The Entrepreneur: Niels Thone, Sprout.ai

Founder: Niels Thone
Company: Sprout.ai
Website: sprout.ai/

Sprout.ai makes the lives of everyone involved in insurance much easier, with its ingenious end-to-end automated insurance solution that functions from the moment a claim is received to the final settlement.

Niels Thone, founder and CEO of Sprout.ai, speaks to Startups about business achievements, trading internationally, and the importance of AI for Sprout’s success.

The Business

Describe your business model and what makes your business unique:

Sprout.ai is a SaaS platform built for major insurance companies to automate claims. Sprout.ai is the first of its kind to deliver a frictionless, end-to-end automated solution, from the moment a claim is received to the final settlement.

What makes Sprout.ai unique is:

• Our proprietary AI technology has solved a previously unsolvable issue with unstructured data and therefore unlocked a new level of process automation and customer service.
• A world-leading team across all areas of the business, but particularly in our tech and data science team. The tech team is led by CTO Niclas Stolenberg, (highly ranked in several top computer vision competitions by Kaggle). We have managed to attract seven of the world’s top 100 software engineers and data scientists globally from the UK, Vietnam, Germany, Denmark, Russia and Brazil amongst others.
• Finally, Sprout.ai is mission-driven and entirely focused on getting the best outcome for the end customer. We might be a B2B company, but we genuinely care about the end customers, building products that make their lives better. Solving insurance claims in real time when people are at their most vulnerable is an important and tangible outcome of our technology!

What is your greatest business achievement to date?

Since the company was founded in 2018, we have secured partnership contracts with three of the global top ten insurers in our industry, (all fortune 500 companies). I’m super proud of getting these large organisations to take a punt on a small company like ours! It speaks to the vision and leadership of clients that are open to exploring cutting-edge solutions like ours to improve the outcome and experience for customers…

How did you fund your business?

To date, the business has raised a total of £10.5 million in funding from Octopus Ventures, Amadeus Capital Partners, Techstars and Playfair Capital.

What numbers do you look at every day in your business?

Every day I will look at pipeline and revenue forecasts, FTE forecast, and of course cashflow!

To what extent does your business trade internationally?

We trade in three continents: LATAM, APAC, and Europe. We are looking at expanding further but want to make sure this growth is controlled, so we can provide the best service to our clients. We decided really early on in our journey that if we grew at all costs, we would suffer in the long term.

Where would you like your business to be in five years?

Ultimately, the end goal is to create business value, while positively impacting people’s lives. Our mission is simple – to help people when they are at their most vulnerable. If we have helped 100m people with their claim, we will have achieved our goal.

We also want to make money for ourselves and our investors who have supported us throughout the last few years.

In five years, we want to be a unicorn company in terms of valuation (£1 billion+). Finally, we want to support job creation for a diverse range of people and create new and exciting roles in the UK and beyond.

What software or technology has made the biggest difference to your business?

Our bread and butter is AI (deep learning) and this technology has fundamentally shaped the product that we’ve built.).

It may sound obvious but video conferencing tools have allowed us to keep the pace during the Covid-19 pandemic. During the pandemic our company grew from 8 to 30+, all working remotely. We needed to interact with customers and employees, and video tools allowed us to do this (almost) as well as if we worked out of an office.

Growth Challenges

What was your biggest business mistake and what did you learn from it?

Saying no to the insurance giants. Whilst there is nothing more I would like to do than say yes to every potential customer that comes knocking, often the scope of work is either outside our wheelhouse, incredibly expensive or resource heavy. It has always been very tempting to drop everything and take on the project. However, this detracts from our resources on the key products we are building.

There are lots of mistakes you make as a founder in the early days. Something that I often think about is how naive I was when first launching the company. My co-founder and I laugh about it now, but we used to think that the bigger the company became, the easier it would be in terms of workload and stress. Looking back on that now, that does seem a little ridiculous as the stakes have just gotten higher and therefore the work and stress load have grown concurrently!

What one thing do you wish someone had told you when you started on your business journey?

I wish somebody had told me that starting a business is often about making a lot of sacrifices. I think this probably came from a place of naivety, but I’ve learnt you need to be prepared for the many personal sacrifices you will face. My wife and I are about to have a baby, so this is going to become even harder to find balance.

Success really is a choice. It doesn’t come for free at all – you just pay for it in a different currency, which is quality time with family and friends.

Success really is a choice. It doesn’t come for free at all – you just pay for it in a different currency, which is quality time with family and friends.

How has the pandemic affected the market you operate in?

In many ways the pandemic has had a positive impact on the insurance industry, as it’s made a lot of companies realise they were not digitally equipped.

Insurers have realised that automating a critical process has value in itself, because it won’t break if a pandemic hits and people are limited in what they can do from home. Insurers have doubled down on investing in tech as a consequence.

So, all in all, it has been a good and fruitful market for Sprout.ai to operate in – we’ve been lucky!

Personal growth

Did you study business or learn on the job?

I studied Organisational Psychology at University, so I have very much learned on the job!

I don’t believe any MBA or degree prepares you for entrepreneurship really. Nothing can prepare you for day-to-day challenges that seemingly come from nowhere! That said, studying business can equip you with skills such as financial forecasting.

What would make you a better leader?

Probably one million things!! One of the things I spend a lot of time inside and outside of work on is how to become a better manager and leader (because they are different). I do this through:

• Taking executive coaching courses
• Books, books, books (some recommendations below)
• Mentoring from amazing people who’ve been there and done that (shoutout to Todd Olson at Pendo.io and Alastair Bathgate at Blueprism)
• Asking for regular feedback from direct reports

One business app and one personal app you can’t do without?

For business, it would have to be WhatsApp. It is a great way to get in touch with your team and clients quickly. I have also found when you have a personal WhatsApp channel with clients it’s a good barometer for your relationship status.

Personally, I rely heavily on Amazon and Deliveroo.

A business book or podcast that you think is great:

I am much more of a book person as I find it really hard to focus auditively and have loads of recommendations:

Persuasion: good for customers, investors, talent attraction

‘Influence’ by Robert Cialdini

‘The Challenger Sale’ by Brent Adamson

‘Crossing the Chasm’ by Geoffrey Moore

Leadership & Management:

‘The Culture Map’ by Erin Meyers

‘Trillion Dollar Coach’ by Eric Schmidt

‘The Five Dysfunctions of a Team’ by Patrick Lencioni

Scaling:

‘The High Growth Handbook’ by Elad Gil

‘Scaling Up’ by Verne Harnish