7 Lessons Insurance Agents Can Learn from 2015’s Worst Entrepreneurs
The Entrepreneur Magazine website recently announced its picks for the 10 worst entrepreneurs of 2015. Never one to pull punches, contributor Steve Tobak backed up his picks with sound reasoning, and what we found is there are several lessons insurance agents can learn from these misfits. So without further ado, and in anticipation of the New Year, we give you 7 Lessons Insurance Agents Can Learn from 2015’s worst entrepreneurs. Let’s get started!
1. Deliver a good customer experience
Ryan Grepper was Tobak’s No. 10 pick for the worst of 2015. His company, Cooler, “raised over $13 million to become the second-biggest Kickstarter campaign ever,” Tobak noted, adding that was at the end of 2014. “Today, Coolest is selling coolers on Amazon ahead of fulfilling commitments to its backers in order to ‘keep the lights on.’ The good news is the product exists. The bad news is the reviews are dismal, with 28 percent giving it just ‘1 star,’ mostly due to poor product quality and support.”
Insurance agents do not deal in physical product, but they do deal in customer experience, and it’s vital for you to make sure you’re giving your customers the very best. How do you do that? By thinking of what the customer needs before they think of it first. That’s why it is so vital to learn as much as you can from your customers and prospects. Each piece of information is a window into their hopes and fears. If you can live up to the one and assuage the other, you’re on the right path.
2. Fulfill commitments
Not to keep picking on Grepper, but another thing insurance agents can learn from his failings is the need to fulfill commitments. As Tobak notes above, the people who funded Grepper’s Kickstarter campaign — a large portion of them anyway — are wondering where their products are and why Amazon customers are enjoying the fruits of their labor.
While sometimes fulfilling a commitment may be out of your hands, you can compensate for this by doubling up on Lesson No. 1 (refer back to the above).
3. Be fiscally responsible
Few people in the business world need a lesson in fiscal responsibility more than rapper/entrepreneur Curtis James Jackson III (aka 50 Cent). As Tobak states, the hip hop star “made a fortune on a record label, on a clothing line, and as an actor. Then he reportedly made $100 million from an investment in a vitamin water company that was acquired by Coca-Cola.”
Where did it all go wrong?
“Last year, he filed for Chapter 11 bankruptcy protection,” Tobak writes, adding that it was a “Lack of fiscal responsibility, i.e., he overspent” that proved to be Jackson’s undoing. What’s worse is that 50 Cent isn’t really broke, “but using the courts to stiff creditors for $28 million is pretty low-class,” Tobak concludes.
Not every entrepreneur/business owner, such as you, can be a 50 Cent and go back to what made you famous to pay the bills. In insurance, reputation is everything. The big insurance companies understand this, and it’s a lesson many independent agents should draw from.
4. Ditch ulterior motives
Dan Price of Gravity Payments made Tobak’s list in spite of being a viral business superstar earlier in 2015 for his decision to pay each employee $70,000 per year and lower his own salary of $1.1 million. Turns out, as Bloomberg recently reported in the piece, “The CEO Paying Everyone $70,000 Salaries Has Something to Hide,” he was keeping a pretty devious secret. Apparently Price had been overpaying himself for much of Gravity’s history, and his motives for raising employee pay were less than altruistic. Since the Bloomberg piece hit, he has also been fairly criticized as doing much of what he did for the publicity it would generate. His own brother is currently suing him. So is at least one former employee.
Lesson for insurance agents: the best way to strengthen customer service and build a team of employees, who believe in your vision, is to be authentic in everything you do.
5. Understand the product you’re selling
Tobak rightly points to Ellen Pao’s reign as interim chief of Reddit as “mercifully brief,” adding that in eight months, “she was successful at just one thing: demonstrating a complete lack of understanding of the site and alienating just about the entire Reddit community.”
Her firing was public and brutal. Insurance agents can find themselves in a similar situation if they do not take the time to get to know the products they are selling thoroughly.
6. Clearly define the roles of your employees
In small businesses of the type that many independent insurance agents run, there can be a lot of hat-wearing, but at a certain point, you have to know who’s who. There is nothing wrong with cross-training — in fact, it’s advised — but as Tony Hsieh demonstrated with what Tobak calls “a controversial new organizational system with no managers or titles known as Holacracy,” he quickly lost 14 percent of his staff “and the rest are still trying to figure out what their pay and jobs are.”
Establishing clearly defined roles and responsibilities for yourself and your employees is not only responsible, but it can also help your employees to feel more ownership of what they do. Never a bad thing!
7. Keep your personal life in check
A messy personal life will always yield bad results for business. You can’t allow your personal issues to run rampant, or they will eventually catch up with you. That’s something that Gravity4’s founder Gurbaksh Chahal has found out the hard way after “pleading guilty to two domestic-violence charges, self-destructing in spectacular fashion, and getting fired by the board of ad-tech company RadiumOne on the eve of a planned IPO,” Tobak notes.
Also, “the narcissistic serial entrepreneur is back in the news with a new assault arrest, a gender discrimination and harassment suit, and allegations of epic pill-popping.”
Lesson for insurance agents: keep it together!
Bad examples can be just as effective as good ones in teaching you what you should and shouldn’t do when running your business. Since every independent insurance agent should act like an entrepreneur in order to grow their business, it’s important to put the individuals above on your radar and learn from their mistakes.
What are some lessons you’ve learned from incompetent or bad leaders? Sound off in the comments section.