MICHAEL Gottlieb vividly remembers the moment he knew he was going to survive as a business owner.
It started with lunch in 2003.
But let's step back two years earlier, when Michael, a management consultant, and his business partner Gavin Donner, an actuarial consultant, jumped off the corporate ship and set up their own insurance broking business (Mega Capital Insurance Brokers) despite neither of them having any experience in that field.
They had spotted what they thought was an opportunity providing insurance solutions to companies backed by venture capital. It was a good idea, but poor timing and inexperience meant it came to nought.
But it was too late to go back to their safe but boring corporate jobs.
"We had pushed the rowboat into the middle of the river and burnt the oars," is how Michael describes his determination to persevere as an entrepreneur.
Mega Capital plugged away trying to sustain itself but couldn't get any significant traction, no breakthrough moment where the partners could say their sacrifices had been worth it.
Fast forward to that networking lunch in 2003. Michael found himself sitting next to a director of the mortgage broking giant, Australian Finance Group.
"He was telling me insurance was a nightmare and explained why it was a nightmare," recalls Michael, 44.
"The key issue for them was there were several different policies covering different parts of their business, and then they had a distribution network of brokers who all had their own policies. Working out which was responsible in the event of a claim was a nightmare.
"I said to him 'We will solve this'. I told him that we could get one policy to cover everything, and he replied 'if you can do that you've got the business'."
Michael knew the opportunity was massive. What he didn't know when he promised his lunch companion that he'd solve the dilemma was that he'd bitten off more than anyone thought it was possible to chew.
Insurers are notoriously conservative and resistant to change. But Michael, being an outsider, hadn't had his views on how the world works shaped in that crucible. He went to London, the Wall Street of the world insurance community, and started pitching his idea for one unifying policy covering AFG's operations.
"I was there for two days and I went from meeting to meeting to meeting and it was 'no, no, no'," said Michael.
"It came down to my very last meeting and the guy goes, 'I love it, we'll do it', and we had our solution.
"When we won that account, it was the equivalent of winning hundreds of clients across Australia and it substantially changed the scale of our business.
"It was naive thinking we could solve it, but it was naivety in not conforming to how the industry operates that enabled us to solve it.
"We came up with a clever solution that would work in a fair way for the insurer, ourselves and the customer, and ultimately I'm extremely grateful to that person and company for taking a gamble on us.
"It's the most exciting relationship I've had in business."
Michael said that once Mega Capital had that account, people took them more seriously.
"It gave us credibility. And we believed in ourselves. We had entered an industry we knew nothing about and felt we were now on a level playing field."
Mega Capital continued to broker insurance solutions for high-end clients like AFG, but the founders' appetite for lateral thinking led them to form a second business in 2008 that is leading a revolution in the way small to medium enterprises access insurance.
Called BizCover, it is one of the few companies in the world selling commercial insurance through an online contestable platform.
It is a perfect example of how technology and a good idea can combine to disrupt the status quo.
"We had spoken for many years about creating an online solution - possibly an insurer, but then came up with the concept of contestable quotes," said Michael.
"Everyone wants three quotes … in fact that was going to be the name of the business.
"The problem was the insurance industry was absolutely against contestability, showing quotes side by side."
He told industry magazine Insurance & Risk Professional after BizCover was launched that he spent "six months of my life" trying to convince insurers this was the future
"It was an incredibly difficult process. The insurance landscape is dominated by a few insurers and the traditional supply chain works for them. They have no reason to want to change," he said.
But Michael eventually managed to get three insurers - AIG, DUAL and Vero - onboard, and BizCover was born, changing the way small businesses accessed insurance the way Uber turned the taxi industry upside down.
"It's all about giving small business a fairer go and providing much more transparency around what's available, and making it simpler and more accessible for people to get insurance. Small business is big business for BizCover," he said.
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