How start-ups cured my big business boredom
David Urpani doesn’t like to stay still for long. He went from being an architect to a doctor of artificial intelligence to the founder of insurance comparison giant iSelect in 2000.
Urpani, who created the technology behind the iSelect machine, departed iSelect in 2008, confessing to StartupSmart that he got “bored” once the company was well established.
Start-ups are Urpani’s passion and he’s looking to hit the big time again with Moneytribe, a new app started with co-founder Andrew Coates that allows users to enter their information to see how much people similar to them pay for various insurance products.
Last year, Urpani sold 40% of his iSelect shares to US firm Private Equity for $15.50 each. With an iSelect IPO in the offing, Urpani’s remaining stake could fetch him $9.3 million, providing enough cash to back other promising start-ups.
Urpani speaks to StartupSmart about the lessons he learned from iSelect, what he looks for in a good start-up and how he uses innovation to avoid getting bored all over again.
What attracted you to this particular start-up?
I was introduced to Andrew by a friend. He initially wanted me to invest in a start-up called Cloud Super, which was a business that would provide information for super funds via mobile phones.
The poor guy was spending his time educating the big end of town about mobile. He was having a hard time.
We kept in touch and we hit on the idea of adapting the idea to the retail consumer. Over the course of a few months, Moneytribe was born. We played ping pong with the idea for some time but, with hindsight, the business is a natural next step to iSelect.
What’s the concept behind the business?
With iSelect, we wanted to help customers make informed decisions. It was a real improvement on what went before it because it provided a one-stop shop rather than having to call around everywhere for health insurance quotes.
But times have moved on and the next thing we need to look at isn’t one-stop shops but the advice you get from people you have an affinity with.
Moneytribe takes the mythical water cooler or barbeque conversation about your car insurance and allows you to see how you compare.
It gives you an online version of bumping into someone who can say either ‘yes, that’s what I pay’ or ‘you’re being ripped off.’
You can create your own dashboard for your car insurance, health insurance and so on, and see what people in your situation are paying.
Won’t that just attract disgruntled people rather than a broad range of opinion?
It’s not about being happy to unhappy; it’s about comparing yourself to your peers. It’s a question we are all trying to tackle – are we doing well with our finances?
We’ve made a soft launch and had 200 to 300 downloads so far.
How will you monetise it?
Advice in itself doesn’t sell, but it generates, through social means, leads that we can connect with insurance providers.
It’s a bit like déjà vu from iSelect in that I’m going to the providers and we are talking about the commission structure we’ve come up with.
The question back then was always, ‘What do you know about health insurance?’ The answer then was ‘not much’, but I knew then and now how to generate leads.
There is a real hunger and desire from the industry to get leads in social ways. They are very interested and keen to find out now.
People say we are in competition with iSelect, but we aren’t. We are an aggregated, crowdsourced service that shows what people are saying. In reality, it is breaking new ground by using social capital for these leads.
You must’ve been keen to dive back into start-ups after iSelect.
I didn’t ever have a grand plan. I generally take each day as it comes. I was working on iSelect for 11 years before I left in 2008 and that’s a long time.
Basically, it became boring. It grew into a mature business with 150 to 200 people and it just didn’t hold the excitement for me that it once did.
Call it a mid-life crisis if you like, but I just wanted to do something different. I was also mindful that founders of a business always outstay their welcome, so I was keen to sell up my shares and move on.
However, that was badly timed because of the bad situation that the world economy went through in 2008, so I held out selling my shares but still left the business.
I was bored out of my brain within two weeks. I became interim CEO of a tech business and then COO of a clean tech company. And now this. The common thread is that I like start-ups, especially customer-facing ones.
What’s it like starting up second time around?
I would’ve said before I started for the second time that there were so many mistakes to avoid, but now I know there are lots of others to add to the list!
Running a business does give you a certain measure of self-confidence to do it again. You know who you can work with and the investors and shareholders you want to deal with.
What makes a great start-up business?
I very much trust on a gut feel – do I like and trust the people pitching to me? If not, I will walk away.
There’s an intellectual side to it too. When someone talks about a great idea, your immediate reaction should be “I should’ve thought of that myself”. That is a sign of an idea that is meant to be.
Moneytribe has been a long gestation, it didn’t have that ‘wow’ moment, but it was great to develop that idea over some time.
I always have a lot of doubts about a business. If someone asks how Moneytribe is going, the answer is always “the jury is still out”.
You may think your idea is the best thing since sliced bread, but until you get that market feedback, it doesn’t matter.
Ultimately, I don’t want this business to be another iSelect, where I spend 11 years building it. I want to give birth to it, build it and then move away from it within three years.
By the end of the year we want at least 5,000 members, along with some sort of monetisation model.
What are the main start-up mistakes you learned from iSelect?
There were a few. When we started, we thought most sales would be via the website rather than a call centre.
What we ended up with was a hybrid model where people would look on the site and then fulfil by calling the call centre. That had a big impact on us as obviously the margins are a lot higher for online transactions than employing a whole call centre.
We also got distracted because a lot of banks and other institutions liked our technology and wanted to license it. It made us think that we were a tech company.
Ultimately, though, that wasn’t what we were good at. We got lost for a little bit, thinking tech was our focus, whereas what we were good at was selling health insurance.
We then went too long before diversifying from health insurance, as a result of reacting to the fact we weren’t a tech company. We moved into car insurance, but only in 2007.
Did you leave the business at the right time?
To understand that, we need to see how iSelect plays out with its IPO. But if I have any doubts, it’s over whether I should’ve left earlier.
Spending 11 years in one job is a long time when there are so many great ideas and people out there. I get bored easily, unless something is very engaging.
I just like start-ups. I did architecture at university not because I was a great start-up person. But that’s just who I am.