Nimble speedboats VS slow moving ships. It’s a great metaphor for energetic startups going head-to-head with large established businesses.
Here at Cove, we like to think of ourselves as the speedboat taking on the two Australian supertankers who dominate the local insurance market.
Being the challenger brand, or the “small speedboat”, we are in for a tough ride, but what we lack in size we make up for in a thirst for innovation, creativity, and the ability to execute rapidly. Everything big business can only dream of.
Of course, there are many advantages to being a big business. There’s the established customer base, brand awareness, and benefits of scale. But despite these strengths, big businesses are often vulnerable. With the shift to digital, opportunities are presenting themselves faster than ever before, creating challenges for the established traditional brands.
So why do we at Cove cherish being the challenger brand? Speed, opportunity, and culture.
Anyone who has worked at a large business knows how painfully demotivating it can be to present an opportunity in 2017, have it added to the backlog in 2018, and implemented in 2019. Nothing stifles ideas and innovation, and employee motivation, more than corporate bureaucracy.
Startups can spot an opportunity, roll out MVPs in weeks, monitor real-time feeds of data, act quickly to make changes, and see the results on their bottom line almost immediately.
The startup shifts focus from exhaustive planning and preparation, to relentless testing and learning.
A major advantage of being a speedboat is the ability to react to incoming trends quickly.
Steering a ship takes a lot of time and distance to adapt. They have incredible inertia which resists change. So much so that in some cases, you simply know it’s too late to change course to even bother trying. For example, Blockbuster could have gone head-to-head with Netflix – but by the time they saw that opportunity, it was already passing them by and the chance to change direction had passed.
Opportunities pass by Cove every month, and although we don’t react to every one, it’s comforting to know we are in a position to do so.
Operating with the speedboat mentality means you can move quickly to implement new opportunities or react to macroeconomic change.
Without this mentality, the default is doing what you’ve always done, while carefully keeping one eye behind you and crossing your fingers that no challenger brand emerges to disturb your safe & profitable journey.
At least to me, one of these scenarios is a lot more exciting than the other, and the difference this makes to staff motivation and the fostering of a creative and innovative environment is significant.
What’s the future look like?
Perhaps the future of business looks like a combination of both the speedboat and the ship. 2030 could be awash with brands which were founded to be digital-first, but have grown to enjoy the size and strength of a long established business.
My role as CEO means it’s my job to ensure Cove has the right structure for success, and I believe a big part of this should be ensuring we remain nimble and hungry as we grow.
University of Auckland graduate Andy Coon began his career in insurance at Sovereign. He also worked for a number of years in investment banking across the UK, US, and NZ before returning to insurance and working on various startups in Europe. Andy has long been a tech enthusiast and is loving applying cutting edge technology to the insurance industry. Andy is Strategy & Actuarial at Cove Insurance.