Limitless Possibilities Podcast: "When to Create a Category"

June 28, 2023
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In this follow up to Season 2 Episode 1, Acrisure Chief Operating Officer Sozon Vatikiotis joins host John Pelle to talk about why the best (and most difficult) moment to transform is when you're already successful. Dive into a few examples from recent years for a conversation that speaks to the entrepreneur in all of us.

"The key is to evolve not when you need to, but when you don't need to." - Sozon Vatikiotis

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Key Takeaways:

[1:10] Soz's take on Netflix, Blockbuster and anticipating client need.

[6:48] The importance of thinking three years ahead.

[8:36] What you leave on the table if you rest on past success.

[10:46] Benefits that creating a category brings to clients and employees.

Key Links:

Season 2, Episode 1: We're Not Slowing Down
Acrisure on LinkedIn, Instagram and Twitter
Send your ideas, questions, and suggestions for future episodes to [email protected]



Welcome back to the Limitless Possibilities Podcast presented by Acrisure. I'm your host John Pelle, and we are picking right back up where we started with Sozon Vatikiotis for part two of our kickoff to season two. In part one, we heard Soz talk a little bit more in depth and detail around Acrisure's bigger announcements recently. I'm excited to have Soz continue this conversation in a broader sense. Not just what is Acrisure doing to transform and look at our clients in a new way, but how are businesses trying to keep pace? Let's jump right back in.

You alluded, Soz, to the composition of the Fortune 500, I was going to say 50 years ago because I always think the year 2000 for whatever reason, but actually 70 years ago, 1950. There's the countless business school examples of companies that either when faced with a transformative moment, right to your point, waiting for a crisis, act or not act, look ahead. So hopefully the Acrisure case of we're not going to wait for that to be imposed upon us. We're going to continue to advance. And you could choose your favorite example. One that stands out, Netflix and Blockbuster. Do you have a favorite transformation case study that, maybe not directly influences you, but is there something given your important role in this company, you're like, these are the lessons that I've sort of gleaned over the years? Whether it's an article you read or a conversation you've had, what keeps you on as a business leader?


So I'm very familiar with the Netflix and Blockbuster dynamic, and I've spent some time studying it. And there was a meeting back in 2000 where the founders of Netflix came to Blockbuster with a proposition to have Blockbuster buy Netflix for $50 million. And I can't remember last time what Netflix market cap is today, but I think it's north of 200 billion. And Blockbuster passed. Well, why do I know that? Well, there was a bigger event during that same time, and it was when I actually met my wife. So that's how I kind of hone in on that one. But the reality of it is, there's sort of the perfect example outside of Acrisure, John, where I was speaking to a minute ago where you Blockbuster at the time was still riding a high. I mean, it was the 800-pound gorilla. And here you've got this tiny little startup that certainly had quite a bit of users, but it was burning cash and offered to sell for $50 million.

If you're Blockbuster intuitively, you wouldn't do that. You're the 800-pound gorilla, you'd be burning cash in this company. But it's a perfect example of why you evolve, not when you need to, but you evolve when you don't need to. And if this conversation would've happened probably a year or two later, the dynamic's probably different. Blockbuster's on its way down. Netflix is more solidified as a business. They've evolved their business model away from mail order DVDs and now more into streaming and subscription-based digital media. And it's too late at that point. It needed to happen at that point in time and it didn't. So it's no different than us. We could fast forward three years and not transform this business today and wait for three years. But we run the risks that we're a much bigger organization at that point, but bigger in the traditional ways that we are today.

And to change it at that point as others that have adopted and embraced earlier might be too late for us. And we don't want to ever find ourselves in a position where we've done everything we could to position this company to be at the point where it is today, where we control our destiny, we can control our future not for the next five years, but perpetually in two decades and waste an opportunity to be on the forefront of one of the most transformative periods that will likely ever hit the modern business world.

It's a really interesting dynamic, and I think Greg does an incredible job with this. You have to, on the one hand, be bold enough and confident enough in the fact that we will constantly be different, better, more valuable, and never satisfied, while also having enough humility to know that, hey, what we've built today likely won't work tomorrow.

And so it's this constant friction between the confidence that's needed to continue to grow a business like an Acrisure with the humility and the lack of ego to say, "Well, what we've done today and to got us here, yeah, it really works and yes, we're the belle of the ball, but very quickly it won't work in the future." And so having that friction and that tension between those two is a constant. And you go back to the Blockbuster situation, had they looked at this and said, "Yes, we're the 800-pound gorilla and we're the belle of the ball, but will we be tomorrow?" I think if there was a little bit of an honest moment, there was an opportunity there that probably passed them by. And when it's gone, it's gone. It's a little too hard to, at that point, shift when you need to.


So I'll try to summarize. What I heard, Soz, is a healthy amount of, maybe not paranoia, but there is always somebody somewhere. And again, whether you're a client, we have clients who sell products and services themselves, we're made of entrepreneurs. When you're an entrepreneur, you tend to have that extra gear of somebody who's going to take the next step, take the next level. I think again, that's one of the things that differentiates us and organizationally, Soz, allows us to go be transformative. It's because we're made up of people who they've themselves have transformed and made a commitment and decision to sell their business. But it really seems like having a healthy amount of, again, I'm weighing my words, paranoia, but understanding that complacency is probably a killer when it comes to innovation.


Call paranoia, call it doubt. Call it just a very healthy check and balance. Someone that's going to constantly pulse and pressure check the model to make sure that what we do today is what we need to be doing tomorrow. And having the foresight and the boldness at the same time to have the confidence and understanding what tomorrow may bring and what tomorrow will need to bring or what we need to bring to tomorrow to be thrive. And look, I mean for us it's different. We've got a very resilient business that has a client base that's extremely diversified. We have very low client centricity risk or concentration risk I should say. We could lose all top 10 clients and have less than 1% of our revenue impacted by it. So there's a very resilient business that we've created. So there's not really a dynamic where we can wake up and be out of business by any means.

The issue for us is how much value do we leave? How much disruption that we can lead, do we leave on the table by not thinking three to five years from now and then going and doing something with it? And so that's the piece for us. Look, we're in such a differentiated environment in how Greg has built this business. We've got an entrepreneurial DNA that drives so much of our thinking that many other companies do not have. And that's so important because we're thinking about things that others aren't thinking about and certainly aren't going to be able to go execute. We've got an ownership structure that gives us the flexibility and the autonomy and the control to go think about transforming a business to support the next two and three and four decades of growth. We've got size and scale that allows us to take advantage and do really dynamic things that position us for that future multi-decade of transformative growth.

And then we've made the right investments and tech and AI capabilities and insurance and non-insurance distribution strategies. And so, when you put all that together, John, we've positioned this business in a way that even if others wanted to go become a Fintech company, a tech-driven professional services business that sells an SME client base and supports that client base holistically and in a more effective and streamlined manner, they can't. They either don't have the scale on the client base, they don't have the control of the company, they don't have the entrepreneurial DNA and they haven't made the investments. And for us to do what we're doing, you need all of that. And so yes, healthy paranoia, maybe a little bit of self-doubt, but really for us, the issue is not so much we're going to be disrupted by the next competitor down the road. The issue for us is our own selves.

We've done everything right to position this business for such a transformative, broad, differentiated future. We just need to allow ourselves to take it there. All the pieces are in place, all the time has been invested, all the moves have been made going back to this concept of intentionality. But we still need 16,000 people to go help us get there, and growing every single day. We still need all of our stakeholders and our clients to understand why we're doing this and buy into that. If we want to think of ourselves as the Amazon of the small business community, that's a bold statement.

Do I think we are positioned for that? Hell yes, absolutely through and through, perfectly positioned. But we got to get everyone to believe that and take us there. And so it's not like we're going to be worried about the company next door that's going to disrupt us and put us out of business. We could continue to do the things that we're doing today, and are we going to be a good company? Yeah, we'll be a good company. Is it less of a good company down the road, probably with all the disruption that's coming. But really for us it's more can we ourselves allow ourselves to take advantage of how we position this business to really lay a foundation for a future that you can't even begin to paint because it's so opportunistic.


And one thing we did last time, Soz, we had asked all of our guests, what does limitless possibilities mean to that person? I think we learned along the way, some people take it very literally in the work sense, right? Limitless possibilities means professional success. Others took it just very motivational speaker. It means as a human, the capacity to be great and to do great things and to be untethered, which could argue that's maybe a bigger sense of the question. Question I would ask you Soz is as we think about season two and really broadening the appeal and the lens of the content, what is a limitless possibility for an Acrisure client or an Acrisure stakeholder? What do you think we unlock for somebody listening who again, may not be a partner, may not be an employee, but they're clearly listening for a reason. So what's the limitless possibility you think we unlock for our partners and stakeholders out there?


Yeah, I mean, look for our clients, at the core of everything we're doing is client centricity. And it goes back to day one, and it's today the same and tomorrow will be the same. All of our revenue and profits are generated by clients, by mostly small businesses. And that won't change. And so for us, we love the fact and we embrace the fact that our core clientele is the small and middle market. And we position this business perfectly to provide through our entrepreneurial model and our model of the best of human and machine and the investment in digital capabilities that allow us to better service that client base. If you think about it, I used to run a small business, and I have to be honest with you, you start to create enough scale where the complexities of running the business, the administrative and operation side of the business become pretty darn demanding.

And you're an entrepreneur, so you're required to wear any hat that you have to wear in the moment to support that business. And as the business gets incrementally bigger, the problems get bigger, which means you find yourself wearing more of a problem solving, administrative, operational hat than you do a revenue-generating, strategic hat and thinking about growing the business from a revenue and a performance standpoint. And when you're small and middle market business, that friction, that tension is exacerbated. We're in a world where companies of size and scale that support clients, particularly clients in that segment of the business community, they don't want that segment of the business community. On a per client basis, it's not as profitable. It doesn't generate as much revenue as say a Fortune 500 or Fortune 1000. And so what we're finding is that so many of these businesses are being offered less and less from companies of size and scale like us.

Then you've got the other end of the spectrum where you have companies that aren't of size and scale but love this small and middle market businesses and want to support and they're more community centric. But they don't have the ability to invest in the resources and capabilities that many of these clients and these businesses need. And so they have this dynamic where the actual client in the SME space is stuck where they almost have to choose to accept that they can go with someone that really cares about them, but can't offer the resources that they need. Or they can go with a resourced company like an Acrisure scale, but unlike an Acrisure, they're offering them less because they're chasing the bigger business segment and the more profitable. We love where we are. We love this client base. And so as we sit here and we've studied it and we've surveyed it and we analyzed our data, what we found is that a lot of these businesses, the majority of these businesses, they buy very common similar things to support the day-to-day operations of their business.

And yet they buy them in a highly fragmented way. They have an insurance broker and they have a real estate person. They have someone they go to manage their mortgage. They have someone that they go to an outside MSP to manage their IT services. They can't even get cybersecurity because they're a smaller organization. They've got someone else for payroll and someone else for benefits administration. And all of a sudden you find yourself where it's like death by a thousand cuts. I've got to manage 19 different vendors. And so for us, for our clients, what they need to understand is we're investing in technology capabilities that streamline the procurement of these services and make our clients' lives a lot easier. And by virtue of that, provide a more robust, fulsome experience for themselves and for their employees, number one. But number two, we're diversifying into these other industries that they need to buy services from in order to support their business so that instead of having multiple vendors and a fragmented buying and service experience, they have Acrisure. They can come to us for all of these services. They can leverage their buying power and individual scale with us and take advantage of our AI data capabilities and digitally-driven distribution capabilities to purchase these products in a way that is more streamlined, more wholesome, more robust, more effective, and certainly puts them in a position to wear that strategy and that revenue and performance-generating hat for their business more so than managing the operational problem and administrative side of their business. So we love where we are, we love our client base. We're doubling down on it. We want to provide it more. And all of the investment and all of the repositioning of the business into a broader fintech posture is designed to offer our clients a better overall experience, put them in a position to allow them to focus more on the performance of their business and their growth of their business, as opposed to the day-to-day management and operations and problem-solving for their business.


That sounds like an extraordinary advantage if there ever was one.


Yeah look, for us, if you're a sales professional that's looking to join a new company or you're an account executive or a client service representative, if you're on the client service side, your job's going to get a lot easier. It's going to get a lot more streamlined. You're going to be able to actually maximize your impact. And rather than doing manual things like checking certificates of insurance, you can spend your time on true robust client service offering. We're going to leverage generative AI and automation capabilities to take a lot of the manual and mundane work off of the plates of our client service representatives so that they can be the best of who they are for our clients and maximize their impact in the time that they have in the day to take the client experience to another level.

If you're a sales professional, my gosh, I mean, imagine being able to focus on a segment of the business community that no one really wants and offering them not only unique ways to buy insurance, and very differentiated insurance products, but digitally driven ways to buy insurance, cyber and IT services, payroll services, mortgage origination services, the next, the next, the next. And you become this client advisor that is responsible for the holistic needs of that business.

Imagine being a sales professional, where you can offer all of that in a community that people are moving away from. It doesn't get any more advantageous than that. So yeah, if you're a stakeholder, whether an internal employee, a client, an outside investor, this is something that no one in the world is positioned to be able to do more than us because of that scale that we've created. Because of that entrepreneurial DNA that we had since day one and we'll always have. Because of the ownership structure and the ability to look long-term to the company and because of the investment in these resources and capabilities that we've made that others can't. So again, we love where we are. We love it for our clients, we love it for our employees, we love it for our future employees, and we love it for our investors because we've put this company on an island of its own and we've just validated through and through that where we're going with it is a bit of a blue ocean and something that no one else can really claim.


Love it. Definitely, Soz. Thanks for taking the time and I think again, to those listening, this really we hope is a good primer for the future guests we have on representing both the Acrisure team as well as the really cool relationships and affiliations that we've been able to accrue through our people and just through our brand over the last couple years. Soz, thank you. Thank you as always. We'll definitely continue to have you back on as someone who can speak really, there's only a handful of people who could speak about this progress and you're on that short list. So thank you for taking the time.

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