a good point. So how do you know – like I mean, have you – because that’s always an issue, how do you let them learn versus kind of really holding their hands? Do you have an example of where that might have happened with you at that..?
Brian Hemesath: Yeah, and we’ll get into our program, but we do have a heavy mentor set and we put our mentors through, we call it mentor training but I really call it more mentor preparation, I don’t know if you quality the official training facility. But you certainly get them prepared and our training is all about getting the mentors who are mostly corporate types into thinking like a startup. And so for the startup peopled that are listening, it’s all the things that you live day by day. Things move fast – you’re the janitor and CEO, understating the flood plan of opportunity and all the stuff that comes your way and how to focus and filter the way we are teaching these mentors from the corporate world, how to think that way and all the things that a startup experiences. One piece that I share with the mentors is knowing the difference of giving direction and sharing perspective. So when a startup comes to you and they have got a challenge that they are presented with and trying to solve the challenge. You as an mentor have a fork in the road to they say, I’m going to give this particular person a direction, I’m going to tell them what they should anticipate and what they should do and that’s valuable mentoring and you should do that when applicable. But there is also a time when you realize I maybe out of my league here. So for example I’ve never raised real, you know large amounts of money for any adventures. We’ve done a small seed around with one of them, but we’ve never really raised big money and so I will advise as best I can. But there is a point where you have to let go and what you do is you give perspective. And it’s to some degree role-playing up the next steps, what are all the different scenarios that can play of in this. Introducing to the right people that will also give feedback and you are letting that startup at least have all the options presented before them so they can own and make that decision themselves. And so there is – that’s the fork in the road, that is sharing your perspective of what you know think they should be doing versus actually giving direction. So that to me is a important thing for people to realize. I think we naturally do that, but we may not be cognitive of the fact of the two difference between the two.
David Kruse: No, that’s great, you should write a small book on that, I mean because I see there is always mentor programs all over the place now for entrepreneurs and I often wonder if they are getting the right advice. Because if they don’t a mentor can definitely lead to – waste a lot of time or lead down the wrong path and so that’s an interesting balance yeah.
Brian Hemesath: Yeah, and just to talk a bit about our mentor programs, if you don’t mind I’ll…
David Kruse: Yeah, do you may want to just give a brief overview on the Global Insurance Accelerator?
Brian Hemesath: Yeah.
David Kruse: I tried to at the beginning, and then we will talk about the mentor.
Brian Hemesath: Yeah, let’s do that. All right, so here is the health thing, and you can time me to see if I can get this done. This is about a three minute version. So I mentioned that I was a resident in an incubator called StartupCity and it ran from 2011 to 2014. When it shut down in 2014, one of the Founders of that incubator put together WhitePaper, that was essentially what he would do differently if he could do it all over again and it was brilliant; it was a great move. He described an accelerator model. He recognized that a company is coming into incubator was short on capital and he described a more sophisticated mentor model and then the biggest steps though is that its focused on a niche market. I am not from the insurance industry, so I didn’t really this coming in, but Des Moines, Iowa is home to over 200 insurance companies that are domicile here, and then the Greater Des Moines area has 60 plus insurance companies headquartered right here, again in the Great Des Moines area. So that means two thing, one you have a lot of corporate support, because there is a lot of companies here, but two, more importantly, you have a whole lot of insurance workers right here in the metro area and I’m a big believer after having done this now for two years, that niche accelerators have a tremendous opportunity because of the focus. So to bring this back, so that WhitePaper was put together. It was presented to the Greater Des Moines partnership, which would be considered the Regional Chamber of Commerce here in Central Iowa. That proposition was put in front of a handful of insurance carriers and seven said yes to the ask of $100,000 annually, as well as participation from their leadership to act as mentors. So that was the genesis of all this and how this came to being back in 2014. Again just a repeat; we asked our investors for a cash contribution of $100,000 per year and then also then we solicit from their leadership group to serve as mentors and so all of that work was done in 2014 before I hired. They brought me in December of 2014. I would like to point out that we had 60 days until the start date of the class had been announced. So I was brought on and had 60 days to try to pull all this together and it was fascinating to go through this for the first time, but we took the mentor pool from 30 people up to 70, recruited a lot more insurance people, but also recruited designers, developers and lawyers and people that make up other building blocks of that mentor pool. We got a really beautifully space in a part of down town called the East Village and we recruited, like had to find start up’s that were building insurance solutions, which as you can imagine especially in 2014 was not a really hot space and those companies were pretty hard to find. So February 2015, we welcomed our first cohort, six companies in all. They each received $40,000 of seed capital in exchange for 6% equity. I helped form the term sheet and then tried to make it as sounder friend as possible, we come it at common stock. We don’t take a board seat. We got a handful of rights, which none of them are outlanders. So it was a Founder friendly program. The startups then go through the mentor speed dating process and so while most accelerators have some sort of mentor process, I’d like to think we’d take it to another level, because we put our mentors and our startups and one on one setting across the board, all of them. So the mentor pool in 2015 was about 70 people strong, now two years later we are at 150 and still growing. We’ve had the good fortune of attracting a lot of their talent. We are now faced with the really good dilemma of how do we manage all these people, how do we onboard them in way that they still get value. So I think there is a point where it saturates a bit, but we haven’t reached that point yet. So to fast-forward to today we have a 100 or so mentors that are from the insurance space, the other 50 are again those building blocks, accounting, legal, design development and things like that. But those 100 insurance mentors, all self scheduled over the course of three weeks and give up four hours of their time coming into 2017, because we have eight teams that we plan to bring in, and so they will give up four hours of their time to meet with each team one on one for 30 minutes and so that happens again in weeks two, three and four of our program. So it’s an incredibly intense networking exercise that is laser focused on the insurance industry. And I don’t know if anybody else really in the world that’s doing it quite the way that we do it. We do some prep work prior to the mentor speed dating to make sure the start-ups are prepared for this. We had a good lesson learnt in year one. We had a company called Pablo; two brothers, great, smart guys, great insights, but they are brothers and they will ramble on, they will kind of bicker even within one setting. So they are standard brothers from that standpoint, but didn’t figure it out until the mentor speed dating was almost done that they were not effectively communicating what their needs where to their mentors and so their sessions, they weren’t wasted by any means, they still made an impression, but the mentors weren’t leaving the room with their sense of how they could be helpful. So that was a key lesson that we took away from year one, is that we shouldn’t assume these startups know how to ask for help and I think that’s valuable for anybody listening on this call. If you are really good at pitching your startup that’s great, but if you are not in a place where you are just – you are rolling in the revenue and you got everything figured out. You need to get good at asking for help, very specifically and to simply ask for help. So years two and looking at year three, we take a few days before the speed dating starts to have our start ups meet with what we call advisors and that whole point of those meetings is to make sure they can give a very, very clear six to eight minute mentor pitch with very, very clear asks and where they think they are week at the end of that. And that’s the core of our program right there, those three weeks of mentor speed dating. We do a whole lot more and of course we are 100 day program. So following the mentor speed-dating we do some light programming. Most of the educational side of it is focused on either very specific insurance topic, such as underwriting or clams, marketing within the insurance space or its specifically focused on business development and sales. We have our board Chairman by the name of Jeff Russell. He is the CEO of Delta Dental and he will be the first to tell you we here to build an income statement not a balance sheet. And that’s – so that is the way of letting everybody know we are serious about business, we are serious about pilots and trying to create revenue and our – my goal, our goal is to connect with many of these startups with opportunities as we can. And so the educational session of sales and business development is taking these teams that have probably never had any formal training of sales or business development and helping them understanding the key points and how to do it. Just to close,
David Kruse: Oh no, keep going.
Brian Hemesath: So to close out and how our program wraps up, traditional to most accelerators we have our own demo day on day 100. The unique thing about our demo day is that its tied to an existing insurance conference called the Global Insurance Symposium, which is right here in Des Moines. That Symposium was created a year prior to the GIA being formed. So we have been pretty much step and step with it coming up now in our third year, the symposiums four year. That symposium is fantastic because its puts 500 plus insurance executives in the room. So all due respect to other demo days, we are not focused on selling the remote investors of getting back to that theme of an income statement, we are focused on filling the room with prospective customers and you know traditional demo day from that standpoint, then they get their seven to eight minute on stage, tell their story. We backed that up to get some brakes that we can some decent additional networking and of course, again there is a whole conference built around everything we do to attract the audience and get them more content now they are here.
David Kruse: Yeah, I love your focus on insurance and yeah, I’m curious that other accelerators will pop up kind of with these particular focuses just because it makes a lot of sense, especially from a sales and mentor perspective.
Brian Hemesath: Yeah, so there is a – so if anybody new to the insurance space, there is now an official hash tag of InsureTech. So we are following along the FinTech path and InsureTech is a real thing. There is – so I mentioned back in 2014 it was pretty hard to find companies. Well, just this past October there is an event in Las Vegas called InsureTech Connect and I think the final tally was like 1,500 people were there, across the industry, both on the startup side as well as the incumbent. So I would like to think the InsureTech seen I just has their quote – the InsureTech team has arrived to some degree and there is a lot of opportunity. So we started our accelerator, we announced it in 2014. We have since seen a couple other insurance accelerators come to surface. So start up booth camp which based in London did that accelerators all over the world. They announced their London, InsureTech accelerator a year after ours and then there is a group in California called PulgAndPlay and they do it a little bit different than our model, but they also have an insurance focused program. So they are more resources definitely now today than there were even two years ago for these young early stage companies that are building solutions for the insurance space. And I’ll say this, there’s companies out there that probably are building things that are applicable to insurance, but they just don’t realize it yet and so what I mean by that is again, keeping in mind that I’m not from the insurance space. This has been an educational journey for me as well, but fraud, cyber security, artificial intelligent, machine learning, these are broad technologies that are pretty cutting edge. There is a lot of excitement in those spaces. All of those things I just mentioned have applicable to insurance. Now the internet-of-thing is heavily involved with insurance and so all of the data that’s been pushed around needs to be analyzed, needs to be categorized, that needs to be facilitated in a way that can help the insurance carriers do a better job. One of our startups in 2015 said it best and again, I am not being from the industry I didn’t realize this, but insurance companies at the end of the day are data companies. If you think about what their really task of doing ,the service they provide, they are a data company and they need to make sound decisions from the data they are given. Cool stuff right?
David Kruse: Exactly. Yeah I mean it stretches across so many different areas, which is nice, but then you can – you have a kind of sales focus on insurance, which is helpful. So how do you screen potential companies before they can join this accelerator? Who is on that kind of screening committee?
Brian Hemesath: Yeah, so year one I told the board we are more beggars than choosers and that’s not to take anything away from the six companies we brought in. But your odds were much, much better to join the 2015 cohort than they are today. We don’t publically release the numbers, but I can tell you in 2015 they weren’t impressive. No one would have looked at our total number of applicants and saw that we could have produced a good portfolio out of that group, but we did. And so to answer your question about the process, we have as I mentioned early, originally seven insurance carriers that invested in this program. We added an eight in year two and we’ve added two more now heading into year three. So we have 10 insurance carriers that all contribute 100K a year. Each of those carriers have a board representative, as well as a named alternate. So I got a very large, but very active and supportive board. They are – I would call them a working board from the standpoint of how responsive they are and how helpful they are, but they absolutely look to me to lead the program. They have given me a very long leash and that’s a great way to be right now, because they are looking for me and the startups to help show them this new innovation. So to go back to the question, each of these companies have a board representative. On top of that then they are able to name selection committee members and so I work with the selection committee members during our selection process to analyze and review the applicant pool. We do a paper facing appliqué, or not paper but online application that we’ll look at and give it the eye test, see if it passes in terms of is this relative to insurance? Does this count as innovation, which is highly subjective, we can come back to that too. Does this let us make a big impact on the industry? So a couple of things we are not looking for, we are not looking for new insurance companies. So if somebody says I want to start a brand new insurance company, we are not a set of that. If somebody says they want to create a new insurance product, then let me define what that means not from the industry, an insurance product is your homeowners’ policy or your auto policy. So if somebody came to us and said, we got a brand new auto policy that we think is the greatest thing, that’s not something we would entertain. Now, if they were building an app to help distribute those policies or make claims or you know better support the policy, there is a fine line between the difference of those worlds. But what we are looking for again primarily is this innovative, does this help the industry grow? I like to pick on these guys, so one of our teams from 2016 is insurancesocial.media and they help agents with their social media. They have a platform that can feed content through twitter and Facebook and other social measures that can be controlled by the Chief Marketing Officer. So for most of us outside of insurance, we look at social media and say, okay that’s all past, been there, done that, that’s going back to like 2007 or 2008 and saying this is not new, this is not innovative. But the reality is, is most insurance agents are not very good at social media and there is a not a clutter of tools out there to those CMOs the kind of control they want. So when this company came in and applied, it is absolutely innovative to the industry. So its again as I mentioned early, innovation is a higher subjective topic. So you need to contrast social media with artificial intelligence to help with claims management and you would see those are two very different technology segments, but again innovative all the same. And just to bring it back, I get a little tangent there, to bring it back to the question about our process. Once we’ve reviewed these teams and they kind of make that first cut, we do video interviews and we do everything remotely just to level the playing field and at that point we are really just to be offensive of the team, how well spoken are they? Can they clearly communicate what they working on, you know just all the things that you pick up on from a video interview. Following that then we are meeting as a group in-between each of these segments. So from the application, the video interview, additional follow-up that are on task to do, just some additional due diligence, we then come away with our selections. But the process is still in process if you will. We set ourselves a startup, very much so and so this is our third year of doing it. If I may say the process went really smooth in terms of working through it. We got a great group coming in to be with us here this spring and I’m excited about welcome them to Des Moines.
David Kruse: Can you share any kind of lessons learnt by what you – how you made mistakes in the first year or two or what you have changed since the beginning in the social lessons?
Brian Hemesath: Sure. I think and I don’t know if I can call this a mistake but certainly we are getting better at understanding what it is we are looking for. As I mentioned early, we were more beggars then choosers in year one and so we had, again – but we had some great companies apply. When you look at our model and what we can do with our funding and our mentorship, you can start to assess how it can be most helpful and what we found is we can be most helpful when a company has at least an NVP built. Something that the mentors can look at, can poke and touch and start to understand how it impacts them in their day lives within the insurance world. Contrast that to somebody that’s just a concept. So they are business plan on the back of a napkin. It was not as much that you can do with a concept as a mentor. You can plan, you can do a lot of spreadsheets of forecasting, you can do some white boards of product development. But 100 days is not a lot of time and depending of the complexity of the product, if you are coming at the concepts stage we would just may not be able to help you as much. And then of course the other end of the spectrum is true as well. If you develop a product fully and you have a handful of paying customers, we also start to assist how helpful can we be and we don’t want to turn this into a business development exercise for a startup, we want to impact the product, we want to impact the business model of how it’s going to be distributed into the industry. Those are all things that mentors can help with and if all that work is done, you know the mentors are going to come back to me and say, ‘Hey Brian, I can’t help that company, they are already set’ and that doesn’t create a good relationship really for any of us. This if you go back to what I talked about earlier with the mentors being the key to the program, I didn’t talk a lot of what they get out of that and so Megan Brandt who joins me here full time in October, she is Director of Communications, but I told her, I said your whole role is mentor happiness. We need to make sure these mentors are feeling fulfilled and satisfied with the interactions they are getting, felling they can contribute. Just keep in mind with the 100 mentors and only six to eight startups, there is going to be some mentors that don’t get the interaction that they wish they had, it’s just the numbers game. And so we can’t do much about that, but we can be doing as much as possible otherwise to make sure these mentors are getting something out of the program. So the startups, again I’m off on a tangent already. You know the mistakes really aren’t necessarily mistakes, but just more lessons learnt about what we are looking for and how helpful we can be and I think that – you know the shortest answer to that is, we got a pretty good handle of the stage of company that is a good fit for us.
David Kruse: And do you have an example of a portfolio company that came in and kind of their focus or product development kind of changed the base on the mentors advice and then also what that company – did any of the insurance companies work with them and bring them into their company that test out their product and yeah, kind of work us through how that kind of all works?
Brian Hemesath: Yeah, I’ll stick with the 2015 group. I always disclosed that a level might built that are equally hard to pick and choose once we get into talking about them. But the best example of a mid-connectivity is a company called DriveSport. Chris, the CEO joint us at grand plans to have a wrist band of sort and he also had a hardware idea around cameras and it was all about, is the driver drowsy or distracted and what can we do to alert that driver to wake up or pay attention. So it’s really focused on the driver of the fleet, like a truck and he came in with this pitch of mentor speed dating the first two days and no one got it. Everything from the arguments of you are trying to start a hardware business with no money, all the way to how fierce of a problem is this, all the things that emerged in two days. When he came back on day three, it was pivot. He had experience with computer vision and so he learnt through some of the mentor interaction that there was actually a need to analyze the load and analyze the video that could be captured off the dash cam of the truck. But now where he is today is they are actually a search engine of source, a computer vision company absorbing the road, everything from potholes to other drivers, to the drivers’ behavior, billboards, you name it. They are able to pull all that information in and their technology then can categorize that database and make it searchable and indexable and it’s a really powerful tool. And all of that came out of the direct amount of feedback he was getting in the first couple of days and I’ll mention Chris has since completed our program, raised a seed around the $750 K and then subsequently went to the TechStarts Detroit program, the mobility program. So he’s headed down kind of this autonomous vehicle path with a great background in the insurance space, because the insurance guys are very interested in his data and he went back and helped underwrite fleet coverage later.
David Kruse: Interesting and how – how would that, his technology help with underwriting? You know with…
Brian Hemesath: Well and I’ll – I don’t have the details of that, of that question, but like at a high level having better insight of driver behavior could be used to help train the drivers better, which then creates less accidents and less problems on the road. So some of that comes back to training, some of it comes down to just, I assume the individual fleets and how well are they keeping the drivers up to day, how well are they often. This is a whole another industry, the fleet and the trucking world and there is technologies out there to manage and monitor that. He is putting the technology though kind of again out on the road and not so much on the driver. So the carrier is taking interest in that.
David Kruse: Got you, okay. Nice and so, we are going to go – I have another question unless you want to keep going on that.
Brian Hemesath: No, go for it.
David Kruse: Up to you, okay, all right. So what, what are you goals for GIA kind of over the next three to five years? Do you want to increase the number of mentors or the number of companies that you bring in or what would be, you know in five years what would be the ideal scenario; maybe have an exit or two.
Brian Hemesath: Exits are good. Yeah, I think if you keep in mind our carriers are not here to assess the financial return. For them to take the 100 grand they put into this program versus a 100 grand from somewhere else where there is anyone better or guaranteed return frankly, they are not looking at us as a financial gain mechanism. This is an investment in their people and in their innovation side. So an exist would help from the terms of validating that we are doing something right, that we have created something of value that someone sort out and purchased, but financial verifications rather are less significant. But again, more of a – you can check the box, yeah we created value. As far as where we will be, the great thing about this again, having this diverse board, it’s been fun to work with them because these are corporate types that have built a career at their respective companies and done well. They have never ventured into the startup world, and so I would like to think that GIA in some ways as their first startup. And so we talk extensively about all the different opportunities, the fact that we’ve got a good global reach with the startups that we bring in. By the time we start after the cohort, we’ll have brought in companies from seven different countries. But this is exceeding their expectations and in some ways not to say we don’t have a vision of the next three to five years, we are watching the market very closely in terms of what the startups want, what does the industry want? Another interesting thing about this industry is that it’s somewhat localized on federal and state laws and regulations. So there is an insurance commissioner for the state of Iowa who is a very active mentor here and he is a key part of our success, because he will go tell these startups, you know what you are doing is illegal, you need to go change your model. I mean literally I call him the dream killer, because how many of these startups are like I love what they are doing and he would say that’s illegal. And so it helps balance it because we are able to pivot then. You know it’s not just this company is dead, it’s just lets pivot and let’s fix this up. So the reason I bring that up is there is also a global opportunity for really all of our companies, because not only they are coming to us from other countries to build a solution for the U.S. market. A lot of times their solution can apply to other places and so as we continue to build out our mentor network globally, we have a better understanding of what are the laws and compliance regulations in those other countries. So I think that’s going to be a move for us to be able to offer these companies coming to us, a better reach and again this is buy into the fact that we are all about the fact that we are all about the income statement. It only makes sense to allow them to expand their businesses outside the U.S. when the time is right.
David Kruse: Do you think the insurance companies involved have become more entrepreneurial themselves or do you that maybe actually spinning up their own startups or maybe you guys helping or yeah, do you think that’s happed at all?
Brian Hemesath: Yeah I know, I’ll start with the last point. I don’t know if I see them spinning off around startups. Now there is an example of that happening here is Des Moines ironically, just I won’t see that, but there is an insurance company here. They are not part of our group yet, but they called Homesters Life and they have spun off a funeral software to help – I think it’s to help funeral directors and the funeral process and may even be a B2C play, I’m not a 100%, but – So there is an example of absolutely of a insurance company spilling off a startup. I don’t see that happen very often though; I think that’s more of the exception. What I am seeing is the creation of accelerators like ours, what we will see is equation of labs or often called studios. There is a company is St Louse called RGA. They are the third largest life reinsurance company if I have my stats right, and they have kicked off RGA X and its their own innovation studio and they are more about the internal innovation, they bring in outside companies, they are maybe building things that are relative to their vision or their mission and how do they essentially purchase those things or work with them to improve RGA. So we see – I’ve seen some of that. I also see there is now, I want to say about 20 insurance carriers at least publically known that have invested arms and our actively investing in startups. They are already mutual America family, TransAmerica, Hartford Steam Boiler, there is a handful of these companies have set aside funds and they act very much like a VC with the strategic vision to support the insurance industry.
David Kruse: Have you guys every gone out and actively recruited like a certain technology or companies and hey, the BlockChain is really interesting. We really want somebody in our group. We will go out and try to track down somebody who is kind of started out or are you guys more just see who applies and who is interested in joining GIA?
Brian Hemesath: Yeah. We finally in this third year have hit that point where we can start to recruit on technologies. And again, that was a combination of 2014, 2015 being a little slower, not as many startups chasing down opportunity and also to renew sort – there is a whole lot of people that don’t know about us yet. So it’s a combination of those things coming together in this third year that allowed us to go and actively look for some technologies that we are seeing right. Anybody listening, if I made a plug, you know cyber security is a huge one. My challenges by the time a cyber security company gets any sort of press where I may heard about them is because they have raised $800 million or something ridicules. So I am counting the country for probably, what is probably an academic group that’s built something on cyber security and it’s looking for a market, because I can provide the market, but finding the cyber security solution out there is the challenge; 10 goes for frauds. You think about the components of an insurance company, the underwriting and the claims process, you know fraud is unfortunately a big part of the insurance world and they are doing their part to try to combat that, because that makes rates go up the more, so that is a bad things.
David Kruse: So even with the fraud or cyber security, if somebody has – it sounds like somebody had the technology and an interesting idea. They don’t necessarily have to be focused and have a product to build necessarily strictly for the insurance company at the point they talk to you as long as they have the backbone or the technology, you guys can help.
Brian Hemesath: Right.
David Kruse: Okay.
Brian Hemesath: I would argue that’s almost ideal, because I can provide the most value; those that are connected to the industry.
David Kruse: And how do you know…
Brian Hemesath: You bring the product, I’ll bring the customer.
David Kruse: Hey, that sounds like a pretty sweet deal. So how do you know with the cyber security, you know that it’s actually interesting technology. Like would you have some of your investors review it. You know some of your security experts, because there is tons of cyber securities out there or companies. But you know how do you know it’s actually like unique, interesting, strong idea?
Brian Hemesath: Yeah, so I’ll answer first, the board is total smart. I’ve had investors, insurance carrier investors from my group and say this is an area we are interested in. So I know there is a demand for it on my side and now on the other side – and it is. This is really a broad term it’s like me saying BigData, it doesn’t mean anything right. It’s too broad to even get into the weeds, but hopefully I cast the right enough net that your listeners maybe making a connection. So on something like that, we would just assess it as we would, an applicant, whether they are applying for the cohort or if someone were to reach out to me literally today, even through our cohort is well under way and we’ve got the selection made. I view myself as a conduit between these insurance carriers and the startup world. So I’m not promising to the audience that I can drop names and make introductions, but certainly things that are interesting, I put that in front of my carriers year around to get their feedback on if that solves the problem for them or not.
David Kruse: Got you. It make sense.
Brian Hemesath: I don’t have, one thing that’s challenging is to draw really, really specific needs and let’s put up this project. I think that’s more of an IT function and while if a startup meets that IT functions that’s still a winner, but we are not trying to name specific things, at least at this point that we are trying to solve. We are trying to keep it broad enough that the innovation hopefully bubbles to the top and we see new ideas. Do you see the difference there? The one side of the cohort it is a new idea, we never thought about this. This is fascinating with investments versus oh yeah, that’s still innovative, but that definitely solves the problem. So if you back and pick on insurancesocial.media, its sill innovation, but solves a very specific program. It’s one reason they have seen the traction they have seen. Their sales cycles have dramatically decreased because they are solving a very specific need to the problem. So you contrast that, something that’s a little more conceptually and one of our companies is called Tikie and they had a longer road frankly, because some of what they were selling in the early days was conceptual. Now they have come a long and they have secured several pilots and they are – I like to think they are going to survive the startup grind and emerged successful. But there is a contract there between those two different types of companies.
David Kruse: Interesting, okay. All right, we are almost out of time, but I have one last question for you and this is more around kind of the emotional side of the life and I’m curious how you kind of dealt up and downs in your careers and then how do you pass it on to your portfolio companies, because some days you feel like you’re probably flying to the moon and the next day you feel like you are drowning. And so how do you tell folks and how have you dealt that in your career?
Brian Hemesath: Yeah, yeah. Well two tactical things that I do is you look ahead of you and you look behind you. If you are working hard and your accomplishing things, there will always be a trail behind you of good things. So the minute you are down because you are looking ahead for something happen there in the present, stop, pause and reflect on what you have accomplished this far and you’ve got that far for a reason and you are able to do things for a reason. Try to center back on those and take the next. The other tactical thing is to surrender yourself with people that you want to be around and that will encourage you and give you great advice. One thing we tell our mentors or part of our mentor training is to drop your Iowa nice, you can largely just say drop your Midwest nice for the purposes of the Midwest audience here that you might have and the idea there is no one advances or succeeds. If everybody is so nice that they don’t tell you the real feedback and you need those people and that will be very authentic with you and very real to give you the feedback that you need, not just the pat on the back or that sounds great Brian, but I need someone to kick my butt and right now you really didn’t do that well, here is what you should have done differently. So those are two things that I try to encourage people and they are simple, they are not rocket science. These are simple things that anybody can do, because it is a total rollercoaster and we actually stretched that to our mentors as well so that this is an emotional ride and you as a mentor need to be there to help keep them even on the high days, keep then grounded on the low days, life them back up.
David Kruse: That’s good, okay. Well, I think that’s a good way to end this podcast and Brian, I definitely appreciate your time and your thoughts and it’s been great getting to know you and little bit more about you and GIA are doing. So it’s pretty cool.
Brian Hemesath: Yeah, thanks for having me. This is great and it’s always good to share the message and I appreciate to get to know you better. Thank you.
David Kruse: Definitely. And thanks everyone for listening to another episode of Flyover Labs. As always, I appreciate it and we’ll see you next time. Bye guys, bye Brian.