3 Things: Escape Room Restaurant, GPT-3 for Call Centers, Stop-Loss Insurance Carrier

Happy Sunday and a very warm welcome to all the new subscribers! I’m thrilled and honored to have you as readers and truly appreciate your thoughts and feedback 🙏. I’m back from a much-needed vacation and have some good ones for you today ;-) Each edition of 3 Things will contain a dive into 3 rabbit holes I’ve found myself going down recently and associated business opportunities. Subscribe to get each week’s edition straight to your inbox and if you enjoy it, please share (I suck at self-promotion so can use your help)! This past week I’ve been thinking a lot about:

• Escape Room Restaurant

• GPT-3 for Call Centers

• Stop-Loss Insurance Carrier

1. Escape Room Restaurant

The earliest point-and-click adventure games date all the way back to the early 1980s with Japanese game Planet Mephius. In 1988, John Wilson created Behind Closed Doors which was the first game where a player was trapped inside a room. At the time, the game was entirely text based and most room escape games would remain that way for another 15 years. In 2004, another Japanese creator named Toshimitsu Takagi launched a game called Crimson Room which propelled the digital escape room concept. The first physical escape room was created in Indianapolis in 2003 called True Dungeon which created a team-based experience that involved problem solving and tactics with interactive props and immersive sets.

Since the early 2000s, the concept of in-person escape rooms has exploded and as of 2019, there were over 50,000 escape rooms across the globe. Another trend that has become popular, especially among younger generations, is experiential concepts that often involve food and/or beverages plus another activity. Whether its a brewcade, Museum of Ice Cream, Urban Putt, or Mission Bowling Club, people want more in a dining experience than just good food and a white tablecloth. If you combine the concept of an escape room with experiential dining, you could create an insanely cool activity where groups of diners have to solve puzzles to unlock the next course; which will be waiting for them in the next room. Each room could have a dish and drink pairing along with clues to escape that room and move on to the next. You would sell (expensive) tickets up front which means you can better control revenue/cashflow and since escape rooms are usually time-boxed, you can manage the flow of patrons. Focusing on fun finger foods would make dishware and clean-up between groups a lot easier.

2. GPT-3 for Call Centers

Have you ever called a customer support line only to spend 10 minutes explaining the situation to one representation who then transfers you to another department or person where you start back at zero and explain the situation again? Despite improvements in call center tech, this still feels like the status quo even for the best support lines. Recently when I was traveling, a flight got cancelled and I needed to rebook and then also change the connecting flight so that we didn’t have a 7-hr layover. I ended up speaking to 4 representatives over the course of an hour and each one has zero context despite having just explained everything to the previous person. Call centers are a huge business and call center technology has been hot for a while. In the last few years, there has been a massive amount of VC funding that has gone into solutions like Observe.ai (raised $214m) Replicant (raised $113m), Balto (raised $52m), and many more tools that mostly focus on automation or helping coach reps (similar to Gong/Chorus for sales).

There is good reason to try to improve the call center experience. There is a ton of data showing that people spend more with brands who provide positive customer service experiences and can convert a one-time customer into a lifelong loyal one (and even make them a referrer and driver of word-of-mouth acquisition) which means serious top and bottom line growth for companies. GPT-3’s AI has been used for a variety of use cases including copy generation, semantic search, and text summarization. Today, the best AI solutions are augmenting, not replacing the human, and call centers feel like a place where customers still absolutely want to talk to a human and not a bot. A low hanging fruit opportunity is to leverage GPT-3 to transcribe and auto-summarize calls in-real time so that when you are transferred, the new rep has all of the relevant information and context and can decrease time to resolution, improve customer satisfaction, and provide a delightful experience. Something as simple as this could streamline operations, improve NPS, potentially reduce the number of agents you need, and build brand affinity and loyalty.

3. Stop-Loss Insurance Carrier

In the US, prior to World War II there was very little health insurance. People just paid for health care services directly as they consumed them. In 1929, hospitals in Texas came together to form the first insurance plan call Blue Cross and then in 1939, doctors in California formed their own plan called Blue Shield. During the war, many eligible workers left the workforce to fight, leading to a labor shortage. To help curb inflation and rising wages as the country came out of the Depression, President Roosevelt signed the Stabilization Act of 1942 which froze wages, a major way that employers attracted workers. This caused employers to change course and start competing on benefits — and in particular health insurance as a benefit. In 1943, the IRS created a tax exemption for health insurance which made it cheaper to get health insurance through an employer than any other means and that set the stage for employer-based health insurance in this country. Between 1940 and 1950, the number of Americans that had health insurance went from 9% to over 50% and would exceed 75% by 1960. This was driven almost entirely by employer-sponsored insurance.

Recently, there has been a large shift from fully-insured employer plans (where employers or employees pay a premium to an insurance carrier who covers claims beyond the deductible) to self-funded (where the company is the one to pay claims) as the premiums continue to rise for fully-insured plans. To ensure they won’t get hit with a massive bill that could bankrupt the company, they purchase what’s called Stop-loss insurance that protects them above a certain amount for either either a specific individual or in aggregate for the employee base. There is also a middle ground between fully-insured and self-funded that is gaining steam called a level-funded plan where the employer pays a carrier a fixed monthly fee that covers maximum claims liability, administrative fees, and stop-loss insurance. The employer receives a refund if claims are below the expected level and the risk is capped at the monthly fee. With the rise of both level-funded and self-funded businesses, one universality is the need for Stop-loss insurance. Just as companies like Embroker (raised $142m) or Vouch (raised $160m) made it easy for startups to get D&O, E&O, General Liability and other business insurance products, there is an opportunity for someone to make it easy for SMBs to get Stop-loss insurance. The easiest path forward would be to first act as an MGA providing a modern way to purchase legacy carriers’ products and eventually becoming a carrier outright. Partnering with other platforms that cater to SMBs would help provide the initial distribution and doing a massive marketing campaign before open enrollment season could generate awareness among companies shifting from fully-insured to level/self-funded.

That’s all for today! If you have thoughts, comments, or want to get in touch, reply here or find me on Twitter at @ezelby and if you enjoyed this, please subscribe and share with a friend or two! I will be on vacation for the next 2 weeks so will see you all in a few!

~ Elaine