USA
Thomas Wynne
Understanding the power of your network
Published: 10/11/2022
When he launched start-up insurance specialist Capsule in June 2021, Thomas Wynne was no stranger to entrepreneurship. He had spent over a decade helping scale the family’s insurance business, Kingsbridge, taking private equity capital and through to a full buy-out. However, the challenges of a start-up have proved very different.
“I very much underestimated the pain of the early years. I was always involved in a reasonably well-established business with employees. It was profitable, there was money to pay salaries. Launching Capsule, we were thinking about everything from logo and web design to setting up bank accounts.” At Kingsbridge, he had been surrounded by lots of well-qualified, capable people, but at Capsule he found he had to plug gaps of experience and expertise.
In overcoming these early challenges, building a strong network was invaluable.
He spent a lot of time talking to people within the start-up community, within the insurance industry and picking their brains: “We’ve been really surprised at people's generosity with their time and advice, talking through the concept, discussing ideas, getting feedback. It was essential”.
How did Capsule start?
The idea for Capsule had emerged from his time at Kingsbridge. He says: “We were constantly pivoting. Part of our success was that we were looking ahead at what could disrupt the business - what were our partners worried about? What would the market look like? It was this process that exposed this niche in the market.”
Capsule was built on the recognition that the insurance industry didn’t serve the start-up community very well. There were cheap, low-touch packaged solutions for small companies, and sophisticated, consultative options for larger companies, but not much in-between. As he talked to start-up founders and other entrepreneurs, he realised this approach wasn’t helping them at all.
“A traditional service where a company speaks to a broker at renewal once a year just doesn't work for these early-stage companies because things are changing by the day, and they're evolving.
It means their policies aren't keeping pace with their growth. That’s the problem we sought to solve with Capsule.”
Thomas and his co-founder Liam Green set about building a more dynamic and consultative proposition for start-up insurance, offering it at a reasonable price point. They made clever use of data and artificial intelligence, setting 300 or more data points to alert them to changes in the business. They can see if a company changes its office address, if there are new articles about them, if senior management changes. If they take new funding, they may need key person insurance because the investor will require it, so they built in alerts for that. At each point, the broker team can reach out to a contact to discuss their cover or make changes to the policy.
“We have a three click API, which allows customers to share their financials with us. Rather than sending us a big meaty spreadsheet with forecasts for the next three years, we can look at revenue-based insurance, so a company only pays for the insurance it needs.”
How it’s going
Thomas is proud of the client base they’ve built up in a relatively short time. They now count high profile start-ups such as Onfido, Otta and Castore among their clients, along with high profile names in the innovative technology area.
This model allows them to see where capital is being invested. At the moment, theteam can see that capital is still being invested into blockchain, crypto, meta, Web3. “We are starting to work with the businesses that are still raising capital despite the downturn.” For example, they are working with companies that are architects and builders in the metaverse.
Thomas and Liam have clear lines of responsibility. Thomas is CEO, focused on commercial and strategic areas, as he was at Kingsbridge, while Liam is COO and handles the operations side. He was previously underwriting director at Kingsbridge, so is well-versed in the underlying mechanics of the sector. They now have 15 people in the team.
Future plans
Thomas says: “We’ve partnered with some amazing clients across a really diverse range of sectors, from coffee to jobs platforms, to health supplements to sports branding, to cosmetics. We’re now doing a lot in emerging sectors and emerging risks – Web3, Blockchain, Crypto. Because the whole model of Capture is to capture these growth triggers, we want to grow with them. We’re taking the VC origination model to insurance for the first time.”
His time at Kingsbridge gave him a good understanding of how to scale a business, and the demands it brings. He says it was, at times, a “crazy growth journey”, but one that has equipped him well for the path ahead.
In late 2022, the group announced a minority investment from US strategic partner Vouch, giving Capsule the ability to support UK and European clients trading in the US and US clients that want to trade in the UK and Europe.
His advice?
He says that any good entrepreneur needs to know their limitations and work with great people that can do the things he or she can’t. However, his greatest revelation has been the power of building a network. “It’s a borrowed line, but it seems to be true:
If you ask someone for money, they'll give you advice and if you ask for advice, they'll give you money. If you just go out with a pitch deck and approach people you don't know, you often get their thoughts and advice, but little more.
“It is more effective to go back to your network, meet interesting people and tell them what you're doing, find out what they're up to and kind of get to know each other. Then, they may be excited about your vision."