TCube’s Early Success Drew Notice
May 01, 2017 09:22PM ● Published by Makayla Gay
By Emily Stevenson
Photo Supplied by TCube
TCube Solutions’s president and CEO believes the company’s recent acquisition by multi-national consultancy Capgemini is a validation of TCube’s quick ascent.
“We became very good,” says Lawrence “Sam” McGuckin, regarding the success of the Columbia-based casualty insurance software implementer. “We’re unusually good. We surpassed all of the other competitors in our space and built an amazing reputation. The market took notice.”
TCube Solutions received calls from 14 different integrators who were interested in acquisition. The four-year-old company takes software developed by other companies and helps insurers install and configure it to work with their in-house systems, such as general ledgers, payment and compliance. A merger with a larger company would enable TCube to work with such household names as Geico, Chubb, and AIG.
But despite the obvious benefits, the decision to align with a larger company wasn’t easy for McGuckin.
A 33-year veteran of the insurance software industry, McGuckin began his career at Policy Management Services Corp. in Columbia. He later migrated to Duck Creek Technologies, one of the top two insurance software leaders in the marketplace. When Duck Creek was sold to Accenture, McGuckin agreed to stay on board but found he didn’t like the restrictive nature of a larger company and found a new venue.
“I signed a three-year contract, and one year into it I couldn’t stand it. I couldn’t stand being part of a giant company anymore,” he says. “They eventually turned it over to partners, and when they did, I said, ‘Let me out of my contract and I’ll be the best partner you’ve ever had.’ That’s when I started TCube.”
McGuckin was sensitive to the reaction of his team as he pondered his decision.
“Being acquired was a concern for those guys, but here’s the reality: there are so many competitors getting into our space,” he says. “It’s very lucrative. If we did not team up with somebody, then these big mammoth companies would push us in the corner and we’d go into decline. We’d only be able to service the small end of the market. We had to take control.”
It was a good move; the acquisition with Capgemini will serve to benefit both companies. TCube will receive the benefits of being backed by a firm of Capgemini’s size. Capgemini, on the other hand, will reap the benefits of TCube’s knowledge of Duck Creek software. There are two major players in the P&C insurance software that McGuckin compares to “Ford and Chevy.” Currently, the Capgemini specializes in the second software, Guidewire. The acquisition will allow them to offer both services to clients.
Knowledge is critical in the software implementation business. Despite the fact that, at its core, TCube is a technology company, McGuckin strives to keep his business insurance-focused and make sure his team is well equipped to speak to leaders in that industry.
“When we compete, we’ll go and talk with the president of an insurance company and we’ll describe our services, and we sound like insurance people,” says McGuckin. “Yes, we know technology, but we sound and look and act like insurance people. If you go to a Geico and want to implement their systems, if you don’t understand [certain principles] they get very frustrated. They don’t want to have to explain to you the basics of insurance, so that is a huge differentiator for us.”
Clients have taken notice, so much so that Capgemini is going to concentrate its insurance center of excellence in the Columbia market. TCube is investing $1.7 million to hire 100 new employees and is moving into a new, 25,000-square-foot workspace in the First Base Building at Spirit Communications Park.
McGuckin says Columbia is a natural fit for TCube and Capgemini to expand.
“There’s a lot of people in this town that understand insurance technology,” he says. “That’s a key reason to be here.”
McGuckin cites other reasons, including low labor costs, support from local government, and support from the University of South Carolina. TCube itself was hatched
from the USC/Columbia Technology Incubator, which offers support and facilities as new companies grow and expand. He credits the incubator for introducing him to Thomas “Tom” Pietras, with Bauknight Pietras and Stormer PA, who is now the firm’s full-time CPA.
McGuckin encourages budding entrepreneurs to take advantage of the incubator, but despite his startup success, warns that it takes a lot of hard work to get there.
“My advice to startups is to be careful about becoming so focused on your baby that you can’t see how ugly it is,” he laughs. “It’s only a cute baby if somebody is willing to pay. For me, this was easy because I was already doing the work and I had done it for years at Duck Creek, so I knew the market demand. But from a pure startup, I advise caution.”