HomeServe Labs MD Craig Foster speaks to GrowthBusiness on growing one of the first movers in the home assistance market, and how the business evolved to solve the biggest problems facing insurtech.
What does your business do?
HomeServe Labs started out as an innovation lab for the international home assistance company HomeServe. The team invented a revolutionary new type of leak detector, LeakBot, that solves one of the biggest problems in the home insurance industry – undetected water leaks leading to substantial damage and expensive claims. HomeServe Labs is now a separate entity focused on scaling the LeakBot business.
Where did the idea for your business come from?
The story of HomeServe Labs starts three years ago in 2014 when myself and HomeServe’s CEO Martin Bennett attended a course on corporate innovation at London Business School. Martin and I had been working for HomeServe for several years and were looking at ways to grow the business and open up to new market opportunities. While HomeServe’s core business as a home assistance company was doing really well – providing services to consumers to fix plumbing problems quickly for an annual subscription – we knew there were new opportunities emerging around us which were not yet being explored.
At London Business School we gained more understanding of how to create innovative business models to find new solutions to real problems. It was here where we learned that the most important factor in what makes a corporation innovative is the degree to which they are ‘future focused’, that is the extent to which the resources in the business are focused on the technologies, competitors and customers of the future, as opposed to that of today. It was obvious to both of us that in the long run the internet of things (IoT) would have a dramatic impact on home assistance services, and HomeServe could either shape this future or be disrupted by it.
How did you know there was a market for it?
In the UK alone the cost of claims for water damage, and the financial and emotional strain of a leak causing water damage in the home for customers, costs the UK £629 million every year. Globally, water leaks are nearly a £20 billion per year problem – escape of water claims being the biggest cost to insurers. The unique technology in LeakBot means that a single low cost device can detect exactly the type of small hidden leaks that cause insurance companies and home owners so many problems. LeakBot does this in a way unique to anything else on the market.
How did you raise funding, and why?
HomeServe Labs is a wholly owned subsidiary of HomeServe with the years of experience and financial backing of a large, established and profitable organisation.
Describe your business model in brief
HomeServe Labs’ business model is either selling direct to end user customers who would like greater control over the safety of their homes or through Insurers who offer the LeakBot to their own customers. We currently operate a subscription model with Insurers so that they can see the benefits of the technology before making any upfront investment.
Your lowest point was…
In May 2017 I found out my wife has stage 4 terminal cancer, which turned my life upside down, not to mention taking my attention away from HomeServe Labs for a while.
Your highest point was…
It is hard to choose between the moment we got the news that our first patent had been granted, or the moment we signed our first large deal with an insurance company.
What advice would you give to other entrepreneurs?
Don’t believe your own bullshit – The enemy of any entrepreneur is the lies we inadvertently tell ourselves. It is so easy to be over optimistic about the size of the market, or to look for information which just confirms your inherent assumptions about your product or consumer behaviour. You have to be prepared to change your mind quickly when the facts change. A Zen master once said “don’t seek the truth, just cease to cherish your opinions.
Where do you want to be in five years’ time?
In five years’ time we expect that LeakBot will be the standard in InsurTech leak detection technology across Europe and the US, and will be a good case study as one of the first IOT InsureTech businesses.
If you weren’t an entrepreneur, you would be…
An architect (of houses I mean, not technology).
What is your philosophy on business or life, in a nutshell?
My wife getting cancer caused me to reassess a lot of things. I don’t know what the future holds, however I am more awake in the present moment than I have ever been and for this I am grateful.