How three years at McKinsey shaped my second startup

Article is interesting on the whole (I have no experience with &quot;professional&quot; work, and would love for suggestions as to how to be more familiar), but I latched onto this nugget:<p>&gt; Our vision at Meanwhile is to build the world&#x27;s largest life insurer as measured by customer count, annual premiums sold, and total assets under management. We aim to serve a billion people, using digital money to reach policyholders and automation&#x2F;AI to serve them profitably. We plan to do with 100 people what Allianz and others do with 100,000.<p>Completely separate from the potential ethical issues and economic implications of putting 100k people out of a job, I see one very concrete moral problem:<p>that the only way to provide dispute resolution and customer service to 1B people with only 100 employees is by depriving them of any chance to interact with a human, and forcing all interaction with the company to go through AI.<p>That, to me, is <i>deeply</i> disturbing, and very very difficult to justify.

Wanted to point to the startup the author seems to be running, which is to sell insurance somehow tied to Bitcoin: <a href="https:&#x2F;&#x2F;meanwhile.bm&#x2F;" rel="nofollow">https:&#x2F;&#x2F;meanwhile.bm&#x2F;</a><p>For the record, that strikes me as seriously improper. Life insurance is a heavily regulated offering intended to provide security to families. It is the opposite of bitcoin, which is a highly speculative investment asset. Those two things should not be mixed.<p>Also, the fact that the disclosure seems to limit sales to being only occurring in Bermuda seems intentional. I suspect that this product would be highly illegal in most if not all US states, so they must offer this only for sale in Bermuda to avoid that issue.

&quot;I wanted to derisk my resume by working somewhere with high signaling.&quot;<p>You can take the founder out of a consultancy, but you can&#x27;t take the consultancy out of the founder.

My wife made a McKinsey consultant cry… she hired McKinsey for some internal project. One person on the project was a recent Harvard grad. They were in a meeting going over the deliverables along with the McKinsey partner on the project and in the meeting my wife said something to the effect that their work wasn’t up to McKinsey standards.<p>The junior guy started crying in the meeting. Like just blubbering. My wife still feels bad for it but still…<p>Weird thing, instead of firing him McKinsey kept him and stipulated that he can only be in meetings when the partner is present.

The engineer in me immediately looks for ways to map out how tax avoidance via crypto trading on life insurance funds via a Bermuda company can possibly go wrong. Insurance has a nice long term cash flow that has proved very sweet for Berkshire Hathaway, and investment on top of that gets perks for the insurance. However Crypto, which has liquidity issues and is heavily scammed&#x2F;stolen would benefit far more than the users of business. The holdings would stay for decades, allowing arbitrage of the main company with user investments. If there is a leak or a collapse of the crypto, the customers won’t know it until they can’t get their funds back, but since AI is handling the claims, they may never even find out the real reason they can’t get their money back. And since it’s life insurance, the buyer might never find out, while their descendants or loved ones may not know how to deal with it or be plenty confused by the lack of customer service. Very novel scheme.

This reads like a linkedin post and I&#x27;m only commenting because I&#x27;d like to hear more about the 2nd type of big-org problems he faced that he felt weren&#x27;t fixable, and why - but instead got a pitch to his new startup, which I guess should&#x27;ve been expected from the title. Just hoped for more substance.

Oh McKinsey had a name for that program (&quot;Leap&quot;). I once worked at a &quot;Telco Enterprise Startup&quot; in Berlin founded by them.<p>They essentially lied about any anticipated KPI potentials and let their &quot;tech&quot; people put together a 15k EUR&#x2F;month (before public release) platform on AWS which was such a pile of mess, it made the second year&#x27;s CTO start from scratch. After some heavy arguments because of their poor performance, McKinsey agreed to let some &quot;non-technical&quot; people work there for a couple of months for free. All arguments you&#x27;d had with the McKinsey &quot;Engineers&quot; felt like talking to AWS Sales, they had barely any technical insights but a catalog of &quot;pre-made solutions&quot; to choose from.

&gt; Meanwhile: to break into a highly-regulated, commoditized market like insurance, you need both a truly differentiated product that incumbents can&#x27;t easily replicate and an associated distribution strategy that leverages their blind spots.<p>Having worked in highly regulated industries, I’ve learned that the best way to disrupt incumbents is by creating a product that assumes more business risk than is typically accepted. Large, regulated companies are extremely risk-averse—so if you can take on that risk in a smart, innovative way, you’ll win.

Looking at the home page of Meanwhile only made me think of how life insurance is such a different thing than, say, a mortgage. With life insurance, counterparty risk matters. You don&#x27;t care about your mortgage counterparty. I&#x27;m not going to buy life insurance from an insurer with Youtube videos of Anthony Pompliano on their home page. Know your enemy.

&gt; I learned deeper truths about where startups can win and compete.<p>Now that I&#x27;m working at a big organization (a Fortune 500 company), I can relate. I&#x27;m by far the most innovative person in my team and I&#x27;m being held down because I&#x27;m not doing my role (as I&#x27;m not a dev but a data analyst at the moment).<p>If I&#x27;d be doing my role however, then we wouldn&#x27;t be innovating and the C-suite wants us to innovate with AI. I&#x27;m the only one at my department that can create actual AI automations. And the IT department is basically stripped out by upper management.<p>If anyone wants an actual dev building AI automations and think how we can disrupt with the state of the art, my email is in my profile.

Valuable article, it&#x27;s rare to see a glimpse into McKinsey in normal human language.<p>The fact that the company has become a sort of pseudo-VC (mentorship but not financing) for small teams within megacorps is interesting. I wonder why large corps find it so difficult to innovate. I think that they become somewhat &quot;load-bearing&quot; in society and the lines between the company and the market begin to blur. Any change the company makes causes a misalignment because they shaped the market to fit themselves.

Thought :know your enemy: would refer to the corporation investigative &quot;When McKinsey comes to town&quot; book (McKinsey&#x27;s major involvements in lobbying for tobacco involvement, Opioid epidemic, and many more crimes left mostly unpunished).

In my home country (Norway), I&#x27;ve met plenty of startup founders that come from MBB consulting. Actually a pretty &quot;normal&quot; path here, compared to jumping straight into entrepreneurship out of college. But that also has something to do with how risk-averse investors here are, compared to the US (no one here is going to give inexperienced college kids a bunch of money, unless they&#x27;ve proven themselves to be bona fide serious people) - and the fact that consultants actively get to see market needs in real time, and in positions where other external people might not.

My experience working at a consulting company was that we were a software development agency with change management. It can work well. However as a consultancy, the incentive is also to continually develop our integration into your organization so that you continue to need us.<p>Very much a symbiotic vs parasitic relationship.

&gt; Our vision at Meanwhile is to build the world&#x27;s largest life insurer as measured by customer count, annual premiums sold, and total assets under management. We aim to serve a billion people, using digital money to reach policyholders and automation&#x2F;AI to serve them profitably. We plan to do with 100 people what Allianz and others do with 100,000.<p>So 3 years at McKinsey taught OP the corporate BS. That paragraph doesn&#x27;t say anything useful.

Key claim: &quot;disruption&quot; is impossible for BigCompany. SmallCo can do it, but only if they both (1) have something technically hard to replicate, and (2) target a marketing niche that is a irremediable blind spot for BigCompany&#x27;s. Since his venture now is life insurance, Geico is likely the comparable case in point.<p>I really think every founder (and startup worker) needs to take seriously the marketing side of the business, and not just believe that new technology will win.<p>(While I, too, am allergic to bitcoin scams, given increasing levels of political corruption monkeying with markets, rates, and regulation, I can also see it as an enticing alternative for those looking to get long-term investments off the dollar. For insurance, the main question is, will the money be there and be made available? Having seen even highly-regulated pensions fail (without federal insurance recourse in the case of religious hospital behemoths), I can see how technical guarantees independent of regulation or law could be compelling.)

Insurance business is mostly about hoarding and investing money so you can actually pay when you have to.<p>Unless you can solve that part of the problem as well as the big players, you will run into problems at some point, using extrem value theory you can even estimate when.

I was confused by this as ChatGPT launched in Nov 2022 and had tens of millions of users by end of 2022.<p>&gt; And though when we started our business in 2023 (ChatGPT wasn’t out yet), you could begin to feel that something like that was possible in a way it wasn’t before.<p>perhaps a typo in year?

Not responding about the article, but I remember interviewing with McKinsey as a graduating PhD. I had just passed their test and was going through the case study interview and I got paired with a PhD in physics from MIT. I think the study was something about cognac sales and I just got disgusted with the waste of training and talent, and after I got home from the airport that evening I pulled out of the interview process even though I had no other employment options at the time.<p>Somewhat ironically, over the past 20 years I’ve come to reject PhD-type career tracks after seeing how much PhD overproduction there is and how my older colleagues only had a BS or MS. These days, I yearn to leave my Big Tech job to start a “boring” business. Right now I’m taking Accounting 101 at a local university to understand business financials better.

Lots of people are misreading this post.<p>The key phrase is LIFE Insurance, not HEALTH Insurance!<p>They are vastly different markets.<p>You don’t deny claims for life insurance as companies would do for health insurance. It’s a very different set of circumstances to have to deny life insurance.

This persons vision of their company sounds like a nightmare I&#x27;d pay more to avoid.

I was having trouble connecting the article to the title. Who is the &quot;enemy&quot; getting &quot;known&quot; in this piece?

this is a great piece!<p>one nitpick:<p>&gt; And though when we started our business in 2023 (ChatGPT wasn’t out yet), you could begin to feel that something like that was possible in a way it wasn’t before.<p>ChatGPT launched in late 2022...

Author is not consistent. He mentions in 25 cases, the firm hiring McKinsey did not know the answer beforehand. Yet, Leap is based on firms already knowing the answer. The reason McKinsey is hired is to avoid internal conflicts over which manager takes the reigns. I doubt McKinsey is providing solutions to these industries (as in, introducing a product that was not pitched internally by someone already. In fact, in most cases, a manager will pitch the solution and McKinsey&#x27;s job is purely finding the right managers to leave this internal &quot;startup&quot; to). Should that be the case, I would love to be proven wrong. However, every consultant I had met is no engineer or tech leader. They are merely consultants, restructuring the answers in ways that avoid conflicts within established giants. Most of them are Ivy League graduates that never worked in the technical field (got hired at Bain or McKinsey fresh out of school). Often we would make up stacks to demonstrate how ignorant they can be of technology. Managers and business people love McKinsey. As an engineer, I have not met any tech founder or technical engineer that esteemed the field (just listen to Steve Jobs&#x27; opinion on consulting). I attribute the mess that Google is under Sundar to McKinsey (not even mentioning the Opioid crisis where their hands are stained too). The redeeming factor is the author describes them as the enemy and is at least honest about his reasons for joining (stability and established resume name)

McKinsey should not be anyone&#x27;s role model.