Fleeting Business Models

I was interested to read a recent post at O'Reilly Radar about a new auto insurance concept called Milemeter.

Milemeter is an insurance company that allows you to purchase car insurance by the mile (actually increments of one thousand miles), with the premiums dependent upon requested coverages and geography (where you typically drive your car). Milemeter's premiums do NOT include gender as part of their underwriting criteria.

It's an interesting concept and a potential game changer. As an alum of Allstate Insurance (I worked there for a decade), I'm sure the concept is causing more than a few ripples within the industry.

I don't know whether their model will include all vehicle types (motorcycles for instance), but this model could tread upon some very profitable segments of the industry.

Progressive Insurance has made a very profitable existence in the motorcycle segment - a somewhat counter-intuitive strategy, considering how dangerous motorcycle accidents are to their drivers. But they found out that many of their customers were middle aged white guys, whose motorcycles spent more time idle, in their garages, than being ridden. Identifying and selling to this customer segment was genius.

But if Milemeter covers motorcycles, all that could change.

If you're in the auto insurance business, your world could potentially be flipped upside down.

Your homework assignment: Identify a game changing technology or approach in your current industry and figure out how to get there before someone else does. Unless you aggressively try to obsolete your current business model, someone else may do it for you.

Want to position your business for longevity?

Work everyday with the understanding that your current business model is temporary.