Tariq Hilaly founded Lumity, a startup that helps businesses find the right health benefits plans for their employees, after he saw firsthand the complexities and inefficiencies of health insurance. In an effort to help modernize the industry and make it easier for small businesses to bear the burden of providing health insurance, Hilaly devised Lumity's data-driven model for determining the best possible plan a business owner could offer without breaking the bank.
Today, Lumity is focused on keeping up with the ever-changing landscape within the health insurance industry. CEO Hilaly went behind the business plan with Business News Daily to discuss the challenges of keeping up, as well as how the company plans to continue identifying health care opportunities for entrepreneurs.
Business News Daily: In a nutshell, what service does your business provide?
Tariq Hilaly: In short, Lumity is a data-driven benefits consultancy for employers and employees that enables them to collaborate on making smarter benefits decisions. We analyze health spending data to help mid-market businesses find the health plan that's just right for both their employees and their budget.
BND: How long have you been in business?
Hilaly: I founded Lumity two and a half years ago.
BND: Did you start with a formal business plan? If not, how did you lay the groundwork for your business?
Hilaly: The idea for Lumity stems from our family's experience with my wife's illness. Dealing with health insurance head-on made me realize how overcomplicated and frustrating the system was. The more I looked at the industry, the more greed and waste I saw. The industry needed to be modernized, with a forward-thinking approach to selecting health plans that offered the most value to those who use them, not just those who sell them.
The Affordable (Care) Act is one of the once-in-a-lifetime shocks to our entire country as a system. It created a vast opportunity where we saw the large players in the health care industry moving much faster toward digital, data-driven solutions.
We looked at the broker model, realized there wasn't much value being added to most companies, and saw an opportunity to offer fair value for a commission most employers didn't even know they were paying on top of their health plan premiums.
BND: How did you finance your endeavors, both initially and as your business grew?
Hilaly: We've received venture capital, starting with a seed round and followed by a Series A last fall, led by Social Capital and Rock Health.
BND: How much did you invest personally?
Hilaly: For me, I was fortunate enough to just invest a lot of time and energy into turning Lumity into viable business.
BND: Is your business today what you originally envisioned at the outset, or has it changed significantly over time?
Hilaly: Lumity's changes have walked hand-in-hand with changes in the health care landscape, especially in the last couple of years. The creation of the Affordable Care Act has caused huge societal shifts, disrupting the industry by requiring that everyone have health insurance, as health care and insurance costs continue to rise steadily. Many small businesses are still trying to understand how the new regulations affect them, and we have been able to assist in that transition. We're a pretty agile team and hope to continue evolving our core offerings to meet these quickly changing needs.
BND: What are some lessons you've learned? Is there anything you would've done differently?
Hilaly: As we developed our product and watched other startups in our space hyper-scale in the meantime, we realized growing for the sake of growth will only hurt you. Startups tend to focus on raising huge funding rounds and breaking sales records, but with an industry as highly regulated as health insurance, a more careful approach is required. If your own goals are your sole focus, instead of your customers and their needs, then you are asking for failure.
BND: What were the most important factors that contributed to your success?
Hilaly: One of the most important factors that helped contribute to Lumity's success was being quick to identify opportunities, but careful and strategic as we proceed. But we're still young, and still pinpointing those key success factors by being more calculated.
BND: What are the next steps you want to take as a business owner? How do you see yourself achieving those goals?
Hilaly: Our next step will always be making sure that our customers are happy by finding new ways to serve their health plan needs, going beyond the initial choosing of a new plan. We want them satisfied with our services and communicating with us their questions and concerns. Any future plans or developments will stem from that. Of course, we'd also like to expand to new markets, but are putting regulation and compliance first in every opportunity we see.
BND: What is your best advice to someone with a great business idea who is ready to give it a shot?
Hilaly: Make sure you have that inner fire that keeps you motivated. Like everyone says, starting a business is rough going, but what has helped me push through the rough patches is knowing I'm creating something that empowers people who are otherwise stuck dealing with antiquated, greedy industries.