The Asia InsurTech Podcast spoke with Andrew Schwabe, the founder of ForMotiv, about his decision to build an US focused InsurTech in Vietnam and how data analytics can help insurer provide better customer service.
Michael Waitze 0:01
Okay, we’re on. Hi, this is Michael Waitze. And welcome back to the Asia InsurTech Podcast. Today we are joined by Andrew Schwabe. Got it, it’s not that hard. The founder of – I should have asked right?ForMotiv. I kind of like it like, the more I say it out loud, the more I get it in a way anyway, Andrew? Great.
Andrew Schwabe 0:18
Schwab or ForMotiv. Which, which one are you getting?
Michael Waitze 0:20
Both actually. But ForMotiv, I like it. Yeah, I really do. It’s like when you just read it, you kind of don’t get it. But when you say it out loud, I kind of get it anyway, it’s great to have you on the show. How are you?
Andrew Schwabe 0:31
I’m doing well. Thank you very much for having me.
Michael Waitze 0:34
Awesome. Before we get into the main part of this conversation, because I want to veer around in insurance and InsurTech. And then maybe out as we kind of end this thing. But when you look at the insurance and insurtech landscape, like what do you think one of the biggest trends is? Or just some of the most important stuff that’s happening today?
Andrew Schwabe 0:53
Well, I think insurance is really trying to reinvent itself. One of the stories that I tell with ForMotiv is, you know, if you go back 20 years, the way certain banking and insurance was handled is that you had a person who was an expert, not just who knew what form to hand somebody, that somebody who watched the person who was interacting, and you would observe whether or not they’re nervous and sweating, whether or not they changed their answers three or four times whether or not they hesitate when you ask them about their assets and their expenses and stuff like that. Or even something about you know, smoking or drinking, you know, you, you ask these types of questions, and somebody whose job is to read them, and find out whether or not they’re giving you a load of crap. And we digitalize the world. And we lost all of that type of value. So I think a lot of insurance companies are trying to figure out a lot of them the old fashioned way, they’re trying to figure out how do I overqualified? With as much data as I could possibly get from anywhere to to massively over qualify people to make sure that I’m not making a mistake on writing a policy for somebody. And and that gets expensive operationally, right? And often doesn’t really help as much.
Michael Waitze 2:15
No, not at all. And I want to get back to this in a second. Because I feel like there’s a lot to dig into that. Like,
Andrew Schwabe 2:21
there’s a lot a lot the tear apart there. Yeah.
Michael Waitze 2:24
Which is why I love which is why I love starting with that, because it sounds like an innocuous BS question like, like, what do you think the biggest trend is, but the reality that’s actually super deep? I want to get to that in a second. But before we do that, just for the listeners, can we get a little bit of your background for context, they know how we got to here?
Andrew Schwabe 2:40
Sure, and that’s heaps of a long story. So I’ll try to give you as a quick summary as possible. So I started ForMotiv back in 2015. And, and I mainly started that as a as a Form Builder. Oddly enough for the for the pharmaceutical industry, because whenever people were doing medical surveys, they were finding out that people weren’t always honest, or didn’t always provide all the right information, or they didn’t understand how to answer. And they wanted to find a better way to understand where the problems were. And turned out that takes too long to collect from that industry. And, and there are there other issues with that. And then we pivoted, we pivoted, we pivoted, and like I think the third pivot, we we kind of got locked into insurance really could take advantage of what we’re doing. And that’s kind of the evolution of you know, where ForMotiv came from. But my background, I started six different companies, technology companies in my career, varying from Document Management with origination security, to make sure that people retain ownership of their content, and all the way through analytics, and, and security and encryption. So I feel like a combination of all of these things lead to finding a unique set of data, which is where ForMotiv got its genesis, and then turning that into value.
Michael Waitze 4:06
Are you an engineer, like do you write code?
Andrew Schwabe 4:09
I am. I am. I’m one of those weird combinations of people that I can talk and have a social life. And I can also write code. And I can also come up with marketing ideas and brands. And somehow it works. My wife, I drive her crazy because I wake up at three o’clock in the morning. I’m like, I have an ear worm, I have an idea in my head that must get out on paper and I have to put it down. Otherwise I won’t sleep for a week.
Michael Waitze 4:36
You are like a modern renaissance man. Where are you from originally, by the way.
Andrew Schwabe 4:40
So I’m a Hoosier by birth. I was born in Indiana. And then I lived in California for a little while when I was young and then we settled in Pittsburgh, Pennsylvania, which is where I grew up most of my years.
Michael Waitze 4:52
Wow. Okay, that’s sounds like it sounds like me actually. In a way I moved around a lot. And kind of in the same direction And I think I told you this before we started recording when my dad was in the Air Force at Vandenberg. I was born in California. Right. So Santa Barbara County. And it’s funny because I can tell people Yeah, it was born on Vandenberg Air Force Base. And they’ll be like, I have no idea what that means. But if I say Santa Barbara, everyone then thinks it’s super cool. When actually I lived in a trailer. Do you know what I mean? Anyway.
Andrew Schwabe 5:22
The odd thing is, I tell people, you know, I lived in San Jose, and like, a while so cool, this was before San Jose was anything right. And I was really young. But then people really get surprised when I give the left turn of your last question there, which is where am I now? And right now I’m in Vietnam, in Southeast Asia? Yeah, good, great question. You know, for the last 15 years, I’ve been doing volunteer work around the world, and, you know, with with my wife, and my kids have gone to Africa, to South South America. And we did a lot in Asia and Southeast Asia. And so I’ve kind of started to build a network, and I actually have kind of fallen in love with the culture and the people and, and all that type of stuff. And so this last company, ForMotiv whenever we got the right pivot, and it started to work. And I had to ask myself, I said, Do I want to build another team from scratch on the East Coast, USA? Or do I want to maybe give it a shot in one of the cities that I know is an emerging star. And, and the truth of the matter is that it was a little bit economic, a little bit, you know, the social entrepreneur in me, a little bit of all of those different pieces. But at the end, I when I put all everything on paper, and I did the analysis, I felt like building the team in Asia, the first couple of years, it gave us a better chance to earn our right to play in the next phase of company growth by reducing costs. And, and the second part of that is instead of outsourcing, right, and just throwing it over the fence to someplace, I decided, well, I’m just gonna go. So then I went through the process to bring in executive team, turnips in the US, and I want to build that team from scratch in Vietnam.
Michael Waitze 7:12
That’s interesting. So instead of outsourcing, you just kind of outsourced yourself in a way you said, I’m going to the source of all my developers are going to be, can you? Again, I want to go back to this idea of observation. You haven’t forgotten about it. But can you just talk a little bit about what it’s like building a team for a tech company? Which city are you in in Vietnam?
Andrew Schwabe 7:36
Ho Chi Minh City, old Saigon.
Michael Waitze 7:39
My first time in Ho Chi Minh, was 1991. Anyway, so not so familiar with it to be fair, because I haven’t been back since then. So that’s bad on me. Look, my first time in China was 1992. And then I didn’t go back until 2017. So again, that was two and
Andrew Schwabe 7:58
almost looks different, different place.
Michael Waitze 8:00
It was a complete different place. But can you talk about that? So if building a company on the East Coast is something that people understand, right, I hire people in it are from Harvard, or from Tufts or from BU or BC or Wharton or whatever, right? Or Georgia Tech? Doesn’t matter. You take all the best schools on the East Coast, you just hire all the best people, because that’s how you know they’re smart. What is it like building that thing in – you are smiling? Matters, man, anyway, yep. Um, what is it like doing that in hajiman?
Andrew Schwabe 8:30
Well, there’s two ways this conversation can go. One is the way that most people do it. And then there’s the way that I did it. Because I really, I really did it different even than anybody else in Asia. So the typical way, is really just a soliciting CVS, and going down your checklist and saying, you have this skill, you have this skill, you came from that school, blah, blah, blah, it sounds an awful lot like East Coast. Right? You know, you’ve got word already. Yeah. And you know, what, what’s interesting is that you get the worst company culture by doing that here. Go ahead. Tell me why though.
Michael Waitze 9:08
Like, I have an idea, but I want to know why you think so.
Andrew Schwabe 9:12
There’s a, there are some things that the educational system does very well here. And then there’s quite a few things that they don’t do well, one of the things that they they are not so great at is, is developing a work ethic in people. And one of the most difficult problems was you think about America. Whenever Whenever, you know your kids graduate high school 18 Then they think about trade school or job or university. And generally once they got a job or once they choose university, they kind of push them out the door and they’re on right. But the opposite happens here. Right? The the the family culture here is that the two Return are expected to stay at home until maybe they’re married. Yeah. But also, once you start working and earning, you now have a responsibility to take care of the family. Yeah. And often, you’re contributing a lion’s share to the finances. So that’s this is the pressure is outrageous. It is from the day you graduate university for
Michael Waitze 10:25
this. It’s not just people who go for that. Like, I remember when I tried to get it from college, and I was like, I was I felt rich. I was like, I’m gonna make 25 grand this year. And I’m like, When can I buy a boat was? Yeah, I’m not kidding. That went away pretty quickly when I saw my rent. But you know what I mean? Like, I wasn’t thinking about like, what does my mom and dad need? I mean, they could take care of themselves. But to be fair, even in Thailand, I think same in Vietnam, when you get a job. It’s like, okay, how much of this? Can I give back to my parents every month? Yep, that just happened. Sorry. Go ahead.
Andrew Schwabe 10:55
Yeah, that’s just kind of normal. In fact, I know. I know, university students who as soon as they graduate and get a job, they are also responsible to contribute toward their siblings education. interest. So it’s, it’s substantial. Yeah, it’s big. So because of that, there are a couple of interesting dynamics going on that that happened from family all the way through to university instructors, where they often tell people, oh, you should have a job for two years, then you quit your job, take a short vacation with your family, and then start to go look for a new job that pays you more money. Interesting. Absolutely no concept of ownership of career or building loyalty or anything like that. That just, that’s, that’s starting to happen a little bit. But that is really a very foreign concept, especially in the tech space, where you’ve got a very different demographic of people starting to fill it. I mean, 10 years ago, there weren’t women in it at all. I mean, a very rare thing. And now there’s a fair, fair volume of women in it.
Michael Waitze 12:04
It’s good. It’s more than that we’ll talk about we’ll talk about inclusion and stuff like that at the end. But, yeah, so but then how do you hire?
Andrew Schwabe 12:13
So we hire in a very unusual way. And we often tell people during the first interview, this is not going to be your normal interview. What do we care about? We talk about, number one, are you a teachable person? So we poke at them and ask questions to find out whether or not they are willing to admit that maybe something they learned in the past is not entirely right, or the entire scope of what they should understand about that? Are they willing to learn new? Are they willing to respect somebody who may be younger than them with more experience to give them some ideas? That’s actually an interesting challenge, because age makes a big difference in this culture.
Michael Waitze 12:56
Yeah, it does. You know,
Andrew Schwabe 12:57
if you’re, if your manager is younger than you, a lot of people can’t handle that.
Michael Waitze 13:02
Wow. But how do you ask a question to see if somebody’s teachable? It’s a really good point, right? Because the key is, I think, at some level, like I can teach anybody how to write. Yep, code or do anything, really.
Andrew Schwabe 13:17
But that’s the important point, actually. Sorry, go ahead. That’s the input. That’s actually what you just said is, is one of my next important points is that certain skills about ability I can teach Yeah, I got no problem with that. Right. So even if somebody is terrible coding, but they’re teachable, and they’ve got a good attitude and stuff like that, I can teach Yeah. Right. So. So talking about trying to tease out whether or not they’re teachable. I asked questions about when you were in university and working on group projects. Were you the group leader? Or were you a team member? What happened when you had a problem with the team leader? What happened whenever you had a project? And you found out that what you decided was wrong? How do you react to that? How do you feel what do you do in response to that? What if the team leader says we’re doing it my way anyway, even though you know what’s wrong? What’s your proper step of action? To increase the quality anyway? How do you how do you push through those types of problems? And these are interesting conversations with people that typically after a while will begin to reveal whether or not somebody is hard nosed, or whether or not they’re gracious to figure out that they don’t know everything.
Michael Waitze 14:38
How would you answer because this is really interesting, right? Like, how would you deal with adversity? Do you know what I mean? Like you’re an experienced dude. And if someone came to you who was like, I’m guessing you’re around 40? I can’t tell for sure. Because we’re not sitting in the same room.
Andrew Schwabe 14:51
Thanks. That was the nicest compliment I’ve had in the years.
Michael Waitze 14:56
Let me do some math. Let me get my calculator. But you understand the point, right? But yeah, how do you handle it when somebody who’s 24? Right says to you, you know, Andrew, maybe you haven’t thought about it this way? Yep. Right?
Andrew Schwabe 15:11
Well, well, I subscribe to the life perspective that everybody knows more than me about something. Fair enough. I may know a lot of stuff. And I may have a lot of experience and sometimes experience Trump’s knowledge sometimes, okay. But often, it’s the combination of fresh ideas and knowledge with experience that yields the best direction to go. And so I actually often get into situations where people know more than me about certain things. And, you know, and I actually, I’ve learned to love it. And I’ve learned to praise people, whenever they have a perspective, or an idea that’s new. And I make it a win for the team. More than a black eye for the
Michael Waitze 16:02
individual. Where does this come from for you?
Andrew Schwabe 16:06
I mean, how I learned to deal with that, that was like,
Michael Waitze 16:09
you don’t wake up one day and believe that like, that type of management, or that type of experience, or that type of being teachable is important. Like you’re not a four year old is gone, like, oh, geez, I hope my mom teaches me, you know what I mean? Like, where does this come from?
Andrew Schwabe 16:25
All right, you’re gonna feel like this part. My first job, which is where this came from, go ahead. My first job after university was working for the New Jersey Department of Motor Vehicles in Trenton. I love it
Michael Waitze 16:37
already. Go ahead. And the DMV, the DMV,
Andrew Schwabe 16:42
New Jersey, DMV,
Michael Waitze 16:44
I think I’ve been to the DMV in Trenton, I lived in
Andrew Schwabe 16:46
New York, can you imagine a more exciting place to learn life lessons?
Michael Waitze 16:51
You joke but to be fair, right? Everybody’s got to go get a license. So you’re dealing with every every type of person, you’re dealing with every educational level, you’re dealing with people already in a bad mood, because I got to go to the DMV dealing with some people who may have just bought their first car, and they’re just super duper happy. Like you’re dealing with everything there.
Andrew Schwabe 17:10
You’re right. And you’re mostly talking about customer facing. So So I had I had an internal facing job fair, my responsibility, there was to automate the boat and motorcycle registrations from a paper ledger on no computer system. So I’m dating myself a little bit because this goes back a few years. But my job was to take it from the old big book into a computer database system. And, and the things that I learned there is that politics tend to get things done more to get more control than the right answer about any kind
Michael Waitze 17:52
of thing. I learned that at Goldman Sachs. I hated every second of it. But yeah, go ahead. Yep.
Andrew Schwabe 17:56
And I learned that so much that I had to be a lot more aware of my surroundings. And that that’s the lesson that I actually learned one of the pessimistic lessons like, oh, people who have stronger politics will always win. Right? That’s, that’s not an affirming lesson, right? The affirming lesson is, if I’m in a situation where stuff like that happens, I need to be a lot more aware of the people around me their needs, what makes them tick. What matters? Yeah. And some basic lessons like anything that makes somebody look bad, is likely to be met with a reaction. That is unpredictable. Right? So when you follow that breadcrumb, you begin to realize that if you take a legitimate care about the people around you, chances are you can spin just about every situation in a way that will help be more of a when you can avert difficulties, if you care enough to try. So after my substantial learning curve, at the DMV, and I decided after that, well, I think I’m going to not to government anymore, I’m going to work somewhere else. And the opportunity fell in my lap to start a small company with a few friends from university and doing web development back when it was cool. And we built the culture that we wanted. Yeah. And you’re doing this and that’s where I began to learn it.
Michael Waitze 19:32
You’re doing the same thing now. It’s so interesting. I do think and I talk about this as I’m building out my own business, right, my my business partner and I talk about this all the time, it’s like we have a bunch of skill sets that we need to fill and we don’t care if you know anything about them before we hire you, as long as you’re like we can work with you and I guess what you’re saying is if you’re teachable, but also if you’re self aware enough to understand like, there are things that you know, I like to say this there are Things You know, you know? And then there are things you think you know. And as long as you’re self aware enough to know, like, Oh, I thought I knew that. But I guess I didn’t please teach me anyway, we could spend hours talking about the psychology behind this. But I do feel like as you introduced this at the beginning, this idea that in the old days, that, you know, if you want to open a bank account, or if you want to get a loan, or if you want to get an insurance policy, you sat in front of somebody, and you basically told that you answered their questions. So maybe it was 15 questions, maybe it was five, I don’t know, I wasn’t there, then yeah, that’s when everything got, you know, went through. And I’m just saying this with a smirk on my face when everything went through digital transformation. Now I’ve got to answer 1000 questions, just to make sure that I’m telling the truth. But do you think because you said before, they like those people were experts. And the implication is that today’s people may not be experts. And then even the people that are building the questionnaire may not be experts. But can I just pause this for a second. If you go back to the I’m just going to pick a date and time randomly, right. But if you go back to the 1950s, the guy and it was mostly a guy back then who went into insurance in the United States really cared about insurance wanted to be an insurance salesperson, and then got the domain knowledge that was necessary to do that. And I think two things happen. One is between 1950 and 1990, everything just grew so fast that you just needed to throw people at it. And a lot of those people turned out not to be experts, at the same time where computers became a tool for productivity. And then people said, look, let’s just attach the productivity to the digitalization of this business. And those people don’t have to be experts anymore. But we lost this idea to go, like to really just make that face like really? Yeah, and this is all like, frankly, in the same way that you hire, you’re doing this whole idea of like behavioral science and trying to figure out, are they squirming in their chair? When I asked them? Are they a good teammate? Or do they really believe that like, they’d rather not score the goal, but make the pass kind of thing? Exactly. Right. Is that fair? Do you know what I mean?
Andrew Schwabe 22:10
It is, you know, and, and, of course, I wasn’t around the 50s. And insurance either. But But when when you look at some of the history of where things have come? I think the the internet especially has enabled people to be dishonest. Easier,
Michael Waitze 22:30
in a weird way, right? Yep.
Andrew Schwabe 22:34
It’s the same. It’s the same dynamic as, as social media. You know, I laugh because the young people in Asia, if they want to take a selfie, they don’t just flip the camera, go click, oh, it’s a good memory. They pull it up, and they go, click, click, click, click, click, click, click, click, click, click, click, click, click, click, click, click tick. 100. Right. And then later, when they got a break, they swipe through, and they find the one that looks the most perfect. If remind, that’s the one that that’s the one they put on Facebook,
Michael Waitze 23:00
it reminds me. So look, I mean, I can take 1000 pictures on myself. It’s never remotely perfect. But it reminds me of the first time I went to Disney World. And I remember looking up and they said, photo spot. And I’m like, You’re telling me to take a picture in the same place where everybody else is going to take a picture because that’s where the Magic Kingdom looks the best. This seems like a really bad idea to me, like, did they do this at the Grand Canyon as well? And probably yes. But I guess the question, Is this because to go back to what ForMotiv does? How do you then simulate that idea of behavioral science without asking people 1000 questions, like you said, you started with this form in the pharmaceutical industry, maybe they moved too slowly or couldn’t figure out how to use this data. But insurance companies are super famous for asking all these questions to qualify me and I did this last year, last year at the beginning of this year, to get health insurance. And you know, part of my problem was, I didn’t know how to answer the question. And I was sitting with an agent. So it was kind of this hybrid digital, face to face experience. And she kept saying to me like, and she was great, like I bought from her and I tried a bunch of different agents. But she’d asked me a question. I’d be like, I don’t I don’t know how to answer that. And I don’t remember exactly what the question was, but like, how do you resolve that stuff?
Andrew Schwabe 24:21
Well, let me first go back and say one more thing. I made this example of pictures and the best one that that represents to me goes on Facebook. Yep. I feel like in Today in 2020, Tues world of people applying for insurance policies online, they’re doing the exact same thing. Right, which is, a lot of times they’ll kick the tires, they’ll figure out what’s going on. They have already shopped a couple carriers for stuff that they want and they know what the ranges of policy rates are. And as a result, whenever it’s time to actually get the job done. They do the equivalent of dressing up in their one suit. That was in the closet back in the 50s they get the equivalent of that. And they take their time methodically, and they answer the questions the way that they think they should answer them to look the best. Right?
Michael Waitze 25:08
It reminds me that scene in stripes, right? I don’t know, if you remember this movie, you know, when they go into it to become part of the army, they I can’t remember what it was. And they look, you know, the guy, the recruitment officer says them, Have you guys ever been convicted of a felony? And they look at each other and go convicted? No, no, not been convicted.
Andrew Schwabe 25:26
Exactly right. But you
Michael Waitze 25:27
know what I mean, it’s that that’s like, what you’re saying, in a way, it’s like putting on your best suit? Like, how many drinks do you have every week?
Andrew Schwabe 25:35
So to add some, to add some more dimension to this, go ahead. There’s a thing that I call The Weather Channel effect, you know, whenever the weather channel came out on cable, and then we had an app on the phone, all of a sudden, everybody became freaking geniuses about meteorological stuff. Right? Before that. Before that, you asked somebody what the weather was like, like, Oh, I think the paper said it was gonna rain today. Right? The papers about it. Yeah. Okay. But But now, people are like, oh, there’s a high pressure system coming out from the north because of a depression over here. And you know, it’s going to affect the cumulus Nimrod, blah, blah, blah, blah, blah, and rattling off all these terms that are not common. No terminology, but everyone’s an expert. It exemplifies the fact that people are way more informed about what they’re buying than they used to be. And that’s also a pointer back to the 1950s era, like we’re talking about, we’re generally you had an expert that watched you while you were asking questions, but also that person was an expert of selecting the product for you. You’re not having technology, select the product based on your qualification or behavior. It was a little bit by qualification, but not anywhere near as much as the agent feeling, which one was the best fit for you? Maybe based on my read, you might be able to handle paying a little more because the benefit is more appropriate for what you need long term. Right? Yeah. It’s
Michael Waitze 27:03
super tricky, though. Right? Because, like when I go into a restaurant, particularly a new place, I just say and even a place that I’ve been to a lot I just say like, what’s what should I have for dinner tonight? Like, you know, what’s back there? And you know what? Yes, good cook. It just make me the best thing. I don’t care. Do you like fish? I do. Okay, I’ll prepare the proper fish for you. That chef better be an expert, right? It’s not some dude, just cutting open a plastic bag and putting something in a microwave. I won’t do that anymore. But how
Andrew Schwabe 27:30
many people do it wrong? And go to Joe’s steamed crab and order steak?
Michael Waitze 27:36
Everybody had been wrong anyway. Wait, wait, wait, wait, wait, wait, you’re in a sushi place? You just ordered pasta? What’s the point? But I feel like I can’t do that anymore. In a lot of these, like, artificial intelligently enhanced machine learning based products that I’m getting, there’s nobody to ask. In a way. I feel like I’m getting worse service. I don’t know. You tell me. Yep.
Andrew Schwabe 28:02
So that’s really interesting, you know, one of the pillar, one of the pillars of the software we built that matters to me. Go ahead. Important is don’t annoy power users. Yeah, that’s one thing. But engage people when they need help? You know, how often have you been on an application? And you know what you’re doing? Yeah. And all of a sudden, you get that spammy pop up window that says, Do you need help with this? Or, you know, you start to get a drink of water? And all of a sudden it says, oh, clearly, you’re stuck. I’m going to connect you to an agent to chat with you right now. And you’re like, just leave me alone. Yeah, you know, some people need that legitimately. Yeah. But, but that’s your most expensive engagement. So not only do you annoy the person that you’re trying to transact with, but you’re also throwing money at the problem that you don’t understand.
Michael Waitze 29:07
But how do you do that then, in software?
Andrew Schwabe 29:11
Well, something that for MODOK does, and again, we’ve kind of been evolving over time here. But we kind of know as you’re filling out an application, we know roughly what behavioral group you’re starting to slot into. But how so you’re 20. Well, some of the details I can tell you in some of these, I can’t tell you but but but we look as there, we try really hard to look it up. But this is this is actually a very strong differentiator between us and everyone else. We don’t ever look at PII, personal identifiable information. Alright, so this is like when you type in your actual name into the name field, when you type in your actual zip code, and address and your social security number. None of that stuff comes down the wire to us at all. And that’s important because because we are trying to find a purely behavioral way to tease out behavior, and we don’t want the personal identifiable information, so as to add biases, to decisioning, and stuff like that. That’s one of the toughest things to beat in the whole machine learning landscape, not just insurance. So, so we take a pure list of behavioral stuff. And what does that mean? You know, if I’m, if I’m a scammer, and I bought a list of people’s identities, and I’m going to try to apply for policies, I’m going to copy and paste that stuff from a spreadsheet into their application, probably. Right? Well, that’s an observable behavior.
Michael Waitze 30:46
Go ahead. I’m listening. Yeah. But because when you say that, it just triggers this other thought I have in my mind about like, what’s the word I’m looking for? Sorry, self sovereign data, right? Like, I want to have my data just constantly available, and it may get copied and pasted in the future. But understand what you’re saying, right? Like, if it’s not really me, I don’t know. So I can’t just type in my name naturally, right? It’s like, you can tell by my mouse movements if I have oncoming Alzheimer’s as well, right. So some of these things are good. Some of these things are bad. But yep. But can just to get back to something you said, can we make too many presumptions by people’s behavior? Do you know what I mean?
Andrew Schwabe 31:23
Yeah, yeah. Yeah. And that’s one of the most sensitive and challenging issues here, why we need, you know, pretty heavy duty data scientists behind this data, to tease out what actually is meaningful, versus what, what’s a big loud, you know, distraction of variation in the data. That’s tough.
Michael Waitze 31:43
Yeah, tiring. And do you think that that’s static or dynamic? You know, in a way, you know what I mean? In other words, do you build this behavioral science model, using data science and machine learning, and again, I’m simplifying, because I just know what I know, there’s a whole bunch of about this that I don’t know. And then just kind of let it ride, or you learn along with the learning and then just go, oh, we used to think this, but now we kind of know this. So we have to get away. Analysis.
Andrew Schwabe 32:09
It’s dynamic, dynamic. It’s changing all the time. And in fact, one of the things that I often talk to carriers about is that they had this mentality that if I use all the data, from the beginning of turning on the behavioral data today, if I use it all all the time from the model, somehow that’s better. And actually, it’s very wrong. It’s very wrong. And and, and a lot of times, it’s difficult for them to understand, because you’ve got so many factors going on, number one, your audience changes over time. Yeah. Okay. Things like COVID changes the audience of who is applying for what kind of insurance and when, and then what ranges, what products, things like geographic region, things like inflation, things like the season, right? And then you’ve got, you know, you know, as much as I do, that insurance is a complicated product in, in North America. So you’ve got some of these ridiculous rules, where you got somebody from one state applying for a policy with a carrier and another state, and sometimes it’s okay. And sometimes it’s not okay. And sometimes the limits are different based on the state where you’re from, and sometimes they can’t even sell you that product. And so being able to segment those users and have the behavior tracking of just the right people, right, it’s pretty, pretty difficult, pretty difficult to do that.
Michael Waitze 33:42
I think most people can understand this, right? Because in their day to day lives, they’ve been in situations where they have and I’m, again, making up a number like five pieces of information, and they feel like, I get it now. And then like, they asked one more question, well, how about x? And they get the answer. And they’re like, now I’m confused. I don’t understand. Do you know what I mean? And it’s got to be the same thing. When you’re dealing with machine learning. I’m curious as well. If this is like a quantum physics thing, where merely observing changes the behavior, and if it does, then your analysis may get thrown off because merely by watching it, it changes the behavior of that thing. And then you have to go back again and think about what it really means. Yes,
Andrew Schwabe 34:22
it does. And there’s no there’s there’s some things and insurance carriers love that, that consumers sometimes feels a bit creepy, a bit 1984 ish. And the fact is, what while you’re observing some, some behavioral aspects of things, the carrier may be very direct, or maybe very indirect, about, about what type of information is is collected and analyzed. The fact that we don’t collect PII, makes it a little bit easier to be hidden under the covers. And as a result, you don’t necessarily had an observation bias, like you’re talking about? Yeah, it’s not as significant. But you know, sometimes you got the power users that, that try to figure things out, as well. And you can you can look and figure out some of that stuff.
Michael Waitze 35:17
Got it? Where does this fit into, like the workflow of a typical insurance carrier? Do you only mean I’m not clear on where that fits in yet?
Andrew Schwabe 35:24
So one of the common use cases is being able to measure propensity to quote, and then propensity to buy. And so as you’re going through for the questioning things, if somebody’s tired kicking, are they trying to game the system to, you know, get the quote lower? are they behaving like somebody who’s trying to inform themselves the first time, such that they can be better informed to do the policy better? The next time? Pretty common? Right. But then also, the models kind of change, after they’ve quoted one, two or 50 times. And yeah, that happens to that goal of getting a quote, and getting to the finish line. And, and so one of the one of the common use cases, is for us to measure which behavioral group they belong to what kind of correlation group, and then also determining, well, that means that you’re two and a half times more likely with this behavioral group to say yes to this product, or, you know, minus 10 10x, likely to get to that product, which gives the carrier value and a couple of ways. Number one, it helps them determine, should I engage them with a super expensive, annoying engagement like a chat window, okay? Or somebody who should I help direct them to a more appropriate product, right? That’s interesting. And on the low end of people who are less engaged, but maybe in influenceable, then maybe what you want to do is add some abrasion or extra qualification. So you might introduce some additional steps to the workflow to further qualify them to make sure that they self select properly. So all these types of things, ultimately drive to fitting the right person with the right product, and helping people to self select themselves out of the process. If they’re not right.
Michael Waitze 37:28
Can I ask you this, though, if this works in insurance, right? Why can’t it work everywhere else or anywhere else?
Andrew Schwabe 37:37
It totally can. In fact, the example I did earlier about how I started with pharmaceutical Yeah, I felt like that would have the most benefit to mankind. Right? Because part of what we collect is we collect behavioral data on incomplete form submissions, which means you get three quarters of the way through the screen and don’t hit the submit button, we still collected behavioral data. And we know, we know what the behavior looks like up into the point that you left. So we know what the behavioral signature looks like, whenever you don’t complete a certain transaction. And if you were to go back and peek under the covers, with a lot of these phase two drug trials with the FDA, you’d find that they only incorporate in their analysis, completed submissions of health surveys, they do not include the partials or misunderstood or incomplete submissions. And the scary thing about that, not hopefully, I won’t make your blood pressure go up with this. But the scary thing is, that’s maybe two thirds of the data, that they’re not incorporating into their analysis about effectiveness.
Michael Waitze 38:46
I mean, it’s so tricky, right? Because I guess part of the presumption because I’m sitting here thinking in my head, like why, if you know that that data is relevant, and if you can do if you can learn stuff from it, why wouldn’t they do it? Well, then there’s a whole cohort of people who may be just like, are logging in just to muck with the data? Do you know what it means? And it’s hard to separate that from the people that are actually operating in good faith. It feels like a
Andrew Schwabe 39:12
nugget for you. I got a nugget a nugget of something you’ll enjoy there because it also insurance and watch other industries. We’ve got these lead aggregators, right? And the lead aggregators job is to just flood your funnel of potential people who might be interested go ahead, right. And, and one of the one of the interesting challenges with them is they don’t care about quality. Generally, there are some, but generally they care about quantity. Yep. And how do you get quantity? You get quantity by under qualifying people, what we often called the race to the finish line situation where people will say, well, we’ll get you great quotes for insurance policies for you know, current show went through this or that or whatever. And you only have to provide four pieces of information. Right? Okay. And what happens is, you might get some that are appropriate, and you’ve got a lot of garbage quotes that come from that. But also in the majority, those people don’t turn out, the conversion rates are ridiculously low. You know, so when you talk about people trying to, like marketing problems, like surveys with pharmaceutical companies, right, the marketing drive our transactions, hurry up, give me lots of people that fill it out, not about quality. So they don’t care as much about that it’s not enough value to pay for something
Michael Waitze 40:40
that’s intelligent, right and back in the day, like back in 1950, and 1960. And frankly, even in the 1970s, a lot of insurance, people went door to door and knocked on doors. And even though a lot of those people weren’t qualified, you knew what neighborhood you were in. You can make whatever sort of political judgment you’d like about that statement. But that’s just a fact. But the flip side of that is you could literally only physically go to so many doors in a day, like, it’s not even 24 hours in a day, maybe it’s eight or nine hours in a day. And because most people were either driving or walking, you just couldn’t get to that many places. And if you really were interested in sales, you had to be much more strategic about. I’ve been to that house. They said no, they actually weren’t even nice if I’m not going back there. Because I know that that’s a no. But over here, it was a maybe or the purchaser wasn’t homes, I can go back there. But in a digital world, it’s just like, I can spam everybody. Yep. And like you said, it’s not qualified on quality. It’s on quantity. So if I’m an aggregator I now have an incentive just to get as many people in the door as I possibly can. So then I can say to you, I met my quote of a million I said, I could give you a million leads, I gave you a million leads.
Andrew Schwabe 41:50
That’s right. If I get paid by the lead, yeah. Why do I care?
Michael Waitze 41:53
I don’t care at all, actually, but it’s a shitty way I set it to do business. Yeah. Because at the end of the day, you’d rather have one decent lead than 10 terrible ones.
Andrew Schwabe 42:04
Yep. You just hit the heartstrings about Wi Fi motive. Because ForMotiv helps you learn, understand, and then observe. Whenever consumers are the right consumers, it’s as much about knowing the right qualified right behaving, people that look and act and self select, that are the best customers as much as it is the people that look like bots and look like tire kickers, and try to game the system.
Michael Waitze 42:38
So I’ve got a radical question for you that that I just thought of actually, yep. I talk a lot about how so many things are cyclical, right. And one of the examples that I give is in the E commerce space. So a slightly different space, but not really, you’ll see in a second one, I’m thinking in the old days, right? You’d go to like a suburb of Pittsburgh. And on the side street, where your mom would shop for meat was a butcher. There was also a bakery shop that where she’d come home with doughnuts or cookies, or whatever. And then your dad would buy shoes that like the men’s shoe store. And then all these things turned into department stores were on floor one floor to floor three, all these things were consolidated. But those places became noisy and messy, and really hard to deal with. And you’re right, go up to go up to the third floor for sale on Menswear. And you’d get there and it would be like nothing was on sale. So what happened was big brands figured this out. This is why Ralph Lauren shut down all their stuff at Macy’s and Bloomingdale’s in New York and just bought its own shop again, up on 72nd in Madison, because you knew when you went there was just Ralphie stuff. And I feel like online is kind of getting the same way, where we’re throwing all this technology at stuff. And at the end of the day, wouldn’t it be better just to have a supercharged agent who really cares about you know what to do and how to do it and then be able to give you that personal service without you being spammed in the same way. So you’re leaving this massive marketplace, these massive aggregators that are just doing what department stores did, were at the beginning, it was like, Don’t worry about why you get everything for you just come there, it’s easier. But what ended up happening is because it became so competitive, it got so noisy and so ugly and so dirty. That at the end you just wanted Can I just talk to an agent again, kind of thing? Or can I just go back to the butcher shop? Because I know the Meet there’s good kind of thing. Is that gonna happen here too.
Andrew Schwabe 44:36
That’s a great question. And it’s really difficult to know. You know what I? I totally know what you mean. And well and let me let me give you a peek about hopefully nobody from eBay watches this but kind of how I how I game Clothes, clothes shopping for me. Right? It exemplifies what you’re talking about. So I know what brands of shirts that I like you The same and you know, I like Columbia, like Nike, like stuff like that. But if I go by retail, or if I even go to Amazon, I’m going to pay pretty reasonable prices. But I know that if I go to eBay, and I search for new tag shirts, of the brands I like that are my size. And then all I do is I click the Like button, like, go away. Yeah, what’s gonna happen is people who are anxious to move their product and inventory on, they’re gonna see that I’m interested, but didn’t buy right away, Oh, that behavior looks like somebody who’s losing interest. And so they send me a 20% off coupon. And then boom, I click on a buy. So maybe I’m a cheap guy this way, but I get brand new stuff. For 20 30% off that way, the, the public is informed now, more than they have ever been. Why do people make individualized ecommerce shops for just their product, instead of getting a account through a big box, or Amazon or something like that account there is because they can get a bigger piece of the pie if they learn how to build some loyalty around it, as well. And so people are finally starting to wake up and say that service matters. And that you don’t necessarily get service with a big aggregator or with a, you know, an Amazon or Walmart or whatever service is lacking in Asia and is interesting enough, you can go to one street where all the competitors have one product or in one place together. You would never do that in America. Right? But in Asia, you would why? Because the consumer is going to want to go and look and try and see and touch. And there’s such a camaraderie of the shop owners that they say Well, the thing you’re looking for, actually, I don’t have it. But two doors down. I know this place does have it. And they’re okay to send them. Yeah. Why? Because they know that that person is going to do the same for them and refer them.
Michael Waitze 47:06
I mean, isn’t that what Akihabara is in Tokyo? Yeah, bar is a place where just like, there are 1000s of little electronic shops, and I’ve been there Got it. And you just gotta and you’re like, hey, I need this little thing. And I’m like, Oh, I don’t have that. But time is on over. There’s got it.
Andrew Schwabe 47:20
Ah, Malaysia has got a similar one. So So yeah, you’re right. And they all know what each other selves. And they are all they all allow themselves to be focused on what they know. That’s interesting, as opposed to selling a lot of crap that you don’t know. Yeah,
Michael Waitze 47:33
exactly. I want to ask you, right? I want to ask you about this too. I spoke to a guy and this is years ago, right? Who, and I can never remember the name of the company started. I think it was called like travel 57 or something, an American guy who was in London and started going to these discount travel companies. And then he sold it to again, I can’t remember Expedia or one of these guys. And one of the things he realized when he was there was he was looking at the behavior of people. And he noticed that if they went to Expedia, they also went to Travelocity, and then they went somewhere else. So he came up with this idea of, if I am Expedia, why would I not advertise on Travelocity? Since I know people, they’re looking for me. And if I can get a click through on it, I can make money. He called this company intentive media. Well, how do you differ because I think a lot of my listeners are intentional. They’re specifically coming just to listen to these types of conversations, because they learn something from it a lot. But how do you define that intent? If that makes sense?
Andrew Schwabe 48:41
Well, the way you have to do that is you have to know what a what behaviors are going to measure, and you have to know what outcome you’re going to be able to correlate it to go ahead. And, and the thing is, you know, if you take something as simple as here’s a form with 15 inputs, the more you fill out, it makes sense that it’s more likely that you’ll finish it, okay. But then there’s deeper data that says that the manner in which that I complete, it helps select amino group of people who are more likely to have the intent as opposed to just having 80% of the journey. Right? Just because you’re a lot a lot of the way down the road doesn’t necessarily mean that you have the intent to finish. And so so those are very different things to measure. Yeah. And so understanding the difference is important. And then understanding legitimately what data you have to confirm that. So a lot of insurance carriers, we can kind of cherry pick meaningful goal states, out of like the web address, you know, that depending on what phase of an application, they label that it’s a pre quote, post, quote, stuff like that, and so It’s easy for us to see, we just cherry pick that and we kind of automatically can build intelligence to know what phase of the journey are in. But then also begin to study, chunk by chunk, you know, whatever we predict, on the first 20% of the application is going to have a lot of air, right? Yeah. But we can observe a handful of unique behaviors that are not necessarily common, the more outlier style behaviors that actually correlate quite well to somebody who later on, you know, what will is someone who’s going to finish? And if so you observe that you track that and you encourage, and help them along, speed them along in their way, as opposed to, you know, giving them the same experience as everybody else. And hoping for the best. That makes sense.
Michael Waitze 50:51
Yeah, it makes perfect sense. I love this stuff, like so I was in Singapore for a month, and I kept walking into this chanel shop, because I wanted to buy a fragrance for myself. We can talk about that later. But I knew exactly what I wanted. Because I bought it once when I was in France, like 15 years ago, was it 15 years ago? Yeah, 2007 or 2008. And it didn’t matter how many times I walked into the shop and told that salesperson just don’t come near me like I know what I want. I don’t need to be assaulted. Right? Like pay attention to my behavior so that you can understand, like, just get away from me, I don’t want to be sold to Yeah, this is part of what you’re talking about this observing. And they should know better. I want to ask you this, and then I’ll let you go. as well. Do you feel like you’re so deep into this, that you’re constantly thinking about this behavioral science, that you can’t get it out of like the regular part of your life?
Andrew Schwabe 51:47
I overanalyze everything. Even during our discussion, I’m analyzing the questions you’re asking me, I’m really analyzing my answers all the time. And then it’s interesting, because I’m doing I’m doing AI research, in addition to ForMotiv and doing AI research with a university in the UK. And it’s all around behavioral stuff. Right? But but how it applies to education and how we can behaviorally correlate it to, you know, people self regulation, or self efficacy and stuff like that. So what’s really cool? Yeah, it’s, it’s now baked, it’s baked in here permanently. And, but what I love about it is because it’s changed the way that I deal with my family. It’s changed the way that I communicate with employees, it changes the way that I talk to people on the street. You know, if we got a moment, I’ll tell you this one interesting story. I’ve been in Vietnam for almost six years now. And about one year in, I was doing my normal thing where you sit on the street having a coffee and you people watch, right, it was just so much fun. And every time you see a Westerner, foreigner walking along the street, I observed that their face is kind of like a little bit Stern, a little bit focused, they kind of have the tunnel vision, where they’re not necessarily observing the amazing environment they’re in, they’re kind of, they’re kind of focused on where they’re walking to the goal, they’re going to, to what they’re getting to. And because of that, they walk around kind of like a spring that’s twisted and compressed. So when the littlest thing goes wrong, just such as, at your restaurant, you’ve got four people, three meals come out at once, and the fourth one is delayed a little bit. And it’s just really easy to go, blah, blah, blah, boom, and explain an unload on somebody, even though culturally, it’s normal. Right? But it’s not a western standard. So just the littlest things, set people off and make the spring decompress. And I realized that was the same. Yeah, I, I observed in myself, the same type of thing. And so I behaviorally changed myself. I said, that won’t stand. That’s not acceptable. So the next day, I like, forced myself to have this cheesy grin on my face, and lift my eyebrows. I made myself walk around with that for a couple of weeks. And what happened was an extraordinary response. All of a sudden, people wanted to engage me more in conversation. Locals wanted to talk to me more, they were more pleasant, because I looked like I was pleasant. That’s just a real small behavioral hack, by choice, but it says a lot about the human condition. You know that that? And also answers the question you asked, is it in there? Yeah. I can’t not think that way anymore.
Michael Waitze 54:51
But this also and I’ll leave you with this right? This also gets back to this idea of are you teachable? Right at 40 something years old or 48 years old, you’ve already said I have all this information. I know all these things, but I’m going to live the same way I expect other people, particularly inside my company culture to live and I’m going to learn about me change my behavior and see what the result is. And I think that’s an awesome way to and Andrew Schwab, the founder ForMotiv. Thank you so much for doing that. That was awesome.
Andrew Schwabe 55:17
Thank you. It’s a pleasure.
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