Latest / Daxko Fitness Forward / Episode 2: From Risk to Growth: Modern Insurance for Fitness Operators
Transcript
- speaker-0: This is Fitness Forward, conversations shaping the future of Fitness. speaker-1: Hi, I'm Wendy White from Daxco. Today our guest is Bobby Lowe. And Bobby and I've got to know each other pretty well over last year as we've gone on a growth journey together, ⁓ which fits because Bobby's title is Head of Growth at Authentic Insurance. So Bobby, ⁓ welcome. Hey. Tell folks what authentic does, just so we have a good understanding of of like your role there. And then I want to talk a little bit about what the heck is a head of growth. Yeah. speaker-0: Thanks for having me. Yeah. So ⁓ at a high level, Authentic is a insurance infrastructure company. Right. Like what does that mean? ⁓ to different people, it can mean different things, but ⁓ really for two main groups of people. So think affinity groups, people who serve affinity groups, like you know, platforms like Datsco or or any sort of vertical SaaS company in the restaurant space or anything like that. We enable companies who don't traditionally sell insurance to provide an insurance offer. Right. And so that's that's one market we serve and then the other market reserve is we also enable people who currently sell insurance like brokers or agents to do it in a more effective manner and to do it at a at a way that you know sort of respects the the nature of small businesses and and you know middle market businesses overall. speaker-1: Okay, so we're gonna get around to the tie to fitness here pretty fast. But tell us first, give me a sense of like what is ahead of growth do so people have a context of how you spend your day. Yeah. speaker-0: Yeah, good question. So I think ⁓ depending on where you go, ahead of growth can be a lot of different things. I think in in one sphere, it can be somebody who you know sits there, just thinks about like paid ads all day and making sure that you know we're getting top of funnel through the door. And I think for me, in my role at authentic, really it's it's a lot of things, but I would say where I spend most of my time is on our partnership side. Right. So with the likes of a lot of, I own all of our software partners, I own a lot of our ⁓ collect success management as well. And so my job is just to make sure that the people who we are enabling to offer this awesome ⁓ product for and solution for, you know, have the ability to make it successful. speaker-1: So we've been, you know, partnering the last couple of years. And I think ⁓ so at Daxco, you know, we want to be the trusted platform provider to our customers in in every market we serve, you know, be it a nonprofit like a Y all the way down to, you know, the smallest martial arts studio out there, right? and and I think we're thinking differently about what does that mean, you know, to be a platform provider. ⁓ and to bring everything they need to run their business through our platform or adjacent to our platform. ⁓ and so we met a few years ago and formed a partnership. ⁓ and now we are offering authentic in ⁓ the boutique market as Zen Planner business insurance ⁓ out to our customers. So talk about like why do you think now is a time, like what's happened in the insurance world. Where now is the right time for ⁓ a a service like insurance to come to fitness businesses through a a new online model? What what's changed? speaker-0: Yeah, it's it's an interesting question. So ⁓ maybe the way I I think about it is from the shoes of an operator. Right. And so most operators, they haven't taken a second look at their insurance since the day that they opened their doors. Right. Right. And it's it's not because they don't care. It's generally because they're running a business, right? Their insurance isn't that speaker-1: Going membership and and engaging and retaining members. Right. For sure. Right. That's where their priority is. speaker-0: Yeah, and like if you think about like where insurance sits in all of that, it sits in the category of like things you deal with once and you hope to never have to deal with again or never touch again. Yeah. And so I think for for most owners, it it was like the last box that they checked before they opened. And whenever their you know, whatever their broker put in front of them at the time to get it across the finish line, that's what they did. And if you think about like with him being in the shoes of an operator, like five years later, the business looks completely different. Right. So you have new classes, new instructors, new programs, and yet like I don't most people have it checked their coverage to make sure that that's evolved with them. Right. And so the industry in general has sort of like relied on that inership, like the insurance industry. Right. speaker-1: So do you think based on that then operators are mostly underinsured? speaker-0: ⁓ I I wouldn't say I'm not saying that they're all underinsured. What I'm saying is if you've added new products and new services, like when's the last thing you checked if you're properly insured? Right? Like chances are you might be, or like get a quote to see if you're still in line with where the market's gone. Right. And I I I think we're what we're trying to do with Authentic is make it easier for people to not do more with insurance, but make it easier to engage with it. Right. Because if you think about the way it works today, like again, like it's kind of like a mental and social tax to deal with insurance, right? Like if I have to send an email out to or get a call, schedule a call, have a lot of back and forth. Like checking your insurance is not particularly intuitive or easy. And so for us speaker-1: It's not fun either. I'm gonna just say. Yeah. Not fun. speaker-0: Yeah, and so I think like the the industry, at least in the last few years, has sort of been built on this assumption that like small business owners won't have the time or like visibility to question what they're paying for. Right. So when you take a closer look, you almost realize that like people are overpaying for things that they don't need, or in some instances, I'm protected in the areas that you know they they need the most. And so that's where like I think authentic has had a lot of success, especially with Zen Planner, for instance, where we're instead of treating a martial arts studio the same as like a yoga studio, right? Like we've sort of designed the coverages to reflect how those businesses actually operate. Right. So when insurance matches reality, it sort of stops feeling like a nuisance and starts feeling Feeling like something that you need to actually run a better business. Right. So, like, I I think maybe like the way I'll sound it up when they is like in principle, insurance is supposed to feel like something to evolve as a business grows. But in reality, most operators are still carrying around the same policy that they signed the day they opened. And think the the gap between the principle and the reality is where like most of the pain in the insurance world lives. And that's where we really focus our energy at authentic. speaker-1: I think there's another issue though, which comes down to, and I think I see this, which is coming down to this like fundamental aspect of trust. ⁓ and what I mean by that is I had this conversation with somebody I know who is an operator, ⁓ it could be my boss. ⁓ and he said, ⁓ interestingly, that, you know, ⁓ hi his attitude towards this was like really changing in the last few years because he had ⁓ experienced buying something that he had previously only called somebody up for online. And in that instance it was, you know, a a mortgage or some financing. And this, and so when I talked to him about, hey, would an operator at a club level consider buying insurance online? His attitude was, We're all shifting to being more comfortable, having higher trust. wanting easier, faster experiences, wanting to be able to chat in, wanting to, you know, a quick response, wanting ⁓ an answer in a place where I already am, right? How much is that you think changing the acceptance of, you know, buying insurance in these new ways? speaker-0: Yeah, I I think it's it's important. speaker-1: Did I just do your sales job for you? I just did your sales job for you, right? speaker-0: I appreciate it. And I think your words are much better than mine. So that means it's working. All right. I mean, the way I I'd I'd sort of frame it is like most operators don't wake up thinking about insets. Yeah. And like that's exactly how it should be. And they just want it to work. So if you have an industry that has sort of trained people to believe that like insurance can't work without hand holding, that's Then it's supposed to be confusing, right? Like you need someone to interpret every single detail that you're doing everything on your own and it's gonna be painful. I think like the belief that like insurance can't be done by you or it can't be done by me is something that like ⁓ this industry sort of like flourished on, right? And so we've sort of like, yeah. speaker-1: But what about the ex the changing consumer expectations of the experience? Like on, you know, I would think about our own support environment. It used to be I needed to call a human on the phone and now I'm really comfortable chatting. Yeah. Right. Like ⁓ I think there is a tipping point that has come and probably past for these kind of experiences where we're tipping into I want the convenience, I want the ease of use, I want the easy access. Yeah. And that is a consumer-like experience we're bringing into the business world across all aspects. speaker-0: Yeah, it's true. But I I think it's you have to compare it and contrast it with the way that things are. Right. So like the way that things are is people feel like they can't go through insurance without a brinker. Yeah. Right. And I'm not saying a broker doesn't have their place. Like a broker is very much there to help you find like very specialized needs because your business has a very unique aspect to it, and that's w they are worth their every single penny that you pay them. Right. But for for people who have a very stereotypical business, like you have a gym, you Do the standard services, like you do not need to be on a phone with the broker, you know, every single day trying to figure out how to get a normal policy to get your, you know, to feel safe and run your business. Right. And so, like, yeah, so like to bring it back, like we we have the what we've done is we've made the tools available and the places where people are every day to operate their business. To understand, here's where my insurance is. If I ever need it, here's how I can use it. And should my needs change, I can actually update it myself. That's that's sort of like enabling people to self-serve. speaker-1: I get it. I get it. And I assume that there's also probably a cost savings involved ⁓ for the average person who's looking at like if they haven't thought about it, how much has insurance changed? Is it more expensive, less expensive? Or is it just that you're giving them access to so many opportunities for a quote that they can just find ⁓ you know, a policy that that could potentially bring a cost savings as well. speaker-0: Yeah, I would say over the last call like a couple of years, like there's been a hard insurance market, right? Meaning every single year here without any claims or any change to your business, the your insurance claims are just getting the sky. Right. So 20% 30%. Yep. Yeah. And so like we sort of like took a look at that. We said, why? Right? Like if your business isn't inherently more risky or there isn't a reason why speaker-1: Everything, right? speaker-0: ⁓ your business is perceived as more risky, like why is it that your your rates continue to go up? And what we learned is that the people's rates are going up because they're lumped into one giant bucket of risk. Right? So if you're if you're a gym You whether you're a martial arts studio, a yoga studio, a CrossFit gym, whatever those things might be, you are treated all the same from a risk standpoint. And so that's where we've had a lot of effectiveness in the market because we came in and said, hey, like we think a martial arts gym has an inherently different risk profile than a cycling studio. Right. And so when we tailor the products accordingly, like that's where people find savings, right? Because they're not buying too much and they're not buying too little, they're actually getting the random amount of coverage. speaker-1: Love that. Okay, love that. ⁓ the other thing that you and I talked about recently, ⁓ and I we had a stroll through through New York City ⁓ in this summer on a beautiful day in New York. ⁓ you told me that ⁓ the model of how much of insurability was going up ⁓ through this kind of a service. So previously was more accessible to smaller businesses, now a larger footprint. So what what is that? What is that range? speaker-0: Yeah, I mean like tell me if I'm ⁓ not answering your question directly, but I think like people have been almost inundated with too many choices, right? So like they hear about all these things, like I hear about cyber insurance, I hear all these developments around professional liability, I hear, you know, about all these different products that are coming into market and and you're dealing with somebody who just wants to operate their business. They don't know what they need because they don't have the time to figure that out. Right. It's a headache and a nuisance. So what our principle here at Authentic is it's not about choices that matter for these small business owners. It's about it's not about more choices, it's about fewer decisions, is the way I put it. And so we say, like, hey, when we put together these products for, say, a a martial arts studio, what we learned was a lot of people were underinsured. Right. And so we said, Hey, you know, if you have you only have a general liability pro product, you don't have any professional liability coverage in the event that You know, someone hurts themselves ⁓ based off some instruction that you gave them. Right. And so when we go through the platform together, we actually bundle those things together. You cannot separate them because we believe that for a martial arts studio, in order for you to reach this level of coverage that should cover your needs, like you should have professional liability. So we sort of like bundled those things together. And then that's also where we find like cost savings, right? Like when we bundle these things together, like you get better economics for it. speaker-1: Yep. I was thinking more about like ⁓ larger gems, not just smaller gems, can I buy can I buy into a model of like click click to buy can convenience. speaker-0: Yeah, yeah. And I think like for those gyms, especially or for those like clubs and facilities as they sort of expand their offering, right? Like I think clubs continue to be that sort of third place for a lot of people. Like we're all working remotely. speaker-1: I spent a lot of time there. Yeah. I like my recovery lounge services. I like playing my pickleball. I'm there all the time. Yes. speaker-0: Exactly. And so like pickleball is something that only why I grew up out of COVID, like really, really expanded. So like we don't know what that looks like in five years from now, like what's the next pickleball. Right. And so like as those things start to grow, like we are going to grow with it and make sure that we're offering and and almost doing the work for these clubs so that when they purchase, they don't feel like they have to question that, you know, is this the right level of coverage? Because they can almost trust the partner that it's coming from who's offering them that insurance to to meet their needs. speaker-1: Who knew insurance was so interesting? speaker-0: I hear that all the time. speaker-1: I'm sorry. I I just fascinated because I think I'm fascinated by just the changing dynamics of us as consumer buyers. And and frankly, ⁓ you know, I've been in I I I I come from tech, I've been in tech my whole whole career, 30 years. And so I've I've seen, you know, cycles of innovation. And what I think we're in right now is between like AI and changing consumer expectations. We're in this very fast pace of change. And I think the fitness industry is really facing that. And I think for us at Daxco, It does mean that we're also thinking every day about the experiences we're bringing our ⁓ operators. ⁓ and so this is one that I thought was, you know, was great because ⁓ we can provide some scale ⁓ to them, you know, easily to bring services like the insurance into our platform where it's clicking click easy and something they're already doing day to day. So that that's why it was interesting to me. Yeah. All right, let's switch, let's switch gears. Sure. Time time to talk a little bit about like life lessons. So head of growth, ⁓ all of our gyms wanna grow. Like give me one great life lesson that you've learned recently about, you know, growing your business that you think applies to a to a gym or a club operator. speaker-0: It's a good question. I would say at a high level, this is something I sort of had to learn in in the most recent years, but this is, you know, one of the biggest challenges that made me grow as a leader is to learning how to like not get married to my own ideas. Right. And so much of my career was sort of built around the idea of making business cases or making ideas and sort of standing them up to be as defensible as humanly possible. I would say like for the I cut my teeth off that building that function and that muscle for my and so that worked in sort of my early career in consulting and that sort of worked in my early career in big tech, where there was usually a right answer. Right. At Authentic, we're building something that hasn't been done before. speaker-1: Yeah. Yeah, I can relate. speaker-0: Right. So there is no right answer. Like we do not know the problem. And we do not or so we don't know the exact answer to everything. And we're trying solve that. And so you almost have to like change your approach to like that's the only way we can test, learn, and adapt from is by being wrong constantly. Okay. And so speaker-1: Experiment. Experiment and feel fast is like one of my one of my things too, right? It's okay to experiment. Learn. speaker-0: And I I think like in those types of environments, like what I've learned is I used to feel like I should be the smartest person in the room. Like that's like sort of been my goal. But I actually think it's the opposite now. And that's like the g that's where I've learned I've grown the most, at least personally. Right. Is like if you've learned to welcome the idea of being the dumbest person in the room, then like you'll start to listen more than you defend. Right. And like Curiosity has like ⁓ has become almost like a leadership muscle to some extent. Right. Like, I don't know something. I'm not going to pretend like I know what that is. Please tell me more. Because the moment you start believing your ideas matter more than the problems you're solving, like you sort of lost the plot at that point. speaker-1: Love that. That's fantastic. ⁓ okay. Thank you for a life lesson. Thank you for an insurance lesson. Thank you for a consumer experience lesson. ⁓ I really appreciated it. and you know, ⁓ I'm gonna just reiterate the name of the company is authentic insurance. In case any of our partners want to think about how to bring insurance into their vertical or into their business, ⁓ you know, I think you're a great resource for them. And then for our customers, I hope you'll turn to either the Zen Planner Business Insurance or the Club Automation Business Insurance and get to know Bobby's ⁓ you know, products through that ⁓ opportunity and offering. So thank you, Bobby, for being on today. speaker-0: Thank you so much. Maybe could I ask you one question, Wendy? I would love to know. speaker-1: ⁓ okay. Let's turn the tables. Yeah. speaker-0: Why is it that you have stuck with us for for so long from a partnership standpoint? Like what made you want to work with us? What sort of makes you ⁓ hopefully excited to continue working with us? I think like understanding how you guys ⁓ choose your partners, how you guys decide who you put in, you know, ⁓ it's a it's an intimate relationship, right? Like who you trust to have a connection with your and customer base that rely on you for their everyday businesses, like I think that's really important for the audience. speaker-1: I think you just ⁓ you you you pulled the word out there trust. ⁓ I think when when you know I I I lead our partner team in addition to many other hats, but ⁓ one of the things I would say is that ⁓ you your point earlier, you build a business case, is this partner a good business ⁓ opportunity for us? ⁓ is it starting with we put the customer at the center? Is this the use case the customer is gonna care about and need? How can we then bring it in? And is it a good business case for us? Good business case for the customer. But then you have to build on that with is this the right partner? Do they have the right scale? Will they will they be a trusted partner? ⁓ will they have great service? Can they operate well? Will our customers trust them? Do we trust them? And ⁓ and so for me, I think some of that is intuitive and some of that is based on pattern recognition of like how ⁓ partnerships go, right? and ⁓ And ⁓ so the the intangibles there sometimes ⁓ outweigh the tangibles. So like I'm making partner decisions every day and sometimes you go with your gut on who's gonna throw in with you and really work hard to be successful. And I know that again, that's a life lesson for you know the operators and for everybody else, which is when you have two great choices, you always have to go with your gut. ⁓ if ⁓ all the tangibles are the same, you go with the intangibles, right? And I think that's just business. speaker-0: Yeah, yeah, and that's I I always love to ask that question 'cause I hear a lot, you know, Bobby, you bug me all the time, but I like it 'cause, you know, at least you guys are fun to work with. Like I I hear that all the time. ⁓ speaker-1: Stay on top of us, keep us honest, be a good partner. Yeah, for sure. All right, Bobby. Thank you, sir. speaker-0: Thank you so much. Bye Wendy.