Ruth Foxe Blader was a digital change agent at PepsiCo before she joined Allianz Ventures. Now, at Anthemis, she invests in early-stage fintech start-ups. In this podcast episode, she explains how to effectively anticipate and manage change—and why conflict is crucial for innovation.

Highlights

  • Ruth Foxe Blader credits her curiosity and love of learning with being able to navigate change—and successfully shift her career from digital change agent (first at PR firm Ruder Finn, and then PepsiCo) to corporate VC at Allianz Ventures, to her position today as managing director at Anthemis.
  • Common challenges among start-ups are falling afoul of regulatory or compliance bodies; getting unit economics right; and having enough capital to weather loss-leading growth years.
  • Ruth will be speaking at InsureTech Connect 2019, taking place September 23–25 in Las Vegas.

A deep dive into insurtech

In season two of the Accenture Insurance Influencers podcast, we’re looking at different facets of the insurtech industry. We’ve spoken with Scott Walchek, serial entrepreneur and Trov founder, about pivoting from direct-to-consumer to B2B—via partnerships with Waymo and incumbent banks and insurers. We’ve also looked at the evolution of insurtech with InsureTech Connect founder Caribou Honig.

Anticipating change, with Ruth Foxe Blader

In this episode, we’ll look at the insurtech world through a venture capitalist’s eyes. Ruth Foxe Blader’s diverse background includes studies in literature and criminology, stints as digital change agent in PR firm Ruder Finn and PepsiCo, and financing start-ups through corporate VC at Allianz Ventures.

As a managing director on the investment team at Anthemis, Ruth invests in early-stage fintech start-ups. In this episode, we talk about how to anticipate—and manage—change, and why Anthemis is focused on financial services products for a digital world.

The following transcript has been edited for length and clarity.

Welcome back to the podcast. I’m Eagranie Yuh and today I’m speaking with Ruth Foxe Blader. She’s a managing director at Anthemis, on the investment team. Thanks for making time to speak with me today, Ruth.

It’s my pleasure.

Tell me a bit about your role at Anthemis and what you’re focusing on there. 

Anthemis is the world’s leading fintech investor, committed to cultivating change in financial services. We have made more than 90 investments in fintech and we have more than $190 million in capital deployed across a really broad range of fintech and insurtech propositions for the past 10 years. I lead an investment vehicle at Anthemis which is focused specifically on insurtech. But I look broadly at propositions across fintech and insurtech.

Fascinating. I’m looking forward at getting into more of what you’re looking for and your work at Anthemis. I wanted to start with a little bit about you, because you have an unexpected background, at least from my perspective, for someone who’s in insurtech and VC.

The CliffsNotes version: you studied literature and criminology. You’ve worked for the PR firm Ruder Finn and then you were at PepsiCo as well, before you joined Allianz Ventures and then Anthemis. I’m wondering how all those pieces fit together to inform your role as a VC today.

I think the one thing that’s true about VC is that it’s eminently learnable and I stand by that not only because it serves me well, but also because I’ve seen people come to VC, particularly in my generation, always from somewhere else. I feel really lucky to have had a pretty diverse background.

I really do love literature. Criminology is really cool. It’s the intersection of sociology and psychology and law, and all of those things are really essential to my day job, frankly, thinking about demographic trends, thinking about contracts and legal documents and thinking about people.

I grew up in tech, so my role at Ruder Finn was really building the digital agency within this quite established private communications firm. I was there at the inception of that project, where I worked for a number of years, both in New York and then in Europe. At the time, I was really focused on what was, in the early 2000s, emerging technology––getting people their first websites and intranets, exploring social media and its impact on consumption and communications. And as I continued to really be interested in what was on the cutting edge, it became clear that the start-up ecosystem was really where those cutting-edge things were happening. So what we now consider very much legacy tech was emerging tech, when I started.

At PepsiCo I ran a project called PepsiCo10, where we were really bringing start-ups into contact with the PepsiCo brands and I realized that was very much the space that I wanted to stay in. And I was always really interested in financial services, and I think that this is where my background is like many people at Anthemis––we really see financial services as the nervous system of the world and it underpins all of our interactions and our economy and, in many ways, our society.

So when I had the opportunity to go to Allianz, essentially to do what I had been doing at PepsiCo, really bring a large organization into contact with start-ups, I jumped at the opportunity.

I want to pick up on something that you just mentioned which is that at the time, this new or emerging technology of the Internet and social media, which today are almost not even technology at all, they’re just part of the fabric of our society. When you were working on these strategies did you did you see where it was going? What questions did you ask?

I worked with a really cool, interesting, curious team and I think we were really asking the questions and seeing in real time the digital revolution changing the way that people think and live and consume. We were conscious that things were changing and we could see analogies between the digital world and the analog world, and we were definitely trying to push the envelope.

I think I continue to watch change and to try to anticipate change in the same way. And sometimes you’re right and sometimes you’re not right––but it is very exciting to live through what we’re living through, and to feel like you have the opportunity to participate in change on behalf of organizations and also individually.

It sounds to me like you were brought into a fairly traditional organization and tasked with bringing in the digital strategy. Can you talk about the integration and the culture that needed to be navigated there in order for you to be effective?

I think when you work on the agency side, you work on behalf of clients with their teams and you really commiserate with the teams that you work with.

And I would say that I’ve always worked either on or with innovation teams, in one way or another. And I think the real challenge there is the challenge of the body killing the foreign entity that enters it; you’re trying to vaccinate the organization without getting killed. Those types of teams are sometimes wrong, first of all. And so it’s really easy to say, “Oh, don’t listen to them. The last thing they said was really stupid.”

But I think there needs to be this culture of upheaval if you want to have change. At the same time change is really, really difficult and it’s especially difficult for large organizations with legacy technology and legacy infrastructure and legacy thinking.

I think I’ve always been at the vanguard of that kind of conflict and I think it takes a special kind of personality to be comfortable with it—not only comfortable with conflict, but also comfortable swimming against the current. I’m pretty sensitive to that, with the founders that I meet who were involved with large organizations previously and just couldn’t take it anymore, or young founders who never worked in that context and can’t figure out why they can’t sell to large organizations. I think that these are our problems which are pretty constant and that I’ve encountered consistently throughout my career.

Do you feel like there are keys to managing that conflict in a constructive way?

Sure. I mean, I guess there are always keys to managing conflict in a constructive way. One of the things I would stress with the companies that I work with, is making sure that the people that they’re dealing with have the power to actually effectuate change, or execute on the bigger vision of the projects that they’re working on.

So often we see innovation teams relegated to playgrounds or non-decision-making roles and that can be a real waste of time for small companies that, frankly, don’t know better than to pour a lot of energy and resources into those relationships.

But I think there are a number of success factors and they’re largely interpersonal. They’re largely about perseverance and being respectful and having a good sense of humor. But I don’t think that there’s a silver bullet. And I think it’s one of the reasons that we see change, particularly in the industry, coming so slowly because I think that the forces against change are quite large.

I want to circle back to your diverse background. It seems to me like you’ve made a number of fairly smart and strategic career pivots––several times. I’m wondering if you have any personal success factors that you attribute that record to?

It’s a good question. I guess I’m really curious and I always let my curiosity lead me and I’ve never said, “Well, I probably can’t do that.” I think if I’ve wanted to do something, I’ve believed that I’m really, really hardworking and can probably accomplish it.

My dad told me one time if you’re not learning something in your job then you should quit. I think that was really great advice. It’s something that I’ve repeated a number of times to friends who have been asking themselves if they should leave their current place of work, or to people that I encounter in the community. And I think it’s something that I’ve always really held dear to me: that you should be continuously learning, and once you stop learning then it’s time to move on.

Good words to live by. I’d like to talk a little bit more about Anthemis and your work there. I noticed that Anthemis describes itself as “reinventing financial services for the digital world.” Can you break that down for me? You’ve mentioned financial services as nervous system. I’m curious how the digital world, specifically, plugs into that.

Yeah, so I think that the way we see things at Anthemis is that we really are living through a technology revolution, and what happens in technology revolutions is that everything changes. And so there are a lot of legacy systems, legacy thinking, legacy capital which prevent change in the first instance, but the efficiency and potential inclusivity of technology forces change. We look to be at the vanguard of those changes.

Our CIO, Sean Parker, always says we’re skating to where the puck will be. The way we do that is by investing. We really look to invest in diversity and it’s been very much at the core of the Anthemis ethos from the very beginning, looking for diverse founders who have something new to say. We are looking to cultivate better, smarter VC practices, which will impact financial services practices. We hope to unearth the next generation of financial services innovators.

And yeah, I think we have a thematic focus on a couple of key growth areas. We think about finance as being intrinsically embedded in the way that people live and do business. And we see technology as a key to allowing finance to be more deeply embedded, and more naturally embedded. So we have a big focus there.

Essentially, we are looking for what’s really different and what’s really going to shape the future. And it’s a very refreshing place to work. It’s the best place I’ve ever worked. And we continuously have debates about the different permutations of what the future could look like because it’s not written yet and are seeking to find elements of that future and invest in them.

In a digital world then, if we’re looking at teams or companies and a future that we don’t know, what does Anthemis think needs to be in the anatomy of a next-generation financial services company?

A few things:

  • Technologically, all of the efficiencies that we’re able to build out of digital tools, fundamentally from a diversity and inclusion perspective.
  • Teams that are really bringing new ideas, different ways of thinking, cognitive diversity as well as more obvious kinds of diversity to the party.
  • A high level of efficiency and new ways of thinking about unit economics, whether it’s more innovative access to capital or more innovative ways of trading or funding new ideas.
  • Looking at the way that data impacts decision-making, and that can be all kinds of data; it could be everything from sensor data to more traditional financial services data.

We have a pretty broad thesis also around changes to infrastructure—those things might not be things that we invest in from some of the funds that we’re running now, but we think that the world is really going to look a lot different very soon.

When we hear about VCs and funding, we always hear the success stories: IPOs, funding rounds, raising a ton of money. We don’t always hear about the things that don’t work. I’m wondering if you can comment on why some companies do so well, and others don’t.

Sure. I’m happy to talk about success factors. I’ve been involved with companies that have done really, really well, and I’ve been involved with companies that have been really challenged.

On the challenge side, there have been a number of companies in the insurtech ecosystem which have wound up recently and we’ve seen that happen in the public space. So maybe we’ll talk about the challenges first. I think that particularly in financial services, there are a couple of things you need to get right.

Obviously, one is regulatory and compliance stuff. It’s a highly regulated industry. It’s very different from building other kinds of consumer tech. So falling afoul of the regulator is probably not a good thing to do.

The other thing that I think is really tricky in financial services is the unit economics. So the considerations around cost of capital, considerations around how large the market needs to be, and how much money it’s going to cost to capture that market. And the threats from incumbent players really come from their staying power in terms of the capital reserves that they have on hand. So, it’s difficult to be scrappy and bootstrap when you need hundreds of millions of dollars to get to scale.

I often see founders underestimating the impact that unit economics will have and it’s easy to overestimate how much market share you can capture, or underestimate customer acquisition costs. But those things, even if there’s a really interesting proposition, take a long time for the fire to catch and companies need to be properly funded if they’re going to make it that long time.

By contrast, I think the really big successful companies, both that I’ve been involved with and that I admire, do a bunch of things right. I think they create a proposition that people—or if it’s B2B, enterprises—really need and really want to buy. And those propositions are just really well-built and well-made and easy to use and demonstrably superior to what exists.

I think that they’re usually quite good at selling those things. And I think that they have figured out the capital side, meaning that they’ve been able to attract capital to the companies which will allow them to sustain a period of loss-leading growth.

I expect a lot of those successful companies will be at InsureTech Connect in a few weeks. You’ve been a panelist there before, and you’re on the speaker list this year too. Can you give us any teasers for what you might be talking about?

I cannot yet but it’ll be this and more. I’m very excited about InsureTech Connect. It’s a really amazing event. It’s bigger and bigger every single year. If you’re there and you’re open, you can meet all kinds of people.

Typically, I will look to be, I hope, in the midst of my portfolio––we have 10 companies in the portfolio, the vehicle that I run and growing––so that’s always really exciting. And like to talk about these issues with whomever is interested in them.

Do you feel like the event has changed? I mean, obviously the size has changed, but fundamentally, how has the evolution of InsureTech Connect been as someone who’s attended and been part of that conversation?

It has changed. I think as insurtech has become more institutionalized, it’s just become bigger and I think, of course for the old people from the streets like me, you’re always harkening back to a day when it’s more intimate. But I think it’s really a rare opportunity to be around so many people who are interested in the same stuff. I think it will change again, because I think that the organizers are really talented at creating consistency with past events but also making each year feel new. So I will definitely be there and my team will be there too.

That was part one of my conversation with Ruth Foxe Blader, a managing director on the investment team at Anthemis. Ruth, thanks so much for speaking with me.

Thank you.

Summary

In this episode of the Accenture Insurance Influencers podcast, we talked about:

  • Curiosity and lifelong learning as tools for Ruth Foxe Blader to navigate through several industries—from studies in literature and criminology, to consumer-goods giant PepsiCo, to insurtech.
  • Bringing digital innovation into traditional, entrenched organizations requires conflict and upheaval. Change isn’t easy, but it’s necessary to innovate.
  • Anthemis is “reinventing financial services for the digital world.” Part of its focus is on embedded financial services that are enabled by technology.

For more guidance on anticipating and managing change:

Join us in four weeks for the conclusion of Ruth’s interview. In two weeks, we’ll circle back with Caribou Honig, co-founder and chairman of InsureTech Connect. We’ll be talking about trends in insurtech, social implications of digital insurance products—and why insurers should aspire to be dentists, not toothbrushes. In the meantime, you can catch up with previous podcast episodes here.

What to do next:

Contact us if you’d like to be a guest on the Insurance Influencers podcast.

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