Transcript:
So that's a very difficult question to answer. ...I specialize in difficult questions to answer. Turns out that I have a couple of thoughts. First of all, my my background: I was a data scientist before it was cool to be a data scientist, so I geek out on things like pricing theory. And there's a couple of things that I've observed that I think might be helpful. One is, if, if you look at sort of the unit economics of this business, it revolves around a life, right?
It's not a policy, because an individual person might have multiple products. So it's really that person, that life unit, which could be a household, or could be an individual. And that that life generates a certain net margin. It could be from overrides. It could be from writing commission, it could be from marketing fees. But that net amount, after the cost of the leads, after the cost of paying your downlines, is, is your sort of net margin per life. And somewhere in the range of 20% of that should be devoted to technology.
What will happen as you scale that 20% will get smaller, because the technology will enable you to grow your business. If you're not interested in growing your business and you want to stay at steady-state, that's not the number to think about, but about 20% of that net is where we really find a lot - whether it's small upcoming startups or well-established players. And then the second thought is that all of these technologies in, in the SaaS world, Software as a Service world, the idea of charging for usage rather than some fixed fee, is it's what clients and customers are demanding. Now, my clients don't want to have to pay for technology unless they're making money and their business is growing. So this isn't like a calendar system or an accounting system where you just pay a fixed fee. You should demand - when I'm small, or when I'm in a test market - and I'm using your technology for a tiny slice of my business, I pay only for that data, basically those records. And as I grow, then I pay more.
And so you're never investing in technology ahead of your profit curve. You're using your profits to fund your growth in technology.
