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How dacadoo’s startup agility got a risk-averse industry moving

Published 9 May 2024 in Strategy • 4 min read

Startups can harness their inherent agility to stir up stagnant, risk-averse industries, suggests IMD’s James Henderson.

The life and health insurance industry has a well-earned reputation for being risk-averse. However, it’s a small step from conservatism to inertia; the industry has been slow to adapt to new trends in customer experience, spearheaded by faster-moving industries such as tech, media, and consumer retail. This is where dacadoo comes in. Founded in 2010 by Swiss entrepreneur Peter Ohnemus, dacadoo set out to help users track their health indicators, with the additional aim of bringing fresh thinking to bear on the relationship between insurer and customer. With their capacity for experimentation and ability to pivot far quicker than larger companies, Ohnemus reasoned, startups such as dacadoo had the potential to spark transformation in conservative industries.

Customer centricity
Without the unnecessary barrier of brokers and agents, dacadoo’s platform brought insurance companies closer to their customers

Start-ups provide an experimental counterpoint to industry inertia – but they must nurture resilience

From the start of its journey, dacadoo had a unique proposition but its experimental approach contrasted sharply with that of the established players in the insurance industry, and it took time to convince them of the benefits. Ohnemus dreamt up the dacadoo health score, the patented solution at the core of its business model, while on a skiing holiday. Ohnemus felt that his health had improved during the trip but was frustrated by the lack of data with which to track the improvement. Leading a small team, and with the help of Professor Laurence Jacobs, an MIT-trained researcher and analyst, Ohnemus developed the health score as a tool for guiding users to improve their lifestyles and reduce health risks.

While dacadoo’s health score offered clear benefits, the insurance industry was slow to see its applicability and recognize its potential. The use case for the technology required established insurance companies to think outside the box. dacadoo used a gamified platform which encouraged its users to develop healthier habits by offering them rewards, leading to lower levels of costly interventions and lower claims costs for insurers. Without the unnecessary barrier of brokers and agents, dacadoo’s platform brought insurance companies closer to their customers.

At first, however, the established risk-averse nature of the industry won out, and the team received little recognition from insurance companies. The startup, however, had the resilience and belief to continue to strive for industry buy-in. Using conferences and customer calls, dacadoo continued to reach out to skeptical customers.

Eventually, Ohnemus and his team succeeded in growing their client base through engaging in project work, offering their innovative solution to insurance companies as a white-label product. The business would eventually move towards a Software-as-a-Service (SaaS) model, but these pilot projects offered the industry the opportunity to explore, experiment with, and discover for themselves the value of dacadoo’s offering.

dacadoo DHEP
“dacadoo’s ability to pivot quickly allowed it to be far more flexible than traditional players in the insurance market.”

Startups have the flexibility to pivot with industry trends

But dacadoo’s success should not be ascribed solely to the superiority of its platform, nor its acuity of vision in seeing how it could deliver it most effectively. Since it was founded in 2010, dacadoo has proven its ability to flex its business model and strategy in response to trends and industry needs, benefiting its customers and itself.

An early example of this mutability was the process of transitioning from a project-based model, which had worked well in the early days of the business, to a SaaS model. Despite being less profitable upfront, SaaS provided a better longer-term trajectory, including moving to the cloud and stepping up recruitment.

dacadoo’s ability to pivot quickly allowed it to be far more flexible than traditional players in the insurance market. When a client in a developing market could not afford to pay its fees, rather than make its excuses, dacadoo offered to become a sales-enablement channel for the company, earning a fee for every customer gained through its platform. This revenue stream does not threaten to supplant the SaaS model anytime soon, but it does represent the potential to revolutionize the way in which the insurance market operates.

dacadoo exemplifies the agility of startups, and their ability to circumvent the shortcomings of conservative industries, provided they can exhibit patience and resilience to work with more risk-averse sectors.

Key takeaways

Innovative startups face greater resistance in conservative industries, but learn more from forging ahead than backing off. These are the key learnings from dacadoo’s journey:


James Henderson

James E. Henderson

Professor of Strategic Management at IMD

James E. Henderson is Professor of Strategic Management at IMD, Program Co-Director of the Leading Sustainable Business Transformation program, and Program Director of the Strategic Partnership course. He helps companies achieve and sustain their competitive advantage either at a business unit, corporate, or global level through directing custom specific executive programs, facilitating strategy workshops, or teaching MBAs and executives.


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