On this week’s episode of the Full Stack Leader, we are talking to Sharene Lee at TechCrunch Disrupt 2023.
Sharene co-founded Takadao, a community-owned life insurance platform built on blockchain technology. The platform operates as a Decentralized Autonomous Organization (DAO), meaning profits from insurance operations are distributed within the community.
During our conversation, Sharene emphasizes the platform’s focus on aligning interests between the insured and the insurer, in contrast to traditional insurance companies driven by shareholder profit. Additionally, she highlights the potential for blockchain and Web3 technology to revolutionize the insurance industry, giving power back to individuals and enabling mutual insurance initiatives.
We hope you enjoy the episode. You can find even more Full Stack Leader episodes here.
What Takadao does
Ryan: Hello, everyone, and welcome to the TechCrunch 2023 edition of the Full Stack Leader podcast. I’m here with Sharene Lee of Takadao. Great to have you here.
Ryan: Thank you. Awesome. Tell me a little bit about Takadao and what it does.
Sharene: Sure. Takadao is a community-owned life insurance platform built on the blockchain. We’re built as a DAO. And the reason why we say “community-owned” is because the profits that come out of insurance operations are redistributed among the community. We use the blockchain, and we use DAOs for transparency.
We also use cryptocurrencies in order to serve the unbanked globally. And obviously, insurance payouts and stablecoins are a hedge against inflation.
On stability of stablecoins
Ryan: And how stable do you think stablecoins are right now?
Sharene: I think compared to the alternative, which is, if you look in the developing world, fiat currency that has, you know, in Egypt, it was just declared 40 percent inflation.
If you look at what’s happened in Venezuela, what’s happening today in Argentina, and what’s happening with the French CFA, which is money that’s controlled by an external country, I think, by comparison, stablecoins are way better than what the developing world is using right now. I’m not saying that they should be the de-facto currency, but today, this is the only usable money for much of the developing world.
Putting community interest first
Ryan: Why is the take on life insurance that you guys have different than, let’s say, a State Farm-like kind of big, huge insurance company?
Sharene: Yeah, it’s about interest. It’s about aligning interest. Now, your insurance company is owned by shareholders, and they are there to serve the shareholders. And your interests and the shareholders’ interests are not aligned. In fact, they’re at odds. It’s a zero-sum game.
In order for the insurance company to make money, you have to not get a pay, a claim. In order for you to actually get some benefit out of your insurance policy, you have to get a claim, and that comes out from the bottom line and the balance sheet of the insurance company. So, interests are not aligned. But when you make the community the owner of the insurance company, then your interests are aligned.
Now, this is what we’re trying to do with the platform that we’re creating. We want to have a pure, mutual, cooperative insurance platform where the insured is the insurer as well.
And if the company makes money, I get part of that profit as well.
Shifts in traditional insurance paradigm
Ryan: That’s great. Can you tell me what you think are some exciting new things coming out in the world of insurance tech – besides just what you guys are doing? Like, trends?
Sharene: You know, I think because of the way insurance is today, where it’s highly regulated, it’s a “big boys” game.
In order to start an insurance company, you need to have 25 million dollars sitting in the bank – at least. Most of the innovation that’s coming out is their service insurance company and not the insurer.
This is really what is happening. All the insurer-type companies I see – who are their customers? They’re selling to an insurance company. It’s some kind of actuarial thing, some kind of AI thing that helps them process claims better or underwrite better, but it’s never for the insured.
This has to do with the financial system. This has to do with the way regulations are set up. There are no new entrants.
So it is ripe to be disrupted through blockchain and Web3 because now it’s “power to the people.” People can take it back and say, “Well, we’re going to insure one another. We’re going to come together, and we’re going to pool our money, and we’re going to mutually insure one another.”
How blockchain gives power back to people
Ryan: That’s amazing. How do you see blockchain playing into this with companies beyond yourself?
Is it going to be an innovative factor within insurance in the future?
Sharene: Absolutely. I think, again, this goes back to how you give power back to the people. And in today’s fiat world, you can’t. You cannot move one dollar out of the bank. You cannot do cross-border transactions without the government knowing about it without the bank approving it.
In the US, it’s still relatively safe and trusted, but in the developing world, which is most of the world, incidentally, banks are not places that you can trust.
So, in Lebanon, they’ve just refused to honor USD withdrawals. There was literally a story about a woman whose sister needed a cancer operation, yeah? And she needed the money. She went to the bank with a loaded gun, and she said, “Give me my money. I’m robbing you, but I only want my money. Nobody else’s money” because the bank would not honor withdrawals.
And you guys saw what happened with Silicon Valley Bank when there was a run on the bank. “Sorry, we have no money,” Right? And your government stepped in, but in those other places, the government is just like, you know, “Too bad, you guys.” there needs to be a way where people can reclaim that autonomy over their money, and that will change everything – not just insurance, but everything.
Transparency is key
Ryan: That’s amazing, yeah, I agree. As you’ve seen, blockchain over the last few months, recovering from a dip that it took, what are some of the changes in the sense of safety that you’re seeing around that for it to be a good place to trust going forward?
Sharene: Yeah. So I think, generally speaking, we are focused. We know that this industry is still in its inception. There’s a lot that is still gonna go wrong. There’s a lot that still can go wrong. A lot of the technology is in its infancy. There’s gonna be hacks. There’s gonna be all kinds of problems.
However, we also know that the very fundamental core of this is transparency. It’s about decentralization. It’s about not having one group or individual control everything. And this is the thing that I see will grow and will flourish because this is what people need. And with all the FUD that is surrounding this industry at the moment, this will all go away. I mean, every new industry starts like this.
And we’re just hoping to, you know, be part of this growth, as well as help shape where it goes- for the benefit of the people.
Ryan: Awesome. Well, thank you for joining me. I appreciate it.
Sharene: You’re most welcome!