Most people think Lemonade is really good at marketing, particularly self promotion. While they are, this is mainly a distraction to obscure you from figuring out how the magician does the trick. Lemonade’s real trick is financial engineering. You may recall how they were the poster child for the original Continue Reading
Insurers Are Earning Far More Than You Realize
Investors spend a lot of time modeling the earnings of insurance companies and I was no different. However, I never found traditional GAAP models satisfying, so I had a number of alternate ways of looking at the quality of an insurer’s earnings. Today, I thought I’d share one as it Continue Reading
How to Evaluate CAC: An Alternate Framework
If that title sounds familiar, yeah, I cribbed it from the recent TAM piece. Today, we’ll explore how CAC (cost of acquiring customers) is misused. Traditionally, the cost of acquiring a customer for an insurance company was pretty easy to measure. You paid a commission to the producing agent at Continue Reading
How to Evaluate TAM: An Alternate Framework
In the startup world, the best way to become a Hare and get a high valuation is to talk up the giant total addressable market (TAM) of your product. Nothing gets a tech investor more excited than a company with bold plans to take over the world! Rational people often Continue Reading