Peer Effect
Best way to scale? Your peers have the answers.
This is the podcast for scaleup founders looking for insightful, actionable wisdom from some of the best operators around. Each week we’ll explore one secret that other founders and experts are using right now and how to implement it.
It’s practical wisdom to build the company AND life you want. Hosted by renowned founder coach and advisor James Johnson.
You’ve survived to £1m, now let’s scale to £10m+.
Peer Effect
The Art of Opportunity: Harnessing Timing and Simplicity to Raise £22 Million, with David King
Is your startup ready to pivot when opportunity knocks?
In this episode, we dive into the secrets of running a successful tech startup with David King, co-founder and co-CEO of Artificial Labs. From its inception in 2013 to raising over £22 million in funding to date, discover how David navigated the tricky waters of refining his company's niche in algorithmic and augmented underwriting for the commercial specialty sector.
Together, we discuss:
• Invaluable insights on the importance of timing, market conditions, and, most importantly, customer feedback.
• The art of keeping your message simple and clear, especially when engaging with VCs and potential customers.
• Practical tips on mastering meetings, delivering compelling presentations, and crafting a sales process that works for you.
For more insights, follow David King on LinkedIn, or read more about how Artificial Labs is transforming the insurtech industry.
More from James:
Connect with James on LinkedIn or at peer-effect.com
I am David King. I'm the co-founder and co-CEO of Artificial Labs. We're an insurtech focused on the commercial specialty sector, primarily London, but all of our clients operate internationally. There are 60 of us at the moment. We have raised just over 2222 million to date and last raise was a Series A+.
Speaker 2:So it sounds like sort of good progress since launch.
Speaker 1:Well, we went on a bit of a meandering journey since launch. So we didn't start off completely focused on insurance like we are now. My co-founder and I started the business in 2013 and we weren't completely insurance focused until about 2016. And we didn't do what we do now exclusively until about 2019.
Speaker 2:But since then we've been heads down, absolutely focused on algorithmic and augmented underwriting in the commercial space so so another classic story of overnight success, built on lots of years of of hard work, that no one ever talks about.
Speaker 1:Well, I'd say overnight success is very, very kind. What I would say is that over time, we recruited people that were very smart and we also listened to the customers, which gave us the insight and direction of where we are now. I think the timing and the market conditions are absolutely fundamental to the success of any startup or scale up. I think that we were probably a bit early in 2019, but that the market conditions have changed significantly over time and that's really helped us, and other people in the space that have been a success has really kind of helped us on our journey.
Speaker 2:I actually launched a second-hand platform for buying and selling non-stone second-hand bikes in 2010, thinking the market conditions would have to change, like the bike-to-work scheme, et cetera, had to be removed. 14 years later, market conditions have not changed.
Speaker 1:There's no guarantee that the market conditions would change and I think, if you look back to, say, 2016, 2017, we were making or we were correct on our macro assumptions, but there's an awful lot of detail that we needed to learn in order to execute the platform properly. And then, whilst we were developing the platform from 2019 onwards and putting heavily investment into what we believe now is a is a fantastic platform with a number of different partners, we had to start building it before the market was ready and we were just well, partly fortunate that the market changed in our direction. The, if you go back to 2016, that the macro theories that we had, the more data that you can bring to bear to make an underwriting decision, the faster you can make an underwriting decision. All of those things, I think, are still true, but I think the market now, the people now, are willing to adopt a slightly different way of working for certain areas of their business, which is producing the results that we always hoped it would.
Speaker 2:So what is a unique insight or lesson that you would share with others of Series A founders?
Speaker 1:I think my co-founder and I especially but maybe other areas of the business as well really struggle with the amount of information and detail that we want to put into every phone call, every presentation, every pitch, every document. And I think it is very much true that if you tell someone 10 things, you're not going to know which three things they're going to remember or they might get disinterested. So, of course, storytelling is an amazing tool to leverage in business. I wouldn't say that we or I am the best storytellers, but I think what we have absolutely learned is that there are probably three things that you want to get across in a presentation, meeting, pitch. There's probably one key message. That's the takeaway message that you want the stakeholder that you're communicating to to take to their colleagues, takeaway message that you want the stakeholder that you're communicating to to take to their colleagues. And I think this simplicity making it easy for them to understand how your product or platform differentiates their business, their team and their results.
Speaker 1:And I think that works for when you're talking to VCs and when you're talking to potential customers.
Speaker 1:So if you talk to a VC, whether that be an associate or a partner, they have to then go and sell you or explain and describe your business and why you are phenomenally scalable and exciting, to an investment committee.
Speaker 1:Now they've probably got one minute to do that. So if you can't really stress to them what the message is and how they can deliver it in a minute, I think they're going to definitely struggle when they go to their investment committee and I'm not saying it's their responsibility to sell your business in, but you're not going to be in that room for that kind of first pass a lot of the time. So make sure that they are well equipped to do your job for you or to help them make them look good when they're trying to tell everyone about this fantastic company that they found, and in the same context of a commercial partner or a customer, whether it's a chief strategy officer, a chief operating officer, a manager, an end user, whomever it may be when they're discussing in, however, whichever context that they're usually in to get the budget signed off.
Speaker 1:There are always competing factors, right? No customers that you're going to be selling to have unlimited budgets, so there's always the case of what does your tool, platform, product do that delivers for that? Business changes how they operate and how can they describe it in 30 seconds to a minute, which means that you can continue down the process. Draw in all the relevant stakeholders. Of course, the different stakeholders are going to have different things that they're they're focused on interested in and boxes they're going to tick, but the the one minute summary or the one page summary, I think is absolutely vital to to get through those early stages and continue going.
Speaker 2:It sounds really what you're doing is removing the or shrinking the uncontrollables. It's kind of like option one is you just throw as much spaghetti at the wall and hope something sticks, but you're kind of leaving it up to the wall if we can call a VC a wall but it's kind of you're really sort of just throwing a lot out and going, okay, take what you want from this, but actually by simplifying it, it you increase their chances of understanding it, you make their life a lot easier. But also you get to control what you think are the key messages and what you think will cut through and you you reduce the risk of either being forgotten, miscommunicated or or focused on the wrong things yeah, absolutely.
Speaker 1:And if you are a phenomenal spaghetti maker and you want to make 10 different types of spaghetti, right, and you're going to throw them all at the wall to mix a number of different metaphors and analogies and all sorts of different things is that you have to pick your best one, and I think that's another part of selling. That's very close to this is we always discuss this here is don't sell the pizza oven, sell the pizza. We always discuss this here is don't sell the pizza oven, sell the pizza. If you're trying to persuade a restaurant or consumers on the street that you've got the best pizza, you don't tell them that it it goes up to 800 degrees c, it was made in this certain part of italy. That's a phenomenal.
Speaker 1:So you just give them a bit of pizza, and I think that's very similar to the, to this kind of approach of uh, a vc is looking for a business that's going to scale probably to a billion dollars in valuation within five years, and you need to say this this is that. So the pizza in this instance is we have a SaaS business or a software business, and this is the market that. The TAM is absolutely ginormous. We've validated x, y and z. This is our time to, to close a deal. This is our average deal size and say this is the key message. This is why the, the pizza is fantastic and then, yeah, this is why we're going to meet all of your requirements it sounds like that can be, as you said.
Speaker 2:That can be deployed to customers when, like, really focusing on on what pizza they want. It can be deployed internally to your team, like what is the message that you really need them to take away from a meeting, but it feels like it requires quite a lot of work. This maybe, maybe preparation to make sure that to deliver those decide what's important and deliver it.
Speaker 1:Quite simply yes, and we I did quite a lot of kind of research and analysis in the best way to do presentations, the software presentations, and boiled it down to what I used to do quite a lot, which is probably not the best way is turn up, introduce ourselves, try and have a logo, brag of. These are all the different people that we've worked with. This is our understanding of the market and your challenges. This is how we fix all of those challenges. This is how the technology works with the data flows, the different stakeholders, applications, etc. These are the tangible results that you can you can get from using the platform and the tangible results other people have seen. So it's it's empirically based and then start off the the demo with. This is how you go through the steps and kind of build to a crescendo and then ask any questions and I've probably done a thousand meetings like that over the course of my career because I'm so old and don't get me wrong we have got success from doing those and the detail within it changes for every meeting, whereas I think stealing what works for other people is turn up loosely for every single business that you're selling to. Ebitda is a massive lever right. So if you turn up and say this is how we're going to impact your EBITDA, this is how it's going to be transformational. And then you almost start with the end and you say and this is the the end state of the demo bang, then I think you've got a clear message that's delivered. They can then communicate it to other people and if they go into other rooms and say, well, we, we met artificial, they can improve our ebitda and they can do it like this bang, like then you've got your cutout takeaway messages, and then they're much more interested and engaged in everything you go through and it's almost flip the whole thing on its head and at the end they're asking well, who else have you done this for? These are more proof points than maybe, as a young entrepreneur, you want to get your credibility out at the start, because you're trying to just get credibility with your audience.
Speaker 1:And that might be quite specific to what we do, because we're replacing what has historically been largely a manual process, so a process that, dependent upon the speed efficiency of the partner, would take one to two days or one to two weeks.
Speaker 1:In theory, using our platform, you can do it in one to two seconds.
Speaker 1:So how we would have built it up historically, would say this is how the humans would have done it, this is the data going in, this is the data going in in a really bad, unstructured way.
Speaker 1:We've sorted the data out, we've sent it to different systems and gone through, whereas, yeah, we completely turn that on their head and just say submissions arrived, decisions made, and that looks like magic to somebody that's been spending a week to two weeks doing that process historically. So that magic engagement, I think, grabs their attention and then they kind of instantly realize, well, if I'm not spending two weeks on something, if I could do even 30% of my business within one to two seconds with all the robustness and rigor that would have been applied to it had it been processed by a human, then the EBITDA impact is obvious and I won't get too bogged down in kind of commercial insurance. But then you can go through all of the factors around commercial insurance, around what, what's happening in the process and where it's reducing their cost and increasing their margins well, I think we've all sat in those presentations where you're going okay great, now tell me what I need to know.
Speaker 2:It's like okay great that you, that your company's been doing this such a long time, but what are the numbers like? Why should I still be sitting here? I've got a really full diary. This meeting could take somewhere to half an hour. I'm not entirely sure I should have taken it. I'm half thinking about my next meeting. Why? Why does my attention need to be in the room with you right now?
Speaker 1:and if I think that's the feeling you're trying to avoid, isn't it? Yeah, so and you've turned off, or you're struggling mentally by slide three right to your point before. I prefer it when people come to a meeting almost in a competitive state, so if they turn, up and they're asking me those direct questions of why do I care?
Speaker 1:why am I here? I'd really rather have that, because then you can be direct back to them and ask them direct questions and come to a landing. I think the worst type of meetings are with english people or british people that are just very polite and turn up and smile, don't ask many questions and say it was fantastic and there's, you've not had the challenges. They probably not ask you the main questions that are of value to them. Like now I will ask people like if you go through a a really pleasant but vanilla meeting, I will ask people questions like well, what would be the main challenges of adopting the platform? What would be the budgetary constraints? Why would you not do so? All of that type of stuff I would ask them. But again, historically I probably wouldn't have, because I would have also been english and said oh, there wasn't this a jolly nice time and don't don't we all think we're each other's great?
Speaker 2:but those meetings very, very, I think, rarely, I think, transform into a rapidly evolving real live opportunity so so, top tip don't be english yeah, top tip, don't be english but I think the simplicity point is really powerful, because combining with sort of this idea of like grabbing people's attention, which is always one of the things you're taught when giving speeches, is kind of, if you're going to stand in front of a room, grab people's attention straight away, otherwise you're dead. But it just how. How? How do you prepare for this?
Speaker 1:yeah, and the downside or the challenge is, to be engaging and simple and impactful requires loads more pre-work than just doing loads and loads of documentation and slides and stuff like that, because usually everything that's going into the documentation and slides etc. You already know or needs limited research, whereas I think if you turn up to a company and you know who the person is you're talking to, you've got a good idea of what they care about in terms of them as an individual, what they care about, and then you also know the trends in the market, what their C-suite have been saying, all of those things. That takes a lot more work. So you need to know a lot more about their context, not just your product, and then you need to be able to deliver it in a phenomenal way. I find speeches or keynotes or panels a lot easier because that's almost like a shooting range in that you're just shooting at a target and there is no other player in the scenario. So, very similar to what you were saying about some of the coaching videos I've watched on giving speeches, et cetera say, the absolute worst thing you can do is, after the MC or presenter has said this is Mr Smith from Mr Smith Co.
Speaker 1:You get up and say, hi, my name is Mr Smith from Mr Smith Co. And there's probably a board behind you that says Mr Smith from Mr Smith Co. So you should absolutely walk in and tell a story that's really engaging in like three seconds. And I've got like a couple of those that I've memorized that I can just bring out and talk about that I think are moderately interesting. They're definitely more interesting than me saying my name is David King. I'm the co-founder of Artificial and blah blah blah, which I now immediately realize is how we started this podcast. Apologies to everyone who's listening on that front. Blah, blah blah, which I now immediately realizes is how we started this podcast. So apologies to everyone who's listening on that front, but that the speech is relatively straightforward because you've got nobody that's going to interrupt you.
Speaker 1:Really, so very rare in a business context is someone going to say that was rubbish or I don't agree. They're just going to go to sleep or walk off right, which is awful because you've not got the feedback. So that's the absolute worst outcome, whereas in a meeting you are interacting with people and I think you've got to be really good at understanding what that person wants. So in a first meeting. Again coming back to if they are confrontational and they tell you this is what I care about and does this answer my specific needs or requests, challenges, whatever, that's fantastic because you can focus on it. Maybe you have this rough structure and rough playbook, but there needs to be multiple different paths. It can go down based on the stakeholders in the room, what they're responding to, what you're getting back out of them, etc.
Speaker 2:I think that's really what this podcast is all about. Actually, it's just I think when you get to a certain stage you've got enough experience to go OK. Well, I've read 10 different books, I've seen 10 different thought leaders, but actually I've kind of honed my craft and honed my process and actually here's the very simple, practical way of doing it. It doesn't mean it's easy, it just means it's taken sort of a lot of years and a lot of repetition to really hone it down to its effective core. And I think that's the real value that series a later found had for each other was just sharing those lessons, because we don't have time to read a whole new book and implement a whole new process which maybe only move the needle by a little percent, whereas hearing someone like you talking about what works for you on a practical basis is very implementable and will probably jog memories of sellings we've moved away from, but also gives us new stuff to try yeah, and if you think of chris voss, so have you read chris voss's book?
Speaker 1:so never split the difference. And if I remember correctly, is essentially an FBI hostage negotiator. And when you read his books it is quite technical in a step-by-step process. So he's like there are these types of negotiators and that these types of outcomes and this is how you should go through all of the different steps in a negotiation, etc. And but when Chris Voss is on the phone to somebody that he's negotiating with whether there are, I don't think he does it anymore.
Speaker 1:But if they were a hostage taker and or if he's doing a significant commercial deal, I don't think he thinks of every single step at the same time, right, he? He applies his knowledge to the situation to the best outcome that's possible. If someone uh, if he can't put someone in a bucket of what type of negotiator they are, doesn't mean that if there's an opportunity to come to a deal, he's not just going to jump to the end, and he probably also has a lot of that kind of like, I think you're saying, ingrained in him already so he doesn't have to think about it and do it. But again, even somebody as renowned and learned and academically focused as that chap, I still think he would go to the outcome that is desired if that presents itself. I don't think you always have to run through the same process every time.
Speaker 2:Sometimes you can drift away from your own process. Sometimes it's only hearing someone else talk through what works for them. They go. Oh, I used to do that. Why have I stopped? Like your good habits tend to drift. Like your good process habits, I find Bad habits creep in and good habits creep out and it's kind of like somebody just takes someone else just talking to their person. You know that's totally right. I Like somebody just takes someone else just talking to their person going. You know that's totally right. I used to do that. That worked really well for me. Why have I stopped doing?
Speaker 1:that, yeah, and everyone has bad habits, right? I'd be very surprised to meet somebody that didn't have any bad habits.
Speaker 2:Obviously, some have fewer than others but it is difficult to keep with best practice. Yeah, Because also, I suppose the only feedback you get when you become a founder really is you get sort of you don't win a deal but often you don't know why, like you're not getting quality, detailed feedback on your process or your other ways. You're doing things or your behavior in a way that you were in your junior. You haven't got like a boss sitting over your shoulder going that didn't, that didn't quite work. Your client's not going to call you up and go. I'll tell you what. That presentation today was really good, but if you could have just tweaked minute five and just given me that. So you're kind of in this sort of there is no feedback.
Speaker 1:Yeah, you're absolutely right. So if you do an RFP, for example, and you're not successful, you can ask for feedback. If you do an RFP and you are successful, you can ask for feedback. If you do an RFP and you are successful, or you do any type of presentation, you are successful. You can ask your partner during the ongoing relationship what they like, what they didn't. But I think for the average half an hour to one hour meeting, that's an initial meeting and you might do three initial meetings with the same company in the early stage of the process. You definitely can't go back to them every time and ask everyone on the meeting what the feedback is right. They would think you're crackers. So I think you're right as a founder. The cold hard reality is are you building a fantastic product that people are using, love using, using more and paying you well for? And if that feedback or that needle's not moving in the right direction, you get some different type of feedback, but from your board.
Speaker 2:So you kind of want to give yourself self-critique, like even just listening to this I've been making me think, like when I have conversations, am I, am I simplifying things enough? Can I simplify them better? Am I grabbing people's attention?
Speaker 1:I don't think I'm brave enough to make what I think is the best choice on a regular basis. You're talking about that bad habits thing. The bad habits for me is what you described in terms of work rate. So on average, I probably do 11 meetings a day, and that's probably not. They're not high quality meetings. A lot of those are internal meetings. But you're going back to back to back to back to back to back to back. So that's kind of my safe space to think. Well, I did 11 meetings today.
Speaker 1:Now I'm working in the evening and I'm going to get up and get up really early in the morning and I'm going to attack my emails and the million slack messages I've got and all that kind of stuff. You, in the short term, you've got that internal justification of I'm really busy so I must be working hard, whereas actually nobody cares how hard you work, right? So within reason, nobody cares how hard you work, especially when you're an entrepreneur, because it's are you moving other metrics for simplicity's sake. Now I do go through periods of the good behavior and then I think those ramifications of people getting upset that you're not taking the meetings or you're declining to work with certain partners or other things. I wish I was braver to do that more often and back myself, but I'm probably quite a sensitive human that when people start complaining about it then I feel bad and I don't want to people-please or have better outcomes on a number of fronts.
Speaker 1:I think I'm guessing it's a common entrepreneurial trait is I want to win everything right. So I want to want to everybody that that says I think I'm interested in the artificial platform I want them to be, to love artificial, to want to buy the product off of us, be a massive partner and loads of different fronts. But that's just not realistic and is also not needed. And in fact, the overworking, the bad habits, all that kind of stuff it can actually be detrimental to the bigger picture. It's like the eye of Sauron, isn't it? It's like it's always calling you, and I'm not a big Lord of the Rings fan, so it might be the ring's always calling you. I might have got that completely wrong, but there's always this drift back to just work really hard and everything will be okay, which is not true. But full-time makes you feel better.
