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Don’t Listen to Your Business Analyst

When three years ago we created SuranceBay our software engineers knew nothing about the insurance industry

I’m a partner in two companies – an IT consultancy Farata Systems,  and SuranceBay - a 3 year old startup where we’re creating a software for insurance industry. Brian Morton, my partner at SuranceBay who knows everything about insurance wrote a blog delivering a message that Steve Jobs formulated in one sentence: let’s give our clients not what they want, but what they need. The wording may not be 100% accurate, but the message is.

When three years ago we created that startup our software engineers knew nothing about the insurance industry. Brian knew nothing about software. Actually this is not true. He knew how computers were used by the small insurance agencies. He knew intuitively that these processes could be improved, which he explained in a 200-page long business plan. We’ve created a partnership using a tiny initial amount of an investor’s capital, which was not even enough for the first year of operation. But Brian unconditionally trusted our software expertise, and we’ve trusted his understanding of the insurance business.

Farata’s engineers  entered the world of small insurance agencies having years of experience working on large-scale enterprise applications. To our surprise, we found a monopoly in existence. A couple of big firms serviced hundreds of thousands of insurance agents using outdated technologies. Insurance agents didn’t see any better and assumed that this software was the only way to run business.

We’ve created our version of the software, which was not exactly what Brian was envisioning in the beginning, but our customers loved it. Need a proof? Today we serve about 300 agencies (50,000 agents) that pay for our services on the subscription basis. And we are growing.

I titled this blog “Don’t listen to your business analysts” not to offence Brian – he’s one of the key people at SuranceBay. I just want to stress that when there is an unconditional trust between the business and IT personnel, the results can be amazing.

Unfortunately, this model won’t work in larger enterprises where the project life cycle is overly regulated, and software developers operate under the false assumption that the product has to be done exactly to the specification provided by the business analyst and by the approved project plan, where only minor deviations are allowed. Pleasing the business users and meeting the deadlines are the ultimate goals there. Technologists seldom change the way users do business in large enterprises.

How did we managed to be where we are after the initial investor decided to stop financing this company two years ago? Farata Systems was making money doing IT consulting and part of the earning was investing into SuranceBay. Today, we’ve reached the point when we know how to multiply the streams of revenues, but we need a lot more money. Ready for the train station spiel like “My house burned down. Do you have a couple of dollars for the ticket to Philadelphia where my brother lives?”

Our house didn’t burn down, but we need $2M to implement new functionality during the next two years. Last week we showed the spreadsheet with the numbers to a person who’ll be talking to potential investors tomorrow. But he warned us, that these investors will require complete transparency and well defined plans showing a substantial return on investment. This won’t work for us, sorry big guys.Several times over the last three years we’ve been drastically changing directions. This wouldn’t be possible if a big brother would be watching us.

I offered the guy who will try to find the money an elevator pitch: “Back in 2009 one angel gave SuranceBay a chunk of change and left. Three years later he came back expecting to see no money and no survivors either. But somehow, he found a bunch of hard working people and fifty thousand happy customers.” The chances are slim that my elevator pitch will work, but we will survive even though without extra cash we won’t be able to build everything we’ve planned within two years. No biggies. Remember what Gloria Gaynor, the fearless leader of the startup movement sang?

At first, I was afraid, I was petrified
Kept thinking, I could never live without you by my side
But then I spent so many nights thinking, how you did me wrong
And I grew strong and I learned how to get along

I will survive, hey, hey!

Read the original blog entry...

More Stories By Yakov Fain

Yakov Fain is a co-founder of two software companies: Farata Systems and SuranceBay. He authored several technical books and lots of articles on software development. Yakov is Java Champion ( He leads leads Princeton Java Users Group. Two of Yakov's books will go in print this year: "Enterprise Web Development" (O'Reilly) and "Java For Kids" (No Starch Press).

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