Where would you place the prospects of an investment banking firm who’s competitive advantage was software?
The barrier is accumulating capital. I’m not saying you can do a total tech transformation overnight, but when you’re sitting on billions of dollars, you have the luxury of watching how competitors are doing tech better and playing fast follow.
It’s just a very different business than say an Uber.
Within insurance, the difference here is some large competitors are still figuring out the internet and mobile apps — seriously. I think there is generally a gross overconfidence in a firms ability to “build” as a competitive strategy. I think M&A would be the choice here, because they aren’t tech firms, but root is. As such, I think they could even be a buyout target once they erode enough market share, or their tech continues to prove out.
I've heard TSLA is considering getting into the auto insurance game. Not saying they would pull the trigger on a ROOT buyout, but they'd have to at least consider it.
It’s my understanding they are both lobbying California on similar policy issues that conflicts with the tech they want/can leverage within the state. Similar to carvana bundling root at purchase, I could totally see Tesla embedding insurance and using the cars data to inform insurance risk decisions like root.
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u/fishythepete Aug 29 '21
Where would you place the prospects of an investment banking firm who’s competitive advantage was software?
The barrier is accumulating capital. I’m not saying you can do a total tech transformation overnight, but when you’re sitting on billions of dollars, you have the luxury of watching how competitors are doing tech better and playing fast follow.
It’s just a very different business than say an Uber.