From a systems perspective, a startup has some unique challenges. While there’s tremendous opportunity to innovate in a greenfield environment, there’s also widespread uncertainty around what the business really needs because both people and processes are not yet in place.
“This scenario is typically resolved by the founding members leveraging their past experience with systems and trusting that the old solutions fit the new problems,” explained Mnushkin, in a recent interview with Reinsurance News.
He continued to note that while this approach is unlikely to fail, it is not one that encourages innovation and utilising the latest technology to achieve differentiation through reduced IT costs, superior speed, enhanced responsiveness, and so on.
“In a static world, re-using the tools that contributed to past success is a good strategy. But we are living through a period of accelerated change where businesses must do more with fewer people and maintaining an edge against the competition means constantly looking forward to harness the next great thing,” said Mnushkin.
As Mnushkin explained, there are numerous tools out there that can help a business get up and running quickly. This includes excel-based accelerators like Untangl and EASA, which allow customers to systematize data collection and webify excel forms with low or no code solutions. Ultimately, this enables rapid progression from quickly built prototypes to production-level systems at a fraction of the typical IT spend and allows maintenance by non-developers.
“The proliferation of online form-building tools is also making data collection a snap,” he continued. “Both Microsoft and Google have Forms products that permit rapid construction of web forms a customer would fill in and submit – many even support on-line payment processing.
“Most of these platforms host a variety of application hooks further simplifying their integration with all the other tools a startup may acquire. The ubiquitous and cross-industry nature of these platforms mean they tend to be simple to use, scale easily and are embarrassingly inexpensive.”
Previously, Mnushkin has discussed the dangers of monolithic solutions that lock a business into a single vendor.
“Most customers can ill-afford a multi-year system replacement project and so have very little leverage with the vendor to affect change or negotiate price. An alternative to this approach is the reliance on a series of best-of-breed, inexpensive applications that are loosely coupled together to provide the necessary business process support,” he noted.
Adding, “A business built on a platform of interchangeable components is free to swap them around whenever a compelling reason arises. As long as certain rules are followed when joining these tools to each other, uncoupling them later becomes doable, if not completely painless. Most of all, the cost of maintaining such a system is multiples lower than building your own or renting a comprehensive solution.”
Providing a more general view of the marketplace and looking ahead to the coming year, Mnushkin told Reinsurance News what he expects to be key for startups.
“I believe that 2021 will see a laser focus on expenses by both established players in the industry as well as startups looking to make their mark.
“This will be coupled with increased availability of various toolkits by hundreds of vendors that cover an ever-growing range of functionality needed by insurance and reinsurance today. Smart money will challenge base assumptions regarding system costs and push investment partners to explore inexpensive alternatives,” he said.
Continuing to note that, “at Treefrog, we have been advocating modular systems with interchangeable components for several years now. Our own ILS/Reinsurance pricing and portfolio management platform Foundation was built on this principle and easily integrates with a wide range of other tools, systems and applications.
“A customer without choice is powerless to affect change or take advantage of new technologies in a timely fashion. Keep your options open and your costs low by stitching together best-of-breed systems.”
Source: Reinsurance News
Share this article:
Share on facebook
Share on twitter
Share on linkedin
