Since Jason Liu joined Zywave Inc. as its CEO in April 2018, the Milwaukee-based insurance software company has made at least seven acquisitions as it races to become one of the most dominant insurance tech companies in the world.
In the last year alone, the company has grown from around 350 employees to more than 900, Liu told the Milwaukee Business Journal in a recent interview. The company plans to double in the next few years while maintaining its rapid pace of acquisitions, Liu said.
Liu also discussed the company's acquisition strategy, its presence in Milwaukee and some of its most innovative research and development projects.
This interview has been edited for clarity and length.
Can you describe your vision for Zywave?
"Insurance is the largest vertical market that's yet to go digital — it's about a $6.3 trillion market that is really still very manual. So if you think about all the other industries that have gone digital — everything from books to toys to banking — insurance is really the last one. ... People are starting to get their insurance over the internet, and we're the largest enabler of the movement of insurance into the digital world.
"As it relates to Zywave as a company ... we've gone from 350 employees a year ago to over 900, and we want to get to double that over the next 24 to 36 months. We're the most aggressive and most frequent acquirer — I think we've done the most acquisitions in insuretech over the last 18 months. As it relates to the local market in Milwaukee, I'm pretty sure that we're the largest software company in Milwaukee... We're looking to dramatically continue to increase our size and scope and continue to grow globally, but also to continue to grow our headcount in Milwaukee as well."
Why are acquisitions so key to your strategy?
"We ultimately have a vision of being the most leading and dominant player in the digital enablement of insurance. To do that, you can't be small. You've got to be sizable, and there is an opportunity for us to buy up other players in this space that are smaller, and so we're taking advantage of that. It is a bit of a race of scale. There are other players in this space that we're competing with, so we've got to move faster, and acquisitions is one way to do that.
"We're growing substantially organically as well. We're investing heavily in research and development and in our sales and marketing areas. But acquisitions have got to be a huge part of the strategy. The other piece of it is, we were acquired in November by (Clearlake Capital Group), which is one of the largest private equity funds in tech, and they are very supportive and very interested in us acquiring, so the combination of our own ambitions plus the funding has led us to this point."
What can we expect from Zywave in terms of acquisitions in the next one to two years?
"We've been on a really phenomenal pace of acquisitions — we've done five acquisitions this year and you will continue to see us doing those acquisitions at that pace. There's no letting up. ... We've already more than doubled the size of the company just in the last 12 months and we will continue to do that."
Were you brought on to take the company through this type of transformation or did you join and then decide that this was the direction that Zywave should go in?
"I've had a 25-plus-year career in technology and I've run a number of very successful companies. This is kind of my role in the world — I'm typically brought in by new companies that were either founder-led or -managed previously, and I'm brought in to be that next level of management that really gets them to go from regional to global and really to drive substantial, exponential growth in the business.
"Zywave is really one of, if not the best, company I've ever run. It's just such a fantastic company, the people are outstanding, the market is outstanding and our products are outstanding."
What have you learned about making successful acquisitions quickly from your work at Zywave?
"First of all, you have to have the right team, and we've got a fantastic team — we have (Joe Gibson), our chief financial officer, we've got (Matt Warren), who kind of is our head of mergers and acquisitions, and then we have people like Tania Quam, who kind of help with the integration. The key is, you've got to buy the right company, then you've got to really focus on integration, and a lot of that is the operational execution of integration, getting your systems integrated, getting your workflow and business processes integrated.
"The biggest challenge, by far, is the people. Making sure that from a people standpoint, we're fully integrated. You know, that's the culture. It's such a cliche thing to say, but people matter. It's obviously somewhat scary to people when they get acquired by Zywave, about what happens to them, what happens to their role, what happens to their job. As Zywave, we've got to paint them a vision of where we're going and why they fit and will be great, successful parts of that. I think that's been one of our proudest things, is we've been able to assimilate all these acquisitions into our culture and keep the really good talent that they have and find really great roles for them to contribute going forward."
Are there typically also layoffs with these acquisitions?
"I think what I'll tell you is Zywave is in hiring mode ... we have 70 to 80 positions that we're trying to hire for right now, and we just can't add enough great people to the company.
"As it relates to layoffs, what we've found is that inevitably in acquisitions, there are some redundancies that go on, but oftentimes what's happening now is, there may be a redundancy in one role, but then ultimately, there's another role that they can fill at Zywave. So we've had a minimal amount of layoffs as it relates to the acquisitions."
What has been your experience with hiring in the current labor market and what strategies have you employed to try to attract talent?
"In my 20-plus years, I've not seen it this difficult to hire talent. We're in a very unusual situation where the market is hot, there's a lot of demand for top talent. But also, you have the whole situation with remote work and Covid and then also just rising compensation. So trying to get all of that right, finding top talent, trying to make sure that you do it and are competitive compensation-wise, and then match it to the skills because skills gaps are growing.
"I have not seen it this challenging. Zywave is a very attractive employer, so I think we're getting the cream of the crop."
Where are you hiring from, and what percentage of your employees are in Wisconsin? Also, are you considering other office locations?
"We've really thought through how we want the footprint to be. Milwaukee is our headquarters. Of our roughly 900 employees, we've got almost 45% of them in Milwaukee, and we want to continue to grow our Milwaukee presence because that's where our headquarters is. But also, we've got to ... find top talent, so really what we've concluded is, we have embraced the idea of remote. Particularly with Covid now ... all of our employees are predominantly remote. But I think we want to get to a point, when the pandemic dissipates, that we move to at least a hybrid environment where they're in the office at least one day a week type of thing. But we understand that the remote aspect is huge.
"We're looking for top talent anywhere in the country, but our preference would be if they're located in one of our hubs. Our hubs are Milwaukee, Dallas, London, New England and we have also a little bit of a presence in Asia as well."
Could you talk about some of Zywave's most innovative research and development focuses?
"One area is, we are the largest enabler of digital quoting now. So if you go on the internet, chances are that the company that you're getting your digital quote from — there's all sorts of different players in space — we're doing the enabling software. ... We've, in the last year, dramatically expanded that technology. But also, you have to build integrations with all of the carriers — you think about how many insurance carriers are all over the U.S., building all that out, we've had to do.
"Another area of interest is, we've built out an artificial intelligence content engine that has been really a key aspect of our strategy, which is to allow our content to be delivered via machine-based learning.
"The third area I'd like to quickly point out is the incorporation of data into our software. Two of the acquisitions we've made have been data assets, and the data allows our software to be a lot smarter. For instance, we're the leader in marketing automation in the insurance industry. So if you're an agency and you want to send out an email blast or broadcast to your customers, we're the leading provider of that. It's one of our product lines.
"We bought this company miEdge, which allows us to not only have much more rich data that tells our customers not just what the business is, but what type of insurance they have and what type of insurance risk they are. So we can tell an agency ... what insurance carriers they have, what insurance policies (they) have, but also cyber breaches — how many cyber breaches (they've) had, how many accidents (they've) had. ... We can tell you how many of (their) drivers, employees, have actually gotten into commercial auto accidents in a certain area, and that allows the insurance customer to be able to have much richer information when they contact a prospect or even a customer, because they can then know the history but also target them by these various things."
