Wefox Fabian Wesemann on the inner game of entrepreneurship, culture, and the journey to a $3-billion valuation

wefox Fabian Wesemann
We talk to Wefox Fabian Wesemann about the inner game of entrepreneurship, culture, and the insurtech startup journey to a $3-billion valuation.

After a long and well-deserved summer break we’re back in full force with another season of Growth Leap and we have somebody very special to kick things off.

Our guest today is Fabian Wesemann co-founder and CFO of wefox a Germany-based digital insurance company. wefox recently closed a $650 million Series C funding round led by Target Global and reaching a post-money valuation of $3 billion.

Founded in Berlin in 2015, wefox decided to make an important strategic bet. The company has focused on tech enabling insurance advisors instead of seeking to cut the middleman. The results so far have been quite positive. The company posted 119 million in revenues last year and is on track to reach 325 million this year.

But it’s not always been a smooth ride. In this episode, Fabian explains how it all started and the challenges that they faced with their initial go-to-market strategy. Although the pandemic ultimately turned out to be a catalyst for the startup’s growth, it also caused it’s fair share of stress at the outset.

We talk about what it takes to be an entrepreneur, wefox’ journey to becoming a unicorn, and the importance of employee equity compensation.

What you will learn:

  • Why Fabian decided to quit a corporate job and become an entrepreneur
  • Key challenges and skills to have to be a successful entrepreneur
  • wefox’ strategic positioning and channel strategy
  • How to build and grow your team
  • Remote working, the pandemic, and preserving your company culture
  • wefox’ plan for the next 12-18 months
  • The importance of employee ownership

Enjoy the show and happy listening!

🌱#growthleaptakeaways

You need to believe in yourself. If you don’t, then who will. You need to convince other people to believe in you. And so everything starts always with yourself.”

You can subscribe to Growth Leap Podcast on Spotify or Apple.

Transcript

Intro

[00:00:00] Michel: Hi everyone and welcome to Growth Leap. I’m your host, Michel Gagnon. We talked to pretty awesome business builders who are designing disruptive and meaningful companies.

Hello, everyone. After a long and well-deserved summer break we’re back in full force with another season of Growth Leap and we have somebody very special to kick things off. Our guest today is Fabian Wesemann co-founder and CFO of Wefox a Germany based digital insurance company. Wefox recently closed a $650 million series C funding round led by Target Global and reaching a post-money valuation of $3 billion. We talk about what it takes to be an entrepreneur, wefox’ journey to becoming a unicorn, and the importance of employee equity compensation.

Enjoy the show and welcome back.

Interview

[00:00:56] Michel: Good morning, Fabian. It’s a pleasure having you on the show, how are you?

[00:01:02] Fabian: Very good. Very good. Thanks for having me.

[00:01:04] Michel: Fabian you’re a very busy man. If my sources are correct, you got married last year. You got a baby five months ago and we

[00:01:12] Fabian: Four weeks, even four weeks. So there’s more recent. Got married on the 7th of August last year and we got our baby on the 13th of August the year after. So we’re trying to keep things efficient.

[00:01:23] Michel: That’s great. Congratulations. It’s a big a new chapter. The other thing is Wefox the company that you co founded is also doing extremely well. You raised a 650 million series C funding round in the spring. Congratulations.

[00:01:40] Fabian: Thank you.

Why Fabian decided to quit a corporate job and become an entrepreneur

[00:01:41] Michel: So before we get started into Wefox specifically, I’d like to talk about the path that you followed, which is quite interesting. You started working for a German bank. And tell me the story you woke up one day and said I need less security and stability so I’m going to start a business.

[00:01:58] Fabian: Like this and fun was also a major part. But also I’m originally from Berlin. So I was born and raised in Berlin. And so that allowed me to always be very close to the entire startup ecosystem. And then I worked in London at Deutsche Bank for a couple of years. And I was always keeping close generally to the startup environment and then a friend of mine that I know for more than 20 years, gave me a call and said I have this crazy new idea.

I want to go into insurance. And then in the beginning I looked at it and I was like, why the insurance? That, that sounds relatively boring actually. But then I looked into it in a bit more detail and understood what kind of broken customer experience it had, what kind of a gigantic market it is, and hence that very little tech was being used at the moment. That made me then just basically quit my job. So I was working there for nearly four years. Some of the people in investment banking, they looked at me and said, what you’re leaving now you have juniors. Now you’re making good monies .

I was like well, but that’s not what it’s about right. At the end of the day, if you do repetitive things every single day and you don’t enjoy it, then work is way too big part of your life that you go back. And so I I just left and moved in the beginning to Zurich because that’s where we started.

My co-founders were just about to sell their previous company. And this way then we started things off. So yeah, I just took basically a chance and decided to just go for it.

The main challenges he has faced in his entrepreneurial journey

[00:03:27] Michel: If we fast forward a few years and maybe it was the right thing to do, but I’m sure it’s been difficult. A lot of people, these days, think about entrepreneurship which was not a regular path that people were using in the past. This is not how a lot of our parents were raised.

What were the main challenges that you found when you got started?

[00:03:47] Fabian: Everything, the entire journey is extremely hard and I think you need to be aware about it before doing it at the same time. It is a gigantic personal growth opportunity. And that’s why I whenever people leave Wefox, I’m obviously not happy, but if I learn that they are going to go onto this journey of starting their own company, that I’m absolutely happy for.

Because that means that also we’ve educated, coached people that, that are going onto this crazy journey. And I think you just need to be aware that it’s going to be tough. It’s definitely not going to be a straight line. And the most important thing, in my opinion, independent of what the challenges, because you will never know exactly what the challenges might be.

It’s just that, at the end, there’s always a solution. No matter how big the problem may seem in this single second, and you look at it and you’re like, oh shit we will not survive this. A few days later you found the solution, you get through it. And this is also then the amazing feeling. And the journey is for me, just a really big chance for personal growth.

If I look at myself six and a half years ago when we started and today, then I can really say that I’ve learned so much. I think my personality was shaped through this. And so really I can just recommend everyone to do it at the same time, be aware you’ve got to be in a very tough situation for quite some time.

The importance of believing in yourself and making many decisions

[00:05:08] Michel: You’ve talked about problem solving, being a massive skill for entrepreneurs. I think also resilience especially after I don’t know, 18 months of pandemic. It’s more important than ever. Any specific skills that you developed, discovered, or you had already and realized that, oh, damn I was made for this ?

[00:05:27] Fabian: I think you need to believe in yourself. If you don’t then who will, you need to convince other people to believe in you. And so everything starts always with yourself. You will not know everything but you just have to believe in yourself and then believes that this is going to be the right thing and the right decision.

And if it’s not, then that’s also okay. Because you just can take a new decision. And we I’d say if I compare ourselves to more corporate companies where they take maybe 10 decisions, and they try to get, I don’t all nine of them. Then we take a hundred decisions at the same time. And then if 70 of them are right, then we are absolutely happy already.

And on the 30 ones that we got wrong, we take a new decision.

Tips on decision-making

[00:06:06] Michel: Fabian is so right about the need to make fast and many decisions.

In a tech startup action is often more valuable than words. So making quick calls on channel strategy, new feature development, team structure, and marketing will serve you well. But there are two areas where I recommend you not to move too fast.

First hiring key people. When you have the right people on your team, you’ll progress so much faster. With the right set of experience, attitude and knowledge, they’ll identify solutions to problems before you even have to think about it, they’ll come up with innovative ideas, and they will figure things out without you having to be involved. But finding great people sometimes takes time.

The second set of decisions that require careful consideration is around your tech stack. Yes, you can switch CRMs or marketing automation tools over time. But there are key tech decisions that will definitively lead you in a certain direction. If you took the wrong turn, you’ll wake up a few years later sitting on the big ball of mud, where your system lacks a clear architecture.

Fixing technological debt is not fun. So make sure you take the time to make the right decisions. For any other easily reversible decisions, well then yes, move fast.

 

[00:07:19] Fabian: My other recommendation would just be, if you look within your team I would not recommend to be single founders. I think it’s very important to be in a 2, 3, 4, whatever the number is group, not too many also, but I think that’s absolutely essential because some of the topics that you’re going to deal with, you need to have someone to speak to. And that’s why it’s really important that also the people who are founding bring in different skills and it’s not good in my opinion, at least to have two people, for example, who have exactly the identical skillset. But it’s important that you compliment each other. And that you might also be a little bit different because diversity, difference brings you probably more discussions. So it will be, you will be able to agree everything but ultimately the solution will be better.

Wefox’ strategic positioning

[00:08:07] Michel: I don’t want to assume that everybody knows what Wefox is. You are in an InsureTech company that’s grown quite fast over the past couple of years, but in your words, tell us a bit, what is it that you do, how different you are from the competition.

[00:08:23] Fabian: Yeah, absolutely happy to. So Wefox is as a digital insurance company. And our main differentiator here is that when we looked into how are insurance products globally being sought, the 90% of all products are still being sold through the human being. And so what we’ve been doing is that we’ve been tech enabling the human beings.

So we mainly sell through more of the traditional channels, exclusive advisors, brokers, affinities and here these channels we’ve looked into, how can we bring a digital customer journey to the end consumer while integrating the human being at the right kind of touch points. So that means that especially on complex products, advice is still required in today’s world.

Through this focus on these more traditional channels on tech, enabling the agents, right? People have looked at us over the years. When we first raised, I went to the VCs. They looked at us, no, you can’t do this. You need to go direct. You need to cut out the middleman. The agents are dead. Today we can say no way, the agents are more alive than ever. And people also understand it. But it goes back to the nature of the insurance, world that, that we just, I think understood in the very beginning how products are being distributed. And that’s the way that we’ve positioned ourselves as a B to C player and that has allowed us to on the one hand grow much faster than our competition, because we go into this partnership approach with advisors, with brokers. All right. And at the same time also have a much clearer path towards profitability. And that’s also one of the reasons why we’ve been able to this year then also raise this very big round 650 million us dollars because people have seen that at the same time as we are, generally growing with more than a one hundred percent per year.

And so we’ve grown last year to around 119 million of revenues. This year we’re on track to grow somewhere between 315 to 3 25 million in revenues, we, at the same time having a very clear path towards profitability and that I think differentiates us compared to many of our peers.

How the insurtech startup works with agents

[00:10:28] Michel: So your main customer is actually the agent?

[00:10:31] Fabian: Yes. So it’s a two way relationships. We provide technology to the agents and also we provide technology to the end consumer. So a customer journey could look like that you that you sign up, you being assigned your advisor, you’re looking for a specific product. Let’s assume you’re looking for a health insurance product. You’re being matched to your advisor. You can then speak whichever way you like, whether it’s by telephone by video conference. The advisor can then speak to you, can after the consultation push the policy directly to your app, your email, whatever you prefer, and you can directly sign online, and then you basically are done.

Then everything else happens through our automated system. And here we’ve been able to, on the one hand, as we’re selling third party products, we’re also selling our own Wefox insurance products. And by having our own license, we’ve been able to bring into the market extremely innovative products that fit the needs of the customer, but also fit the needs of the advisor.

The way that they work is for example, in Germany, one of our most successful insurance products is a switch tariff. The switch tariff works in a way that you have a previous insurance company, Allianz, let’s say and the adviser in this journey from before has sold you a health insurance. You’ve built up a trust relationship. And then the advisor Hey I’ve seen you drive this Volkswagen and you’re with Allianz. I can offer you the exact same kind of coverage 5% cheaper. For the customer it’s okay, why not? I’m saving a few hundred years, maybe a year. For the advisor, it’s an easy to sell a product it’s a positive experience to the customer, but also not spending too much time on it. And for us, we were an extremely profitable business through this because we’ve been using data in order to understand the pricing of our main competitors.

 We understand where they are pricing at a loss, and where they’re pricing at a profit. So where their pricing at a loss, we would just sell their product. And where their pricing at a margin, we can offer our 5% cheaper products, but still have a profitable product. This way the customer wins, the advisor wins, and we win.

Wefox’ epic fail during their first pitch

[00:12:40] Michel: You used the word boring at the beginning to talk about insurance, but you also picked a very conservative industry overall, it’s not necessarily the industry who was disrupted the first. I’m interested just to go back a bit when you started, because now, you’re setup, you have funding you’ve broaden your portfolio of products and services and your technology.

But when you got started, like that, that MVP that allowed you to get the seed funding, how did that look like?

[00:13:10] Fabian: Yeah. In the very beginning we had our tech team in Barcelona because our CTO, he was from there and he said, look, I can build it up in Berlin, but I can also build it up in Barcelona. I’m going to have much more loyal people, because there’s less war for talent or it was at the time by now. It’s also worst. And I have my network here and so we say. Yeah, sure. And living costs are also cheaper Barcelona. And so that’s how we start from the beginning and then we build our first MVP. I think the best story is that, we went to our first pitch was at Earlybird. And there was Christian Nagel and Simon Schminke was not at CREANDUM. I saw him like before , I told him actually the story so that we were there and we wanted to show our MVP and it was like our first pitch so we were nervous. And then we went into the product. So product demo, and then obviously the worst thing happens or we couldn’t log on. And then we were sitting there and I was like, oh yeah, you enter. That must not be more working in a, I remember how Simon looks up from his from his laptop and types something into Google and directly says, it’s working for me.

And he was like okay.

[00:14:20] Michel: You were a bit like Elon Musk trying to break his unbreakable car

[00:14:24] Fabian: yeah,

[00:14:25] Michel: window.

[00:14:25] Fabian: So it absolutely it didn’t work out. From the first MVP we moved on significantly and there’s so much learnings that, that go into the product by now. And yeah, so it’s really about trying, failing, understanding what needs to be improved and then developing into the next step.

The crazy customer acquisition strategy that didn’t work before getting hyper focused on their key partner and new channels

[00:14:43] Michel: The big question is always, how do you get your first customers. How did you once you had a bit of funding and, the tech was set up, how did you actually started? And I’m sure you’ve tried different things. You’ve talked about making a hundred decisions earlier.

So what worked better?

[00:14:58] Fabian: I think really we just tried. We had all kinds of ways how we tried to convince people to join. We always wanted to, from the beginning, go this B2B2C route. And so we tried lots of different channels. It went so far we tried to go to haircut shops and we tried to convince them that while, giving a haircut, they should actually, try to just join the basically as a lead funnel, to join things.

That was obviously a stupid idea and it didn’t work, but, we tried all kinds of ways and ultimately then we saw that the best way was to directly go towards the insurance brokers and understand exactly their needs. Understand how we can partner with them, understand how we can tech enable them.

Many of the people, not all of them, but many of the people who already understood already a few years ago that you need to be able to advise your customers also in a digital kind of way. And I think that’s what the pandemic really brought into the insurance industry that I think by now, even the very last person understood that you need to have a digital backbone.

You need to be digital ready. You need to be able to work from anywhere. And so we get more and more. By now of people who are looking to work with us are looking to partner with us. And yeah, the pandemic really gave the last push towards digitization in the insurance.

[00:16:15] Michel: Are you focusing on acquiring more advisors? Because they’re the one ultimately bringing in the customers or you have to push on both sides of the business.

[00:16:27] Fabian: We, by now are a big team, we just passed the thousand people mark. So we can focus on many different things. One of our drivers absolutely is the number of exclusive advisors that are working with us. We’re always constantly looking to bring on at the same time.

Also, we’re looking to bring independent third party brokers. And also we are winning what we call lots of affinity partners. This could mean that at point of sale, I don’t know if you buy an e-bike or smartphone or any kind of electronics or even a car, at point of sale , then you’re also directly being offered a Wefox insurance product. And so we’re pushing on all of these. Plus obviously we are our own carrier. And we currently offer our own products in private liability household and car insurance.

And we are working very hard together with our regulators so that we get lots and lots of more licensed extensions . So we have a PNC wide license across Europe. And so we in the process to next to winning on the distribution side, but also launching our own products so that we can offer the full suite to the end consumers.

How to build and grow your team

[00:17:34] Michel: It’s a big market, for a Canadian who moved to Germany. I’ve discovered a lot of insurances that I didn’t know existed. But yes, if you can make it simpler for the customer, this is great.

One of the challenges when you’re building a startup or a business as a whole is resources, people planning to a certain extent and picking the right or experiences to join the team at the right time. Where did you start building your team, what kind of team you felt were needed? And also if you look back, maybe you would have done things differently.

[00:18:09] Fabian: I think in the beginning, at least from my perspective, it’s always all about hiring for motivation and smartness, but not that much for specific competencies. And so I think we were lucky enough that that we had a network of people who came from good universities, we had a network in Berlin of people who we brought on.

And so I think in the beginning, as you’re trying new things, it’s really just about having a really strong connection to each other, really strongly believing in what you’re doing, having a very strong vision of where you want to go and being extremely motivated . And then you just do the things right.

Over time, I’d say that obviously changes. In the very beginning, there’s no real structures. You give like broadly hey this is yours area. This is the other guy’s his area. If something new pops up, then just someone can just grab it and do it right.

That’s I think the spirit is really the absolute, most important thing. So it’s really about being connected to each other. And then over time, you also have more funding right in the beginning, you can’t pay big salaries. Over time you need to bring in a little bit of structure and hierarchy. And so then you need to make much clearer in terms of who actually does what and then you can also go much more about hiring for obviously still motivation, but the expectation is no longer, like we did in the beginning. We worked seven days a week, always late. We were staying in the office. Our first office was I think 60 square meters in the worst point, we had 30 people sitting together. So you can imagine we turned the, one of the toilets into a meeting room in order to have a bit of space.

Right before, before we had funding, everyone was happy to have funding then afterwards. But yeah, I think that’s I think once you need to get through, then over time, it’s really much more determined the competencies. When is that point? That’s a very difficult path I’d say .

It always depends a little bit also on the type of business that you are running and you need to see that if you get more and more issues that are rising up in a certain area. That might be the time when you think about, okay maybe in this area, I should start to bring in someone a bit more experienced that has done it before.

Remote working, the pandemic, and preserving your company culture

[00:20:27] Michel: When you grow, you get to a point where the startup spirit does not necessarily disappear, it evolves and you need to professionalize a bit the team, and as you said, set up hierarchy and sometimes, you end up losing folks because they were really attached to that spirit.

[00:20:42] Fabian: You need to try that the spirit list forever, even though it changes, but culture is a extremely important part and culture became much more difficult to do during during the pandemic, because I think we’ve, everyone has proven that they can work from home, from anywhere.

But it sometimes might even be more efficient because you have less people, and you can just pop in or stop by your desk. But at the same time, really, it’s just it’s just something that you miss out on these kinds of little meetings by the coffee machine and that, that kind of build a bond and build a relationship between the people.

And so that’s why I think I’m a strong believer of it needs to be somehow both ways. You need to have some time in the office. So we want to offer, for example, models of hybrid working so that you can work from home, but also that the manager can say. Hey, look, let’s meet every Tuesday or every Wednesday. For sure. One day in the office and the other days, if you want, you can come, but you don’t have to. These kinds of styles and not to force people to because we don’t trust them or something. I have strong trust and the motivation of the people, but it’s more about meeting each other, going for lunch, building a bond because the interactions that you have over video are just much more transactional and they’re missing out on a very important element. What we are thinking about right now is a lot of, what can make the office attractive to people that they want to come back and not force them, but they want to come back.

So I don’t know whether it’s easy events like having a beer on Friday afternoon, having a Fußball table tournament. These kinds of things are important because otherwise, if you could work anywhere, I had, if you’re doing a certain, I don’t know, specific job, then you could work anywhere.

And this cultural part is something that we especially now after this long pandemic time, want to really focus on a lot because we believe that this is going to be one of the major difference over the time as we need to constantly watch out for how the culture is evolving.

How Wefox navigated the outbreak of the pandemic

[00:22:45] Michel: The other thing is that , when you’re working remotely, you just talk to the people with whom you need to talk to. So you don’t see other people’s potentially from other departments and say, Hey, what’s up and I haven’t seen you for a while. So I agree. I totally agree, and we’ve experienced the same thing.

But if we stick to the pandemic topic, I’m interested to know a bit how you’ve navigated and how, things went when it all started. I remember being asked in April: Michel, how confident are you in your forecast? And my answer was like how confident are you in yours? Because I don’t have a crystal ball at the moment. But how was it for you because that was pre 650 million additional in the bank account. So how did things go?

[00:23:26] Fabian: Yeah, it was tough. It was tough when this all popped up. This was completely unexpected and, I remember that there was complete craziness. People, investors calling me, you have to do this, you have to do that, you know ,and so I was like this hey come on dude but if you call me all day then I can’t work, so stop calling me and let me focus on what I have to do.

And yeah, so I think it was it was a tough time for us. Luckily from an industry perspective people really learned that they need to be able to digitally advise customers, which we offer. They need to be able to have insurance partners that have real time services that can directly process claims within seconds, that answer requests an efficient kind of customer oriented way. And that’s also what we offer. Let’s say from the first craziness, from the first shock we had to absorb this and regroup. If you compared to the football analogy, everyone was just going to different directions on the pitch. And so we had to regroup ourselves a little bit. We went back to the drawing board and use a SWOT analysis in terms of understanding where we are and what other potential kind of opportunities and also threats from it.

And actually, we then doubled down in certain directions. We focused on what we are doing well, and this has allowed us then from a pure financial perspective to, to get through the crisis extremely well. Growing extremely rapidly, winning lots of advisors, setting lots of our own insurance products while at the same time having a much clearer path towards profitability. And so this kind of on the back of this this has allowed us, you then to also start a fundraising early this year on the back of very strong results on really a strong also outlook also for this year and also the years that are to come and really that that people could see that this is a business that is working extremely well in several markets by now.

But this is actually, for us, we want to go to Europe, but then also a global. A global problem that we can solve. And so for us, ultimately it turned from a business side to turned out and turned off very well. But the starting moment was tough. That’s that was for sure.

What to do when things don’t go your way

[00:25:37] Michel: There’s a great lesson here when shit hits the fan. And if you’re in business, it eventually will. You need to be able to stop and assess. In his great book entitled Good Strategy, Bad Strategy, Richard Rumelt explains that any good strategy starts with an accurate diagnosis of the situation.

So if there’s a pandemic a new competitors starts stealing away your market shares or new technology completely disrupts your business model, take a deep breath and do a SWOT analysis. Like any good doctor, you need to first identify the disease before you prescribe any treatment. So next time you got your back against the wall. Pause.

Analyze the situation. Develop a strategy to overcome the obstacles you identified and then design a set of coherent actions to carry out that very strategy.

How Fabian learned to become a better tennis player and leader with this book

[00:26:27] Michel: I saw somewhere that one of the recent books you read, I don’t know how recent that is, is the Inner Game of Tennis, which is a book I read a while back. I’m not a tennis player, but I was told that there was a lot of interesting mental tricks. You’re a tennis player. Did you read it specifically for tennis or did you also find, I’m not going totally off-topic here because the pandemic was pretty intense for all of us. Is there anything in there that you found useful not just for your game but for your leadership or business?

[00:26:58] Fabian: I played tennis when I was young, so I played tennis was for six, seven years when I was six to 13 and then I completely stopped. And then few years back I started, I really started to play. For me, it was a very good sport to just beat just with one other person.

And then to just sweat for an hour free up your mind. And then you can do other things and that’s, I think very important. You need to have whatever it might be for you, and it can be all kinds of different things, but for yourself, you need to find whatever is this one thing that allows you to.

To free up your mind a little bit, and yeah, so I read it actually in this regard. But it has, in my opinion, many lessons, not only for tennis, but also that you can use in your personal and your business life right around finding really your inner self, being calm, always staying concentrated and really, at the end of the day, believing in yourself that this is what you can do. And I think the tennis is, or any any professional sport, I think. These men and women that are operating at this level. There’s so much psychological pressure on you. You have to perform in every single point in time, we just saw a Djokovich right, who was up there for potentially making the golden slam.

And the amount of pressure that is on you is crazy. And I think that. Yeah. Also, you have similar, maybe not like Djokovich, but very similar if you run your own startup and so you can you really have to take care of yourself so that you can be the best version of yourself.

If you completely forget yourself and don’t do any sports then this will harm your performance in your job. And that’s why I’m pushing people to, I don’t know, do any sports take holidays . It’s very important for me that in a team you support each other and that are, if you gone that you are, that you actually gone and then that you don’t think about work because there’s always things that are urgent and that are coming up.

But there’s always solutions for them. And so it’s very important then I think from, I would highly recommend everyone independent if you play tennis or not to read this book because there’s many lessons.

Why you need to take a break?

[00:29:09] Michel: There’s a common thread that emerges from Fabian’s answers so far. You may remember how we said earlier that his entrepreneurial journey completely changed him and how he’s progressed as a person and as a leader. Self-reflection is a critical skill that all leaders and employees, to be honest need.

The point he just made now about not losing yourself, doing sports, getting on the vacation and disconnecting goes pretty much against what we’re used to hear in the startup world where hustling is too often glorified. When you disconnect and take care of yourself, you get your best ideas. You find solutions to problems you thought unsolvable.

And you get the energy needed to keep pushing forward.

Wefox’ plan for the next 12-18 months

[00:29:53] Michel: I have two last questions for you. I want to talk about employee participation, but before that, what’s next for Wefox? You have a bigger bank account than before the spring. What are the top priorities for the next 12 to 18 months?

[00:30:06] Fabian: We’ve proven our model in a couple of European markets by now, and it’s everything now about really scaling internationally. So we’ve now been active in Germany, Switzerland, Austria, recently launched also into Poland and also Italy.

And we are first looking to further expand across Europe. But then also we see this as a global opportunity. We see opportunity to go to the U S but we also see opportunity to go into specific Asian markets. And so that’s what we will focus on a lot. We are always aim to bring on the best possible people.

Please feel free to reach out to us. I think we are hiring on many areas at the moment. We are focusing a lot in terms of investing into our culture and leadership development and how we develop the people that are working with us on this kind of crazy goal. And over time, our goal is to be we want to be the number one insurance player globally by 2030.

So I think we have gigantic ambition. Some people laugh at us, but and that’s okay. We’re fine with that. That’s the way it’s been over the years and maybe we’ll reach it. Maybe we can. Maybe we don’t know, but definitely we strive for, and that goes back to the purpose that we have in the purpose that we have is that we want to always be 10 X better in everything.

We tried to think about whenever we do anything, whether it’s a product, whether it’s, I don’t know, a hiring process, whether it’s a financial process, whatever it might be, how can we approve this process to become 10 X better if we continue to do and obviously also yourself, so I myself need to become constantly to become better.

I need to reflect how can I become better? And that’s very important. And so that hopefully puts us onto the journey then that we can reach these kinds of very big ambitions that we have, and that’s going to be the next step that we’re going for. Still even after almost seven years by now, we still have a lot ahead of us and we really think this is a unique opportunity to be in. And so we want to really continue to push forward.

The importance of employee ownership and why Fabian is on a mission to change European rules

[00:32:07] Michel: My last question is about employee participation. You’ve been quite involved in that field. I think you’ve been also reaching out to politicians to try to push things forward.

Can you tell me a bit about what you’re trying to achieve and why you’re so active in that field?

[00:32:22] Fabian: Yeah, very happy. This is for me something that’s very close to my heart because I strongly believe in the way that you need to win smart and strong people in the very beginning. If you start your company. Smart and strong people obviously have choice, they can decide on where they want to go.

Especially at the starting point why should they come to you if you can pay only a third of the salary that a corporate can pay. Then obviously there’s a big portion of our culture, a big portion around vision, a big portion of our mission. And that’s absolutely critical, but the financial side also needs to be looked at. So all areas just need to be covered. Only this way you can really focus on the work part. That’s why I think this part around employee participation is extremely critical for it because people who have choice decide to join you take significantly less salary and invest their most important good that they have, which is their time to work with you on this.

 That means that maybe if they would’ve made 200,000 somewhere else, they only make 50,000 with you. So the 150,000 that they are missing out on for me is an investment and they get shares in return for this. Currently in the majority of European tech systems, the outcome at the end, if you build something great and you’ve played a critical role to it and that you’re being taxed with a normal kind of salary tax, then I just think that’s unfair. Because I think that’s an investment that you’ve taken. And by now, we’ve seen a recently HelloFresh got into DAX, Delivery Hero in DAX in Germany.

It’s this new age of companies that’s being developed right now. And either it’s going to come from, for example, a Germany, or it might come from other nations. If Germany wants to play a active role in the future, then we need to make it as attractive as we can to join very young companies. Because that’s absolutely the future.

I strongly believe that the DAX in 10, 15 years from today will be almost a hundred percent different from where it is today, because the time to build a company shortens , the digital world is just accelerating. We need to make sure that if we want to play a role with Germany in the future, then we need to make as attractive as we can to join young companies.

 That’s why I’m really trying to push this. I’m also trying to push this, obviously for all the people that we have within the company already. But then also for for anyone who really starts their own business right now, and is in this difficult spot to win the best possible people from the very beginning.

[00:35:11] Michel: So just for our listeners outside of Europe basically what you’re saying is that share ownership is taxed when there’s an exit or a sale or an IPO, they’re taxed on the same rate as an income tax or similar.

[00:35:24] Fabian: Exactly currently it is, and I believe it should be taxed as capital gains.

In this kind of way so that yeah, you’re not in Germany, it’s a difference of 25%. So a very big amount. In the U.S. it is already like this. In the U.S. it’s much more common to give out participations from the very beginning. In Europe it’s in many instances it’s being done already. I recommend it to everyone to do it from the very start. I think it’s much better to share ownership amongst in the best case everyone. We, for example, recently, as part of the funding round made everyone a shareholder. It’s much better to share it out and have a relatively smaller share of something that is really big than to have a hundred percent share of something that’s small.

[00:36:11] Michel: Thank you so much for your time Fabian. It’s a very cool story. It’s a great period in your life and in the business. So I wish you all the best with Wefox, wish you all the best also with your push to make employee participation rules evolve in the near future. Thanks again for your time and hope to see you soon in person.

[00:36:29] Fabian: Thank you very much.

Thanks again for listening, I hope you enjoyed the show. Make sure you subscribe to the podcast. And as usual you can find the show notes at stunandawecom.

Show Notes

[1:41] Why Fabian decided to quit a corporate job and become an entrepreneur
[3:27] The main challenges he has faced in his entrepreneurial journey
[5:08] The importance of believing in yourself and making many decisions
[6:06] Tips on decision-making
[8:07] Wefox’ strategic positioning
[10:28] How the insurtech startup works with agents
[12:40] Wefox’ epic fail during their first pitch
[14:43] The crazy customer acquisition strategy that didn’t work before getting hyper focused on their key partner and new channels
[17:34] How to build and grow your team
[20:27] Remote working, the pandemic, and preserving your company culture
[22:45] How Wefox navigated the outbreak of the pandemic
[25:37] What to do when things don’t go your way
[26:27] How Fabian learned to become a better tennis player and leader with this book
[29:09] Why you need to take a break?
[29:53] Wefox’ plan for the next 12-18 months
[32:07] The importance of employee ownership and why Fabian is on a mission to change European rules

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