Building An Employee Benefits Tech Company - With David Kindlon
We were very pleased to be joined by David Kindlon, CEO and Co-Founder of Eppione, a company which offers cloud-based HR and Employee Benefits software as well as a complete insurance broker service.
David joined us on the Your Pursuit Of Happiness podcast to talk about how he and the Eppione team have transitioned an offline business to become an HR & Employee Benefits tech company with a worldwide audience.
David Kindlon: I started my working career in the financial services industry, it's nearly 20 years ago now, working for some of the larger financial houses, the likes of what is Aviva today. Previous to that, I would have done a bit of work experience in the likes of Irish Life and places like that. Always had a keen interest for, I suppose, finance. I come from a family of financial services professionals. Ended up working around a couple of places. Worked for the Irish Medical Organisation looking after doctors, traveling the length and breadth of Ireland, in and out of every hospital, between the major hospitals and cottage hospitals, sitting, giving financial advice to, I suppose, everything from a junior doctor right up to consultants.
David Kindlon: Decided during my time in the IMO that I'd go out and do my own thing, and I set up a business called Financial Medicine, which was focused on giving advice to doctors in the space. At the time, my dad had an insurance brokerage so I actually reversed my business into his which brought extra support, and obviously every business that starts out there's cashflow issues, funding, all that sort of stuff, so joining a bigger house just made life a little easier. So I did that for a few years and up until recently then, we were in that from where we were just a traditional financial services provider looking after group schemes, giving advice to corporates from, I suppose, all corners of the globe. We've customers from the United States and Singapore, Australia, right throughout Europe. Giving advice to those companies who've set up in Ireland, all around their benefits for their employees.
David Kindlon: So back around 2016, we had this idea that we need to move with the times and get involved in technology. People who sit still are going to die with the dinosaurs, times change. So we took the plunge and we launched Eppione, which is a fully functioning HR platform with the ability to manage your employee benefits and your insurance program all under one roof.
David Kindlon: And the big piece we saw around benefits moving into technology was the ability for the employer to promote their benefits, and that was the big thing, and going in to do a presentation to a company who don't know you, you walk in the door and we would call it the beauty parade. It's the same in every industry. You walk in, and the next three people who come into the room, they can do the exact same thing, and it boils down to your personality, how they get on with you, what you look like. Regardless of what people say, it's what you like, how you're dressed, where you're from, all that kind of stuff. And the bigger the brand that's above your head, so in our industry, the market leaders, the world global leaders, if you're competing with those guys, it's hard to compete unless you can stand out.
David Kindlon: So using technology to stand out from the crowd, in my view, and I'm not saying I'm right, but it's working so far, is that it just gives you that competitive advantage, that you're bringing more to the table than just providing the service that you provide.
Paul Smyth: It's your USP.
David Kindlon: Yeah, it's our USP.
Laura Smyth: Excellent.
Paul Smyth: Good stuff. And before we get into the tech side, you've obviously been in the pension and benefits space for a while now. What changes have you seen in that industry over the years?
David Kindlon: I mean, there's been huge changes. There's been a massive shift away from the old Rolls Royce pension scheme, as we call it, the defined benefit which... I mean, there are companies still in Ireland. You've got your joint pharmaceuticals and technology companies. Some of those guys still have these amazing pension benefits.
Paul Smyth: There's government agencies as well.
David Kindlon: Government agencies still have them as well and they are... I mean, they've actually been known to bankrupt companies. I mean, they sit on the balance sheet of any enterprise, and I suppose for the listeners out there that don't understand what a defined benefits scheme is, it's a promise from your employer to pay you a certain amount of money when you retire, depending on your years of service and your salary, and in some cases it can be up to two thirds of your final salary if you've got 20, 30 years' service with them, and it's massively expensive.
David Kindlon: If you look at a pension funding today, the average pension fund today in Ireland at retirement is roughly around 120,000 to 130,000 euros of a pension pot. Now, that has to do you until your dying day, and the cost of living, all the other factors that have to be taken into account, it's not enough. To look and say, well, if you want to provide yourself... a 65-year-old retiring today, to provide 10,000 euros of a benefit until their dying day, so 10,000 euros of a pension today, they'd actually need a pension fund of about €250,000.
Laura Smyth: Jeez.
Paul Smyth: You're scaring me, Dave!
David Kindlon: And that takes into account... I mean, if there's ill health or anything like that, they could get a higher lump sum. Now, they don't have to go down that road, there are various options come retirement, but pension funding in Ireland has never been paid attention to in the way that it should because, I suppose, historically, everybody always saw, that's my employer, my employer will look after me, my employer will do this, my employer will do that. The shift has been moved away from the employer's responsibility to the employee's responsibility, and don't get me wrong, employers are great, they contribute into pensions. I mean, we're very supportive of employers who support their employees through pension contributions, and you'll see a wide range of contribution levels that go into the pensions, but I suppose going back on the shift around benefits... the other benefits, obviously not just pension, but life cover, disability insurance, so we call it income protection. Your health care, your dental, and then there's all the other flexible benefits, things like gym membership and cinema tickets and discount clubs and all the nicey nice stuff that people like.
David Kindlon: But, I suppose, the employee needs to concentrate on their pension, and that's just me giving a bit of advice to people. Concentrate on the pension, make sure you look at it. The sooner you do something on it, you'll reap the rewards. And people go, "Even if I draw an extra 100 euros a month on my pension..." 100 euros, you don't have to start at 100 euros, it could be 20 euros, 30 euros. Start something today, and in five years' time you'll thank yourself for doing it.
David Kindlon: So there's other shifts within the industry. There has been a huge shift towards technology. At the end of the day, everyone's walking around with their mobile phone in their hand, they should be able to see things. So, again, looking at their pension, they should be able to see where their pension's invested, what the funds are doing that the money's invested in, contribution levels, all that kind of stuff, and they can get through mobile apps from various providers. We obviously provide our own mobile app which brings all of their benefits in one place. So, again, I suppose it helps the employee understand exactly what they have.
David Kindlon: I mean, there's a lot of talk around TRS, total reward statements. We actually got a phone call recently from a company here in Dublin who were looking for a provider to provide... to actually do the TRS statements. Our system provides a TRS. You upload all your employee data, you put it into the system, and based on the benefits that you've added in, it actually provides that total reward statement for the employee to see. And a total reward statement shows exactly what you're costing the company.
David Kindlon: So if you get offered a job up the road, and let's say you're on a forty grand salary, or a fifty grand salary, you've got your other benefits on top of that. An awful lot of employees, they actually don't know the value of those benefits. So they see the flashing lights of the extra ten grand up the road, or the extra five grand up the road, and then they move and they find, well, actually this company doesn't provide medical, doesn't provide pension, it gives me nothing and I end up losing that as a result of moving up the road.
David Kindlon: And, unfortunately, we've dealt with people at retirement age where they had left businesses where they're using then the paid up pension that's sitting with the old employer that's through us. We're talking to them and it's like, "Have you any other pensions outside of this?" "No, I never started again," and they've ended up with tiny little pensions, and we see the bad side, and we see the good side of it. We see people who pay attention and do very well, and when they retire we know they're going to be comfortable for a long, long time, but then, unfortunately, we see the other side of it as well, is where you've got people who... marriages break up and one of them has to rent a house and they're now retired and they have to rent and they're living in Dublin and they've forty or fifty grand in their pension pot. I mean, by the time you take rent out of it and all the rest, you're not left with a whole hell of a lot.
David Kindlon: Obviously, with the state pension being kicked out aged 67, it's making life even more difficult because not everybody can continue to work past 65. People can, and people do, and my own father has worked up until 76 years of age, but there are people out there who can't, especially people who work in physical, manual labor, it's nearly impossible.
Paul Smyth: People are living longer now as well so-
David Kindlon: Absolutely.
Paul Smyth: ... your pension might need to last longer.
David Kindlon: Yeah, absolutely, yeah. And I suppose there is a ticking time bomb there for that generation who are under-funded, who don't have the... If you look at the older generation today, a lot of them do have the old defined benefit pensions arrangement. Not all of them because not everyone was in a pensionable job, but the people who do, I suppose they're well looked after, but I think there is a bit of a ticking time bomb where people in retirement are going to run out of money, and they're going to fall back on the government, and-
Laura Smyth: Yeah, exactly.
David Kindlon: ... put pressure on the healthcare system and all that kind of stuff.
Laura Smyth: And look, I suppose in our line of work we often see people, particularly in their early to mid twenties who aren't really concerned about pensions. I used to work in financial services as well, and I think people aren't really aware of the tax relief with pensions, and as you were saying, the onus is back on the employee to look after their own pension pot and build it up into retirement but-
Paul Smyth: Even apart from that, junior people... my experience of junior people is, they hear salary and they hear bonus and that's it.
Laura Smyth: Yeah, that's it.
Paul Smyth: They might hear pension and life assurance, and whatever, but it doesn't matter because they don't think they're ever going to die or need it.
David Kindlon: No. And there is-
Paul Smyth: It's too far down the road.
David Kindlon: We do see it. I mean, within the Eppione platform we have a full flex benefits system and that, again, if you employ a huge amount of people and you want to give that demographic the choice... So you've got the 20 year old who... all they care about is how much money's coming in every month, they've got a great social life, they want to be out there, they want to be eating out, all that kind of stuff. You've got someone who's, let's say, mid forties, they might have small kids, they're looking, going, "I've got a big mortgage. If I die... What happens to me if I get sick, my income stops? What about my kids' health? What about my partner? What about this, what about that?" And then you've got someone who's coming towards retirement, in their late fifties, who's looking, going, "I need to focus on my pension."
David Kindlon: So they're three people who should be able to choose different benefits because the 20 year old, okay, funding for your pension does make sense, from an early age. The earlier you start, and as I said, the better it's going to look out the far end. Now, trying to convince a 20 year old to fund for a pension, it's near impossible. So it's like telling someone to sit in on a Friday night. So that person, there... so, therefore, the company can give, I suppose, stock standard benefits. So they might turn around and say, "Look, you're getting life cover, you're getting income protection, and we'll pay your medical. Now, we'll also give you a contribution towards your pension, or, if you don't want a contribution towards your pension, you can use it to buy other types of benefit." So that can be things like for one for all vouchers or all the other nicey nice things, cinema, gym membership, whatever. Now, employers need to be careful because some of those purchases may attract benefit kind, or some sort of a tax to the employee. Some employers, and we've seen it, some employers allow them, instead of putting that money aside for clever things like pension and medical and stuff, they let them buy mobile phones and laptops and what not, and that's great, that's brilliant. However, tax could be applicable to that, so they need to be... it's a word of warning.
David Kindlon: So the changes within that space... I mean, years ago, you adhered to a job and you were told, "There's your benefits, take it. That's it." You didn't really have a choice, or employers used to say, "We'll pay into your pension, and as you're paying into your pension as well, we will give you life cover, we'll give you income protection." Well, we've seen a shift away from that, where they provide the standard benefits, and then they let them add them on. Now, again, a lot of employers out there will look and go, if you're managing a workforce of 500 people, it's very difficult to turn round and walk round with a clipboard or an Excel spreadsheet and say-
Paul Smyth: "What do you want and-
David Kindlon: ... "What do you want this year? What do you want? What about you? What about you?" It just becomes a nightmare. And we've great examples of how technology's improved the offering of that. I mean, I'm sure you've heard of some of the lunch services that are provided, and they're popping up all over the world, but there's one particular one here in Dublin where we're out with the business, and when we go out and sit down with a potential customer, we always talk about pain points: what are your pain points around running your business, from the HR perspective?
David Kindlon: We were out with a particular company and we were talking about pain points, and the HR manager, she said, she goes, "One of the things that I actually struggle with, big time,"... They have 365 people in an office in Dublin, and she goes, "We provide lunch once a month," and she said, "You know, we have two people that takes two days to organize lunch because we've got dietary requirements between people who are dairy intolerant, wheat intolerant, et cetera, et cetera." She goes, "So you can't just go out and order 300 pizzas and hope for the best." She goes, "We have to provide..." and she goes, "But it takes two people two days." And I was like, "That's ridiculous." It was like, "Have you heard of any of the lunch services that are provided?" I'll give them a plug. Lunch Team is one of them. Stuart and the guys run a great ship. They've brilliant technology where the employer can give the employees an allowance and then if the employee wants to go OTT and buy themselves an extra can of coke or a more expensive lunch, they can do it using their own debit card or credit card. What that does is, it just helps the management of it. So the employee gets a notification that morning, they go in, they fill in their order, it all gets delivered to the table-
Laura Smyth: Brilliant.
David Kindlon: ... and that was one pain point. So looking at technology and improving function and, I suppose, administration of various benefits, technology is helping with that in a big way.
Laura Smyth: Brilliant.
Paul Smyth: And actually, just one quick point, the benefits segment, we see it now for offers as well, that clients are given the full list of benefits and what that actually adds up to. So we're seeing at that stage as well as for people in companies, and it's good to see. It makes people think.
David Kindlon: It does. Absolutely, yeah, yeah.
Laura Smyth: Dave, you touched on it anyway, so obviously technology has enabled what you do hugely, but what have been the main challenges for you moving from, I suppose, the traditional business that you were in, and you knew so well, to a tech company?
David Kindlon: I suppose it was the... going into the dark hole that is technology. I mean, you hear so many stories of people who, they go and... I mean, going into the unknown... and, look, I've always been, I suppose, very, very interested and keen on technology. I've always had a mad interest in smartphones, and my first car, I had stereo systems and everything was hooked up to... you could plug your phone in and you could plug your iPod in, and all this kind of stuff, and I always had that interest, so technology didn't scare me.
Paul Smyth: Did you have a subwoofer?
David Kindlon: Sorry?
Paul Smyth: Did you have a subwoofer?
David Kindlon: I didn't have a subwoofer, no. There was no room in the boot! I always had a keen interest in technology. My wife, still to this day, she calls me a bit of a gadget freak. She says, "You have to have the latest and greatest in gadgets," which I don't, but sometimes I do. And going into that technology space... but that's fine. Walking into a shop and buying the latest phone is amazing because you can go in and you can do it, but you don't actually have to worry about how it's put together. But when I decided to go down the road of venturing into the unknown, it was... I'm not going to lie to you, it was quite daunting because, again, I went out and I found two business partners. Now I knew these guys from before, but we weren't looking at just Ireland. We were looking and saying, "Right, the world is our oyster. We can bring this technology out to many territories. We can go in. We can revolutionize the employee benefits landscape. We can do an awful lot of really, really clever things, and obviously we will generate obviously a lot of money, et cetera, et cetera." So the daunting piece was the technology.
David Kindlon: Now, thankfully, my business partner, Ernest Legrand, who's based in New York, he brings a huge amount of technology expertise to the table. He's an ex-IBM guy, brings huge capabilities around data and getting data into systems and all that kind of stuff, and that's obviously a big part of what our system does for employers. It's about taking their data in a format that puts it into the platform that makes it functional for their employees and themselves.
David Kindlon: That was one thing, and then the other thing was, like every startup, funding. Funding is a huge worry, cashflow, all those kind of things. Now, thankfully, we've a great team of people. We've been very, very lucky with the people who we have, which has been brilliant, and it's great for us, but as a business, we now need to grow, we now need to bring in more expertise, people in different areas. And if you'd said to me five years ago that we'd be looking at hiring people like a tester or systems admin and stuff like that, I'd be like, "Are you sure? What do we need those people in our business for, that's-
Paul Smyth: And they sell insurance.
David Kindlon: "We're insurance brokers, we're in pensions, building insurance, what do we need that stuff for?" And even down to the learning curve has been huge. The shift from what I did in my day-to-day job to now, sitting and having conversations around technology and the way it works, and even understanding how it's pulled together, it's been an amazing journey.
Paul Smyth: And so, two questions actually. One is for people in the industry at the minute, in that kind of traditional brokerage or pensions or benefits industry. What advice would you give them? And also, because we do financial services and fintech, we see a lot of people in banks who are traditional financial firms looking to move into fintech, or insurtech, as you guys are. What advice would you give to those two groups of people to stay relevant to going forward?
David Kindlon: I suppose the traditional, historical insurance / financial services broker out there, think outside the box. You've got to stand out from the crowd. You can't just bury your head in the sand and get on with it because you will lose your customers. Your customers are looking for a smarter way to do things.
Laura Smyth: Of course.
David Kindlon: Technology is at the fore of everything we do nowadays and if you don't embrace it, you will be left behind. My advice to people out there in our space: do not rely on the providers to bring you technology. If you can create your own technology and you're in control of that, and you're using that with your customers, you will never let your customer down, whereas relying on a big provider, so one of the big pension providers out there, any of those guys, because their technology belongs to them, and if they decide to make changes or they decide to remove it from the market, you're the one who's explaining that to the customers.
David Kindlon: I saw that in Australia. We've a partner down in Sydney and they were using a really, really clever platform that a provider had taken a license for, and they had a huge success rate with picking up business, but, unfortunately, the technology wasn't being used by everybody, so the provider turned around and said, "Well, actually, we're just going to pull the technology. We're not going to pay for it anymore," and the broker who had most clients using it from a day-to-day perspective then had to turn around and try and figure out how they were going to do it, and it ended up costing him more to continue with that technology than it would be to actually lose the clients. So in the end, he had to make the very, very difficult call to turn around and tell the clients that technology's no longer provided, and it did harm his business. So it's one of those things. And, look, business is business. At the end of the day, the provider was like, "Look, it costs us money."
David Kindlon: But, one piece of advice, stand out from the crowd, think about technology, and if you're going to think about technology, try and own your own technology.
Paul Smyth: And what about people looking to move into fintech or insurtech or something relatively early stage?
David Kindlon: I mean, it's exciting times. I mean, there's a huge amount gone on in that space. I suppose if you look at financial services as the financial services which incorporates your insurtech, your regtech, your fintech, everything in that mix, people are looking to move into it. I mean, it's definitely going to be exciting times if you're going into a startup. It's going to be very, very different to your traditional house where people are watching you punching your time clock in and out, and Big Brother's always looking at you, type of thing. But it is exciting times for people to make that move, and, of course, I'm obviously very pro moving from traditional industry into something different.
David Kindlon: But, yeah, I suppose, just go with your heart if you see something you like because you just never know what the future could look like. When you think of all those employees in Google that started in Ireland when Google came to Ireland first, now those guys, they didn't know what the road looked like ahead, and some of those people became multimillionaires as a result of Google's success.
Laura Smyth: Exactly.
David Kindlon: It doesn't happen everywhere but there are a huge amount of massive success stories that we don't hear about because they're just not hitting the headlines because not everybody wants to be a headline grabber. So there are massive success stories, and I've bumped into some of these people on my journey as well, who've... they've done exceptionally well out of being part of a business.
Paul Smyth: Took a risk.
David Kindlon: Yeah, go for it.
Laura Smyth: Take a risk. Go with your heart.
David Kindlon: Take a chance. And, look, if it doesn't work out, you can always go get another job.
Laura Smyth: Exactly. Especially the way the jobs market is at the minute. There's never been a better time-
David Kindlon: At the moment, yeah, yeah. Absolutely, yeah.
Laura Smyth: ... to take that risk.
Paul Smyth: And if you do move out of it, and if you move back into a traditional, have done a year with fintech, or whatever, have learnt a lot more than I would have-
David Kindlon: And if you look at the opportunities that are around the world, I mean, the technology space in financial services, they are competing against the big guys so they're trying to get people out of these big finance houses, whereas if you're working in that startup arena, the world is open to you, whereas if you work for a bank here in Ireland, and you work for one of the historical Irish institution banks, you work for those guys, if you go apply for a job, say, somewhere in Australia or somewhere in the Middle East, or whatever, they're going to look and say, "Oh, that's great, you've worked for these guys," whereas if you've worked for something that's just that little bit different, you're probably going to stand out from the crowd-
Laura Smyth: Definitely.
David Kindlon: ... and they're going to be like, "Well, hold on, we're looking for somebody who has a little bit of experience in something around technology,"-
Laura Smyth: Exactly.
David Kindlon: ... and it's going to open a conversation.
Laura Smyth: Definitely.
David Kindlon: Think about it, I mean, you go into an interview... I personally haven't done too many interviews in my life. I've been the employer side of the table asking the questions. Something I always look for in the person's CV or on their LinkedIn profile, is a conversation piece because if you can get people into a comfort zone where you can actually have an open conversation with them in their interview, it's going to flow an awful lot easier, whereas if you're just going down to the CV, "Tell me about this, tell me about that." You want to pick something and say, right, this person might actually have something very valuable to bring to the table, due to the experience there, let's try and thrash it out.
Laura Smyth: Excellent.
Paul Smyth: Good.
Laura Smyth: Dave, it's been great to hear about your passion about technology, and demonstrating how it's enabled your business is fantastic. If people want to find out more about Eppione, how do they do that?
David Kindlon: They can go to our awesome website, it's eppione.com. That's E-P-P-I-O-N-E.com. Or they can drop me an email, email@example.com. That's K-I-N-D-L-O-N.
Laura Smyth: Excellent. Excellent, Dave. Thank so much for your time.
David Kindlon: No problem, guys.
Laura Smyth: It was lovely chatting with you.
David Kindlon: Thank you.
Paul Smyth: Thanks, Dave.
David Kindlon: Cheers.
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