Electrek can confirm that Tesla has dissolved its PR department — technically becoming the first automaker who doesn’t talk to the press… The move has been confirmed.. at the highest level at Tesla with the source saying, ‘We no longer have a PR Team.”
The piece created a stir, and many others quickly covered the story.
Without a PR team you don’t have an official statement; and people were left to speculate on the reasons. Many assumed that Elon Musk, a celebrity CEO with 43M Twitter followers, no longer wanted to suffer a sometimes unkind media; and thinks he can frame the Tesla narrative on this own.
The attention for this story might not be surprising since it involves media and big tech. It led to a lot of comments and chatter on social media, and teeth gnashing about the state and future of media and PR.
Obvious questions include:
Will others follow suit? Those with known brands and large social media followings can directly reach large audiences.
Are the relevance and influence of media declining, when there’s record mistrust of the institution?
If media influence and relevance are in question, where does that leave PR?
The media alarm over this also says something about how they cover tech. The irony is that pitches from startups often go ignored by major media. But take away PR and access to big tech – and there’s a panic. It’s because well-known brands are safer stories. And negative articles, of the techlash variety, seem to be good attention-grabbers.
These are some of the same types of questions PR has been facing since the advent of social media. I’ve written often about the evolution of PR here. And I just addressed some of these questions in my recent podcast appearance, with host Marti Sanchez, who also runs content and thought leadership firm Influence Podium.
I rarely cuss in writing. But if I read one more “what does it mean for PR now Elon Musk shut down Tesla’s PR shop” article, I might lose it in a profanity laced rant. It doesn’t mean anything. And it’s 2020, so I get a pass on cussing.
You go, Frank, that is effin’ awesome!
Comments from our Team
I asked our team at Fusion PR for their thoughts. Here were some responses:
It’s Musk. I wouldn’t jump to a trend for eccentric things that work for him.
Jordan Chanofsky, CEO
Well-known businesses, such as Fortune 100s and companies with celebrity leadership, can reach a certain point where bad press will not affect consumer habits. For example, Facebook has a ton of bad press, but the majority of people still have a Facebook account and will continue to use the company’s other platforms like Instagram and WhatsApp.
Tesla’s elimination of a PR department is not an indication of a larger industry trend. Perhaps proactive media relations will end for a time at the company, but skillful communication with key stakeholders, such as employees, investors and more is essential and fundamental to businesses’ success.
I guess with a Twitter following of that size, Elon Musk doesn’t have to worry about securing coverage of his company announcements. But what is his plan for countering any negative stories that break? We know how volatile he can be. Without a PR team to help him develop a level-headed response, we might wind up seeing a lot more “Sorry pedo guy”-style tweets.
Also, I don’t think this says anything new about the state of PR. Elon fancies himself an iconoclast who breaks the rules. Most corporations are very conservative and would never take an unnecessary risk like this.
The fourth wall is a figurative one at the foot of a stage (the other three walls shape the room of the set). Actors breach this wall when they talk to the audience. Similarly, PR is being challenged to break through mass communications and take the message directly to individuals.
This has been happening for some time. E.g. many use social media as part of the PR arsenal, and those who do a good job of it engage one-on-one. But direct communications is being taken to a new level to support sales and more specifically, ABM (account-based marketing) programs. PR people are being asked to go beyond mass media, even beyond what you might reasonably call PR to do something many would consider anathema: sell stuff.
In this post I explain more about the ABM trend and how PR can advance key account selling goals.
The PR and Sales Connection
First, let’s take a closer look at the PR and sales connection. Both professions advance their goals through communications (well, spin and persuasion help, too). But PR is more about getting attention for ideas, whereas sales is about getting the order (I confused the two and blew a job interview for a sales position, earlier in my career – see this post).
PR might want to disavow any connection, and not be seen as “product peddlers” (this works great until the client says “We hired you to make some noise, the great press hits are coming in. Now, where is the ka-ching on our web traffic and orders?)” I’ve even heard some say that PR is not a tool for driving sales, which is kind of ridiculous because I know I’ve bought things after reading about them in an article.
Suffice it to say that we should be friends, and make nice – one should support the other. It is hard to sell when no-one has heard of you. And PR success comes more easily with sales success, case studies, and testimonials from happy customers.
All well and good, but things take an interesting turn with ABM (also called key account marketing).
If you’ve worked in the tech industry, especially B2B and enterprise, you have probably heard of these terms. ABM is a sales strategy that targets key accounts, rather than taking the typical shotgun approach across markets. But it is not just about the sales team – it is about bringing other resources to bear, and lining them up behind the effort; especially marketing, which might otherwise operate more independently.
ABM has become a priority for many B2B organisations, thanks in part to their need to become customer-centric. Customer experience is changing how organisations are conducting business. The customer is in control.
B2B organisations are battling to see who can best deliver value to customers and drive them along the customer journey to advocacy. ABM is the future of B2B – it’s all about organisational groups aligning together to build customer relationships and growth, and maximising customer lifetime value.
That was written in 2017, but the practice continues to grow. Last December, Amy Gesenhues wrote on MarTech Today that 73% of marketers planned to increase ABM budgets in 2020.
PR is increasingly becoming part of the mix that supports an ABM approach. It can help in all the ways PR helps sales: through validation, brand building and product or service PR, as examples.
It can help in other ways, too (depending on how broadly you define PR, and how resourceful and versatile your agency and team are).
Here are some ways
Define buyer personas
Compile prospect lists
Court ABM buyers and influencers on social media
Go beyond the usual social engagement, like sharing and reciprocating and actually pitch them for a client event or offering (breaking down that fourth wall).
Engage them in other ways
I’ll be writing more on this topic, and posting about tools that can support ABM PR.
I love the band Talking Heads, and saw them for first time in college many years ago. Back then, I thought they had a cool name – but only found out that it refers to the disembodied heads of yakking newscasters when my friend and fellow concert-goer explained.
Fast forward many years later, and I am afraid I am becoming a talking head on tech startup PR and branding. In the past year or two I’ve done a few such spots; OK, not network news (give me a little more time), still, excellent forums in their own right.
I can’t say I’m a natural. You know the old sayings: we’re not the main story, our clients are; and cobbler’s kids, no shoes, etc. Yet as communicators, we should be comfortable with the video interview format. Zoom has made us all video stars during the pandemic, right?
Mitchell was a real pro in preparing and coaching me. While I waited to go on in the virtual green room (how cool is that!), he helped me nail the all-important CPOP – customer point-of-pain (referenced in the title of this post) Fusion PR addresses. Mitchell and his team were a pleasure to work with. I strongly recommend you contact him for any thought leadership coaching and writing help (here is his LinkedIn profile).
I am also including links to other interviews I’ve done on similar topics.
It’s hard to think of anything in our lifetimes that’s so taken over our lives and attentions. We’re all trying to adapt, with the best minds tackling the Covid health and economic crises, and focused on getting us back to work and the “new normal,” whatever that means.
It’s also changed how we communicate. Every news cycle brings new ideas and words.
I don’t think we need a primer on newfangled terms blared in non-stop media coverage, like the word cloud here. Instead, in this post I focus on some of the stock phrases that have taken on new meaning.
How are you doing?
It used to be an innocuous (or insincere) way of starting a conversation. We’d say this and quickly move on; how many really cared? No one expected or wanted a long winded update.
A positive side of the pandemic is that “how are you doing’ is no longer a throwaway question. We really do want to know, and listen closely to the answers while sharing our own updates. The simple conversation starter has turned into a new way to bond and commiserate.
It’s also become emblematic of the state of small talk. Maybe a side benefit is that we will spend less time on verbal filler and more time getting into important things with the people we are holed up with and those we meet on Zoom.
The Zoom conference has become synonymous with business calls and meetings (anyone who’s curious about how they zoomed to the top of web conferencing heap, see this CNBC story).
This trend has forced us to up our video games. It now seems like an amateur move to hide behind your avatar. You need to be on-screen and presentable, causing some of us to do the unthinkable like shower once a day and attend to personal grooming.
In other cases we have become less formal. Who puts on a suit for a Zoom meeting, even if you are trying to impress a business prospect?
The good news is that many formerly camera shy folks are learning to rock it on video. They’re cleaning their rooms and some are even using fancy virtual backgrounds. I am surprised no-one has come out with a way to really ham it up with Zoom, like integrate laugh tracks, other sound and visual effects (hint, hint, a good business idea?).
Um, is it? We have lowered our expectations for birthdays and more significant life events. Some are being postponed, done virtually, by a drive-by, or not at all.
“I can’t come to the phone” or “If you’re around…”
Where else are we going to be?!!! We are all here at home, dammit. The pandemic has been the bane of call screeners with fewer good excuses for those trying to dodge friends, family and calls.
Summer and Casual Fridays
We are now all casual, all the time. No need to let the troops avoid the city exodus on Friday afternoons in the summer when we are all working from home. Every day is a casual dress day.
Don’t try this at home
I love this catch phrase. But it has taken on a whole new meaning when we are all at home, all the time. Things we would have never thought of trying without leaving the house (like getting a haircut, grooming a pet) now get done at home, or not at all.
The company you keep
The pandemic has unfairly singled out businesses that service consumers. But even many B2B companies are getting hurt.
Those who serve other businesses must deliver results and prove value like never before. If you are good enough to do this, you may well just stand a chance and weather the Covid storm.
So, the words “the company you keep” (from the old NY Life Insurance commercials) have taken on new meaning.
Fusion PR is truly grateful for clients who continue to retain us; many have fought hard to keep the agency budget amidst other cuts.
If ever there ever was a company in the right place at the right time, it is Zoom. Their namesake teleconferencing service has come to symbolize how corporate teams can get useful work done, from a distance.
Those in PR understand the importance of conveying the right image. when using Zoom, or another service, you don’t want to come off like the jokers in the SNL video, above.
You do want to look and sound your best at virtual meetings, meaning professional, ready for work and to make a good impression. Sometimes, you can’t help things like loud pets or kids in the background. People tend to be understanding and can relate. But it is better, if possible to look and sound as if Zoom meetings (or Google Hangouts, or FaceTime) are second nature. This means avoiding messy room backgrounds, and heeding obvious things like dress and grooming.
You don’t want uninvited guests crashing the Zoom party. This can especially be a danger in the PR world, for obvious reasons. Check out this NY Times article, which explains how to counter Zoom bombing.
Designing at Home
Most PR pros are not graphic designers. When asked to create an infographic, e.g., we often call in a partner with this skillset.
Not to take away from the pros, but I found a tool that does let PR try designing at home (well, isn’t everything tried at home these days – negating the old saw).
It’s called Visme, and is like Canva on steroids. E.g. Visme has a nice library of art, templates and animations. It guides you in color selection and layout, you don’t need to be a design whiz. Visme makes it easy to design infographics, and other visuals that combine data and charts. It brings stunning presentations, brochures, graphics and videos to life.
I am using Visme now to create cover art for a podcast that we’ll be announcing soon, and will be writing more about my experiences with Visme.
Dispatch from the IT Front Lines
I was recently fact checking a pitch about tools to help enterprises manage IT consultants amidst the pandemic. To do this, I wanted to speak with someone who works in the field, to see if the pandemic had an impact on IT projects, their business, and if the pitch might have legs.
So I called my buddy Joe to hear about what’s been happening. He leads 36 IT consultants; their company has a team of 350. He prefers that the team work on client-prem, for face-ime, but now all are remote. Here are some things Joe shared.
In-flight work continues
No major impact on new business, so far
Major new initiatives, like digital transformation are being held up
These days it is easy to manage everything off site, even for infrastructure like networks, firewalls, and servers.
He used Coronavirus as a verb, like deals getting “Coronad”
There’s been remarkably little impact on their work, except it is tougher to close new business as he normally does a lot of wining and dining.
I asked if he’s worried about team productivity, he said no; this kind of work style takes politics and appearances out of the equation and emphasizes real results.
It’s dark in here. Let me find the light switch. There you go. Hey, where is everybody? It sure is quiet.
These are the thoughts you might have, if you work in PR in the Age of Coronavirus.
People are bunkered down. No one knows for sure when the crisis will end. Media and social channels can’t focus on anything else. We are all adjusting to the new, shut-in normal
If you are lucky enough to be in a business that is not taken down, you may well be wondering: what is the proper response? What should we say to customers, and the market? Should we continue to pitch the media and promote our news?
One is tempted to think back to earlier crises. But this time is different. There is no precedent, no play book to trot out. Just the same, we need some strategy, some direction. I thought I’d offer the following tips, based on what I’m seeing and believe.
It is not all about Business
Your first instinct may well be to protect what you have; perhaps by convincing clients that there’s no cause for concern. That would be a mistake. You should check in, let them know that you are thinking of them, and that you care beyond the monthly fee.
My friend Don Leon offered some great advice on LinkedIn:
Take a moment to identify some of your favorite clients and customers (folks are tending to stay local so lots of people around/at their desk). Send them a brief text or email letting them know (in your own words) that you’re thinking of them. No agenda, no apologies, no doom and gloom–just thoughts from your heart. That little bit of love can go a long way in BOTH directions.
Customers don’t need 500 emails from vendors telling them to wash their hands. Businesses don’t need to send a message unless there’s some direct impact on customers as a result of the virus.
DO Provide Guidance and Direction
People will naturally look to the pros for direction about communications. When clients and corporate teams are unsure of how to best proceed, we need to provide clear and confident direction.
Yes, PR, you are an essential business function.
E.g. some may not be sure what the proper approach is to media and other external communications. They may be skittish and want to clam up. Others will want to jump in with ill-advised pitches.
To Pitch or not to Pitch
In times of crisis, people like to tell PR, essentially, to shut up – hold fire on our pitches. I do not agree (see a post I did some time agoon the topic).
No, you shouldn’t chase ambulances. And you should not flood reporter inboxes with irrelevant or clueless pitches (not that this was ever a good idea).
Yet there’s a danger in going silent, for the media and customer communications. As long as the press and analysts are showing up for work, and you are also open for business, you should continue to communicate with the media, including on topics relevant to the crisis (but carefully; more about this below). The competition likely are.
Michelle Garrett blogged about pitching media in the Coronavirus Era based on journalists’ feedback. The post confirms that the waters are safe for media pitches, with certain caveats and exceptions.
But we know this because the great team at Fusion PR has continued to support clients and generate results during this time.
What to Pitch
That doesn’t mean you should launch major news now, especially if there’s some flexibility in terms of timing. People are distracted, it’s a busy news day times ten.
But some news has a shelf life and can’t wait. Awards, analyst recognition, customer wins that need to be announced now, or never – this drumbeat can be a backdrop to the more dire news crowding the headlines, show you’re there for the market and customers, and might even be a welcome distraction.
There’s an obvious appetite for stories tied to the crisis. Here, you want to be careful.
As always, stay attuned to what’s being covered and what’s happening today that may make your news more relevant.
“Working from home tips” may be passé by now; but if media are covering a shortage of ventilators, and your 3D printer can generate parts for the same, it is a perfect time to discuss this option.
Don’t promote something crass, like a Coronavirus sale, but why not give away technology solutions to researchers or relief organizations, like Oracle did?
The media may also be interested in your expert advice on a range of topics, e.g. about how best to cope and plan in the face of uncertainty, stories about your company and the impact of Coronavirus, as well as:
Personal stories, about how businesses and teams are coping
Thought leadership, observations
Technology that addresses security challenges of telecommuting
I learned this from a prospect who clued me in to a
podcast and Forbes
article (the former by uber influencers who should know better; the latter
was generally negative on agencies but had some great points).
Before I go further, sure, I agree that PR does have its bad
actors, just like any profession; and don’t have an issue with fair criticism.
I am against clueless flaming.
Below I list a few examples, including ones I’ve covered before.
The Marketing Guru
If you want my respect as someone who understands PR, please
don’t gloat about all the agencies you have hired and fired. This just tells me you are not as smart as
you think you are.
I am referring to two recent pieces by marketing folks who seemed to take glee in repeatedly giving agencies the ax. In the first, Neil Patel and his sidekick Eric Siu trash the idea of hiring a PR agency, citing success with a single campaign led by in-house PR that drove lots of signups. This is described as hacking free PR. They both decried PR to build brand and implied that you need to choose between product PR and the former.
I had this one friend recently talk to a bunch of top CEOs and the consensus is this: the 10, 15, 20K retainer that you might pay one of the top PR firms – they generally amount to nothing.
I’ve actually canned a couple of PR companies… the top PR machine is generally the leader… It’s not to hire out a firm that you pay and may not get anything back. From my experience, that’s the trouble with PR companies…
Neil agreed and went on to plug a couple of friends who
offer pay-for-performance PR. We can
save the topic of performance-based PR for another
post. Suffice it to say that this is
not a winning strategy.
I’ve hired and worked with more than a handful of public relations agencies over the past 15 years. I fired them all within a year or so.
It gets better from there.
He points out the challenges of working with traditional PR agencies
amidst a changing landscape:
I believe it’s the typical public relations (PR) model that’s broken…The market has moved on and, based on what I’ve seen, the PR industry has yet to adjust.
Last time I had to say goodbye to a PR firm we hired was a couple of years ago. They went through all the motions… update calls on media outreach and stories they were developing, checking in with us to see if we had some exciting news…. and explaining that… stories… weren’t going to happen because the reporters they had pitched to simply didn’t find them compelling enough.
Um, Udi, sounds like you need an evolved agency that is more proactive and creative (hint hint!). He goes on to point out specific ways that PR needs to change and puts the onus on brands too.
A close cousin to the marketing guru is the churner. These are the companies that burn through agencies
and are the worst kind of clients.
Churners would never admit to hating PR firms but show their contempt by always complaining about their current or last agency, and swearing they’d up their PR game if they only they could just find the perfect partner.
This breed is famous for treating the PR firm like “arms and legs,” just another vendor, and for setting unreasonable expectations while doing blessed little to support the program.
PR agency churners would be well advised to read Udi’s piece, and heed his words:
But PR firms cannot carry all the blame for a failed brand-PR relationship; a brand must assist a firm in understanding its needs and what it hopes to gain.
I’ve written before about armchair flacks. Like armchair quarterbacks, they are great at calling the plays without having played in the pros. These are all the CEOs, VCs, and journalists who claim to have solved the PR puzzle without using actual PR people.
They come in various sub-flavors. The blustery tech industry hotshot like Mark Cuban; his post from 2014 deriding agencies circulated again recently; I addressed this in Tech startups, Want to Go Big? Get PR Help, for the Love of God. The jaded journalist, like John Biggs, whom I wrote about here (at least his rant was entertaining, he won points for style).
They come in various flavors. The too-good-to-be-true TV spot. The “Pssst I can get you into XXXX, guaranteed, just pay me $YYYY.” The endless procession of awards and articles with price tags attached.
Many PR people reflexively dismiss these and spend a lot of
time explaining why to clients.
It’s a mistake to indiscriminately shoot them all down, as
some are worth considering. I
explain why in this post and share thoughts from our team.
You Gotta Pay Somebody
Bob Dylan sang that you’ve got to serve somebody. It is also true that in PR you’ve got to pay someone, even if this means salaries or an agency fee. So, PR is not free earned media, despite what some say.
Beyond the cost of PR talent, it can be tough to understand
where to invest.
The growth in content marketing and paid media options add to the confusion. Some think that traditional PR is a waste of money. Others say that the media game is all rigged (e.g., one client berated me for mocking their paid TV spot, saying all media is bought and paid for anyway). It’s a cynical view – true, you can buy TV time on an infomercial hosted by some B list celebrity that runs at 2 am in isolated markets but you can’t buy, and stage-manage, a network TV news spot.
Should you pay that writer who contributes to major
publications and can get you in for a fee, guaranteed? While tempting, you’ll likely only get a
minor mention and may
get outed as it is a shady practice for contributors to make these kinds of
The most irritating is all those offers to buy placements in top vendor articles as well as awards, like the kinds mentioned in my post: “PR Hits a Paywall.”
However, some paid opportunities are worth it. You need to pay to apply for most awards, including for those that carry weight in your market. And selected paid media may be a great value.
Where is the line?
Which opportunities are worth considering?
Experts Chime In
I asked our team and reflected on how Fusion PR has answered the question. Here are some of the answers I got.
The awards that are tied to a major publication and typically cost between $200 – $400 to enter should be considered. Ones from FierceWireless or LightReading (in the telecom space), for example. I tend to entertain those and then vet them to see if the client has a real chance before providing a recommendation. The rest I really don’t see any value in and the prices are usually out of control.
There are times where it makes sense when to consider paid media opportunities like Forbes councils, especially if it hits the target audience and/or they’re in a difficult market for garnering media visibility.
As far as bad ones – anything in which my client has already been shortlisted for, and it’s something they didn’t apply for yet still have to pay, is a bad sign.
I think a single publisher runs several of these outlets, because I constantly get what appears to be the same note (same formatting, similar wording, etc.) from different-sounding publications offering my clients inclusion in roundups like “Best Cybersecurity Solutions” and “Top 10 Fast-Growing Companies” in exchange for payment. Once you see two of these and get a feel for them, it’s simple to recognize further attempts. Publication titles include “SuperbCrew,” “CIO Applications,” “CIOReview,” “Analytics Insights,” “Technology Headlines,” “Beyond Exclamation,” “Aspioneer,” “Market Exclusive” and “Industry Era.” These magazines apparently DO exist, but only for the purposes of selling feature space to gullible vendors. Nobody actually reads them.
I’ll add my own two cents on the topic of industry analysts.
Coverage in their reports is another way to earn validation and reach
your target market, especially in the B2B tech arena. Analysts’ services
come with fees, although most do take a limited number of free briefings
(generally accompanied by a pitch from them). Which ones are worth
engaging and what are the costs? Read more about this in my post Cracking
It can be a challenge to navigate the field of paid PR opportunities. Hire an agency or in-house talent with
knowledge in your space – those that can help you avoid wasted time and money
and maximize your PR spend.
As we enter a new decade, I implore PR to do its part in protecting the journalistic info supply chain.
Be truth-tellers. Be great fact-checkers.
Now wait a second, I can hear you protest. That is not our job. We are paid to put the
best possible spin on our news. To help the team win. And truth, what is truth,
really? Of course, we don’t lie!!! (Did
I see a wink?)
In this post I explain not only why it is so important to be great fact-checkers; for our clients, employers, journalists, and their readers; but why it is good business, too.
Facts lost, facts are never what they seem to be There’s nothing there, no information left of any kind
Facts are simple and facts are straight Facts are lazy and facts are lame Facts don’t come with points of view Facts don’t do what I want them to Facts just twist the truth around Facts are living turned inside out Facts are getting the best of them Facts are nothing on the face of men
In 2020 it is a different moment of truth, a different kind of reckoning. Here, “truth” has a double meaning – and some say no meaning.
We are living in a world in which it is all too easy to distort, weaponize info and use levers to manipulate people and algorithms. Shouldn’t PR be using the same sketchy tools and strategies, in fact, is it not our professional obligation to do so, to fight fire with fire – if that is what it takes to win?
These are some of the same kinds of ethical challenges we
have faced before in an updated format.
PR has always had to decide how far to push rhetoric, persuasion, and
But this is not just about ethics. The problem is bigger than PR and even
Today, the very notions of truth, science, and facts are under assault like never before. The growth of fake news, alternative facts, etc. make reality far too malleable.
Yet journalism can combat fake news. And PR should be a good cog in the reporting supply chain. (Those who question the influence of PR on news-making should read this, and this article from PR Week). Sure, there are fact-checkers on the publication side, but we can make their jobs easier.
PR, do your Job, Be a Fact Checker
So, in the information supply chain we call news making do
your job, challenge claims, check facts.
It’s not just the right thing, it is good business. Here’s why:
Reporters like it when you are straight with
them, you jeopardize relationships when you feed them BS; especially if bad
info finds its way into an article.
Press releases with dodgy info can ding the
You bolster your personal and agency brands as a
credible source (and hopefully won’t wind up in a BuzzFeed article like the
The client may not even know their claims are
wrong; good ones will appreciate your diligence and candor in helping them tell
Most of all, we should all be doing our part to combat fake news and info.
Next up: A PR truth-telling how-to guide (and no, it is not the shortest book ever written!)
Insurtech startups and insurance carriers: they’re the perfect combo. Startups love the budgets, distribution and big brand cred of the major insurance carriers. Plus, they can hone their tech in a real-world environment and maybe even find a nice exit. Carriers crave the startup moxie and tech improvements that insurtechs can bring.
If it’s the proverbial match made in heaven, dancing with insurance stars can be challenging and frustrating for both sides.
InsurTechNY’sDecember meetup featured two great panels that covered just about every aspect on partnering for success, from those who have lived through it, covering the mechanics of POCs (proofs of concept), selecting the right partners, managing the process, and covering the HR and legal angles.
It was a great crash course in helping gazelles and elephants cut up some rug together without stepping on each other’s toes.
Read on for the details; but first, on a side note, let me say how happy I am to have discovered InsurTechNY. David Gritz, Tony Lew and team do a great job, bringing people together from across the industry. Each event offers the opportunity to make great connections and learn from the panels and content presented.
Fusion PR does much work in the space. We are headquartered in NY, although our clients come from all over. But it is good to know more about the thriving insurtech ecosystem right here in our backyard, and InsurTechNY is a key part.
This meetup focused on improving collaboration and results between insurtech startups and those who can make a big difference in their success, namely carriers and brokers. It featured two panels, which shared startup and carrier perspectives, respectively. Below I feature a small sampling of the great insight provided by the panelists. Check out the video to see the entire session.
David Gritz moderated the session, and started by asking the panel to explain proofs of concept vs. pilots vs. commercial implementations.
It’s important to get everyone from the carrier who needs to kick the tires on a tool in the same room… POCs can be formed in different ways… always try to build one in steps…
Make sure the process to enter the organization is clearly defined; do not pass go if you don’t have this. Ask the carrier: “what would a positive outcome look like for you; how can I show that with this project?”
A POC is about the cultural fit, and optics, not just technology
There are three potential pitfalls: selecting POC objectives; if you don’t set the right ones in the beginning, it is tough to change course later… is it measurable, easy to explain? Selecting the POC team; and setting up the right communications process at the beginning.
Try to get business and tech alignment up front; frame it as “If we check these seven boxes is there a path to doing biz together?”
On finding the right champion
Find the person who directly feels the pain of the problem we’re solving; they should have significant influence and be someone who can sell effectively on our behalf.
From POC to commercialization
If objectives that translate to success are defined at the beginning, then there’s less of a chance that [the POC] falls off a cliff. We advise carriers, if you’re not interested, just be honest, If you’re a startup, try to understand why it’s a no.
Don’t be afraid of procurement; Involve them early, ask who we should be working with.
It starts with a strategic planning process, and defining problem statements: what do we want to solve?
Divide Into “food groups”: do you want to enable distribution, accelerate technology, focus on customer experience? Then you try to match problem statements to solutions that come from insurtech and fintech companies. If they can address the problem statement need in a crisp way, the faster the conversation goes.
What criteria do you apply?
When a company acquires or invests in a joint venture with the startup, they’re buying the entrepreneurial spirit, the vision, technical expertise.
Startups and carriers approach it from very different places; for the startup is it their whole world, their number one priority is to see the project become successful.
How to assess the viability of early stage company
It’s a little different than for more mature companies. It starts with strategy, does theirs fit well with ours? How do their capabilities fit? Can we work together to address a larger market or do things faster?
When it comes to financials, we are trying to understand how the company will evolve when we become partners. Would the customer funnel expand? What’s the conversion rate once they become part of Prudential? Great concepts need a brand behind them; life insurance is all about trust.
Being able to assess those metrics first, before looking at income statements and book value is very important to get a picture of the startup.
Discuss best and worst engagements
At NY Life, we are excited about startups that are solving a problem that has never been tackled with tech before. An example we are proud of is Vault, formerly known as Student Loan Genius. It’s a company that helps employers provide employees with student loan repayment programs. We are proud that our benefits team is taking that initiative to help support our employee population.
Hire an attorney that knows the product… In addition, there’s nothing more frustrating than insurtechs not caring about their own insurance coverage.
As much as it’s important for companies like NY Life to understand a startup’s sales cycle, it’s equally as important for startups to recognize the incumbent’s sales cycle.
We are at the crossroads of build and buy for insurers, who use communications providers to build mobile or desktop apps.
Our visual APIs power the top ten insurers; remote visual inspection solutions.
Make sure startups are looking holistically at the communications stack for adoption and utilization of a solution between customer and provider.
How important is executive sponsorship?
It’s critical; 9/10 times the tech works. You must get over that hurdle of what you’re trying to accomplish. It’s about finding what the end game is going to be for inviting a champion. Once you identify the executive where it is a win, things move faster.
There’s no implementation without a business unit sponsor.
Entrepreneurs underestimate regulatory hurdles – how can the carrier smooth the way make process easier for startups?
You must devote resources (personnel or funding) to projects. The carriers who struggle the most try to take people who have a full time job not working in the tech space – tag on an hour a day, to try to help startup launch – what happens is emails go unanswered for weeks, it dies on the vine.
What about the team, and financial side?
Founders of startups are equally as important if not more than the product. We look at their backgrounds, experience. Have they had exits? Do they understand the pain points of your business?
How can startup determine the best carriers – and how to
Be aligned with the mission (not the same as culture or strategies). Have same purpose. Look at mission statements. Startups should find carriers that share the vision.
There are things we want to change based on the culture we see at a startup; e.g. how to make decisions.
Assurance IQs Chief Strategy Officer said they don’t pend a lot of time debating. It’s different than what we do, we have meetings, we debate. They measure, cut, measure.
Find out what kind of culture the carrier wants to aspire to. If your startup has that culture, e.g. moving with speed, testing and learning, it’s appealing to a carrier that wants to fix things.