Alien Abduction Insurance.
Crazy idea?
Or crazy good idea?
Most entrepreneurs have ideas that fall into both categories – crazy and crazy good.
How do you know which category to put an idea into? People have called some of my most profitable ideas crazy. While others have praised concepts that fell flat.
Once you’ve decided to pursue an idea, turning it into a product or service, how long do you hold out for success? Six months? Six years? Until the bitter end?
Here’s a case study sure to entertain and educate (I think the trendy new term for that is edutainment). Read on for…
Three Business Lessons from Alien Abduction Insurance
Believe it or not alien abduction insurance is a real thing – tens of thousands of policies have been sold. The two primary companies who have issued policies are Lloyd’s of London (via Goodfellow Rebecca Ingrams Pearson) and The UFO Abduction Insurance Co. located in Florida.
They’ve taken vastly different approaches, and had vastly different outcomes.
Business Ideas Lesson #1 – Is there a Market?
Are there people who are afraid of being kidnapped by aliens?
Yes.
Translation for Your Business:
Is there anyone else who sees the need you plan to fill? Everyone knows the cliche about being able to sell ice to Eskimos. Wouldn’t you rather be the person selling ice on a hot tropical beach to tourists with cash to burn?
Are there enough people who are afraid of being kidnapped by aliens to make a viable market?
Yes. (Just Google “fear of alien abduction”.)
Translation for Your Business:
The easiest litmus test for market size is when your product or service is a significant improvement upon what’s currently offered by others. That generally tells you a market exists (but does NOT guarantee they will buy anything from you).
Yet entrepreneurs often put out cutting edge products, services and ideas. While market research might provide some insight, often the most cost effective way to test the potential is to do a limited offering. This leads to…
Business Ideas Lesson #2 – Will People Buy It?
Let’s face it, in today’s society most people have more wants than cash in the bank. There’s no shortage of trendy new products, services, and experiences that consumers are bombarded about non-stop.
Personally there’s about 20 gadgets I’d love to own right now that just don’t fit in the budget.
Lloyd’s of London is famous for offering insurance on just about everything, so why not alien abduction insurance? The cost to introduce this new type of insurance was probably minimal, allowing them to test the market. Lloyd’s claims to have written over 40,000 policies during the time it was offered.
Translation for Your Business:
Look for a low investment way to offer or test your idea. Set a minimum number of sales, or minimum amount of revenue to consider it a success.
Be sure to set your benchmarks before you launch – otherwise you may be tempted to keep going even when it doesn’t pay
.
The UFO Abduction Insurance Co. took a completely different tact. Their product, while legitimately an insurance product, is more of a spoof or schtick. If you are abducted you will receive $1 a year for your lifetime, up to a maximum of $1 million dollars. To qualify for the insurance you must pass the “Texas IQ Test”
a) do you have a sense of humor?
b) do you take this coverage seriously?
c) were your or parents related before they were married?( if you answer yes more than once – you do not qualify)
To generate initial publicity and buzz the first policy was issued (gratis) to Shirley MacClaine. More than 20,000 policies have been issued since the company formed in 1987.
Translation for Your Business:
If you are offering something unusual, and want to keep initial investment / launch costs down, find a way to generate relevant free publicity. Shirley MacClaine has publicly voiced her belief in aliens for years, and claims to have seen UFOs from the porch of her New Mexico home. A freebie to the right celebrity, public figure, or expert can pay for itself 100 times over.
While I would have believed that the people who buy from The UFO Abduction Insurance Co are more likely to be skeptics, they have paid out on two claims. Be prepared to follow through on all your guarantees, or don’t offer them.
If you don’t generate any sales with your initial market test it’s time to pull the plug.
Business Ideas Lesson #3 – Fold ‘Em or go All In
Products and services have a lifespan. Some are quite short (Pet Rock anyone?), others are very long (Arm & Hammer Baking Soda has been around for 160 years!). Even if your product or service passed the initial market test, that doesn’t mean it will last forever.
In 1997 39 members of the cult Heaven’s Gate committed mass suicide. They were insured by Lloyd’s of London against alien abduction. Fearing that they may have contributed in some way to the mass suicide, Lloyd’s decided to stop offering alien abduction insurance.
When a product no longer aligns with your core values, it needs to be discontinued.
Meanwhile The UFO Abduction Insurance Co is still going strong, currently celebrating their 25th anniversary. They seem to have doubled down on their tongue in cheek approach, while fulfilling their obligations by paying out on two claims. More freebie celebrity policies have been sent out, and they’ve even added a $10 million dollar option. Of course you have to live 10 million years to get it…
Embrace your core. Whether it’s wacky or wise, celebrate who you are.
Final Thoughts
What’s a crazy good idea that you’ve made profitable? What finally made you give up a unprofitable offering? Would you have ever guessed nearly 70,000 alien abduction policies have been purchased?
This post is part of the November Word Carnival. The topic is Letting go: How and What to Trim to Keep Your Business Lean and Focused. This month’s carnival will make the juggler want to go stand out in the cold; multitaskers – you’re on report!
Who knew, Nicole? Love the way you have linked aliens with a focused business. I especially like the final takeaway – not only is embracing your core good for a refocusing process, it can also guide you as you do business. In my case, my gut feeling about a new gig is usually a good barometer of whether it aligns with my core values. Now, if only my gut would tell me which clients would be good payers, I’d be laughing! 🙂
Sharon it’s surprising how easy it can be to get away from your core. Having recently done a vision board I realized that it’s something I need to keep front and center all the time.
For good payers – good contracts help a lot (which I know you know) 🙂
Oh, Nicole, I wouldn’t have missed this post for all the UFO’s in outer space! One of the most entertaining (and insightful) posts in the blogosphere. 🙂
” What finally made you give up an unprofitable offering?”
Well, I haven’t actually given it up yet. But I’m giving serious thought to saying goodbye to affiliate marketing. I’ve been trying my hand at it for more than five years and I’ve only raked in a few dollars and cents … very few. Initially, I was super excited with the notion of promoting other people’s fabulous offerings (and I’m really picky about who and what I promote). But I’ve realized affiliate marketing is not paying off and I want to create my own offerings … my own uniqueness. 😉
Thanks for an awesome post!
Melanie – that’s a LOT of UFO’s! LOL.
Affiliate marketing is hard. Some people do make it work, but it is work. There’s no such thing as a free lunch. So yes it sounds like it’s best for you to focus on your own business and offerings.
Sweet Baby Lettuce, Nicole! I almost dropped my coffee this morning. How did I EVER miss out on the alien abduction insurance thing? (And if I actually WANT to be abducted, do I still qualify?)
Once again you’ve shown that a good story can make a fabulous lesson. LOVE this one.
“Sweet Baby Lettuce” I just love that saying!
I learned about alien abduction insurance from a fellow actuary. She co-founded and is president of a pet insurance company. In a presentation she used a LOLZ image cat talking about alien abduction insurance and I thought she was making it up. Nope!
Since the insurance doesn’t mention it has to be against your will, I think even if you want to go you can be covered (I mean it’s not like buying a bus ticket, just because you want to doesn’t mean it will happen)>
When Jenny Bones and I first tossed around the idea of a Summer Camp for adult entrepreneurs, we laughed so hard it had to be crazy – silly for sure! But as we began putting it together we realized it was the fun, playful nature of our collaboration that was making the difference for the folks who’d signed up!
And by the way, I’ve never heard of alien abduction insurance! Great story!
What ends up being a crazy idea to some is absolutely indispensable to others. For instance I love typing on my iPhone. I absolutely can’t imagine what it would be like to go back to the phone with a physical keyboard.
The only reason this is true for me is because of Star Trek. If it weren’t for Star Trek, and their beautiful beautiful touchscreen displays, I wouldn’t give two craps about being able to type on my iPhone screen.
You can say the same thing about whiteboard paint, chalkboard paint, or even those massive rollable cork boards that you can pin on to your walls.
Traditionalists be damned, it’s all about the crazies now. Although, it’s really hard to make money in a crazy niche. At least, enough money to put food on the table if the niche isn’t large enough.
Great thoughts Nicole! 😀
How hilarious! I love the way you told this story, Nicole. after a while, I started to read “align” as “alien”, too lol…
I can’t say I’ve had any great or horrible ideas yet. I seem to sort of hang out somewhere in ok-land. But maybe that’s enough to remind me to kick up some sparks. This also reminds me of the people who made money, I think it was for selling insurance or care or something for pets who got left behind when their owners were raptured. While I’m not sure I want to be that person selling ice to the Eskimos as you say, there’s no doubt these were creative!
Thanks for the fun post, Nicole! Some great things to think about…I’ve not yet offered anything crazy, but I feel pretty confident that I will when it’s right. I’m just starting to build up enough experience that I’m seeing some trends, so as long as I stay passionate and profitable long enough, I trust my creativity to lead me to crazy good ideas!
Nicole – Love Love your points! It’s amazing to me how many businesses try to start out with a “Me Too” business model, when there are so many niche markets without competition. When I started my own business a lot of my friends and family thought I was nuts (ok, a lot of them still do, but that’s beside the point). I targeted a little niche and ran with it. I’ve done some stupid things along the way, but they’ve made me smarter so I don’t consider them mistakes. (ps… I really wish I’d thought up the alien abduction insurance).
Nicole, you are giving Carol’s zombie analogies a run for the money. LOVE how you do the setup and then the translation to your business. My favorite takeaway is Be prepared to follow through on all your guarantees, or don’t offer them! Great business storytelling.
Fabulous story telling Nicole. Hooked from the beginning and couldn’t wait to read how your would unfold the moral of the story.
I was hooked too, because UFO is used frequently among the crafters in the knit-a-square forum as an Unfinished Object. Clearly crafters too start many projects that lie around for years in cupboards unfinished. One month recently they had a UFO challenge, to finish off all the UFO’s and send them to the children in South Africa.
So I am wondering if we could challenge entrepreneurs based on this topic and your spin on it, to review all their UFO’s and finish or ditch them.
Oh and I do remember Pet Rocks. It’s still shake the head territory!
My first time to your blog and what a first post to read! You had me at “Three Business Lessons from Alien Abduction Insurance.”
I’ve discovered I’m an idea junkie and I’m not alone. I’m married to one too. My Evernote database is filled with wild, crazy and a whole bunch of “oh, you’ve got to be kidding me” kind of ideas. My husband and I frequently discuss (or should I say daydream) about running with one of them to just see what happens. Millions have been made with crazy ideas right?
However, knowing what we know from ALL the reading and research we’ve done, we’ve plucked a couple of good ideas from the list and are working at laying the foundation for a great product/service.
That’s an awesome post! people are going crazy sometimes, but I could not imagine that they can go such crazy lol. but that was very amusing to read-thank you!