My grandmother once asked me: „What is the difference between a false friend and a good friend?” “A false friend says what you want to hear, and a good friend tells you the truth when you don’t want to hear it. All know that I was a strong supporter of Lemonade from the very beginning. With their example of a chat bot-based sales process they changed the insurance industry forever and for good. Every success – especially spectaculars funding rounds - of Daniel and Shai I celebrated wishing them the best.
Now Lemonade filed a suit against Julian Teickes WeFox, it’s direct insurer One and Julian personally because of “infringing IPs”. As “proof” Daniel presents three screenshots showing the apps of lemonade and one.
The first screenshot shows the integration of geo location and a google maps API, the second a search bar and the third a payment interface. I am quite struck that Lemonades lawyers found the audacity to claim intellectual property for using a Google-API, a Search-Bar, a payment interface and other basic app technology that was neither developed by Lemonade nor acquired by them. If this was a cause with foundation, Lemonade could have suit thousand of companies – but why WeFox? Why now?
A bad rumor that could hurt Lemonade a lot
Spiros Margaris, one of the most influential fintech and insurtech thought leaders, tweeted that it was a “Funny timing by @Lemonade_Inc to file suit vs. @wefoxHQ just as they are about to close big funding round”. And indeed, it’s quite known that Julian is organizing a fundraising round that would put its company into the same league as Lemonade. May it be unintentionally or intentionally to hurt a fellow insurtech in most critical times, this move by Lemonade does not only damage WeFox. It also damages Lemonade.
By its anti-incumbent rhetoric it alienated large parts of the traditional industry. By filing a suite with three screenshots that lack – in my personal view – any substance, Lemonade puts itself in danger of being seen as the unicorn to be that tries to hurt other insurtech companies in the most critical point in time pushing potential competition to the side. Even if their allegations would have more substance, it still would hurt them, because of the timing of the suit. All this happening at the same time when experts like Matteo Carbone don’t get tired to criticize the business model and expansion strategy by ruthlessly analyzing published claim and insurance KPIs with profound arguments.
Make a win out of a lose
Right now, there is a classic lose-lose-situation. Lemonade losing public support and hurting it’s selflessly brand and WeFox getting bad press during funding round. It would be impressive if Lemonade would drop the suite and even maybe apologize for the misunderstanding. Then both could move on to do what both are best at: disrupting the insurance industry and improving insurance service for the customers.
And again, false friends tell you what you want to hear. Good friends tell you what you should hear, when you don’t want but need to. I am still a big fan of Lemonade and their great team, but this issue does not help anyone – except the involved lawyers.