Executive Spotlight: Betsy Ziegler, CEO of 1871

Stewart: Welcome to another edition of the InsuranceAUM.com podcast. I'm Stewart Foley, I'll be your host. Betsy Ziegler can see the future. That's what I learned the first time we met when she was the keynote speaker at CFA Society Chicago. And I ran up to you like an excited kid and started talking with you, and you were kind enough to join us on our first podcast. And so I am thrilled to have Betsy Ziegler, who's the CEO of 1871, to join us. So Betsy, welcome. Thanks for being on.

Betsy: Thank you, Stewart. I appreciate it.

Stewart: It's great to have you. We want to start off the way we do them all. What was the town that you grew up in? What's a fun fact? And what makes running 1871 so cool?

Betsy: So the first 17 years of my life, I grew up in a suburb north of Milwaukee called Whitefish Bay, Wisconsin. And my senior year of high school, we moved to Cincinnati. And so I finished high school just in a little suburb north of the city called Wyoming. So depending on who I'm talking to, if they're Wisconsin people, I say, I grew up in Wisconsin. If they're Ohio people, I say, I grew up in Ohio. Went to college in Ohio. So I have love for both.

Fun fact, well, there's probably a few. As we're ramping to football season, I'll say that I'm a maniacal Ohio State football fan just beside myself on football Saturdays.

Stewart: That's awesome.

Betsy: I've circled the globe twice. The second time I went solo.

Stewart: Wow.

Betsy: And that was pre-child, pre-fifth grader, now fifth grader. I'm a collector of unusual experiences, so I like to have something interesting to talk about when I meet new people.

And then 1871. There's no shortage of fun at 1871. For those that may or may not be familiar with 1871, we're a non-profit innovation hub, and we're the only organization that we know of that supports the full maturity curve of a business. And so we've got hundreds of people that are at the, “I have an idea, I have the first version or I'm launching”.

And we've got growth companies and later stage growth companies and big corporates that participate in our, let's call it innovation and entrepreneurship, community and network all over the world. We're based in Chicago, heartbeat is here, but based in Chicago. And so the cool parts about leading 1871 are maybe the obvious, is that every day I get to meet at least one new person and hear about one new problem that they're working on that I didn't even know was a problem to begin with. And that's ever stimulating, ever interesting. And so it's been a great experience so far.

Stewart: You are the largest private tech incubator in the world, is that right?

Betsy: I don't know if we're the largest anymore. We were named the number one private incubator in the world in 2019. We might be the largest, but I don't have that as the fact base. I will say we have just shy of 500 early-stage companies working with us right now, another couple 100 growth in late-stage companies and several dozen corporates.

And so we've got a very... We've been around for 11 years. We've got quite a rich history, and I think an unparalleled record of impact. Again, from the lens of a non-profit. So the companies that have started, 1871 have created just shy of 15,000 jobs in the Chicagoland area, which contribute about a billion dollars of annual salary to the system every year.

Those companies have raised around $4 billion in capital. So there's something... For me, that's external validation that the companies that are being built there are important and have the potential to grow and be enduring far into the future and hopefully change a lot of lives to the positive.

Stewart: And you can imagine my excitement when I saw you on our calendar, and it turns out that you are launching the first-ever insurance innovation lab. Can you tell our audience about what you're doing? And it is super exciting.

Betsy: Yeah, for sure. And it might be just worth mentioning that in a life prior to running 1871, I was a partner at McKinsey where I spent my life serving insurance companies. And so both P&C and life insurance, a lot on the operations and technology front. And so for me, it's a little bit of back to my roots, which is one of the reasons I'm extra excited about this opportunity for 1871.

So as I mentioned, because we're in this unique position where we have the opportunity to support young companies, growing companies and large companies, plus the network of experts that participate as mentors and advisors and the network of venture capitalists, we have rolled out over the last 12 months an approach to bringing those groups together under certain themes. Those could be industry themes or technology themes. We just finished our artificial intelligence lab.

We are in the middle of our food tech and supply chain lab. And what comes next is our insurance innovation lab, where we again, uniquely can bring folks together, whether they're members of 1871 or not. We're agnostic to that, right? We want to facilitate and convene in a way that... It'd be much harder for any of these groups to do on their own. And you might imagine that somebody might be thinking, well, okay, who are you designing... Who is it for?

And what we find is that the growth companies want to join because their value proposition is cash and contracts, right? They want to be connected to companies that are much bigger than them to hopefully be where they can be customers of that growth company and/or they get investment dollars. The big guys, the big corporates want to accelerate their internal problem solving. They want to provide professional development opportunities for members of their team to be part of this effort and activity and community. They want to amplify their brand a bit, depending on the situation.

And then the late-stage companies also largely participate to amplify their brand because they're becoming category leaders, they're becoming household names. They want to be part of the energy. And so the experience, which I'll get to in a minute or two, is designed with each of those groups in mind.

Stewart: Are you focused on any particular area in the insurance innovation lab? I should have known, didn't know you had real insurance jobs, which is phenomenal. Where are you focused?

Betsy: So each lab, we try to have some themes that we recruit the growth stage companies for. And for the insurance innovation lab this year, for the growth companies, and these themes were defined and developed by a group of other large companies. There's five major themes for the lab this year. Now if you are a growth company outside of these themes, you can still participate. But the five themes were the primary focus that we're recruiting for.

Companies working on anything related to litigation, anything looking at claims, anything on subrogation. And we'll come back to those three in just a minute because there's another level of work that we hope to do on the innovation front with those three that I'll circle back on. Then anything related to back-office productivity, which could include the company that you mentioned to me, Stewart, that has some innovation on the pricing front, that would find a home in that theme.

And then the last theme is preparing for the volatility. Insurance obviously is in the driver's seat of risk management. The world's been a lot more volatile the last several years. What are unique innovations, technologies, thinking going on with respect to climate, with respect to the workforce, et cetera, that might help you as an insurer deal with that impending volatility and then in turn help your clients. 
So those are the five major themes, buckets of things. We are agnostic whether you are a P&C, personal line, commercial line, life insurer, health insurer, agnostic. Obviously some of those themes might lean a little bit more towards P&C, but there's room there for anyone in the insurance space to participate.

And as you know, a lot of innovation in insurance, the companies, the growth stage and late stage companies, some of them are standing up their own insurance company. They are competing against the big guys. And then there are others that are developing to help solve problems for either on the consumer side or on the enterprise side. And all are welcome and have a home in this lab. And I think an opportunity to really accelerate their agenda regardless of what their agenda is, given the breadth of the experience.

Stewart: I have obvious biases here. I think insurance is super cool. I think insurance asset management is super cool. It's interesting to me that investments aren't one of your buckets, but I get it.

Betsy: This year.

Stewart: Yeah, right. But why insurance and what we would refer to as InsurTech? Why that as your next theme for your innovation lab?

Betsy: So, a multi-trillion-dollar space touches everybody in one way, shape or form. I have a personal passion for it, so it's the fifth one of the year. So snuck in my passion for it. And I think we can agree, even though you think insurance is cool and insurance and investment management is cool, I do too. I think we can agree that relative to other industries, the insurance industry is not known for leading the pack with respect to innovation.

Stewart: What?

Betsy: I think we can agree on that. And there's lots of reasons for that. There's lots of valid reasons for that. As a result... Betsy's opinion, as a result, though, it's given rise to all kinds of innovation for these young companies and really early stage, growth stage, and later stage companies to go into that space and take over where the large established carriers and institutions may not be making as much progress.

And so that is energizing for us. And hopefully, this experience acts as a catalyst for greater change. Whatever shape that change takes. Again, I have an appreciation for why a lot of the change hasn't happened already. And going back to the theme around litigation, subrogation, and claims like that trio, those are things that almost every insurer, again, some to a greater degree than others, depending on how you're viewing the ball string, face. Is there an opportunity for groups to come together in an appropriate way and try to drive structural change at the industry level with respect to those three themes?

Yes, it impacts their own institution positively. But with enough locking arms can there be a shift made at the industry level, akin to what the banking industry did together several years ago?

Stewart: It's super cool. What are your expectations around the size of the effort? How many companies and so forth? And I want to make sure that we touch on this upcoming summit.

Betsy: We expect there to be somewhere between 30 and 40 growth companies in the lab. If you join the lab, you're joining 1871 as a member for an entire calendar year, a 12-month period. The first couple of months of that experience are going to be the immersive time, the lab itself, which runs for about 13 weeks. Of which the 13 weeks have four immersive weeks.

So two of the four immersive weeks are virtual. And so you can be anywhere you want to be around the world and participate virtually. Because what we find is even though Chicago has lots of InsurTech and large insurance traditional companies, there's still a lot of activity that goes on outside of Chicagoland. 
And so week one and week three are virtual. Week one's in October, week three is in December. Week two is in person. There is a hybrid option, but we prefer people to be in person. And then week four is in later January and that's in-person and it culminates in a summit.

So we expect 30 or 40 growth companies. We expect 5 to 10 late-stage companies and we expect 5 to 10 corporate companies to participate. The summit we expect about 500 people to participate. I've got a keynote, one of the keynotes locked in, one of my longtime dear friends, and I just locked in the entrepreneur in residence this morning, also a long time, dear friend, not ready to go public on names yet. Need some things signed off on. But stay tuned because really exciting to see who's participating.

Stewart: That is so cool. And so can you talk a little bit about, I'd like for folks to know how to get in touch with 1871. Are there links? On the web, how do I find you? How do I become a member? I assume there's a cost, I'm sure it depends. Can you talk a little bit about what it means to become a member?

Betsy: So first of all, you can go to the website, the website's 1871.com. So on the top you go to Programs and under Programs there's Innovation Labs. And under Innovation Labs, you go to the InsurTech Innovation Lab and that is the landing page that talks you through all of the pieces.

And so it should take you approximately one second to get to the landing page about this particular program. You can indicate your interests on that no matter who you are. Again, you could be a venture capitalist, you could be a convener like you are Stewart, you could be an academic, you could be head of innovation of a major company. It does not matter. You indicate your interest through that form. Also, you can send me an email, I'm just betsy@1871.com or shoot me a note on LinkedIn. I and my team are happy to spend more time with you.

In terms of cost, to your point, it is different. The growth companies, we don't charge them to participate. We hope that they choose to become a member, an official member of 1871 after their experience. But our job is to prove ourselves to them and make sure that they have a really... That their business... We're a non-profit, right? So my focus, I have less of a profit motive than I have an impact motive.

And so the impact motive for the growth companies is they make progress on their business during this experience. But for this experience, they may not be where they are in late January. The late-stage companies, we asked them to join 1871, and that's in the $5,000 to $10,000 range. Again, a whole bunch of benefits come to them for that, I'm happy to talk through.

And then the corporates, the price tag is different. The list of benefits is much greater. They become a corporate member, which gives them access to all of our recruiting activities, all of our training activities, the Corporate Innovation Summit, it's much broader beyond the InsurTech Innovation Lab.

And then you can be a member or you could be a sponsor of the Summit. There's a number of ways that you can participate and we're just excited to get this rolling and have people be energized to interact with one another and for 1871 to serve as that convening point.

Stewart: Absolutely. We're very happy to help you do that. It's always great to have you on. I've got a couple of fun ones on the way out the door. You can take either or both. I have a feeling you're going to take both. What's the best piece of advice you've ever gotten? And who would you most like to have lunch with, alive or dead?

Betsy: Okay, I have five life mottos that are formed off of advice that I've gotten over time, so I'll try to-

Stewart: Oh, this is good.

Betsy: All right. So the first one is acting with intent and owning your life. And that if you don't plan for an interesting and full life, whatever that means for you, then you get heads down in your professional stuff and it goes away. So that's one.

Two is no unmanaged outcomes, which is this idea that actually Greg Case from Aon was my original mentor when I was at McKinsey. Now longtime CEO of Aon. He taught me that. But for a long time, if you Googled ‘no imagined outcomes’, there was an image of me that popped up because I say it so often, in fact, it's on this wooden piece behind me. But the idea that you understand what you're trying to get done and you're thinking ahead and clearing the pathway to make sure that you have the best chance of achieving it, right? And so that things aren't surprises. You ask my team, they'll say that they hear that more often than they want.

So number three is that people remember your response to the bounce versus the bounce, which is really about how you think through when you make a mistake, which of course all of us make mistakes a lot of the time. Not many of us are willing to admit to that. But it is true. We all do. And what I have found and believe that your attitude supersedes all else, and so if you pick yourself up and move forward and you learn from it, nobody remembers the mistake you made, they just remember your resiliency.

Number four is to resist the urge to go underground, which for me means if you're stuck on something and you feel like you're spinning, sit up straight, shoulder back, raise your hand, ask for help, tell somebody you don't know what you're supposed to be doing versus what most people do, which is fold in and hide. And then of course the problem gets worse because it doesn't solve itself. It doesn't magically go away.

And the fifth one, which is often where I start the list, is that your life story is the summary of the choices that you make. And if you make a bad choice for you, then you just have to make a new one. So you're in control. It's your story that you're writing and that one is courtesy of my mom, who has taught me that over my relatively long life so far, is the one that really impressed that into me. So those are the five which are pieces of advice I've gotten that I've then translated back out to other people.

Stewart: That is great stuff. Thank you so much. I'm thrilled to have, 1871 is going to be one of our members. We're going to be helping promote this effort with you, and we're super happy to have you on, Betsy. It's always great. I always learn so much and thanks very much for taking the time.

Betsy: No, my pleasure. I appreciate you giving me the opportunity. Thank you, Stewart.

Stewart: My pleasure. We've been joined today by Betsy Ziegler, CEO of 1871. Thanks for joining us. If you have ideas for a podcast, please shoot me a note at podcast@insuranceAUM.com. Please rate us, like us and review us at Apple Podcast, Spotify, or wherever you get your favorite shows. My name's Stewart Foley, and this is the InsuranceAUM.com podcast. 

 

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