Morrow - End of Year Letter
Does the boat float?
Happy Holidays to everyone taking 5 minutes to read this. Whatever your 2022 has looked like, we’d like to wish you a restorative holiday season marked by reflections of things learned and pursuits for the year to come. That’s what this letter is for us - where we’ve been and where we’re going, with a moment to appreciate our strides and the band of people with us along the journey.
Editors note: since writing the last update letter here, we’ve taken our periodic company updates private for our investor community. Nevertheless, the EOY Morrow Holiday letter is back.
Welcome back. Merry Christmas and Happy Holidays. Here’s what’s on the menu:
2022 - Major milestones
Broker buy in
Engagement = separation factor
The three digit club
2023 - On the horizon
Market & customer expansion
Fundraising in Q1
2022 - Major Milestones —
When designing the Morrow concept, three of the key open questions faced were:
Is demand from blue collar companies there to get mass adoption of a benefit like Morrow?If we successfully sell to companies, will we be successful getting their employees to actually sign up? Company benefits have notoriously low adoption.Can we craft a product that is so well-received by a blue collar workforce that it defies overblown perception of a tech-resistant user base? All are legitimate questions we’ve kept close at heart and frequently hear from investors aware of the historical challenges of doing any single one of these effectively. Entering 2022, we had our reasons to believe “yes” to each question starting out, but the hypotheses needed real-world demonstration. Exiting 2022, we have empirical evidence of:
1) Broker buy in
Is demand from blue collar companies there to get mass adoption of a benefit like Morrow?Benefit brokers are responsible for working with companies to design benefit packages that address the immediate and future needs of their employees. Some of the larger benefit broker firms are names like Aon, Willis Towers Watson (WTW), Gallagher, and Lockton.
The best brokers are exceptional at listening closely to the demands heard from their clients and knowing how to match them with the supply of innovative benefits solutions in the market.
For a new benefit like Morrow, broker interest is in many ways a stronger litmus test than securing a first cohort of customers — it serves as a leading signal of market interest. When brokers begin buying in, it indicates they’re seeing something different that addresses a direct need they’re hearing from their employer clients.
For these reasons, we’ve invested much of our early business development time in these channels both as a way of pressure testing market demand and setting the foundation for a highly efficient distribution engine.
Our early efforts have paid off as we’ve built a strong roster base of individual brokers, representing firms such as Lockton, Alliant, Acrisure, OneDigital, and Aon. Each benefits broker has a unique book of business they manage and craft a benefits package for. We’re thrilled to have a growing core of outstanding broker partners. By end of Q1, we expect to have 30 individual brokers working with us to promote and sell the Morrow product.
Spotlight Moment: Morrow was invited to speak at Stanford Center of Longevity’s Century Summit in December.
2) Engagement = separation factor
If we successfully sell to companies, will we be successful getting their employees to actually sign up? Company benefits have notoriously low adoption.The all-feared double sale. A vendor works hard to get a prized contract with Company A only to launch and generate weak employee utilization of a few percentage points. What went wrong? Poor communication, ease of access, benefits knowledge, trust in the benefit — these are just a few of the reasons most benefits have discouragingly low employee adoption rates. To make the point, here are a few benefits commonly offered by employers and their benchmark adoption rates1:
Life insurance = 15%
Legal = 5%
Identity theft protection = 6%
Long-term care insurance = 5-8%
Sometimes I refer to Morrow as an engagement company. We are an engagement company that drives positive financial health outcomes for the blue collar workforce. We have been obsessive about learning the profile, needs, and wants of the blue-collar employee, and have been clinical in designing something different that wins engagement through the heart and mind.
In September, we launched Morrow with an initial cohort of employer customers, which collectively have 400 employees. Within 4 months of rolling out, we have a 24.8% employee engagement rate. As positive word-of-mouth continues to spread (see below), we expect this number to climb higher.
3) The three digit club
Can we craft a product that is so well-received by a blue collar workforce that it defies overblown perception of a tech-resistant user base? Two weeks ago, we celebrated a proud moment working with our 100th Morrow member…the three digit club! While we are proud of the progress it reflects, we’re even prouder to know that Morrow has helped a hundred different individuals/families move from a place of financial duress towards a place of financial clarity and security. The impact on real lives is significant. The mission feeds the vision.
That impact has shown up in uplifting stories shared with us by companies and employees, both directly and indirectly, which would make for a longer letter than anyone signed up to read, but can be summarized through a few of the accounts captured here…
Numbers-wise, user-product traction shows up across our member base in user satisfaction scores. Since launching, our satisfaction score has rated 9.8/10. This is an affirmation of the product performing, but it’s equally an affirmation of the people on our team who’ve worked with intentionality and passion to “put a great product on the field,” as we talk about often.
What is a moment of accomplishment is also a moment of motivation. The mission feeds the vision. These first 100 individuals are a small but important first step to the next hundred, then thousand, and ultimately millions of Americans who don’t have access to financial guidance and serve as our market. With a product showing strong signs of customer-product fit, we’re inspired now more than ever by the opportunity before us.
On the horizon —
1) Market & customer expansion
Six months ago, I had never been to Nashville, Tennessee. Last week marked my fourth trip in nearly as many months. What we’ve discovered there has been a dynamic interplay between champion customers, broker relationships, word-of-mouth power, and target customers that has been nothing short of exceptional. At seemingly every turn, we’ve experienced the power of building strong relationships and leveraging community. We anticipated strong referral effects within employee bases, but can’t claim we predicted equally strong referral power between employers within a market.
The playbook of selectively picking a great initial customer partner in a new market, executing cleanly, and having them say nice things about you has proved priceless. It’s led to warm introductions with:
Potential new customers
Regional benefits brokers
Trade associations
Strategic partners
In Q1, the Morrow team plans to be on the move. In addition to expanding our presence in Nashville, we will be boots-on-the-ground in Austin, Charleston, and possibly other markets replicating a similar dynamic to the one we’ve created in Nashville.
If you’re in any one of those places or know of folks we ought to meet — we’ll be in friend-making mode and would love to connect.
2) Fundraising in Q1
We’ll be raising our seed round starting in Q1. We expect the round to be a mix of VC and strategic capital, comprised of a new lead investor, existing investors, and a syndicate of individual investors with inroads to our target “Made in America”, blue collar customer base.
In closing…
2022 has been quite the year in the technology world. Pick any indicator you want — valuations, hiring, funding, company priorities — and this year is finishing with conditions pretty close to opposite from where the year started.
The storm left many boats underwater. It left others bailing out water from the storm and patching holes furiously to stay afloat. It left a reminder that building the biggest boat the fastest doesn’t matter if the boat can’t float. It sent a sobering message to all voyage sponsors, captains, and crews that the fury of the sea won’t be underestimated — tailwinds and still waters aren’t a given and conditions can flip on a dime. It cleared out an all-too-crowded harbor and opened capacity to recruit better workers at the shipyard.
We spent 2022 building the structure of a boat. We built it with intentionality, resourcefulness, and humility. We want our boat to be fast, consistent, and durable. We want to build an enduring ship that will weather the next storm, the one after that, and the next one after that. If that means we have to be creative and invent new models that we’ve tested but look a little bit different to the outside world, that’s what we’ll do. Ships must change to get better. We look forward to a year in 2023 of adding passionate crew members, sponsors, and resources to our ranks who share the journey vision and can’t help but wanting to be apart of it.
Wishing everyone reading this a merry Holiday season and a bright 2023.
— Sammy
“There are thrilling moments, doubtless, for the spectator, the amateur, and the aesthete; but there is one thrill that is known only to the soldier who fights for his own flag, to the aesthetic who starves himself for his own illumination, to the lover who makes finally his own choice. And it is this transfiguring self-discipline that makes the vow a truly sane thing. It must have satisfied even the giant hunger of the soul of a lover or a poet to know that in consequence of some one instant of decision that strange chain would hang for centuries in the Alps among the silences of stars and snows. All around us is the city of small sins, abounding in backways and retreats, but surely, sooner or later, the towering flame will rise from the harbour announcing that the reign of the cowards is over and a man is burning his ships.” ― G.K. Chesterton, The Defendant
SHRM - May 2022