Bought By Many: Steven Mendel
Provides communities with collective buying power for insurance
Tell us what your business does:
Bought By Many helps communities use their collective power to buy insurance on better terms than they could get as individuals. At the moment, we're doing this for Pug owners, residents of Yeovil, and parents of rugby-playing children (among others).
Where did the idea for your business come from?
I used to work for a major bank, and like many employees I had private medical insurance through the company. When I left, I asked the insurer for a quote to continue providing medical cover for me and my family. It was four times the cost that my employer had been paying, even though nothing about me or my family's health had changed! That shocking experience highlighted that individuals are at a big disadvantage compared to organisations when they arrange insurance. It gave me the idea of applying collaborative buying to the insurance market.
How did you know there was a market for it?
The concept tested well in focus groups with consumers and insurers. The UK insurance market is huge, and low on innovation. It's ripe for change.
What were you doing before starting up?
I'd spent my whole career in financial services – first as an actuary, then as a consultant at McKinsey, and subsequently in leadership roles at companies like Barclays, Christies, and Close Brothers.
Have you always wanted to run your own business?
How did you raise the money?
From an angel investor, who likes innovative insurance businesses. I met him through my network and we worked together on another one of his projects before he invested in Bought By Many.
What challenges have you faced and how have you overcome them?
Most of our clients are large insurance companies, and it's been a big challenge turning their interest in Bought By Many into a commercial agreement – and then yet another challenge in actually implementing offers with them. Tackling this has really been about accepting that corporates inherently move much more slowly than start-ups, respecting the fact that they also have a lot of other priorities – and then adjusting our expectations and planning assumptions accordingly.
Describe your business model and how you make money:
Insurance companies pay us a commission on any policies they sell to the customers we bring them.
What was your first big breakthrough?
Changing the user experience of Bought By Many to make it easier to invite friends to join through Facebook, LinkedIn, and Twitter. We're now seeing some of our growth in customer numbers come because of our viral efforts, which is very exciting.
What advice would you give to budding entrepreneurs?
Your network is a hugely powerful asset. Use it to find partners, investors, and employees, and make sure you are devoting time to cultivating it.
Where do you want to be in five years' time?
I'd like to be able to say that Bought By Many has truly made getting insurance a better experience for people.