Headquartered in Nashville, Asurion is one of the largest and fastest growing subscriber-based businesses in the world. In a little over 20 years, Asurion has expanded to provide its award-winning services to over 150 million wireless customers, with over 17 thousand employees in 21 countries around the world.
Co-founded in 1995 by current Chairman, Kevin Taweel and fellow Stanford GSB alumnus Jim Ellis, Asurion began by selling roadside assistance through wireless carrier channels. Expanding to offer insurance for mobile phones in 1999, retail service contracts in 2008, and technical support in 2011, Asurion has become the global leader in technology solutions services.
On February 13, 2019, LebNet hosted a talk in Silicon Valley, California given by Kevin Taweel and moderated by Abdo George Kadifa, LebNet’s chairman and the managing director of Sumeru Equity Partners. During his talk, Taweel took us through the journey of Asurion, how luck played its part and how tough decisions and competition made his company one of the leading providers of device protection and tech help.
When opportunity meets readiness
Taweel, whose father is Lebanese, credits most of his successful journey to being lucky and ready. In other words, taking advantage of the opportunities that came his way and knowing how to react when bad things happen.
Asurion’s business model was totally different when it started. Kevin was introduced early on at Stanford to an investment vehicle called a Search Fund that financially supported an entrepreneur’s efforts to locate, acquire, manage, and grow a privately held company. The goal was then to sell it and repeat the cycle. Taweel and Ellis had purchased a roadside-assistance company in 1999 which proved to be a challenging business to operate. It did, however, have an important upside: the product was sold through wireless carriers, and exposed the young company to opportunities created by the emerging mobile phone market.
In the early days of wireless, “…the phones were so big you could only put them in your car. So wireless carriers sold roadside assistance for $3 per month when you bought your wireless plan,” explained Taweel. The idea to sell mobile phone insurance presented itself when he came across a phone insurance brochure during a client store visit. Much of Asurion’s growth can be traced back to that decision in 1999, to purchase a small cellphone insurance company. As mobile phones became ubiquitous and increasingly valuable, the business grew from a few million dollars in revenue at the time of acquisition, to the multi-billion-dollar enterprise Asurion operates today.
It proved to be a very wise decision. While the original roadside business grew by a factor of 50x, the wireless protection grew by over 1000x. “Today, approximately one in four people in the US use our services,” said Taweel.
Customers pay a monthly fee of around $12 to insure their phones and have access to other services helping them fully use the capabilities of the technology they own. If the phone is lost, stolen or broken, Asurion can replace it the next day or often, fix a cracked screen within a few hours. In addition, Asurion support services, via phone, chat, or mobile app, help customers realize the full potential of their phones and other consumer electronics.
Tough decisions make great companies
Taweel, who studied engineering at McGill University and business at Stanford, explained that in the beginning, he had to make a lot of tough decisions that helped the company maintain its culture and top clients.
In the early days, almost half of Taweel’s time was spent on hiring the right people and making sure that his best people were positioned in high leverage roles. Even today, he still spends about 30 percent of his time dedicated to people and talent.
“It has been a great learning experience. The time you spend hiring people will take you a long way. The biggest mistake [you make] is when you hire misfits and let them stick around and then they hire others worse than them. [It ruins] the culture, so early on in our growth trajectory people who weren’t very good were exposed immediately.”
Culture remains a key component in Asurion’s success. It’s the glue that binds all members and Taweel attributed the company’s strong culture to its core values and leadership principles. Both core tenets reflect his beliefs and helps ensure the culture is true and strong by aligning how employees work and lead.
“It is challenging to institutionalize a culture. Most of our team is new but we’ve created a culture where the team focuses on reaching full potential by putting our customers first, taking ownership, and collaborating across the business,” Taweel stated.
IPO and future plans
During the Q&A session, Taweel was asked why he has not filed an IPO and what will Asurion’s next steps be.
Without taking the IPO completely off the table, he told the audience that it was very unlikely. “We don’t need the capital and we don’t have liquidity issues. As long as our customers and partners find value in our service and have a great customer experience, that’s what’s most important. Being known for the sake of being known isn’t interesting to us,” he said, adding that making the company public requires a lot of work before and after. Taweel explained that he wants the entire team to stay focused on delivering the best service and experience for partners and customers, not be sidelined by analysts.
As for Asurion’s plans, the future looks bright. Taweel announced that the company will be offering a new smart home service, to connect, protect and maintain all electronics people use at home so they can enjoy their technology. A new software product will show all the available devices in the house and assess their performance to ensure everything is working at optimal level. “We want to be the trusted partner that actually helps customers keep [their devices] up and running and provide more services on top of that,” he concluded.