Welcome to our Meet the CEO series of brief interviews with Activate portfolio company leaders. This interview features Kin Insurance CEO Sean Harper. Kin provides simple and affordable coverage to homeowners facing the challenges of climate change. Kin’s competitive edge lies in its advanced and nimble underlying data infrastructure—by analyzing thousands of data points about each property, Kin can accurately assess risks and identify homes that are most resilient to extreme weather.
Sean has a background in management consulting and venture capital and is a serial entrepreneur with a software background. He founded FeeFighters.com, a payment platform acquired by Groupon, where he then managed the Breadcrumb payment platform.
After the challenge you’re currently addressing, what is the second most important challenge facing the world right now?
Sean: The second most important issue facing the world right now is people and governments are overleveraged. We will need to make major investments as a society and species to adapt to weather volatility. Federal, state and local governments, and households, are all too leveraged to afford such investments.
This is especially problematic for younger generations because they will face ever greater weather volatility with ever fewer resources to fund adapting to that volatility.
When seeking investment, what’s the most important piece of advice you’d offer to companies like yours?
Sean: If you’re a company like ours looking for investors, my best advice is simple: obsess over your fundamentals and make sure your unit economics are rock solid. These are the keys to building a business that actually lasts.
You have to know exactly how much you’re making on each sale, and that number needs to be good before you even think about growing fast. If you’re not making money on the basics, scaling up will burn through cash and could blow up your whole business.
We’ve all seen companies try to grow with negative or just-barely-positive unit economics. In some cases that was intentional—they thought scale efficiencies, network effects, or something else would improve their unit economics as they grew. In some cases, the companies themselves and their investors didn’t understand their own unit economics and that scaling was unintentional. Neither is good.
What motivated you to try to solve the complex challenges your company is addressing?
Sean: I’ve always been interested in financial services because it’s such an important part of people’s daily lives and because it’s inherently a technology/data business.
I want to have a large positive impact on the world and I’ve been drawn to technology since I was a little kid. It’s always been a part of me. There isn’t a lot of technological innovation in financial services and I think that’s a problem that makes peoples’ daily lives worse.
After I sold my last company, which was in payments, I was looking for a part of the financial services industry that was lagging in terms of how they were both delivering and manufacturing the product.
Homeowners insurance was a logical target because it’s becoming an increasingly important part of people’s daily lives as weather volatility increases. It’s also very wasteful. It’s quite common for 30-40% or more of customers’ premiums to go to a combination of insurer profit and insurer expenses, a big part of which is the cost associated with a large volume of infrequently used local insurance offices. That means a significant portion of the money you pay for homeowners insurance isn’t directly providing value to you as the consumer.
The risk analysis and pricing is also very unsophisticated because it’s all based on agent-provided input data, which isn’t as accurate.
When I spoke to homeowners in areas hit hardest by weather volatility, their interest and engagement in home insurance products was just on a whole different level. Whether we were talking to someone in Tahoe, Houston, or Tampa, they weren’t just interested. They wanted to tell us their whole story about the troubles they’d faced. It was clear there was a huge customer need.
If you weren’t in your current job, what would you be doing?
Sean: If I wasn’t doing what I’m doing now, I’d want to be in public service. A Wisconsin native, I currently split my time between Wisconsin and Illinois and have a lot of affinity for the state. I think I could chart a path to improve the state’s economic prosperity and help Wisconsin residents achieve an unparalleled standard of living.
Our politics is a polarized mess right now. I strongly believe we need more of a centrist platform, where we focus on our areas of agreement rather than our areas of disagreement. We also need leaders who both understand economics AND care about people. Wisconsin, as a very purple state, would be an ideal starting point for such a platform.
Why did you choose to partner with Activate Capital, and what has your experience been working with our team?
Sean: We chose to partner with Activate Capital because of their conviction in our mission. Sure, there were parts of our business they didn’t know much about initially, but they really leaned in to learn, and they dug in and learned fast. That was cool to see. It felt right.
The key things for us with investors are conviction and understanding. We are doing something big, and there will be bumps in the road so you need investors with conviction in the same way you need employees with conviction. We are all on the same team.
But conviction needs to be coupled with understanding. An investor with conviction who doesn’t understand the details of what we are doing will be distracting and create misalignment.
Activate has also been a big help with raising capital when we needed it, and they’ve been a productive, not distracting, presence in the boardroom.
Welcome to our Meet the CEO series of brief interviews with Activate portfolio company leaders. This interview features Kin Insurance CEO Sean Harper. Kin provides simple and affordable coverage to homeowners facing the challenges of climate change. Kin’s competitive edge lies in its advanced and nimble underlying data infrastructure—by analyzing thousands of data points about each property, Kin can accurately assess risks and identify homes that are most resilient to extreme weather.
