Northwestern Mutual makes its pitch

Entrepreneurs from Milwaukee and beyond attended Northwestern Mutual Life Insurance Co.’s Reverse Pitch MKE event Monday evening at the company’s new Tower and Commons in downtown Milwaukee.

Karl Gouverneur, vice president of digital workplace, corporate solutions and head of digital innovation at Northwestern Mutual, laid out the structure of the company’s innovation efforts and introduced the competition.

“It’s very difficult to take solutions that we start in a lab and 10 people use it and scale it up to 22,000,” Gouverneur said, which is where the contest comes in.

Subject matter experts from within the company then laid out the challenges Northwestern Mutual was pitching to entrepreneurs, so they could develop solutions.

The challenges are:

• Legal automation: A way to automate the procurement contract process by disaggregating key components and virtually red-lining language of concern in contracts – an efficiency win for any corporate law department and procurement professional.
• Referral friction: A creative solution to overcome the friction its financial representatives encounter in acquiring referrals and new leads.
• Compliant communication in the digital world: A way to allow clients to reach their advisor using their preferred digital communication method while remaining compliant.
• Salesperson market potential: An automated way to identify prospects based on a financial representative’s publicly available social media contacts.
• Real-time spending capture: Software to act as a platform linking several cards a customer already uses to capture real-time transactions and offer the ability to automate future credit card actions through the platform, based on business logic.

Legal services is a $437 billion market, and legal technology is a growing field, said Shantanu Singh, assistant general counsel, law at Northwestern Mutual.

“If you’re a seed stage startup, this is a good time to be tackling the legal tech marketplace,” he said.

The technology product that entrepreneurs create to address the legal automation challenge would need to include text processing and be able to do some basic legal reasoning, Singh said. The product could be used by Northwestern Mutual and other businesses to more efficiently and effectively analyze contracts in a proactive manner based upon level of complexity, rather than reactively.

The gathered entrepreneurs—about 75 in the room and more in an overflow room—asked Singh for more specifics about the company’s contract challenges, but Singh advised they keep their solutions broad enough for a wider client base.

“I would start thinking about these concepts from the smallest degree of complexity,” Singh said.

“We wanted to make sure we picked solutions that had more than just a client of one,” Gouverneur said.

For each of the ideas, the attendees vetted them, heard about use cases and discussed potential approaches.

Three of the challenges—referral friction, compliant communication and enhanced market potential—addressed the system and process used by Northwestern Mutual’s sales representatives in the field. In a changing world, cold calling has become less effective and the company is seeking new technologies to provide ease of communication and bring on more clients.

Roman Geyzer, product manager, asked entrepreneurs to consider how to reduce referral friction and tap into a rep’s massive personal and professional networks more effectively. This kind of solution could be used at any number of businesses with sales professionals, he said.

“How do you make the ask easier? How do you connect with your next client?” he asked.

When it comes to compliant communications, Tom Holtan, enterprise compliance-electronic communications, asked entrepreneurs to create a flexible solution to integrate any communication channel with any supervision system so a client could text or social media message an advisor, and the communication would still be compliant.

Anand Mehta, assistant director-field strategy development, described the challenge for a new representative at Northwestern Mutual—about 2,000 of them per year. About 65 percent of them leave the career in one year, and 87 percent leave within five years.

Northwestern Mutual’s typical sales process, he said, involves making 1,000 potential contacts, obtaining 300 potential meetings out of those contacts, and about 60 of those people becoming clients in a rep’s first year. He asked, how could the entrepreneurs help a new rep expand her network by analyzing her social media network data?

And real-time spending capture would involve the entrepreneurs creating credit cards with web hooks that could link up with their software in real-time to provide Northwestern Mutual clients with up-to-the-minute information and budgeting tools for all of their financial accounts in one place. No other product in the market is doing this, said Frank Greco, Jr., cloud native engineer.

“The problem that exists that we’re asking you guys to solve is a solution we can use and any person in the outside world can use it,” Greco said. “We don’t want to be in the business of being a bank, but we don’t think we have to to be at the center of our clients’ financial life.”

The entrepreneurs, which can group into teams, will have until Dec. 10 to submit their applications to Northwestern Mutual, laying out how they would solve one of the challenges, the value proposition, competitive positioning, strength of the management team, consideration of risks and how they would use the up to $85,000 that Northwestern Mutual will invest in the winner.

The field will be narrowed by Dec. 15, when Northwestern Mutual announces about five to seven finalists. On Jan. 8, those finalists will pitch their ideas to Northwestern Mutual at Pitch Back Day.

Northwestern Mutual also laid out more specifics about its investment in the winner. The winning team would receive $10,000 to create a new legal entity and form a company, and then Northwestern Mutual would invest up to $75,000, split into three tranches based on mutually agreed upon milestones. The entrepreneurs received a term sheet that included last look right and right of first refusal. The winners would also get free office space and mentorship at Northwestern Mutual.

After the Reverse Pitch, attendee Dan Emmons, a Milwaukee-based developer who specializes in financial software, risk management software and blockchain, said he was interested in pursuing the legal automation solution.

“I thought there would be a great way to use my skills and combine them with what I consider to be a landmark of Milwaukee,” Emmons said. “Basically, we have a common goal. … We both are trying to build this as the technology hub that we live in, we work in. If we can find solutions to problems that everyone has, (people will) have another reason to come here.”

Brian Robertson, a Madison-based developer who completed Milwaukee’s devCodeCamp last year, said he hopes to pursue one of the ideas if he can form a team.

“Clearly it’s a big challenge,” Robertson said. “They’re putting some big things on the table and it’s a team effort. It’s not anything that could be accomplished by a single person.

“I’m very impressed with what Northwestern Mutual is trying to do. It’s very difficult to establish innovation and lead innovation.”