[Raised $40 million] Ep.123 - The First 100 with Hedda Båverud Olsson, the co-founder and CEO of Lassie | Insurtech | Pet Insurance | SEM | SEO | Referral Program

Hedda Båverud Olsson is the co-founder and CEO of Lassie, a pet health app and insurance provider. Lassie has now raised €36.5 million from Balderton Capital, Felix Capital, Inventure, Passion Capital, and Philian. Since Lassie's successful launch in Sweden, over 2.5 years ago, and 60,000 customers later, the company recently launched in Germany.

Where to find Hedda Båverud Olsson:

• Website: Djurförsäkring – Din digitala djurförsäkring | Lassie
• LinkedIn (6) Hedda Båverud Olsson | LinkedIn

Where to find Hadi Radwan:

• Newsletter: Principles Friday | Hadi Radwan | Substack
• LinkedIn: Hadi Radwan | LinkedIn

If you like our podcast, please don't forget to subscribe and support us on your favorite podcast players. We also would appreciate your feedback and rating to reach more people.

We recently launched our new newsletter, Principles Friday, where I share one principle that can help you in your life or business, one thought-provoking question, and one call to action toward that principle.

Please subscribe Here.

It is Free and Short (2min).

Transcript

Let's do it. Broadcasting from around the world. You're listening to the first 100. A podcast on how founders acquired their first 100 paying customers. Here's your host, Hadi Rodwan. Good to have you on the show, Hida. How are you doing today? I'm very good. Thank you for inviting me. Super happy to be here. Absolutely. I'm really excited about this space because I work in it. I'm in the insurance space as well. You're in a more glamorous because you're helping other companions, which is the pet. And I'll give a quick introduction to our listeners. Our guest today is Hida Bavered Olson, which is the co-founder and the CEO of Lassie, a pet health app and insurance provider. and you raised to date around 36.5 million from notable investors like Baldurton Capital. Heda, take us back to your founding AHA moment. How did you end up in the insurance world, but also as well in the pet insurance space? Yeah, it's funny that you ask. I think when looking back three or four years back, if someone would have told me, you know, you were going to work in the insurance business, I would be like, really? That's very random. But the reason why I ended up here is because of my love for pets. And I was working first as a management consultant, and then I worked on the investment side, but I felt like I really wanted to kind of work closer with operations. I always had the dream to start my own business, but I realized quite early on that for me to start a business, it's super important for me to have a passion. And so that's how it ended up being Lassie. My mom is a veterinary. So of course we've been growing up with lots of pets. But that's also how I saw the problem that Lassie is trying to solve. That there's a lot of insurance in general is very reactive. You know, you only get in contact with your insurance company when something has already happened. But for pets and for humans as well, of course, there's a lot of things you can work on. proactively and preventively to avoid a lot of injuries. So that was my mission. And I saw that we had worked a lot preventively with our pets growing up and we could avoid it. We had very few injuries. So basically I wanted to create the pet insurance that was just more than pet insurance. That was also a health platform. I really tried to help users to avoid the injury because that saves a lot of cost time and money for everyone. Pets are your family members and no one wants them to get sick, of course. So that was the start. I had no background in insurance. I had more of the vision that I wanted to do this. And I realized quite early on that you want insurance is very technical. You want someone who's an expert on insurance. It's a lot about underwriting, pricing models, claims. So I realized you wanted to have someone who was an expert in this. So I got. through mutual connections and contact with Sophie Wilkinson, who's been former head of pet insurance at one of the large incumbents here in Sweden. I asked around with the industry and my question was, who's the most innovative person you know that knows pet insurance? And that's how Sophie's name came up. The perfect mix of knowing the industry but still wanting to change things. And I think she felt that it was a lot harder to change things at the incumbents. It took several years to. you know, implement ideas, whereas we could do it in a few days. And then of course you need someone to build the actual product. Someone who knows tech and product and got in contact with Sophie Johan Jönsson, who been kind of full-stack developer for companies like Spotify and King, also recent pet parent. So the same week that I contacted him, he also bought his first puppy. So very much with Star's Alliance scenario there. The three of us founded Lassie in summer or autumn 2020. And from there, it took me quite a long time to find the right co-founders. I was really picky. I knew it was super important to get the team right. But once we got the team in place, things got really worked really quickly to get funding and to launch the business. But it was really worth it to take a lot of time to find the ideal mix because you want both. I think our strength is that we have a lot of different capabilities and knowledges, but we all want the same, we have the same vision and want to go in the same direction. And that is really a sweet spot because we can kind of challenge each other, divide and conquer and still kind of complement each other, which is, but of course have a lot of fun together as well. So that's been really the key part of the journey. Yeah. I mean, you touched on an important point when building a startup, which is finding the right co-founders that complement. not only the vision you're building but also the skill set. I would be very intrigued to know how did you convince two people who are working in an insurance software company that probably they have a good career and someone in Spotify to join you. What was your, as they say, your speech to them? The funny thing since I worked on investments before when I started to research Lassie. my way of just putting my thoughts together was actually starting to create the pitch deck. And it wasn't because I was raising money or anything. It was just for me to outline why, is this a good idea or in this case, why. So I kind of had the pitch deck. And when I met candidates, it became quite naturally to kind of go through it. So that ended up being kind of very, almost like pitching to investors, pitching to future co-founders or employees. After a while, when you do a pitch, you end up being pretty good at doing it. So I think that was of course a real advantage to be able to have data. But of course it's all about, you need to have find someone who's actually likes, wants to do that journey. If you're too safe and maybe risk averse in your mindset, it's hard to convince them anyway. So there must be some personality trait where you think it's going to be a fun challenge. So it's not all about selling. There also needs to be something there in that person. who has some curiosity about starting your own company or building something from scratch, taking a bit of risk. So a combination of being well-prepared, having, it doesn't need to be a pitch deck, it just ended up being that way for me, but still finding also people who had that personality where they were looking to build something from scratch. Amazing. Two years ago, two and a half years almost ago, you started the company, you're now at 60,000 customers. You launched also in Germany last year. If we go back to the early days, let's talk about your first 100. Tell us the story. How did you find them? What tactics, growth strategies did you employ early on? I remember so much our first 100 customers because in the beginning we had this kind of internal CRM systems. And as soon as you go to the Slack channel, that you've got a little ping every time there's a new customer signing up and every time there was someone signing up. You went in to check, is this someone I know, or is this someone who doesn't know us? And every time there was someone who didn't come from our closest network, you were so happy. You started to look into how they did find us, and it was super exciting. But for us, how we started, we started very much with the digital channels. We started with Google, SEM, Meta, paid social, other kind of a bit of influencers and that type of things to build a brand. But what we saw very early on was that once you found like the right messaging and you got the right customers on board, they also started to refer their friends. So we very quickly built a referral program where users could, they could all become micro-influencers basically. They could create their own code. My code, for example, is HEDDA. So if anyone listens to this, lives in Sweden or Germany, you can sign up using the code HEDDA and we will both get some money off. But by doing that, we could see that people started to put this out on their own kind of personal Instagram accounts or Facebook. And that was really key to get, I think it's all about building a product that customers love. And since they loved it, is they started to recommend their friends. So we have a really good kind of organic a variety loop and that was really key for us to really find that early on. And the way we did it was that we had kind of our customer success. Chat was open from early morning. We started with opening it seven in the morning until 10 o'clock in the evening. Now it's eight to nine, so almost the same hours. And we all took turns in chatting and talking to customers to really figure out. what do they like about the product? What should we tweak to really kind of build and make tweaks early on so that the products or so that the customers would love it. Because if customers love your product, especially if it's a consumer product, they will start talking about it. You know, dog owners to meet in dog parks or so forth. And so that was really key for us to kind of build that strong product love. And we also saw that when we started to get more reviews, more love. That also meant more trust and then we grew even quicker. Amazing. I'd be very interested to know why did you go early on with the digital channels, especially when we talk about insurance keywords and the D2T space, it's quite expensive to target these accounts. Is there any specific special source that you had where you were able to have a strong customer acquisition cost early on? Where we had a low customer acquisition cost early on, you mean? So that was really the referral. So for us, it was fine for us to pay a little bit more in the beginning for the right customers, because then as soon as we got them in, then they started referring and that was a lot cheaper. But you need to find your first customers somewhere. On Google, it's still very high intent. So that was a great channel to start with, but they're also kind of paid social where you can more build your brand, influencers. So that was still good channels that worked really well for us. Of course, I mean, adding on kind of more partnerships as well. But the first customers came from digital channels because it was quite easy also to target where they live, the ages and to really find the right, the first best hundred users. That was a lot easier to do through digital channels. Amazing. Now, if you go from 100 to 1000, it's a different scaling strategy. What channels worked for you here other than the referrals and how did you have this hockey stick effect? Because you've grown to 60,000 in two years, which is quite impressive. Yeah, no, so I think it's really the organic part that's been growing each month. It's now kind of the biggest part of our acquisition comes from organic. So it's all about kind of scaling our existing channels, adding on kind of affiliate partnerships, breeders. veterinary clinics, so just adding on more channels, but still we have kind of a very kind of stable base coming from our existing channels, but the more kind of the stronger brand we have and the more customers we have, we find that we convert at the very much lower cost than we did in the beginning when we were a new brand. This is very interesting by the way. So if I'm a customer today and I'm coming to Lassie. What is my expectations? Am I buying an insurance with an app that would help me prevent injuries and that essentially translates to a cheaper policy or do I download the app and then you upsell me the insurance? So most of our customers come actually from getting our insurance and then one of the USP compared to other insurances are that we provide this free app where you can do a lot of courses, quizzes, you can... collect points there and can reduce your price. We now also have an e-comm so you can also buy things in the e-comm shop. Now that we are building out the ecosystem, which is the next part of our journey, we are also looking to get people in for other parts of the ecosystem and then upsell to insurance. But so far we haven't had those channels kind of properly live yet. There would have been more in the beta mode. So that's something that we're going to explore more in 2024 and 2025. But so far, it's been more driving our customers to the website because insurance is a decision where you want to do a little bit more research on. Maybe you're not ready to download an app the first thing you do. You want to read up on the terms and conditions, check your pricing, maybe compare a bit since it's a bit higher threshold to download an app. The first thing you do. So that's something that we have played around with on the journey, but seeing that it works really good to go to the website and then kind of after that link them to the app and we see that 90% of our customers have the app and are using the app. So that works really great, the funnel, because you can't forget that pet insurance is actually a product where you care a lot about what the product includes. It's a passion product, so people spend a lot of time researching it and that's why it's important to be able to do so on our website as well. Amazing. What has been the hardest part of building ID2C in SureTech? I think there's always so many fun, kind of difficult parts. I think it's always difficult when you launch a new market to figure out how should the marketing mix look like in this market, how should we tweak our USPs, our messaging. So that's always a challenge. I think we did a very good job in Germany with tweaking a lot and testing a lot the first months, you can't expect to be able to just go to a new country and have exactly the same strategy. So we did a few two weeks on the signups, on the marketing, and after two or three months we really saw things picking up. So I think that's always a big challenge, but also a very fun challenge. Then I think as you know, looking at kind of DTC and growth, I think the debate on how much you should invest in brand versus kind of... conversion activities and growth is always an interesting debate and it's very hard to measure brand awareness and how much brand is worth it to do and that's always very difficult. Amazing, I mean you talked about international expansion to Germany, there's a lot of listeners who are also founders of startups and want to expand. What are things you look at when you want to expand to a different market because you could have gone to the UK, you could have gone to France. You chose specifically Germany. So is there any criteria you look at for international expansion? Yeah, we look at a few criteria. The most important one is probably how the market looks like, what's the growth rate, how big is the market. For us, it is as much work to go to a small country as it is to go to a big country. So then we prefer the big countries since we're also very digital and scalable. That's why we were mainly looking at some very large European countries. And the reason why we were looking at European countries were due to regulations. Since we have a license in the EU, it saves quite a lot of admin work to stay in the EU or within Europe. So that's also kind of another criteria. So market, and with market also including competition, how much existing competition is there, what's the CAC looking like, you know, we look at all these things. market dynamics, growth rate, size, but then also kind of the regulatory parts where EU makes it a little bit less admin heavy. So those are kind of the main criteria. Amazing. What's the principle that you live by that has made you successful in your entrepreneurship? I think ask for help because you're going to face multiple issues and questions. you know, especially being a CEO or any co-founder, it's not going to be something that you've done before. And there's a lot of mistakes you can avoid by asking startups that has been in this a couple of years ahead of you, or kind of just get advice on how to do things. And you can save a lot of time by not, you know, being too stubborn or too proud. So for example, when I looked for co-founders, if I would have been too much in a stealth mode, I don't think I would ever gotten introduced to Sophie and Johan as well. So I think it's really important to be able to talk about what you're looking for and your successes. There's been so many things that's been hard to predict. It was really hard to get a bank account in Germany. By not being too proud, we asked a lot of advisors and investors for intros to banks or we had angels. Just trying to get... leverage where you can to avoid mistakes and also to make some processes faster because you can save a lot of time and mistakes by asking for help. Absolutely. So you worked before starting Lassie at McKinsey and Goldman Sachs. What are specific learnings you brought with you to the startup world? Yeah, I only did a summer at Goldman Sachs. So that was I choose to start at McKinsey and then work with investment at UQT. But some of the learnings was definitely I think to how to analyze markets, how to build some good plans, both on the financial budgets, looking at metrics. I think pitch decks as well helped a lot, knowing how to tell a story, how to put them together. So I think that really kind of presentation also to investors, I think that helped a lot. It's always hard to know exactly. There's a lot of soft skills you probably also learn that it's hard to quantify sometimes. You also work to learn to work hard and to have grit. And I think that's also important. Amazing. So at the end of every interview, I started a new section where I would ask the guest to share a business problem or a question that they're contemplating. They're looking for answers. And we take that question and ask it to the next guest so that they could respond with the way they would think about solving that problem. Is there a question that is? today on your mind that you'd like advice from someone else for? Oh, good question. Well, since I already spoke about this, I would love how other kind of consumer startup think about brand versus more growth investment. But maybe that's too specific to consumer startup, but that's what's on my mind right now. Excellent. So we'll put that in the notes and send it to the next guest. I do have a question for you from the previous guest though. who is practically asking about pricing and how would you approach increasing or decreasing pricing and positioning it in your space, in that case, insurance, but they're coming from a different sector. But how would you think about increasing or reducing prices? I think it's a lot about looking at the overall picture and doing benchmarking on competitors, where are they on pricing? Do you add more value, less value? And to think about where you want to position yourself. Do you want to be a little bit more premium? Do you want to be more value for money? So it's all about what position you want to take then adapt your pricing. For us, we can also be very kind of specific on prices where we can be really niche and say, there are, you know, over 400 dog breeds and 200 cat breeds. So we can also go breed by breed and age by age and decide. Okay, we really want the Labradors or the Chihuahuas and decide that here we want to be a bit lower than competitions, but maybe for these breeds or these age group, we might want to be a bit higher. So for us, we can be really advanced in our pricing. And that's why it's so important to have someone like Sophie in the team who knows how to build a really profitable insurance book because you can really be, you don't need to decide we're going to be the cheapest or the most expensive. You can actually go. very targeted and see where are the profitable customers, where are the customers who will love our app and really be quite niche about it. And if you know that you are adding more value, you can add similar prices as everyone else, but just win by being more value added. Because, for example, we have an app, so we don't need to be cheapest. We can have similar pricing for the be really clear that we add more value. Amazing. We'll send this advice to the guests. Thank you for sharing this, Hida. One last question. What's next for Lassie? So right now, we are super excited to start looking at our third country. As you mentioned, we just raised the capital from Baldeton and with this new financing round, we are starting to do our strategic work on what country market analysis on the growth rates, market sizes, and it's going to be super exciting to launch a new country in 2024. It's also something we're looking a lot is continued optimization with AI, with the claims management and tech, and also to expand our ecosystem. We already launched kind of an e-comm shop to our Swedish and German customers and looking to kind of integrate that even more with the product. So kind of the core themes are expansion. tech optimizations and the ecosystem. Excellent. We'll put that as well in the notes. Thank you for joining Hida. This was an amazing and insightful episode. Two questions. How can people reach you and are you hiring? So people can reach me on LinkedIn. We are hiring right now in Sweden and Germany. We are in hybrid companies, so we like to see each other once in a while. So if you live in Berlin or Stockholm. just ping me and send me your profile and see if there's any available routes. Amazing, Heida. Thank you for stopping by. We wish you the best of luck. Thank you so much for having me. Thank you so much for listening to the first 100. We hope it inspired you in your journey. If you're enjoying the podcast, please subscribe to our podcast on Apple iTunes, Stitcher, Google Play, or Spotify, and share it with a friend starting their entrepreneurship journey. Leave us a five-star review. Your support will help spread our podcast to more viewers.