How to Build a Platform Company with the Capital of a Product Company

We made Zipari the fastest-growing health company in insurtech with deep industry knowledge and relentless capital efficiency.

At the start of this decade, big changes began brewing in the health insurance business. Most of them were hard to see, or understand, from the outside. 

The most apparent was the shift to a more consumer-friendly product; the Affordable Care Act forced most health insurers to launch or expand their individual plan offerings, driving them to improve customer service and offer more modern, intuitive and digital customer experiences. 

An influx of consumer-savvy executives, seeing opportunity in an aging U.S. population, began investing heavily in Medicare Advantage–individual plans that gave the insurers yet another reason to step up their game on customer experience. 

Meanwhile, new health plan CIOs understood that if they wanted to be competitive, especially on customer experience, they couldn’t keep building their own technology; they had to partner with tech companies. That meant looking to others for APIs and microservices to manage and leverage their data, and relying more on third-party cloud technology, which their predecessors never got comfortable with. 


The Health IT Opportunity

The shift was gradual and subtle, and few outside the industry could have seen it. Having worked in the health insurance industry for more than a decade, I saw an opportunity to leverage prior IT investments and overlay with modern technology. Most health plans, for example, were using off-the-shelf CRM tools that weren’t configurable for the health insurance industry–which operates on legacy technology and where nearly every function and decision is driven by complex and constantly changing regulatory regimes. 

Witnessing these shifts led me to start a company, Zipari, in 2014, which aimed to build a customer-experience and CRM platform for health insurers. Five years later, we might very well be the fastest-growing company in the health insurance technology space (Zipari ranks in the top 5 percent of Crunchbase’s 100,000 most active companies).


How We Built Zipari

Since our launch, we’ve built more than 20 products, from comprehensive sales solutions that maximize the acquisition of new employers and members to superior service solutions that provide a consumer-friendly experience for members and providers. We’ve raised more than $30 million in funding and grown to 220 employees and counting. 

We couldn’t have done that unless we understood precisely what was happening in the vertical we were selling into. This knowledge was so essential that not only did we make sure that everyone on our six-person founding team have experience in health insurance, but we also require that every new hire have at least five years of experience in health insurance (software engineers are the only exception). 

To cement this understanding, our team met with over 200 health plans before we started selling anything. And we’ve kept it up: We continue to meet with more than 300 plans every year. Listening carefully in those conversations deepens our vertical expertise, ensuring we’re only building what the market actually wants. 

That, in turn, fuels the second crucial factor in our success: capital efficiency–a critical component when trying to build a suite of products without fundraising for each one. 


Creating Capital Efficiency

To stretch our capital as far as we possibly can, we’ve come up with a unique model. When embarking on the development of a new product, we partner with health plans to develop the initial version. This helps us gather real-world requirements, and provides our partner with the ability to prioritize feature development. In short, we fund growth largely through customer revenue.

But–and this is imperative–we retain the intellectual property on every product we build. So, for every new product we build for a customer, we convert the specific needs into more general product requirements. We then add the product to our holistic Zipari platform, which we can then sell as an off-the-shelf offering or as a highly configurable solution. 


Our Guiding Principles

Making this work, and building a true platform company in just a few years with minimal capital, takes more than just industry knowledge, of course. We’ve also created a disciplined way of working, defined in a set of guiding principles that we display on every conference room wall and reinforce in weekly town hall meetings. 

Those principles help ensure we always deliver on time–a crucial selling point to health plan CIOs with significant internal political (and financial) capital riding on our platform–and they keep us accountable. We say, for example, never compromise on hiring requirements–including health insurance experience. Everybody sees that every day; to maintain our credibility as leaders, we have to live up to it. 

The result of living out our commitment to intensive vertical knowledge and diligent capital efficiency is the fastest-growing startup in the industry. Any entrepreneur looking to build a B2B technology company should look to do the same–especially if they’re building for a vertical as unique as U.S. health insurance.   

Mark Nathan is the founder and CEO of Zipari, the first and only consumer experience platform built specifically for health insurance. Mark began his 25-plus-year career as a robotics engineer at NASA and spent half of his career leading the modernization of customer experience at Guardian, one of the largest insurance companies in the nation. The other half of Mark’s career has been dedicated to developing enterprise-level, consumer-oriented technology for large consumer brands, like Apple, Disney, and 

  • Originally published August 24, 2020