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Neil Patel

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Gustaf Agartson is an international entrepreneur who set off to prove his business idea in a new emerging market. His venture has already raised over $100M in capital while attracting tens of millions of new customers. He has attracted funding from top-tier investors like CreditEase Fintech Investment Fund, LeapFrog Investments, Allianz X, and Kinnevik AB.

In this episode, you will learn:

  • Adapting to COVID, and working from home
  • How traveling has opened his eyes to different leaderships styles
  • Gustaf’s top advice for new entrepreneurs

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About Gustaf Agartson:

Gustaf has been CEO at BIMA since the company’s formation. He has played a hands-on role in transforming BIMA from a small pilot scheme, into a high-growth, international business.

Gustaf Agartson previously worked in management roles at the pan-European telecommunications company Tele2, including positions as Mobile Product Manager for Tele2Netherlands and Head of Controlling for the Tele2 Global Sales and Marketing unit.
Gustaf holds a masters from the Royal Institute of Technology in Stockholm and a Bachelor in Business Administration from Stockholm Business School.

Connect with Gustaf Agartson:

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FULL TRANSCRIPTION OF THE INTERVIEW:

Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have an amazing entrepreneur that has been at it for a little over ten years, and he has an amazing remarkable story going from one country to another. I think that it’s going to be really interesting to hear his story and how the journey has been. So without further ado, Gustaf Agartson, welcome to the show today.

Gustaf Agartson: Hi. Thanks a lot, Alejandro. It’s great to be here.

Alejandro: Originally born right outside of Stockholm in a town that had about 5,000 people. How was life growing up there?

Gustaf Agartson: I think it was great. A small town is perfect when you’re a young kid, so I really enjoyed it probably up until the age of around 14 or 15. Then 5,000 is a really small place. From that moment, I looked forward to moving from that city to Stockholm.

Alejandro: And you ended up in Stockholm at about 15 years old. Was that a big culture shock to all of a sudden see much more than 5,000 going around the street and seeing different faces rather than the same face over and over again?

Gustaf Agartson: Yeah, probably a bit like that. I’ve, obviously, been to Stockholm before. But yeah, it was a bit of a shock, but it was also very exciting for me to do that. I had support from my parents making that move, which I very much appreciate.

Alejandro: So, telecommunications. Tell us how you ended up in the telecommunications world because that was your first gig in professional life, what you started doing right off the get-go. How did you land in telecommunications?

Gustaf Agartson: After my studies, when I started to look for jobs, there was this Swedish teleco, a Swedish mobile operation called Tele2, who had an operation throughout 26 countries in Europe. That company had an entrepreneurial mindset. They had grown fast, and they had these two-year programs that you could apply for where you had an opportunity to have a mentor, and you had an opportunity to work in a number of different countries during those two years. We were both in exciting projects. For me, that was an excellent opportunity to see different countries, but also to work with everything from product, marketing, technology, and learn a lot. When I joined that Tele2, my mentor at the time said, “Focus your two years on learning as much as possible and have fun rather than produce work.” I think that was a great opportunity. I learned a lot, and it was a really exciting time.

Alejandro: Why do you think that Swedish people travel so much? It’s insane. Obviously, with this Teleco, you did travel quite a bit, but it’s like Swedish people are born with luggage under your arm. What’s going on?

Gustaf Agartson: [Laughter] Good question. Sweden is a small country, and it’s cold and dark a good part of the year, and as a result, I think we’re quite excited when we see things going on in other parts of the world. I think that’s why the Swedes like to travel, especially during the winter. That also indicates, for me, I’ve always been excited about what’s going on outside Sweden, both in my professional life but also when I was a kid. Travel and going on vacation were things we and others around me really wanted to do.

Alejandro: That’s probably also contributed to being interested in what’s happening outside of Stockholm and Sweden. You know, in 2009, for example, you started to see what was happening in East Kenya. At that point, you started to incubate the idea of doing something on your own. Tell us about what happened, and what was the sequence of events there?

Gustaf Agartson: Around that time, again, I wanted to do something else, and I was excited about what was going on, not only outside of Sweden but outside of Europe. In Kenya, at the time, the mobile operators, Safaricom, had invented M-Pesa, which was basically a platform that enabled people that didn’t have bank accounts to send and receive money. What they managed to prove was that with the mobile operator infrastructure with mobile technology, you can actually create financial products for people that haven’t had access to it before. I thought that was really inspiring. At the same time, I heard about the Swedish investor called Generac that they were backing very young businesses that were focused on consumer finance in an emerging market. I got a meeting with them and discussed the idea of doing something in Africa, where we continued on the same line as Oracom, where it would explore how they could use mobile operators to do more than in financial services. We discussed doing something around insurance. That led to a commitment from Generac that if you move to an African country, and you prove through local research and pilot projects that there’s an opportunity here, we will back you financially. So that’s what I did. I moved to Ghana in mid-2010 and set up a business that later on became Bima. That’s how we started.

Alejandro: What ended up being the business model for Bima for the people that are listening to get it.

Gustaf Agartson: The whole purpose of Bima is that we want to provide insurance and health services to people in emerging markets that haven’t had access to these services before. We started in Ghana, but the situation is very similar, also, in other African countries, and in the emerging part of Asia, as well. People don’t have access to insurance. People don’t have that safety net, and that is also something that the government can provide. What we wanted to achieve with Bima was by leveraging technology, we wanted to find a cost-effective way to provide life and health insurance to people. The whole idea from the beginning was if we leverage technology the right way, we can bring prices down to, say, $50 and up to a couple of dollars per month, which is affordable for the mass market. That was the whole idea. Then I knew before I moved to Ghana that there was a need for these products in a country like Ghana and also in other markets in Africa. You can see that from the stats. You can see that the insurance penetrations were very low. But what I didn’t know when I arrived in Ghana was: do people actually want to buy these products even if we create them and make them affordable? Do people want to allocate the money that they have and pay for something like insurance? That I didn’t know. I also didn’t know anything about what the business model would look like. One of the things I realized when I arrived in Ghana for the first phase of the research was that there is actually the market. We created example products that we were planning to launch, and we discussed those with potential customers and said, “If we were to offer you this life or health insurance and it cost you a dollar a month, would you buy it?” The answer was, “Yes.” I realized that this could actually work because there was clearly a demand here. The reason why people don’t have access to insurance in Ghana is not because they’re not prepared to pay for it, or they don’t want it, or they don’t see the need for it; it is because no one has offered it to them in a convenient way at an affordable price. Then, the question was: how do we develop a business model that works? What has evolved since then is a model where we’re leveraging mobile operators or providers of mobile [10:30] in the sense that that’s how we collect premiums from customers. So customers can subscribe through their phone, and then they can pay for the insurance through their phone. That’s core to the business model, and that’s all digitalized subscriptions and payments and communication because that’s digitalized. What we also realized was that when people are buying something like insurance for the first time, you need to provide them education around what insurance is and how it works. Our business model from the beginning has been a plan of digital processes with a human touch. What we mean by that human touch is that even if customers can subscribe themselves on the phone, we actually have full-time employed sales agents that are operating out in the field and in market places meeting potential customers and pitching the product to them. We’ve also set up call centers in Ghana and in the other markets where we operate. Across Africa and Asia, we have around 2,000 salespeople in call centers that are reaching out to customers. They tell them about the product and answer their questions and help them with their subscriptions. That’s what our business model looks like.

Alejandro: It had to be wild to all of a sudden go from a place like Europe where, there, you are familiar with business, with how interactions are. It’s like the same mentality if you’re in the UK or Germany or wherever you are across Europe. Here, you go to Ghana, which is not as developed as what you were used to seeing. I’m sure that was a culture shock for you, too. What was that like? How was it conducting business in Ghana and developing something from the ground up in a place where you were completely unfamiliar?

Gustaf Agartson: I think it was challenging and also very exciting. I had never been to Africa, so this was the first time I had seen an African country. Obviously, that was a big change, but Ghana is also a great place. If you look at other countries in West Africa like Nigeria, Ivory Coast, etc., these countries can be much more challenging, I think. Ghana has been politically stable for a long time. It’s English-speaking, and it’s a safe place. You can walk out in the streets in the evenings, etc. From that perspective, for me, it was a very positive experience. Then, of course, building something from start was tricky. We were inventing a new business model that also required approvals from regulators, and getting those approvals took some time and required many needed things and a lot of convincing and explanations. Overall, they were very exciting times.

Alejandro: In this case, it seems that you guys had hit a nerve in the market, and I’m sure that there, when you were building this up, and you started to receive validation, then it was all about building the team. How did you go about building the team in a new area for you, in a new country? What were some of the measures or things that you took into consideration to make sure that you were able to surround yourself with the right people?

Gustaf Agartson: I think, for me, I was lucky in the beginning with a couple of recruitments that I did that have been absolutely critical for Bima. Our deputy, the CEO, is called Matilda. She joined me in the beginning of 2011. I made some key hires in the beginning, but looking back at that time, I can also say that I didn’t spend enough time on building a team in the beginning. So I made some of the mistakes that I think many entrepreneurs make. You try to do everything yourself in the beginning, and building a team and recruiting people takes time. When you get new people on board, you actually have to invest time in making them understand the company, which actually slows you down. It can be tricky in the beginning to spend the time and the money that is required to build a team, even if you know that it’s going to be necessary to succeed long-term. I think, for me, it was a little bit of luck in the beginning that I got some good people on board. But we could have also moved, I think, faster by recruiting additional people early on.

Alejandro: As we’re thinking about recruiting people and building things up and the business model, obviously, this requires capital. How much capital have you guys raised to date?

Gustaf Agartson: We raised around $130 million to date.

Alejandro: Got it. In terms of capital deployment, people are a big one. In your case, it seems that you guys accelerated a bit too fast when it came to building the team. So what did you learn from perhaps expanding so fast and going to different countries so fast? What were some of the lessons there for you guys to be learned?

Gustaf Agartson: You’re right. When we had proven that the business model would work in Ghana, we started to expand geographically. Initially, in other markets in Africa, and then into Southeast Asia, and also to Latin America. For example, in 2014, we launched seven new countries within that year, and we recruited more than 1,000 people in that year. Looking back at that time, I think we moved a bit too fast. We didn’t do enough research before we entered a new market. Now, we also look at potential answering in new markets, but we’re going to go through a very different process when that happens in terms of making sure that we understand whether the circumstances in that market are right for our business model. That wasn’t always the case in the past. For example, in Latin America, we entered countries that didn’t have the right circumstances for us to succeed, and we didn’t end doing the right commercial agreements with partners, so we had to exit. Those markets no longer have any presence in Latin America as a region. The learning there is that, for me, you can move fast, and I think it’s important that you take positions fast and move forward as a business. But before making significant investments, it’s also doing the required research, and we haven’t always done that.

Alejandro: I hear you. I’m sure that there are a lot of people right now that are listening that maybe they are at that point where they’re transitioning from being at a Series A financing cycle where you have the product/market fit, and you have the revenues. They’re transitioning from that Series A to a Series B, which is more about historicals, more about the wheel already turning on its own by adding more capital, and where you go from early-stage to growth stage, which is the expansion stage. For those people that are listening that perhaps are transitioning from early-stage to growth-stage and thinking about expansion, what three pieces of advice would you give them to consider as you are thinking about expansion?

Gustaf Agartson: This is something that I’ve also been guilty of, and I’m seeing quite a few people making the same mistake is to start when you fundraise. You put forward that very aggressive growth plan to your potential investors. By doing that, you can commit to that plan. Then when you close the round, you set those expectations. Then, you might end up in a situation where you actually think it’s better for the company to slow down a bit, but because of the commitments you make, you continue to move full-speed ahead, even if you know that might be a risky thing to do. My first recommendation would be to be quite careful before you put over that workup and set those expectations with your new shareholders, for example, ahead of the Series B. The second thing would be that if you try to scale something, and you realize that the fundamentals here are not in place, it’s better to force and fix it before you scale out. And again, sometimes that is easier said than done because you’ve set expectations among others and yourselves that you’re going to achieve something according to a certain timeline, but it can also make sense to take a forced step. Then the last thing would probably be, in our case, we’re operating across several regulated industries, and when you have the combination of new technology being required to launch something as well as regulatory approval, you need to have some buffers in your timeline in order to be successful. That’s another learning.

Alejandro: For the people that are listening, Gustaf, to really get an idea of how big Bima is today, is there anything you can share in terms of maybe the number of employees or anything else that you feel comfortable disclosing?

Gustaf Agartson: We have around 2,500 employees. We operate in nine markets across Africa and Asia. Then we have three global offices, one in London, one in Bangalore, and one in Singapore. We have sold our insurance and have services to date to more than 35 million people. If we look right now on a monthly basis, how many customers that actually have paid for their monthly premium for their insurance product. That’s a bit more than 5 million. Then we also have expanded our product portfolio to be offspring insurance, but also other health services like telemedicine, and we are delivering around one million consultations over the phone a year.

Alejandro: Gustaf, as we’re thinking here about numbers, and we’re thinking about realizing the vision for Bima, imagine you go to sleep tonight, and you wake up in a world five years later; you wake up in a world where the vision of Bima is fully realized. What does that world look like?

Gustaf Agartson: In that world, we are successfully operating in the nine markets where we are today, plus an additional two to three countries in Africa and Asia. In all of these markets, we are well-known and a very much trusted brand that families believe is there for them to protect them and their future. I would like us to offer product that spans across insurance, telemedicine, but also other related health services. And I want us to be specialized in some areas where we make sure that if you have, for example, diabetes, and you’re a Bima customer, that you have access to the tools that you need to manage your health.

Alejandro: Very nice. One of the things as you were talking about telehealth, definitely one of the things that comes to mind is the COVID experience. I’m sure that this whole COVID situation has been pretty wild to experience being the operator behind Bima, so how has the COVID experience been for you guys?

Gustaf Agartson: Last year was an extremely challenging year. We offer telemedicine service, and therefore, people think that telemedicine has benefited from the COVID situation and that that’s been a positive thing for Bima, and that is correct. The demands of telemedicine services have increased, so that’s positive. But also, for us, and this goes back to what I said earlier, that our business model is not purely digital. It’s also that human touch, and our growth is dependent on more than 2,000 people that are selling our products out in the field and in call centers. Obviously, when markets go into lockdown, it’s impossible to operate with a field agent salesforce. That was one challenge that we felt. But also, before COVID, all of our sales staff in call centers came in and operated from the call center. When there were restrictions from the government around how many people there could be in an office, it was very difficult to do. We had to arrange for those people to do sales from home. In countries like Pakistan, Ghana, or Bangladesh, not everyone has the right equipment to use from one day to another to make sales calls from home instead of the office. So that was a transition that we had to go through. In Q2 last year, we had to make that transition and get basically everyone within Bima to operate in an effective way from home. Then what we saw the second half of the year was that the situation started to vary a lot between countries. Sometimes, it opened up again while other countries have stayed in lockdown. That’s the situation, also today. Even at the beginning of this year, everything seems to be going across markets in the right direction. Now that the situation is going on right now in India, we see potential knocks on effects in some of the neighboring countries, their near-term future for the development of COVID in countries like Bangladesh, Sri Lanka, and Pakistan, where we have operations is actually quite uncertain. That challenge is very much there, and even if we see vaccines being rolled out, I think we all agree that that’s going to take time. We’re going to continue to have challenges also for the rest of this year due to COVID.

Alejandro: Just one thing that is very interesting here is, you are a very well-traveled individual. You’ve been all over the world, literally. When you’re able to have that level of exposure to different cultures, to different people, to different mindsets, to different approaches, I think that you’ve been able to learn a lot, as well, on how to deal with people too. How do you think having that type of worldview has transformed yourself as a leader, as well?

Gustaf Agartson: It’s a good question, and it’s a hard one to answer, but I think traveling and meeting people and listening to what people have to say, you learn a lot as a leader, but also as an individual. I’ve also seen that leadership styles can work in some countries, and they’re less effective in other countries. What one of my colleagues said, for example, in Southeast Asia, is that here in the region, you have to be respected as a person before you can be respected as a manager. That might not be the case in other countries where the new boss can walk into an office and start to decide how things should be done and that works. In other cultures, that doesn’t work. You have to spend time with people and earn their respect before you can start having conversations around what should be done and what should not be done. These are things that I have learned along the way, and I’m still learning. That learning curve will probably never stop, and that’s something I’ve also realized over the past year is that when it comes to developing into a strong leader, that will take a lot of time, and I’m very, very far from being done with that. That’s for sure.

Alejandro: One of the questions that I typically ask the guests that come on the show is, imagine I put you into a time machine, and I’m able to bring you back in time, obviously, with all the experiences, all the lessons learned, and everything about this journey with Bima. I transport you back to 2009 to have a conversation with your younger self. Here you are at a point in time where you are keen to understand what else you could do that is something of your own, and you have the chance to sit down with that younger self at that moment in time, what would you tell your younger Gustaf about launching a business. What would be that one piece of advice about launching a business, only one, and why would you give that one to your younger self before launching a company and why based on what you know now, Gustaf?

Gustaf Agartson: It’s a tricky one. If it’s only one thing it would probably be to from the start, be more focused on understanding the consumers and the users of the product. Looking back, I could have spent more time doing that throughout the evolution of Bima.

Alejandro: I love that. I think that the consumers are everything. Without them, there’s nothing, so I really love that, Gustaf. For the people that are listening, what is the best way for them to reach out and say hi?

Gustaf Agartson: Well, they can connect with me on Bima or LinkedIn. If people are interested in connecting and sharing exciting ideas, or if they’re interested in working with Bima, or whatever it is, I’m open. So please connect.

Alejandro: Amazing. Gustaf, thank you so much for being on the DealMakers show today.

Gustaf Agartson: Thank you very much.

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