Event, Worker's Comp

ITC and Sønr Name CompScience #1 Innovative InsurTech Startup

InsureTech Connect Vegas and Innovation Scout Sønr Award CompScience First Place in Forward50 Americas.

 

Over 50 startups were researched and evaluated in the the Forward50 Americas Report by a panel of international judges and CompScience came out on top. On October 31, 2023 at 11AM on the first day of ITC, the award was announced. Matt Connolly, CEO of Sønr Global then had a chat on stage with Josh Butler, Founder & CEO of CompScience. Below is the report, the recording and a transcript of their chat.

 

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Read the Transcript

 

Matt Connolly, CEO of Sønr Global: Now take a few wherever you are comfort. So rather than me do a terrible job at describing your business, how about we start with the very first question of tell me about CompScience. That wasn’t a question at all. Who is CompScience? That’s a question.
Josh Butler, Founder & CEO of CompScience: Well, thank you all for being here this morning, really an honor. Thank you for having me. So CompScience, it’s actually a very personal endeavor and I think most entrepreneurial journeys are. Most of my career, I’ve been working on AI related products, whether in ad tech, which actually reminded me a lot of insurance when I started getting into this super thick, complicated value chain business where the majority of the money that flows through it is wasted and we don’t know which half is wasted. There’s a quote, a famous quote, that is in line with that. Most recently, I was in self-driving cars. That’s where I really started to go deep on building enterprise scale, AI perception platforms, and my first experience working with insurance companies, but in road safety. And I was inspired to create CompScience while I was running that product team at Neo.And my father-in-law had an accident on a construction site. It was totally preventable. It ended his career and I saw the impact that an accident like a workplace accident can have on, not just an individual and their physical health and mental health and their community and family and all those things, but I knew that we could do better. I knew that this was preventable and I knew that the technology I was working on for self-driving cars, which has had a tremendous investment, tens of billions of dollars recently, pushing forward was possible with perception AI. I knew it was possible to do better. I think when you start a truly innovative startup, you have to be a little bit naive about how hard it’s going to be.

Matt: I think it helps, right?
Josh: You have to be a little bit naive. I didn’t know that we were going to build an insurance company at the time. I knew that we were building an analytics platform and we were going to analyze CCTV video, these existing camera systems using the data from existing camera systems that now are present in most workplaces. And I knew that we would be able to understand the risks better than a traditional inspection report that a loss control person would be able to do going on site for an hour or two. I did not realize that we’d actually end up building an insurance company. But over the last two years or so, we launched an MGA backed by Nationwide and Swiss Re, and now we offer insurance to this really blue ocean middle market in my opinion, with a completely unique product out there that frankly, no one else has been able to build yet.
So we are largely an MGA selling workers’ comp in the middle market and fundamentally changing the relationship between the underwriter and the loss control team and the end client really attacking, I like to say, attacking the indemnity of the source, really attacking the risks before they turn into accidents. Not focusing on distribution or even just efficiencies of delivering the insurance, but really focusing on the risk itself. And then we also do offer the services to Global 2000 directly, but that’s a different side of the business for us.
Matt: Love it. Guys, check the CompScience out. So yes, in the report, but on the side of it’s an amazing product and business and one that I would like to get in deeper to myself. But for me, it’s a really fascinating thing around how many businesses are coming into the world of insurance. So even the term InsureTech I really struggle with and I appreciate here we are InsureTech Connect, right? It’s a phrase which is too restrictive because the world of insurance is so incredibly broad. At what point, you talk about setting the business up, maybe not having the vision to be setting up an insurance company. What was the moment in time for you that you went, huh, there’s a great big industry out there that is going to be wanting this from us?
Josh: Sure. I mean, a couple years in, I think we’d built the core technology and we were feeling the pull from large innovative insurance companies. So our first and still are largest customers are large insurance companies and yet we’ve seen that it’s really difficult to build a really new technology and a new customer experience working through existing, like the large players that are incumbent in this space. Usually there’s somebody who has something to lose when you’re changing the game and I think that there’s usually somebody in the room at the large carriers that we’ve spoken with that doesn’t want to change the way things are done.
We also got feedback from one of our largest Global 2000 customers, DHL, that it’s really difficult to sell a value prop around preventing something that hasn’t yet happened.
Matt: Yes sir.
Josh: It’s a lot easier, I learned this one actually in my days back in the ad tech space, it’s a lot easier to sell something people already know how to buy and buy a lot of. And workers’ comp is what the middle market buys. They don’t actually have dedicated safety managers. They don’t have huge budgets for new software, innovative software. They just want to know that the house is in order and their butts are covered.
Matt: How do you get around that?
Josh: And so how do you get around that? Well, you don’t sell them something they’ve never heard, which is safety analytics software. You sell them what they already buy a lot of and that’s workers’ comp. So workers’ comp is the solution that this large middle market, our customers spend between one hundred K and about 1.5 million on workers’ comp. And we’re offering that plus all of our services bundled in.
Matt: Let me get your perspective. Just a slight aside beside us, my vision, we’ve got mannequins that are being carried past me, so it’s a little bit distracting. There we go. There goes another one. So let me ask you about technologies. We’ve been talking about AI, and of course, IOTs are in the mix there. What are your thoughts and feelings around, because I mean heavily making use of AI within your business, but what are your thoughts and feelings and reflections just in the industry more broadly? Because you guys are in a fairly unique position, if not a unique position in what you do. How are you looking to make use of technology? What else are you seeing out there that is of interest to you?
Josh: Yeah, I mean I think this really is, we’ve reached an inflection point this year. All of a sudden, AI became the topic du jour on every company’s board level and operations teams. Everyone’s asking, well how is this generative AI and this AI going to transform our business model, transform work, all these things? So all of a sudden, the fact that we are an AI startup isn’t driving the same skepticism I guess that we got from 90% of customers up until this year. Now it’s, how do I lean in? How can I learn from what you’re doing? And is this the thing that I’m going to bring to my board when we’re talking about ESG and sustainability? And when we’re talking about how we drive, how do we get more out of fewer resources? So, I mean it’s a really unique time right now. Not just that, generative AI has had some serious press around it. Sam Altman’s probably spoken from every time zone in the last couple months.
But we also have the compute power and we have the networks and we have the sensor suites that weren’t there when IOT was a big deal 10 years ago. Now we actually have the way to extract the data. We have the way to process it cost effectively. We have the way to make something, actually really actionable data. We call them causal risk metrics that we generate. We can actually do that cost effectively now and it was never really possible before. And I have the self-driving car industry to thank for that, as well as some players that have been moving fast in the CCTV camera space too. Verkada’s a big name. They’ve been really spearheading a very big new cycle of deployment of high quality cameras across workplaces too.
Matt: Okay, super interesting. Two questions maybe and then we can wrap it up. One is, I love the founder’s story, so that fascinates me. I mean, we have an incredible list of entrepreneurs who are building brilliant businesses. And Josh, you are definitely one of those. If you could give advice, you talked about the blissful naivety of a founder, which is definitely a thing. And if you could give yourself or the Josh a few years back some advice on setting up a business, first of all, would you encourage him to set up a business and what advice would that be?
Josh: He would have it no other way. I think that’s a trait of entrepreneurs is they’re probably unemployable outside of startup and two, they can’t not launch something. It does remind me of a quote by Elon Musk. “Starting a company is like eating glass and screaming into the void.” For the first three years, basically no one wants to talk to you and then all of a sudden, you’re up here with sonar at ITC. So thank you for having me. I think that the biggest advice that I would have is if you haven’t read Crossing the Chasm, read Crossing the Chasm, I think it’s a really great book about go to market and technology adoption curves.
I’d say ignore the conservative, the laggard segment of the market for the first few years. Focus on those that are leaning in. They’re the ones that are going to be able to evangelize what you’re talking about. They’ll be able to align themselves and get resources towards what you’re doing. Focus on them, build a vision together, and ignore what everyone else is saying because there’s a million reasons why what you’re doing is going to fail. But if you’re focusing on a core problem, a problem that really creates pain for a lot of people, you’ll get there. You’ll get there. Just find those that are leaning in and lean in with them.
Matt: Wonderful. My last question to you then ties in neatly, right? So it is now looking forward. So without giving any secrets away, what does the next five years look like for you guys? You talk about the vision for the business. Where are you guys heading?
Josh: Sure. So we just closed our series a few months ago. We were backed by Valor Equity and Four More capital.
Matt: Tesla are in there right, or not?
Josh: Yeah, Valor Equity, they don’t like a lot of press. And maybe that’s because the CEO’s on the board of Tesla and was trying to avoid being in the news right now. And I will make a note, finding the right VC for us was not easy. Most of the InsureTech investors are a little bit later stage than a seed series A. And also, so we needed an investor that really understood insurance and are invested in, not just Tesla and SpaceX and all this, but also coalition. But they also understood, they felt firsthand the pain of being in a factory when someone got seriously injured. That group was on the floor at Tesla when they were going through the pit that Elon’s experienced and they spent many years in situations like that. So finding the right investor was a really big deal and I think we found an incredible group to bring us through the next phase.
With the new capital, we’ve doubled the size of the company in the last few months. We’re growing fast, we’re adding underwriters, we’re building out the SaaS sales team. So it’s not just me selling, which is great, and we’re going to be exploring international expansion, which there’s a lot of different directions we can take, but our mission is 100% about preventing injuries. We believe we can prevent one hundred million injuries in the workplace over the next 30 years. And to do that, we need to partner with the right kinds of companies that are global in nature and then understand each niche market as well. So that will be a big part of-
Matt: And it sounds like you’re going to be fairly busy as well. So thank you for making the time for us today, and congratulations once again. A big hand to Josh and CompScience.

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