[Raised $1.2million] Ep.128 - The First 100 with Robert Korzinek, the co-founder of Zingcover | B2B2C Insurtech

Robert Korzinek, the co-founder of Zingcover, which delivers truly specialist, tailored insurance cover for end-consumers through embedded partnerships in retail markets. ZingCover has now raised a total of $1.2 million since its 2021 inception.

Where to find Robert Korzinek:

• Website: Zing Cover – Embedded insurance powered by Brands, Data & Expertise
• LinkedIn (1) Robert Korzinek | LinkedIn

Where to find Hadi Radwan:

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

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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, Robert. How are you doing today? Yeah, I'm good. Thank you. How are you today? I'm excellent. Thank you for stopping by on this lovely day in London. Robert Korzenek is the co-founder of Zink Cover, which delivers truly specialist tailored insurance cover for customers that are in the retail space. And you do that through embedded partnerships. We'll dive into that more deeply in a bit. And you've raised to date around 1.2 million since inception, which is 2021. Robert, when people hear about your company and know a little bit about the space you're operating in, what strikes them different as compared to other things they've used before or something they're familiar with? Yeah, sure. So our typical customer is someone who enjoys purchasing and owning higher value possessions that have quite a high level of brand affinity, you know. jewelry, watches, designer handbags, those sorts of product categories. And the process of purchasing those items is quite intentional. They've made a real decision around their choice of brand and their choice of retailer. And then they have to think about insurance. And insurance is completely dislocated from all of those things. And you're generally having to pick up the phone or fill out forms or send emails. just to try and get the insurance cover you need in place. We wanna take all of the hassle out of it, but beyond that, because we embed with luxury goods businesses, we want to be an insurer that really respects that choice of retailer, respects that brand, and embeds that whole brand affinity in the customer life cycle. Amazing, so I'm going to a shop, I wanna buy a luxury watch. How does it essentially work? Is your insurance on the checkout? Is it with the salesperson at the end of the journey? How does it work? Yeah, so we want to reach our customers in exactly the same ways as the businesses with whom we partner want to reach those customers. We strongly believe that insurance ought to keep pace with modern consumer behavior. And generally retail businesses tend to be better at moving with that than insurance businesses do. So we unashamedly copy what our partner retailers do. So it might be that you're buying something online, in which case you'd see Zing embedded at the product review page and you can simply add it to your checkout basket along with the item you're purchasing. If you were to repeat... customer of ours and we will recognize you as such and make sure it's added to your existing Zing account. But equally, you know, if you're choosing to make a purchase in store with one of our partner retailers, there will be a Zing tablet available for you to get instant cover before you leave the store. You know, people even interact with their favorite retailers and brands over WhatsApp now. We're the first insurer that we know of. that offers a full quote and purchase of insurance through our WhatsApp for Business service. We aim to be flexible for our customers in exactly the same way as retailers are flexible for them. Amazing. So if we look at your business model, you're a B2B2C. Essentially, you're partnering with a shop and then that shop reads the end consumer. To walk us through your thought process, your early thought process on how did you decide on which business model to adopt? Because you could have essentially gone directly to the customer, maybe acquired the customer through Google Ads, but you decided to go through a partner which has some disadvantage, which is a longer sales cycle. But talk us through how you thought about it. How did you validate that idea before you adopted the model? It definitely has a longer sales cycle, but it's really fundamental to a lot of things that we do and we aim to deliver for our customers. So... If we take a step back and look at the big picture of who our customers are, a typical Zing customer, we actually call them members, would be someone who's sort of, in financial services terms, be called mass affluent. So not quite high net worth, but they've probably got 75,000 pounds to maybe a few million of liquid assets. They just fall between the cracks of the existing insurance industry because they have... expectations and value of items that are generally outside the service delivery and the appetite of mass market insurers and the insurance aggregators that we all know from television adverts. But nor do they really fit the insurance industry's conventional notion of what a high net worth customer is. And even if they did, they probably don't like the sort of the phone calls and the forms and all of that are associated with accessing a high net worth insurer. And so it's this huge market that insurers are failing to reach and service properly, which sort of begs the question of why, why is it left to businesses like Zing to take on this market? Two big reasons are that insurers lack the data to properly understand those customers. You know, your average mass market household insurer is judging customers based on their postcode. doesn't really work so well when you're dealing with higher value customers. The other reason is that if we were to, as you suggested, the sort of easy route in a way, direct market to our customers, you've got really high customer acquisition costs associated with reaching these customers. Because if you think about it, we're competing with pension providers, wealth and asset managers, and indeed luxury goods businesses trying to sell products to these types of customers. Now, all of those businesses carry much bigger margins than we could justifiably carry in the type of insurance products that we sell. So partnering with the luxury goods businesses that we do, it gives us access to much better data sets around our customers. We can build up a qualitative picture around their product need and their risk profile based on the retailers, the products, the brands that they associate with. achieve efficiencies of customer acquisition costs by reaching the customers of those businesses so that we can deliver our products that represent good value for customers without the sort of egregious marketing costs that come with a direct-to-consumer approach. So it's really key for us both in terms of understanding our customers better and reaching them in a way that achieves good value for them. Amazing. Take us back to the early days of Zinkover where you were trying to get the first partners. How did you approach them? Yeah, so I'd say... So first of all, we're fortunate in that within the founding team, we've got good experience over decades with luxury goods sector as well as insurance and technology. So that always helps to inform your product creation and achieving that early product fit. But you're right, you know, in going back to a year ago, we were an unknown brand and unknown entrant into a market that, let's face it, doesn't seem any new market entrance. So there's always a little element of distrust of who is this new insurer that's seemingly sort of come out of nowhere. So you're also right in what you said earlier about, you know, by being B2B2C, we're prolonging that sales cycle. Because our first challenge was, how do we get luxury goods businesses to want to trust us as a brand and allow us to reach their customers? And so the first challenge we had was the same as maybe going out and speaking to other businesses to convey why we felt this was important for their customers, why we felt it was. beneficial for them as a business. Because let's face it, not many retail businesses wake up in the morning and think, I must have an embedded insurance offer for my customers. So you're not simply asking them to switch provider, you're asking to do something new in their business. And as with so many things, that comes down to relationship. You need to get out there, start speaking to businesses, business owners and managers, building up that level of trust, listening to them about... pain points in their business and the pain points that exist for their customers and demonstrating how Zing can address those pain points and bring additional benefits to them. And then it's all about delivery because when you get those early partnerships, you need to make sure you really deliver upon them. So you get that buzz, that sort of halo effect through the market where other businesses think, oh, hang on, so that... business that I kind of respect and like is working with Zing, maybe we should start thinking about why they're working with Zing and we should have a conversation with them then. And you've just got to keep that momentum going through the market and obviously make sure that you're delivering great products and great service for their customers. Otherwise, your reputation will fall flat pretty quickly. to do a specific set of actions to get that client. How would the masterclass version of this look like for an entrepreneur who's starting from scratch? I think there's a few elements to that. That's how do you get in front of the business in the first place? That's the first challenge. So how do you really concisely and succinctly put across what might be quite a complex proposition in maybe a couple of lines because if you're reaching out to someone on LinkedIn, say, that's about what you've got to guide as to whether they're going to quickly delete a message or say, hang on, that's interesting. I want to talk further. And then it's a case of how you, if you've got that first bit of interest from a business, that doesn't then mean that they've got amount of time and interest to put into it, continuing to evaluate whether it's good for them. So you can't then just go and move right and here's all the complexity and all the detail about what we're going to do. It has to be layered up in, I think at least, in a way that can demonstrate the potential for their business and their customers without overloading with the detail of it because insurance isn't simple. It would be a lot simpler if we were a straightforward SaaS plugin for their business that was going to deliver one clear, defined benefit. And we could put a nice percentage on the benefit that would deliver for them. It's our stuff and work like that. So it's how to deliver what, in some ways, is quite a complex business proposition in quite simple bite-sized form until, of course, you've then got to that point. where you can properly engage in a meaningful way and have a proper discussion with them. What has been the hardest thing building a B2B2C insurtech for you? I don't know, I'd struggle to work out what the hardest thing about it was. As you know, insurance and regulated financial services are difficult in and of themselves. You've gotta be... slightly mad probably to want to be a startup founder. You probably got to have an additional level of derangement to want to do it in a regulated business where you have the hurdles of getting underwriting capacity in place, getting the state regulator to authorize you and all these things you have to do before you even make your first pound of revenue. Having the confidence in your proposition and the confidence in your market fit to drive you through. all those slow and painful processes that have to be got through. And then I say again, confidence in your proposition and confidence in your market fit for when you start going having those first initial conversations, because if you're not confident in that, it's going to come through. And as a new market entrant, I think you look a lot less appealing if you don't resonate confidence in what you're doing. And I guess the only thing I'd say, which I think... every founder has to do constantly is, whilst having confidence in your proposition, also still being able to listen and listen to others. We are embedded in the luxury goods industry. We like to think that we understand that industry better than other insurers, but we're still not in it. So we still need to listen to what they tell us about how they do their business and how they serve their customers. And that still continues to be really important to us. You know, that bit that we were talking about in terms of the distribution channels we use to reach our customers, that is informed by what our partner retailers are doing to reach their customers. So we need to listen and learn and continue to iterate. Is there a story you can share with us where there was a client who was on the fence, they didn't want to partner with you, but then you've done some objection handling that was successful? and they became a customer? Yeah, I mean, I'd say in the early days, the principal objection is, why on earth would I want to share my customers with an insurance company? These businesses have high levels of customer acquisition costs to acquire their customers, and it's a completely fair and reasonable challenge of, why would I want to trust you? Why would I want to pass my customers to you? And why would I want to trust you with my customers? because if you do something wrong, it then reflects badly on me as a business. I'd say with all of our early partners, those were the two principal objections and we still get those, less so, but we still get those now. I think, you know, it comes back to that confidence in your proposition piece, that you've got to be absolutely honest in how you're addressing those key objections because I think if you go into a sales, routine around really principled objections to an initial proposal, you're just going to be so transparent and you will be seen through. So in terms of what that meant for Zing, we had to talk through their customer pain points to show that we had a level of understanding around the pain points for their business and the pain points for our customers. you know, they're in a jewellery store about to make a high value purchase. The thought of what their insurer is going to require and if they're going to have to have a safe installed or an alarm, that is a pain point that could lead to a missed sale for them. If the customer's in a jewellery store about to make a high value purchase, we want to remove as much of that purchase friction as possible. And part of that might be the confidence of walking out of the store. knowing that they've got insurance in place without any of the hassle that follows of having to speak with their household insurer and find the phone call to do all of that. Part of it might be that these are, for most of our partner retailers, high-value but infrequent purchases. That one of their priorities is, how do I meaningfully re-engage with my customer along the life cycle? Well, insurance can be a really... done right can be a really good tool to enable that. So we're getting in touch with our customers and we're automatically revaluing what they have ensured with us, using our partner retail expertise and market data. That forms a meaningful post-purchase engagement point for those businesses as well as a benefit for our customers. And then when it comes to claim, we obviously want to make sure that customer of theirs is returning to that. Those are all really positive. Most of those businesses wouldn't have traditionally associated with insurance. As for the trust point, because we only work with luxury goods businesses and we don't take customers through any other channel, that sets a high reputational bar for us. Knowing what you know today, and I'm pretty sure you've done so many experiments on which channel or marketing activities work best for you, where would you... focus if you were starting from scratch on the best channel that has really attracted great partners for your business? I think the most important thing is being really clear about what a, so, you know, when you're B2B2C as we are looking at that middle B with whom you want to partner, what does success look like for you and for them and being really clear on that, I think there's a temptation. particularly for a startup, to build up a big pipeline and see this really big addressable market and think it's all a numbers game. We just need to approach as many businesses as we can. And if we get that one in a hundred or one in a thousand or whatever it is, we just then need to keep approaching the next hundred or the next thousand. I think certainly our experience at Zing is that, you know, We've erred on that on occasions and it's never a good thing to do. Be focused around what a successful partner business looks like where you're confident that you'll be able to deliver tangible benefit to them. But also it's going to be successful for you in terms of the customers you want to reach and the customers you want to serve, but obviously in terms of revenue as well. Because if you're going into... partnership with another business, unclear about what you can deliver them and unclear as to whether they're really ever going to be successful for you, then that's a pretty bad way to start. And all you're doing is you might have better sales metrics for your business development team, but actually you're creating a whole load of resource drain down the line. trying to manage a partnership that was never actually a great fit in the first place. Amazing. What's the principle that you live by that has served you well in your journey? Oh gosh, that's a good question. I think a whole number of things, but I think that transparency piece that I've come back to a few times, there are different stakeholders in our business model. What do we want to do? Well, we want to sell insurance products and make a profit from doing so. There's our partner retailers. What do they want? They want those kind of benefits that I just outlined a couple of moments ago. And then there's our customers. What do they want? They kind of just want insurance that does what it says it's going to do in the way that it says it's going to do it and with as little faff and hassle as possible. Well, how do we knit the benefits that each of those stakeholders want to see together? And the way I see it is that whilst we might talk differently to different audiences, if we're ever having to disguise or paper over something that we do with a partner retailer that we might not want a customer to know about or something that we do with a customer that we might not want a partner retailer to know about. therein lies the road to disaster. So I think, you know, a pretty key principle for us is, whether it's a customer or a retailer, or our shareholders, are we happy to say, this is what the entirety looks like, and we're happy to stand by the integrity of our business model. Amazing. Thank you for sharing this principle. I started something new on this podcast, where I asked the guest a question, and they are going to provide us with a business problem or a question that they're pondering to solve and they haven't solved yet. We take that question and we ask the next guest so that they give you their inputs on either how to solve the problem or an answer to your question. Is there something on your mind that you would like to share with us that hopefully we can give you advice on? That's a very good question and one of which I don't think I have an immediate answer. So we have a question for you actually. So you could also chip in. Meanwhile, you could think about something that we could be helpful of. So previous guest asked with the advent of AI, we've seen a lot of the administrative work being either replaced or being optimized. And now the managers who used to manage people who have been doing something administratively and have switched to more high impact. activities with the organization. That manager's skill set of managing these people changed. And the question would be how would they upskill themselves to become a better manager now that they have to manage a different set of people who have either been replaced by AI or have been optimized by AI? I think AI or no AI, that's... probably a challenge that most scaling businesses face anyway. But, you know, certainly I think you want people who are going to grow with the business. And for many people that is going to be going from not managing people at all to starting to manage people as well as what their core function for the business. And then hopefully if they're a high caliber person that does well and really grows at the rate. business grows, they're going to be managing ever higher caliber people as well. So, yeah, I'd probably slightly disassociate that from the advent of AI and say, it's no different to a challenge that all good businesses should be facing anyway. How do you find, encourage? and enable people who are going to grow with your organization such that they are always managing higher caliber people. I always think a reasonably good mantra to work on in a business is always try and hire people better than yourself and then everyone feels suitably challenged and you're constantly upskilling your organization. Thank you for sharing this. So what's your question? Because we'd like to... keep the next guest also active on this. Could be any simple question as, hey, I wanna do a cold outreach to a client. How do I do it? Well, oddly enough, your last question got me thinking and I tend not to go down the AI route, but I think there is a tendency in all businesses to look for better data sources and to use data better. to develop algorithms around what you're doing that test your assumptions and make your business decisions better. And that's all great. Where does the limitation sit where you still think this is fundamentally a human and behavioral process and where I still want to have human beings in our business? I'll give an example in our business. You know, fraud mitigation is a really important thing for any insurer. And we've got some great data sets and we are regularly approached by businesses that say, hey, we can take your data, we can build a really smart algorithm around it, and it's going to lead to tangible benefits in terms of fraud mitigation. And I'm a bit skeptical as to whether that's the case, because I think there's great, we're doing great things with data in terms of risk per profiling and pricing of our products and all of that. But it gets to a certain point. I think from insurance business, it's often at the point of claim where actually there isn't a real substitute for a human being involved in that chain yet. But I'm very happy to be challenged by those who think it otherwise. Amazing. Thank you for sharing this. We'll put that in the notes and see what the next guest has. One last question, Robert. What's next for Zinkoffer? Oh, there's loads that's next. As we, at the time of recording, approach Christmas, There's a busy start to January ahead of us. We've got some exciting new partnerships we're just about to announce that will see us further scaling in the UK, but also making our first move outside of the UK and going initially out into some EU territories. So territorial expansion is probably first on the agenda for us next year. Excellent. Thank you for joining the podcast. Robert, two more questions. Where can people reach you and are you hiring? On the second one, yes, we are hiring and we are always looking for good, talented people, regardless of their background. We have an appetite to come and join us and have impact upon the business in terms of where potential customers can reach us. We are predominantly in the jewelry and watch market at the moment. We only accept customers who are customers of one of our partner retailers. So I'd suggest when you're next making a jewellery or watch purchase, you ask your retailer if they're a ZING partner and therefore if you can access ZING on that purchase. Thank you, Robert. And we wish you the best of luck. Thank you. Thank you so much for listening to the first 100. We hope it inspired you in your journey. 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