Entrepreneur Profile: Greg Berg, Risknicity
Independent’s Entrepreneur Profiles celebrate people out there changing the world every day through their ventures. We ask each entrepreneur a few questions to give us a little insight into their vision of the future, and their take on building a company.
This month, we feature Greg Berg. His venture, Risknicity, is working to bring lower auto insurance costs to young adults. Risknicity is leveraging the power of social media to connect groups of young drivers together in order to benefit from lower rates.
What do they need from you, the community? Greg is on a systematic search for a technical co-founder. If you have contacts with the right profile and experience who are interested in learning more, contact Greg at Greg.Berg-at-Risknicity.com
Stay tuned to hear updates about Greg and his work with Risknicity as they become available.
Questions for Greg:
Q: What Does Your Company Do?
A: The company will provide low cost auto insurance to young drivers inside of social networks. The Risknicity platform will allow these young drivers (age 20-30) to select other safe drivers from their online friends lists and create insurance groups. Members of the groups will be able to lower their costs by managing who stays in the group and by growing the size of the group. Young drivers spend $60 billion annually on premiums. Risknicity will lower the cost of that insurance while earning fees on all premiums flowing through the platform.
Q: When Did You Start Your Company? Why?
A: I started noodling on the idea in 2011 and got serious about it in January of this year. My background is in insurance innovation and I taught a course on alternative risk financing at Yale. I started to see a chance to meld some of the concepts embedded in successful “bricks and mortar” alternative insurance enterprises with the functionality of online social networks. Also, while I have started a number of new businesses inside of large companies, I have always wanted to do a true startup.
Q: What are Your Funding Sources?
A: So far, it has been all bootstrapping; I’ve invested my own money and I gave up my consulting practice to focus on Risknicity. In the months ahead, I’m looking at three pathways for external funding. The first path is the world of Connecticut based angels, combined with Connecticut Innovations capabilities. The second path is more of an “inside play” focused on funding sources that have a history of insurance-related investments. Most of these sources tend not to play “early,” but may consider an exception for this idea and because of my track record. The final path is with strategic investors. The Risknicity business model requires strategic relationships with one or more insurance companies, third-party claims administrators, and payment processors. Firms in each of those areas may also be interested in making an investment in the company.
A: The biggest challenge, by far, has been in finding a co-founder. I’m a very interactive person and need partners to develop ideas and plans. And, it is very clear that investors tend to avoid sole founder situations. I’ve had extensive discussions with a couple of folks who are keenly interested. However, their personal situations won’t permit signing on at this stage of the game. I do expect to have a co-founder soon.
The second challenge is related to communications. The Risknicity insurance and technology model is quite complex. It is hard to distill the model into catch phrases and harder still to explain the business to lay persons. I grew up in the insurance business and it has been difficult for me to avoid the jargon of the industry– but I’m working hard at it.
The third challenge has been trying to balance the competing demands of “spreading the word” with “getting things right.” I’m learning about how important networking is to being successful in the emerging Connecticut startup ecosystem. So, I spend time making connections and evangelizing on the Risknicity idea. Yet, invariably I get questions from prospective investors and strategic partners on my initial funding needs and revenue projections. I’m not yet ready to have those kinds of conversations. This gets back to my previous experience in running major insurance P&L’s and the level of detailed planning we did in those organizations. I tend to want to get the numbers just right, and that may not fit with the startup processes.
Q: Define Entrepreneur
A: A person with a pretty good idea and superb execution skills.
Q: Read any Good Books Lately?
A: I just finished “IQ84″ by Haruki Murakami. Thank goodness for the Kindle, because the book is massive. I also highly recommend “Swamplandia,” by Karen Russell– she was on the Pulitzer finalist list this year.
Q: What is Your Advice for an Entrepreneur Starting Out?
A: I have two pieces of advice. First, take every chance to stress test your idea and business model with people who have the subject matter expertise (i.e. “in the domain”). And second, build support systems for successful execution. This would include tools to organize the work/time, use of task lists, calendaring tools, online collaboration platforms, etc.
Q: What is Your Favorite Entrepreneurship Quote?
A: Larry Ellison once said: “When you innovate, you’ve got to be prepared for everyone telling you you’re nuts.”