About Me 0074: Help Making Money

After Blue Shield shocked the nation with 59% premium hikes in California last week, the company just refused a request from the elected insurance commissioner to stop the increases for 60 days.

Blue Shield is making the case for tough premium regulation, because is has proven that it has the power to raise rates as much as it wants at will and refuse even a modest request from the elected insurance commissioner.

After spending the day walking the halls at the state Capitol in Sacramento yesterday, I can tell you Blue Shield made a big mistake when it decided to price gouge its customers. The state legislature is ready for a fight to give the insurance commissioner power to approve or to deny health insurance premium increases before they take effect. If that fight fails, Consumer Watchdog will help the voters decide through a ballot measure whether government should have the power to regulate and roll back excessive premiums.

Blue Shield made an offer in an errant press release it later recalled which no regulator or policyholder can accept. The company said it would let an independent actuary decide rate justification, and decided to live by the policy when news broke. The problem is that in the absence of legislated standards for what is an excessive premium, an independent actuary has no basis for review of the premium's reasonableness other than whether there is an error in addition, multiplication or subtraction.

Questions abound about how Blue Shield can justify its 59% premium hike other than by the means it seeks -- an actuary to say all the math is good. The standard Californians deserve is that the rates are not excessive or discriminatory. That's the standard for the prior approval of auto and homeowner insurance rates in California that are rejected or accepted by our elected insurance commissioner. The standard saved drivers $62 billion on their auto insurance according to the Consumer Federation of America.

Blue Shield is more opaque than any health insurance company in California because of its unique tax status. We don't know how much the CEO makes, nor can we adequately see the company's the books since it is neither publicly traded nor a tax exempt charity that must make its tax returns public. Suspicion is Blue Shield cooked its books, and hid big sums of money, to justify the 59% increase.

Only subponeas and special investigative hearings will determine the truth in the absence of new authority given to the elected insurance commissioner Dave Jones. Legislation by Assembly Member Feuer will give the commissioner that power and it is precisely what Blue Shield's second PR problem in two weeks sought to derail. Once again, Blue Shield has made the case for exactly the tough regulation it seeks to stop.

Better Personal Advertising

First up today was Michael Greenberg presenting Better Personal Advertising. Mike wants to manage online identity on behalf of consumers so that they can maintain multiple identities for different types of sites, say photo, career, etc. and present themselves better in those different contexts.

Mike's customer acquisition strategy is weak at this point, and he also has a rather broad strategy in approaching this market. While I do believe there is an interesting opportunity in identity management, I am going to need to work much more closely with Mike to extract the nuggets out of his idea, and give shape to a viable go to market strategy.

Remote Stylist

Then Kelly Fallis pitched Remote Stylist, a personalized interior decoration advice service coupled with e-commerce in the domain of furniture and furnishings. Kelly's business has already done about $150,000 in revenue in 2010, which tells me that she has successfully validated at least some of her assumptions. Kelly has a lot of gaps in her customer acquisition strategy, as well as positioning, and she is seeing customers from commercial and residential clients. All this is too broad, and needs tightening up on multiple dimensions.

I like the business idea a lot, and in 1M/1M, we know a lot about building Web 3.0 and e-commerce businesses, so I would love to work with Kelly to help her figure out the various nuances of building a successful e-commerce business, especially one that differentiates on personalization. I have repeatedly said that personalization is an open opportunity in Web businesses, and needs to be tapped this decade. For Kelly, a good starting point would be the 1M/1M Curriculum, where we can offer her a lot more on the subject.

BizzGenie

Next Sajeeva Bora with tekMunk Software Solutions discussed BizzGenie, a business software concept to help retailers manage the decision-making between "shop floors and top floors." Sajeeva and his cofounders have good domain knowledge of the retail business, but have not yet done sufficient validation of the idea. He is looking for money and naturally, getting rejected by investors for lack of validation. As I have said before, this is not the right stage to look for money. There's more work to be done to prepare for a funding round.

Food Is Our Medicine Vision

Nwenna Kai then presented Food Is Our Medicine Vision, an online training concept through which she wants to teach community leaders how to create healthier living concepts like organic gardens, etc. in urban areas. Nwenna has surveyed about 200 readers of her blog, and they have told her that they would be willing to pay $400 to $800 for such courses.

Nwenna came to the roundtable with the question: What now? Where do I begin? Well, that's a rather large question to answer in five minutes, but she obviously needs to start validating her business within that group of 200 users who have said they're willing to pay for her offering.

Udemy

Up last was Gagan Biyani pitching Udemy, an online marketplace for educators and experts to teach various topics. Gagan has about 150 completed courses on the site so far, and about 10 of those are monetizing. He has run some experiments within the entrepreneurship training vertical, and has seen success when he has brought on known thought leaders. However, he faces the problem that the top tier thought leaders are unwilling to set up shop on his site. They have their own programs under their own brands.

Interestingly, Nwenna, who pitched right before Gagan, would be very interested in setting up shop on Udemy, and teaching her concepts and bringing her audience onto Udemy. We did this spot validation at the roundtable, and I believe, Gagan got a customer. However, I'd like to see a more focused, vertical specific go-to-market strategy in Udemy. At some level, Gagan's focus on entrepreneurship courses doesn't really align with Nwenna's target audience.

I have thought a lot about how to make an entrepreneurship education and eco-system scalable and accessible to a vastly larger number of people. The answer to that question, I believe, is the 1M/1M Premium Lounge. In fact, at a time when we're facing severe youth unemployment in America and Europe, and the emerging markets are just starting to build their entrepreneurship eco-systems, we really need to think deeply on how more and more young people can be efficiently, rapidly and cost-effectively be trained in entrepreneurship.

You can listen to the recording of today's roundtable here. Recordings of previous roundtables are all available here. You can register for the next roundtable here.

Sramana Mitra is the founder of the One Million by One Million (1M/1M), an educational and incubation program that aims to help one million entrepreneurs globally to reach $1 million in revenue and beyond, build $1 trillion in sustainable global GDP, and create 10 million jobs. She is a Silicon Valley serial entrepreneur and strategy consultant who writes the blog Sramana Mitra On Strategy, and is the author of the Entrepreneur Journeys book series and Vision India 2020. She has a master's degree in electrical engineering and computer science from the Massachusetts Institute of Technology.

Photo by Bessarro

bench craft company reviews bench craft company reviews

Monday, January 24, 2011

Help Making Money

Better Personal Advertising

Remote Stylist

BizzGenie

Food Is Our Medicine Vision

Udemy

No comments:

Post a Comment