Sign Arkansas Banking Business Letter Template Myself

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welcome everybody welcome to our next webinar this is going to be an incredibly fun conversation uh you've heard me talk about the notion that every single industry is going to get disrupted every single industry is changing and being transformed as a result of exponential technologies whether it's health care finance insurance which you're talking about today entertainment transportation every one of them is going to be almost unrecognizable the next decade because of what because of ai computation sensors networks robotics 3d printing all of these technologies converging to transform industries and it's also a time when the largest organizations on the planet have the opportunity to get disrupted by entrepreneurs and today i'm super excited to welcome daniel schreiber to the conversation uh the founder the ceo of lemonade to talk about how one industry in particular is being completely reinvented from the bottom up uh daniel uh welcome from israel i'm here in santa monica a pleasure to see you pal uh congratulations uh uh since i saw you last lemonade went public um what's it like to be a public company ceo hi peter good morning great to see you again i'm having a blast i've had a blast pretty much every day since we founded lemonade um myself in charge of my co-founder some five years ago um as i like to say kind of it beats working and that's been true since the ipo as well so certainly having a really really fabulous time at lemonade wonderful let me uh let me just set this up and then do a proper intro so we're going to talk about uh how you know when you when you when you're in the streets of brazil or manhattan or in chicago and you look up at the tallest buildings up there the tallest buildings uh have the names of banks and insurance companies and there's a good reason that's where the money is and uh daniel you and your co-founder have uh literally had the potential to reinvent this in a way that's uh extremely meaningful and we're gonna go into that here so any entrepreneurs watching um in my abundance digital community and those watching us on social media uh it's this is this is a time to take out your notebooks and take some lessons on how you might actually go after reinventing industry that you care about so but first uh daniel treiber's bio so daniel is the ceo and co-founder of lemonade the insurance carrier built on ai and behavioral economics started not long ago about five years ago in april 2015 daniel is a tech leader with extensive leadership experience in uh in organizations um in the fortune 500 global business space as president of powermat we many of us have used powermat provided uh provided the largest wireless charging network in the world daniel oversaw its transformation into an industry standard used by samsung galaxy and venues like starbucks and in general motors cars prior to powermat daniel served as the svp of corporate marketing for sandisk again another amazing brand he's a graduate of king's college london and graduated first class honors with a law degree and also daniel you're a graduate of singularity university so uh if you don't mind let's begin at the beginning what were you doing and how did the idea of of lemonade come into existence because there's some personal roots there for me and for su absolutely so when i um left palmatt i i need to refresh and kind of broaden my horizons i tend as i am now at lemonade i tend when i'm doing a job to be pretty narrowly focused somewhat blinkered really trying to get the job done and coming out of four or five years of leading powermat i needed to survey the terrain understand what's been changing in the world and i took off a week and came out to california to do um the singularity university um course there and i was primed because i was really looking for my next thing and i was actually came to su thinking that i was going to do it in the field of um ai diagnostics i'd spent a few months working in that field and i'm pretty convinced that that's going to be transformed beyond recognition and that you know in 10 15 years time we will look back on medicine today much as we do today on medicine in the 1800s but um ultimately decided that the competitive dynamics there weren't appealing and i didn't fancy my chances of success and while those cogs were whirling um in some talk that you gave at uh at the course i can't remember what the question was and i can't remember fully what your answer was but you spoke about peer-to-peer insurance and that set me off on a trajectory of thinking okay well insurance i don't even thought about insurance and he started digging into it and got together my co-founder and we found a sector that is amazing it is vast you're talking about something like 11 of gdp in america this is just a staggeringly large sector with 100 household penetration um but a sector that is entirely unchanged so 12 of the fortune 100 are insurance companies and the average age is 125. no airplanes and no antibiotics and no air conditioning and the world has changed but insurance hasn't and a sector that is deeply unloved and you take that trifecta unchanged unloved and huge and your entrepreneurial juices just start flowing so we started working and we thought about this peer-to-peer thing and we ended up creating lemonade and we started we called it the world's first peer-to-peer insurance company and i pinged you and i said hey peter we've got to meet up i'm doing that thing that you said you and i met for coffee in a hotel in new york and i explained to you what i'm doing and he said to me wow daniel that is so cool but that's not what i meant at all you had this notion of health care and dna sequencing for risk pooling um and so i like to tell people that the origins of lemonade are one big misunderstanding i'll take it though that's great well exciting and it's again it is for the opportunity that lemonade represents their if i think you agree with me thousand other equal sized opportunities that hopefully entrepreneurs here are starting to think about because people get stuck in the way they do what they do and there's a big energy investment required to shift industries and it really takes an entrepreneur uh who says why can't it be ten times better ten times faster ten times more efficient um which is what you've what you've done here with lemonade so let's let's begin and there's a litany here a list of what makes lemonade different um i i'd love to to check this i'm just i'm proud uh as a as as having a a small seed in the in the uh in the creation of this i'm proud of what you've done uh and i'm hopeful that it becomes a uh an example across multiple industries but let's let's take a a list of uh the attributes that make that make lemonade different from a traditional insurance company and then let's dive into those so and maybe i'll i'll kind of continue where the story left off with the fact so once we decided that insurance was something we're going to focus on and wow this kind of discovery that this hidden gray area that nobody's looking at um and that is as i say so untouched and unchanged and unloved um what you would expect us to do is say wow you two are techies with 20 years experience in in the tech sector you know zero about insurance go study insurance before you make any kind of bold pronouncements about this sector at least look up the wikipedia entry for insurance do something man and shy and i kind of did the opposite so what we did is we decided to um use our ignorance for all it's worth and we took a room with a white board and we spent a couple of months saying hey we don't want to know too much about insurance we don't want the knowledge curse we want to do first principles thinking we know what we know we know consumer-centric innovation we know technology we know brand building we don't know insurance but we have kind of high school probability theory how hard can this stuff be let's imagine how we would build an insurance company and we imagined a business model and a technology stack and a user experience that would appeal to us and we asked ourselves kind of the basic question why does everyone hate their insurance company why do they dislike it so deeply and why do we and i reached out i hounded um a nobel laureate in game theory and another nobel laureate in behavioral economics i just started thinking this really comes down to game theory and behavioral economics this is a game you give me money now and you want me to give you money in the future and how could we build this whole game differently and we came to the conclusion that the problem isn't with the players it's really with the game itself the conflicts of interest that are manifest in insurance the the substrate on which it's built which is so human intensive and paperwork intensive and we set out to build the whole thing from scratch so we founded our own insurance carrier we're not just doing the technology we decided we have to transform the business model we created a business model which isn't conflicted today with insurance you claim a thousand dollars from me if i pay it to you you're a thousand richer i'm a thousand poorer and that creates conflicts of interest so we created a flat fee structure you pay me a buck i'm telling you right now i'm gonna keep 25 cents on the dollar the rest is going to go to paying your claims and if there's money left over it's going to go to charity and we're not going to be in conflict one with another so a contemporary business model and then everything is built on technology and the upshot of that is that you can get a policy the median time to get a policy of lemonade is 90 seconds and you know you're you're standing in starbucks you've already placed your order you're waiting for them to make that latte that's how long it takes to get insured we pay claims about a third of our claims are paid instantaneously three seconds to pay a claim 97 of the time the claim is taken the first notice of loss is taken by a bot not by a human so really just transforming the whole business and you end up with insurance that is cheaper first-time buyers of insurance can save 50 not 15 50 and it doesn't take 15 minutes takes you a tenth of that which is 90 seconds getting paid claims quickly and we ended up releasing very rapid growth so the insurance uh uh in uh business has been growing at a compounded annual growth rate of above 400 percent and as you say five years after our founding we're we're now public and traded on the new york stock exchange that is that is extraordinary i mean and honestly it's it is the the six d's of insurance right digitizing dematerializing demonetizing democratizing access to insurance in an extraordinary way you've also you also made a interesting uh choice to become a benefit corporation what's that about we did and actually this ties a bit back to abundance and and to some of the stuff that you write and talk about so narrowly speaking it's about solving a problem with insurance which is distrust and neutralizing the conflict of interest how do you build a lovable brand on top of a conflict of interest you can't so we changed the business model we said money that's left over we're not going to pocket because that creates an incentive for us to deny your claim we don't want to be in conflict with our customers and if there's money left over the end of the year let it go to a charity i now instead of having any financial incentive to deny your claim i have an incentive to settle it as quickly as i can at the lowest cost and to get the highest nps i want you to promote my business and to lower my cost of acquisition and to increase my retention and it changes your interest as well because today you embellish your claim and fraud in insurance is a huge problem but it's not some hacker from the ukraine or some organized crime from god knows where it's people like you and me who are law-abiding citizens in other aspects of their lives and when it comes to insurance we let the devil out because we feel like it's an uneven playing field and we have to fight for ourselves so we wanted to just bring insurance back into alignment with consumers so that they behave in the same way as they do in other aspects of their lives and we did that by giving these leftover monies to charity but think how that impacts your psyche because when you make a claim today you embellish your claim because you can stick it to the man you feel like you're fighting with it in a conflicted relationship with a nameless faceless behemoth whom you don't trust but eliminate if you embellish your claim you're not hurting me you're hurting charity that you designated for your give back course and that changes your psyche that changes mine it changes a bilateral conflicted relationship into a trilateral relationship because non-profits are part of the whole business model and that changes everything and we have a give back once a year we just gave over a million dollars to charities 34 charities designated by our customers the whole dynamic changes but if i broaden the point from just neutralizing conflicts and distrust and insurance you like talking about abundance humanity is climbing maslow's scale we sell homeowners insurance and renters insurance people that we are selling insurance to already have a roof over their head so they are not on the first rung of maslow's scale nor in the second and as humanity be starts enjoying the fruits of abundance we're gonna seek gratification and brands will have to cater to higher levels of um the maslow scale and we're going to want to have community and meaning and self-actualization and ultimately self-transcendence and i think that in the 21st century brands that cater narrowly to just profit maximization and create a relationship that is purely transactional won't even profit maximize you have to understand where humanity is going to and where abundance is going to and where our needs climb in the meso scale and to build durable durable brands today you have to be also talking on the realm of ethics and meaning and not just transactions amazing so let's you mentioned something in passing that you uh that your that lemonade is preventing providing homeowners and renters insurance right now uh any other insurance that you're doing or where will you where might you be going yeah so we just launched health insurance for your pets a few weeks ago and broadly speaking we hope to cater to all of our customers insurance needs so we're kind of knocking off categories one at a time um so that's at least aspiration but today it's renters condos homeowners pet and hopefully other products to follow interesting okay well we just got a dog so i know where i need to go next for my pet insurance um you know i want to take this to the extreme but i want to point out something that that is something you said that i think is so important again for the entrepreneurs that are watching and learning you when when when you and shai your co-founder jumped into this you you focused on first principle thinking right and this is what if you read any of elon musk's work um or how he approached tesla or spacex it's that same concept of you know sometimes we're cursed you know an expert is someone who can tell you exactly how it can't be done that's one of my peter's laws and first principle thinking is more a matter of let's look at laws of physics let's look at the equations let's look at math let's look at at reality and and from the first principle standpoint um could can you remember any of the sort of like the aha moments of the way it's done versus first principle said why don't we do it this way yeah and i'll i'll pick up on something that you said earlier which is about 10x i i think that if you look at the way things are done and you look to improve them you can always eke out a 10 improvement and probably the incumbents can do that a lot better than any newcomer it's very difficult for me as a newcomer to insurance to know how to do what state farm or all-state or farmers or anybody with a name state and farm in there somewhere the idea that i could do anything better their business better than them is is there's tremendous hubris there by the way the whole concept of the farm is so last century it's fascinati g right it's like it's like oh i should trust them they're farmers too i think you've got to go back a century more even probably two centuries that's right um and by the way the whole notion of i'm going to build a skyscraper so you should trust me because i have the tallest building is also really passe um but the idea that i could beat them at their own game is a nonsense so somebody said to me a long time ago they said if you want to be kasparov better challenge into a game of ping pong not to a game of chess um and i think it's the same ideas that if you're trying to disrupt don't do it by playing the same game that the incumbents are playing they're much more experienced and skilled at it than you are the first principles sounds like the harder thing to do and when we went to investors and said what are you guys mad your techies what do you think you know about interns don't build your own insurance carrier partner with insurance carriers you do the veneer the technology in front of it and they they thought that our idea of building the whole damn thing getting our own licenses getting our own financing our own capital and building an integrated vertically integrated solution they thought that that was a much riskier and harder thing to do and i'm convinced that it was the much easier way to go it sounds harder but it isn't really and the the every step of the way when people said about you know what policies are you going to use how are you going to underwrite um etc was all so much we used to call it actually the black hole and i used to caution everybody in our in our business in the early days i haven't had to for a while i said they're gonna be these gravitational forces pulling us towards doing things the way they're done um i i love this i just have to interrupt because this is so true and it is so um it's so fundamental right uh i i saw this in the launch business in the industrial military complex right it's as soon as you start to anchor any of what you're doing into the old ways you start you start getting uh pulled in and gravitational force is a great example or one requirement to get the next requirement begs the next requirement all of a sudden you find yourself sucked in and you're doing it the same way everyone else did it and you can point exactly the reasons and you literally have to start with a clean sheet of paper and it's just it's such an important lesson is it harder maybe maybe not but guaranteed if you're really looking to do 10x versus 10 it's got to be a clean sheet of paper 100 and today we've reached escape velocity but it took a long time and and those forces are so powerful at the beginning and i i say it tongue-in-cheek but i actually really mean it ignorance is bliss um don't get distracted by how it's been done and don't believe as you say the experts who say it can't be done i'll give you one other story that i think you'll enjoy so shy is really the brains of the operation um and i remember in the early days we didn't know each other that well we hadn't worked together before and people were pitching us on hey don't build your own policy management system and all the kind of the back end there's all these vendors out there that will do it you should really license it from them so we met maybe 12 of the different companies one after the other after the other and each one told us it's at least 18 months and at least one and a half two million dollars and we were tiny starter it was just me and him and that seemed so long and so ha so expensive and chai comes to me and he's a really thorough guy he really delves into technology and he comes up to me after the 10th meeting he says to me daniel either i am missing something monumental or i can build one of these on my apple watch while i'm driving home tonight he didn't do it while driving home but five people and five months later we had the system built where did you meet shai um a there's a guy called michael eisenberg who's uh one of the most talented vcs i know and um he's an old friend um and as i was working through this peer-to-peer insurance i went to see him and say hey does this pass the sniff test he was the benchmark no he'd left benchmark at the time he'd start up his own fund and he said yeah pass the sniff test and here's somebody you have to meet and that's how i met shy nice nice so uh just we're gonna be going to uh our abundance digital members and uh and social media network questions in about just 10 minutes to get your questions ready but i get to ask daniel until then uh just selfishly because i miss you pal and i'm so proud of what you've built um so uh let's talk about the use of exponential technologies that's enabled you to do what you're doing now and then i want to talk about what's possible in the decade decade and decades ahead so talk about the technology that enables uh enables you because i think you mentioned to me earliest earlier ultimately insurance has simply been a an algorithm for most of human history yeah so i like to think about what we've been doing with technology the metaphor that comes to mind for me at least is the iceberg so you have the 10 or so that is visible above the water line and that is the stuff that people understood and got excited about lemonade in the early days and i think up until a couple years ago and you know the insurance executives of the largest companies they all knew about lemonade and they knew that you'd buy it by chatting to a bot and they knew it's done in seconds and that we pay claims in seconds and all that but i think what they would have done if you ask them about lemonade that have paid us the back-handed compliment of saying they've got a cool app and they're good at pr and we do have a cool app and we are good at pr i think what they failed to understand is that that cool app and that's the 10 of the iceberg that you see oh wow it's exciting tech it's it's sexy it's fun it's easy to use what i think they've totally failed to understand is that that cool app was generating data sets about 100 fold more voluminous than the traditional insurance interaction you go to a broker today and you want to buy home insurance you sit in front of her on the main street if it wasn't for covid she'll ask you about 20 questions um you will be emitting signals all day long you know are you playing with your phone while you're answering or are you paying attention when she gives you a piece of paper to sign do you sign it or do you read it first did you come in a hurry or did you sit down yeah did you come back three times all of that is lost because her 20 questions don't include any of that um and that's all the data that the insurance company collects maybe they buy data from third parties but you don't build a competitive advantage by data seem like health insurance right ridiculously thin layer of almost meaningless data that's collected to make decisions when you interact with maya abot she collects something like 1700 data points from that interaction so it's about 100 times more data and it turns out that those things are highly predictive now we don't discuss the details i'll give you a couple of for instance so if you insurance is about figuring out not the property but the person and what kind of risk you are two people buy the same car they don't get the same premium we live in the same apartment maybe you lock your doors and don't leave the gas on unattended and maybe i do those things that's really what where the where the gravy is that's really where the business is so you want as many signals about a person as you can if somebody searches for good insurance on google before clicking versus cheap insurance is that a signal um if somebody buys insurance at 2am versus 2pm is that a signal if they buy insurance in 50 seconds versus 5 minutes is that a signal well if you're if you've built the whole stack if you own the insurance company if you see the claims if they handle digitally and you close the loop from the marketing campaign through that acquisition through the customer support questions through the claim and back then you built a flywheel where each of those data points start spinning faster and faster and faster and that's the 90 of the iceberg that's what gives it its heft and that's what sinks the titanic and that is where it's really phenomenal because as you say insurance has co-evolved with statistics for 300 years since pascal and back in the 1600s and the insurance companies today like lloyds of london were founded in the same place in the same time and they've survived for 300 years and if i asked you in 1700 or 1800 or 1900 and possibly even in the year 2000 who is home to the best statisticians and the best data sets in the world you'd have said insurance companies and if i see that today there's no way in hell you're saying insurance companies so that is really the core of why i think insurance is even more disruptible and more susceptible to these changes than a lot of other sectors yeah i enjoyed uh when i wrote my last book which i i feature you and lemonade and as well the future's faster you think i have a a chapter on insurance and i remember doing the research on on lloyd's coffee house and all that was i mean the capability of the time was was humans getting together for coffee and putting quotes on a blackboard and underwriting putting their names underneath a particular quote which is where underwriting came from and unfortunately uh the insurance industry stayed with with the old technology uh uh so let's let me take this forward a little bit um especially since uh you're talking branching out and i'm excited to have lemonade branch out into multitude of insurance today health insurance is is not really health insurance it's sick insurance uh and life insurance isn't life insurance it's death insurance where it's the the system pays you after you've gotten sick and it pays you after you died and so you know i put forward the question and fire insurance pays you after you've had your fire and so maybe this is sort of uh uh conversation part two for the future of the lemonade but i still am enamored with the idea of true insurance eventually being the policy i buy to prevent me from getting sick to prevent me from dying from prevent me from getting fires you know could you imagine in the fullness of exponential technologies that that that's what insurance could become in the future i think it can move in that direction i i don't see a future where um there's no butterfly effect in other words you can you can play the odds um and you know you can you can live a healthy lifestyle it doesn't guarantee that you won't get cancer or stroke or anything else it's about playing the probability theory can you bend the curve but you don't eradicate the risk so i do think insurance will be leaning into helping people understanding their susceptibilities whether it's in health or in other areas and then will be highly motivated they'll be aligned interest to to mitigate those risks some of that is already happening you see some companies particularly out of south africa they've been doing some very interesting work there in the health insurance sector of really trying to keep their customers healthy um in the us the insurance company yeah and it's it's and we have the ability to to do that and i imagine a imagine a business model that says you pay us as long as you're healthy and um when you're sick we start paying you um you know in in lined incentives i also imagine a fire insurance where we're going to come in and we're going to outfit your house and we're going to prevent any fires we're going to prevent any robberies because of the ability to have the wholeness of data that we're able to crunch and provide sort of an anti-fire anti-robbery uh service and that's you know sort of down down the line uh potential the elements of that so let me just tell you about one thing i think you'll enjoy we we have an internal bot so we have maya who sells policies and jimmy pays claims but we've got cooper who's our internal body runs a lot of our internal processes um we kind of think of him as our jarvis and cooper gets um imaging feeds from nasa satellites twice a day so there's um satellites that overfly the continental us twice a day and have heat signature imaging which cooper will use machine visioning to uh interpret and identify wildfires very topical sadly today in california we have a lot of business in california and that system went live for us actually um just as the campfire broke out a couple years ago and we identified campfire on our screens before we heard about it on cnn nice and then we can send warnings truck and now it identifies many weather patterns and we can send alerts to customers to try and protect them by the way as we were as it was getting data sets and training it it identified one of um spacex's launches and mistook it for a fire but yeah you could see that kind of thing becoming more more prevalent absolutely yeah so it's it's it's fascinating so part of the reinvention and you know i'm i'm i remember speaking about lemonade and the traditional insurance industries out there and and perhaps their initial response uh to what you built it it reminds me of uh of blockbuster and netflix you know sort of blockbuster having the chance a number of times to acquire netflix and and and just turning turning it down on two occasions and saying ah they're not not a threat and it's it's incredibly myopic but it's also true that traditional industries rarely are there i can't think of good examples where traditional industries have completely reinvented themselves from the inside out um it really has to be by adjacency and um and so it's important behavioral economics talk about that one second we have a common friend that you pulled in to uh to lemonade talk about what you that that idea and then we're gonna go to questions from the audience sure so i'll just if i may comment about your earlier video so i got to know some ceos of some of the biggest and best insurance companies and they're impressive people and they see the writing on the wall and they know what's coming and they're not blinded by anything and there's almost nothing they can do about it it's just amazing to see that the how heavy the machinery around them is um and it really is the innovator's dilemma you know they've got um assets that suddenly reveal themselves to be liabilities for 100 years they thought that the fact that they're 40 000 brokers is an asset but actually in the direct to consumer era it turns out to be a massive liability or um they've got a tech sack that they've been building since the 1980s but it's much more of a black hole than a black box and they just have to pull billions of dollars into it to just keep feeding this beast and they've got nothing to show for it or they've got teams that have been groomed for legacy preservation not for business transformation they just have the wrong skill sets in their own cultures and it starts even with they've got their own shareholders they've got shareholders who just want a five percent dividend and don't take any risks and therefore they've got boards and child this won't support bold moves so everything is a raid against them very very difficult for them um behavioral economics i think is fascinating um and as i said before i think that you can think of insurance in game theory terms i use kind of role economics and game theory interchangeably even though they're distinct we started off by saying what is it about insurance that brings the devil out in people why does nobody like their insurance company at a fundamental level insurance is a social good it's about a community of people pooling the resources to help their weakest members in the hour of need that's almost the definition of a social good why the most distrusted sect in the entire economy and first it came down to conflicts of interest and conflicts of interest is about if you want to fix it it's about acknowledging that my moral fiber is no superior to that of anybody else and if i am tempted i will also behave in a way or writ large we will behave in a way that we won't be proud of in retrospect the problem isn't the players it's the game you have to craft a game that aligns interest with consumers and there's this whole notion of the ulysses contract which is a a game theory notion where ulysses the old legend there were these sirens who would sing beautiful songs beguile sailors into their grasp and then they would devour them is the only person who heard the song of the sirens because he tied his hands to the mast of the ship so he couldn't change direction he couldn't get too close to them everybody else thought i will know when to pull back i will i you know they trusted their future self ulysses and we've kind of taken a page out of that book and built an insurance company where we don't make money at first approximation by denying claims the money is out of our reach we've tied our hands it goes to charity and that changes the whole dynamics and that's really the fundamentals of the lemonade brand the brand promise and its business model and that's really rooted in behavioral economics that's absolutely beautiful i love love that story um all right well let's go to questions from our abundance digital community uh nia do you want to kick it off yup so first question from keith what sort of timeline or data needs do you anticipate before you can get to covering products of greater complexity for example another member didrik asked about insuring warehoused inventory interesting um i'm not sure that there are many products of greater complexity than homeowners insurance to be honest um you compare it to something like car insurance where there's only so many makes and models of cars and so many dynamics homes are endlessly variable and every address is unique it has different exposures different weather patterns different crime patterns and different kind of windows different kind of roofs everything about it is is one-off so actually homeowners is one of the most complex products out there i don't know about warehousing and inventory we're not in the commercial insurance space i can't talk to that intelligently but i think that the kinds of products that we already selling of a sufficient level of complexity to give us reasonable confidence that this model is extensible to other lines of insurance nia which countries could this work in and how does it change country to country that's a great question um we just spoke about the behavioral economics and aligning interests and increasing levels of trust and um whenever i talk about this uh people say well that's lovely it's very naive it wouldn't work in my country and there's this notion that yeah maybe maybe in that country yeah that those people are good people but my my people would never work um so we're predicated on the idea that humans um are basically a good bunch of folks and that if you treat them with respect and you align your interests with them writ large that will that will pay dividends and that you can change a cycle of distrust into a virtuous cycle of trust if you pay it forward so there's something perhaps naive but certainly optimistic about it and so far that's paid off and we think that the basic components of the lemonade value proposition are global in nature it's one of the interesting things that we've seen lemon that insurance stops at the water's edge so all the brands that you're familiar with in the us state farm in all state and liberty all they basically operate in america but in europe nobody's heard of them and then you look at european brands axa and allianz and generali and nobody in america has heard of them lemonade when it was three years old already launched transatlantic we've got a pan-european license as well as american licenses and we launched in germany and we launched in holland and we're going to roll out other countries throughout europe again predicated on the idea that insurance that is hassle-free aligned digital and instantaneous has universal appeal but there's more to it than that there's one other thing i'd play i'd layer into it peter started off by talking about the the skyscrapers that everybody builds and whatever city you're in whether it's the transunion building in in san francisco or the metlife building in new york or the swiss rebuilding in london it really is that the the skylines are dominated by insurance companies but that's also reflective of the business model if you want to launch in a new country you have to go in there with 10 000 people build a skyscraper and then you can launch um our two largest states in the united states are texas and california not surprisingly they're two of the most populous states in general we have zero employees in texas and we have zero employees in california we launched in germany we have zero employees in germany so the idea that you can create a company on a digital substrate rather than a human intensive one also speaks to global expansion because when the marginal cost of launching another country isn't building a skyscraper and populating it with thousands of people it's flipping a switch then the whole economics change pretty dramatically so that's why we do think that what we're doing both in terms of basic appeal um has global um global applicability although time will tell it's still early so that's the thesis daniel how many countries is lemonade in we're in the us and the us unfortunately is 51 different regulatory jurisdictions of course so that's not so easy but we now have licenses across the u.s that comprise about 90 something percent of the us population um and aside from that we have a pan-european license europe is made up of many countries but actually a single license gets you all of them so we're licensed across the united the european union and the uk thanks mia next question from iver what are your thoughts on applying ai to health care insurance in the us well we have launched health insurance for pets um and we're using all the same technologies there i'm not overly enthusiastic about health insurance just because it's such a political and politicized business so um there's an election coming up i'm going to stay well clear of that but um in the last election you saw how dramatically things can change in terms of the health insurance for humans so at least today we're not focused on that we are a pnc insurance company so we have property and casualty on the mind we will spill out into other sectors but i don't think health insurance will be um early early on for us next question one could imagine daniel that it's it is an area ripe given the amount of data uh that's possible versus the amount of data that's collected that's right and there's an insurance company called oscar that is doing really interesting um interesting work in that space thank you nia back to you next question from stanley is lemonade intuitive for younger adults that are just getting used to being financially self-sustained are there learning resources included in the onboarding process to educate new customers sam that's a great question um and the answer is yes to each of the components of your question one thing that we've found is that unsurprisingly our demographic skews young 70 75 of our customers are under the age of 35. more striking and more surprising is that about 90 of our customers are first-time buyers of insurance wow now that's nuts if you watch more than five minutes of tv you'll see a commercial that is all about i switched and i saved ice you know 50 minutes can save you i switch to liberty mutual you've seen the commercials ad nauseam so the entire industry is playing a game of i switched and i saved and it turns out that we're not playing that sport we're kind of playing an entirely different game and we are mixing my metaphors here but rather than taking the fruit from somebody else's basket we're going to the orchard and we're picking it ourselves so 90 of our customers are first-time buyers of insurance and in fact among first-time buys of insurance the new cohorts we are number one or number two in terms of market share in the us so even though we're still a small insurance company by the standards of the sector among those new cohorts among new new business we're actually a pretty dominant brand and i would put it to you that nothing predicts future market share as much as new new market share so that is a great telltale sign if you're building for the long term because those cohorts then stay with you they grow with you um over time so we are seeing young customers come to us we are educating them and we see some things that are interesting so for example we get a surprising number of claims for events that predate the inception of the policy usually that's a sign of fraud somebody comes on board they buy a policy today they make a claim for something that happened last week that's usually a fraudster but not so with lemonade oftentimes it's people who just don't really understand what insurance is this their first time doing it and they'll be very upfront about it um with lemonade you make claims by speaking to your app without just recording yourself there's no forms to fill out and we see people will record a story hey i came home there was a flood so i quickly bought insurance can you please pay my claim and so we have to educate people i'm explaining that's not entirely how it works but uh yeah absolutely stanley next question from jennifer how did you come up with the name lemonade so i mentioned before that the brains and operation is shy so he came up with it i had a really embarrassing three-letter acronym that i i never bring up because i'm just embarrassed by what i thought would have passed for a good brand and chai very politely and sweetly kind of explained to me that that really won't work and he came up with lemonade um and it was perfect it was um it was a little bit subversive a lot of people said to us or insurance company you'll never nobody will ever trust a brand lemonade it's kind of too juvenile so we like that it's memorable it stands out it's not the same um we we adopted a mantra of one of our vcs michael eisenberg who we mentioned earlier who said that different is better than better so lemonade was different um it played on the americanism of when life gives you lemons make lemonade which is really what insurance is all about right taking something that is sour and turning it into something that's sweet and it also had echoes of social responsibility the lemonade stand the idea of something that's communal and is trying to help the community in which it's a part of and for all of those reasons it just resonated really powerfully with us and has been very good for us all right next question from alicia daniel can you recall an aha moment in the early stages of lemonade when colleagues and investors may have not believed in you but you were internally convinced that your business would take off the standard entrepreneurs crossing the chasm wow alicia that's a great one um it's funny i i was always optimistic that this would work i tend to be a glass half full kind of person but i was never convinced um i'd been around the park enough times and i've had enough failures to know that success isn't guaranteed and it's a lot of serendipity and good fortune um and i've been much more successful in this business than in my prior business but i'm not much better professional in this business than the prior business so there's all different things that have to come together um but as we've got going i i've been my levels of conviction have grown exponentially they really have but i will tell you that early on there were a lot of things that just looked like existential um almost binary outcomes that that were very unsure so for example we decided to create our own insurance company and to apply for the license in the great state of new york new york is regarded as perhaps the most demanding insurance regulator in the world it was a very contrary thing to do but we thought if we can pass muster there we'll get licenses elsewhere and you can't reverse that that's not symmetrical so take on the toughest regulator meet their standards and then you can cascade from there we almost didn't get our license um i had underestimated how difficult that would it was going to be and i'm not sure that it was a smart bet you flipped that coin ten times maybe it comes up ten heads once and maybe we were just lucky and in retrospect we're thrilled that we did it but i'm not sure and a lot of people cautioned us about that another thing that we encountered is that um insurance isn't something you can beta test so nowadays we can be very experimentalists because we have all of our licenses but before you pass that very high barrier you're not allowed to sell anything you can't do a fake insurance policy it's a crime so you're very limited in how much you can test before you make all of your investments which is counterintuitive so on our very first day when we launch in september of 2016 we were taking bets about would the dog eat the dog food does everybody what were you building and so we have had a lot of moments as we were building where you know would investors believe what consumers believe would regulate us belief and i did have internal conviction and um in retrospect i'm thrilled that it that it was justified but even in retrospect i'm not sure that all of our bets that worked out were smart bets nonetheless if that makes sense amazing great lessons here for entrepreneurs and it really i mean a lot of times one of the uh one of the key entrepreneurial lessons is the winners are the people who just don't give up who go one extra round right uh i'm i'm i jokingly refer to a lot of my my most successful efforts have been overnight successes after 10 years of hard work um and and you know all of the you name the greatest companies out there and people see the last the last part of their success story and ah amazing nothing to a billion dollars in under a year well no it's it's a decade of work underneath that no question um you might enjoy peter there's a lovely quote by winston churchill's private secretary who said that churchill spent his finest years preparing his impromptu remarks i'd like that yeah from chris if both of you started a new business today in the same disruptive lens that lemonade took what industry would you have your eye on and why i'm going to pass on that one maybe peter can do a better job i mentioned earlier how blinkered i am and focus on what i'm doing peter can i throw that over to you yeah sure happily i mean there are two there are two industries and i keep on hammering on them because uh they deserve massive disruption it's education uh and healthcare uh education industry like the insurance industry hasn't really changed in in centuries and that's with the you know plural there it's still the sage on the stage and a group of kids in the class half of whom are bored half of whom are lost um and and at least domestically in the united states uh healthcare we spend so much money yet have such awful outcomes it's i you know if you've heard me speak about this it's baroque and broken right it's it's just both deserve we deserve better we as humans deserve better in education and health care and both of those can be fully digitized dematerialized demonetized and democratized so um i'm excited to see and i think covet 19 is the asteroid impact that's shaken up the table uh with enough cap capital people resources that there are probably hundreds of startups out there that will start to see materializing in the in the next few in the next few months to years so we'll see some incredible progress there but those are the two areas without question massive and full of opportunity uh next question from eric daniel what is the sniff test oh the sniff test is just a superficial kind of you give a 20-second pitch and somebody says yeah feels right or nah doesn't feel right so you're kind of sniffing it's like yeah does it smell right or doesn't it smell right that's the sniff test nothing more than that and i i think that this is kind of the daniel kahneman thinking fast and thinking slow stuff that people who are experienced who have kind of gone through the machine learning in their own machine and start having pattern recognition of decades of doing something that sniff test counts for a lot it doesn t mean it won't ever lead them astray but they can tell within a few seconds they'll get a sense of whether this is something worth investing more time in and ultimately investing in or not and that kind of wisdom can be can be very valuable so that's what i was referring to okay what are the golden metrics that you use to keep your company culture from pursuing paths of least resistance the things that pull us back to conventional ways of thinking that's a wonderful question um and honestly it changes a lot uh in the age and stage of the business so when you're two folks starting up your own company there's one set of challenges and then when you bring on board the first three people it's a different one and today that we have 400 people across four time zones it's it's different again um so i'll tell you one of the things that we're doing at the moment um have been doing for some months and we're continuing to do which is uh but that's really germane to the current state of our business we could spend more time than we have talking about the different stages which is splitting so we've adopted what's known as a squad structure um spotify pioneered this and different companies including lemonade i've really developed this much further over the last couple of years when you have four people or 40 people you're still very intimate and small and as you start growing and lemonade is doubling every year you have to build a whole new lemonade every year it creates cultural challenges and one of them is you start slowing down and you start creating legacy and you lose a lot of the nimbleness so what we're doing is we built up our business on squads which are small groups and squads kind of from the military notion of a group that can function independently in the field and they've got everything that they need to be able to survive and thrive how big is that what's the number of a squad typically 10 people or less yeah and by the way if those you who uh if you read bold this is the two pizza rule from jeff bezos any team that can't be fed by two pizzas is too big that's great um so yeah so that's that's kind of what we do and and when the cell grows it divides so we keep splitting um and what that means that every person in a squad is in a startup and it doesn't matter how many other squads they are they're in a startup they've got their own mini ceo and a product person an engineer and a data scientist and an analyst and a qa person and a designer and everything that you need to to create a fabulous product and they'll collaborate with other startups and they form what we call tribes where they'll be focused on homeowners insurance or something like that but each person will be working on a different function and they can move incredibly fast and so a traditional insurance company that has thousands of people on staff in i.t departments and spend billions of dollars a year will release one two production releases every quarter they'll plan those 18 months in advance they'll have committees and i'm not saying this disparagingly that's the way traditional large companies work we have about 15 production bills a day with a team that's so much smaller so we are not building the structure that i just outlined is not optimized for efficiency in the sense of saving dollars there's some duplication there if you just wanted to get the most streamlined team in terms of budgets you wouldn't build it my the way i just outlined but if you're trying to optimize for nimbleness responsiveness and speed and agility that's really what you have to do and that's what we do today that's great and and daniel that's a probably a great question for us to to close out on uh super thrilled by what you've been building and uh and excited to uh to continue to to put you forward in front of our community so i look forward to uh revisiting this a year a year from now uh and to to see what you've been able to build and so uh thank you thank you for reinventing an industry to make it more efficient and make it more friendly and make it more you know just just better all around so uh thrilled about thrilled about that um let me just mention uh before i close out with daniel here tomorrow is our next webinar at uh 10 a.m pacific time one o'clock eastern time is with uh two incredible uh entrepreneurs uh taber mccallum and jane pointer they're the ceos of space perspective imagine imagine hopping onto a balloon that carries you up past a hundred thousand feet into the stratosphere where you can actually spend eight hours with a view that it looks like outside the space station but without the without the the challenges of rocketry this is uh balloons that are reusable jane and and tabor uh are friends of mine for 30 plus years i'll say more about it but uh space perspective is an incredible company you'll hear about it tomorrow if you join me at 10 a.m pacific time uh daniel uh you're closing advice as an entrepreneur if you're talking to entrepreneurs out there who've been sort of like on the edge of an idea trying to think about it what's your what's your go-to advice for them you know honestly pete i'm really leery of dispensing advice um i love sharing my story i'm talking about lemonade but i don't feel best position to give that generic device and i try to avoid the platitudes or the kind of hallmark card stuff um but if i may i'll end by first of all thanking you peter for your support and help all along and it's wonderful to talk to you my friend and if i had to give any imparting wisdom i listened to this man and it paid off do the same how's that that's very kind of you unexpected uh daniel uh thank you congrats again uh check out lemonade check out lemonade for homeowners for renters for pet insurance which we just got a pet so i'm going there next anyway thank you daniel see everybody abundance digital tomorrow 10 a.m pacific time 1 o'clock eastern take care my friend bye you