PEWAUKEE — If you’ve started a company that has a new product to help thwart burglary, fire, water damage or identity theft, American Family Insurance just might invest in your business.
It’s not necessary to be a Wisconsin company to win the interest of the Madison-based insurance giant, which invested in 10 emerging companies nationwide just this past year. But American Family’s chief business development officer Peter Gunder told entrepreneurs gathered Monday in Pewaukee, “I’m very bullish on Wisconsin — and I spend a lot of time in Silicon Valley.”
About 50 start-up companies attended a “speed-dating” event at the General Electric Institute, where they had the chance to make a quick sales pitch of their products or services to representatives of major companies in hoping of building a collaborative “chemistry.”
The entrepreneurs also attended a series of presentations on resources available in the state, including funding, advice, and ways to connect with key players in industry clusters such as water technology and health/life sciences.
Gunder, whose keynote speech concluded the daylong Wisconsin Tech Summit, described why American Family, a Fortune 400 company with $7.4 billion in revenue and a $20 billion investment portfolio, has become keen on investing in innovative startups.
He pointed out how Google became a billion-dollar company in just eight years and that Facebook did the same in five, Tesla, four, Uber, two and Snapchat, one. And he noted that iconic camera-maker Kodak is now out of business. Gunder said his company realizes the need — and financial wisdom — to embrace changing times.
“We live in an exponential era,” said Gunder. “Either disrupt yourself or be disrupted by someone else.”
He said American Family is now one of two major insurers — the other being San Antonio-based USAA — to add corporate investment to its business strategies.
Not only does the home, auto and life insurance company stand to reap dividends from startups that make it big, American Family puts its money in inventions that help mitigate losses. Gunder noted that his company sustains an estimated $335 million in losses annually due to fire, water and theft claims.
Examples of inventions in which American Family has invested include a device that detects if heating elements, such as irons or coffee pots, are left on and a security system that notifies homeowners of disturbances via cellphone.
Gunder said his company is watching with interest the development of self-driving cars that allow even visually impaired individuals to travel safely and social-networking technology that might be coupled with automotive hardware to prevent texting and driving.
American Family also invests in insurance sales-related technology, for example, a tool to allow consumers to easily compare its insurance packages with those of competitors.
Finally, the company remains interested in innovations that help the company use data to understand customer needs and serve them — while limiting the risk of having that data be compromised. “If you think about it, we have a brand of trust,” said Gunder.
Gunder hopes similar innovation can be encouraged in Wisconsin, while acknowledging that the Badger state “lags in backing start-ups,” not only nationally, but among seven Midwest states, where Wisconsin ranks second-to-last.
To that end, Gunder said American Family is a partner in the Starting Block “entrepreneurial hub” to be built in Madison. The project will office collaborative workspace and other amenities for emerging companies.
Scale Up training might expand
One of the other speakers at the networking event, Elmer Moore Jr., said a 2-year-old training project of the Greater Milwaukee Committee might be expanded to include larger businesses.
Scale Up Milwaukee currently offers a 6-month training program, taught by experienced instructors in entrepreneurship, to established start-ups that already bring in $1 million in annual revenue, but which have potential and ambition to grow by 15 percent or more.
Moore said Scale Up, which has held two “Scalerator” sessions since 2013, has helped 27 young companies to polish their sales, organization and leadership skills, as well as connect with sources of funding.
“While we don’t write a check, we help companies make connections to those who can,” said Moore.
He said Scalerator is likely to expand the program to include companies in the $15 million revenue range.
For more information or to apply, see http://www.scaleupmilwaukee.org.
— By Kay Nolan