Building a Fast Growth, Cutting-Edge Insurance Brokerage: Karn Saroya, CEO of Cover (Part 2)

Karn Saroya: Ultimately, we were acqui-hired at Shopify. We got to build all sorts of interesting things. We worked on the Facebook Messenger chat bot for commerce. We got to work with Toby a little bit. Having been there for a couple of months, we still had the itch. We decided that we wanted to build something else because we had this rare skill set where we could build beautiful products.

Stylekick was featured in 80 countries and translated into 14 languages. It’s fairly rare to find folks who can build meaningful consumer products to some scale. We started building a set of apps that we thought we couldn’t get to scale. We settled on Cover as an insurance app simply because I had a background in insurance.

Sramana Mitra: You built this app that went to a million users. Was that a bootstrapped product?

Karn Saroya: Yes. Predominantly, it was bootstrapped. We did end up raising a seed round at some point.

Sramana Mitra: How did the Shopify acquisition happen? How did you get connected with them? How did they find you?

Karn Saroya: To be clear, it was an acqui-hire. It’s a relationship thing. It’s not all that different from venture investing. We were noted for building a beautiful product. At that time, Shopify was trying to build out its mobile team. They didn’t have very compelling products.

Sramana Mitra: What year was that?

Karn Saroya: This was 2013. At that time, they needed to bolster their mobile chops. We were in Toronto. We had a good working relationship with senior management there. It seemed like a fit at that time. We had a conversation rolling. We ultimately ended up joining the team.

Sramana Mitra: How long did you stay at Shopify?

Karn Saroya: About six months.

Sramana Mitra: How much did they pay to acquire you for six months?

Karn Saroya: I don’t want to jump into the details of it. What ended up happening was, we were running hackathons on weekends on our own time and trying to figure out what we wanted to do next. We settled on this very simple app that we built over the course of 48 hours.

It was just a couple of views with some preamble that said, “Take a picture of something you want to insure.” This was before we were a licensed entity. We just wanted to see whether people would try and engage an insurance product via an app and try to buy insurance. Lo and behold, we launched this on a weekend. We drove some traffic to it. All of a sudden, we have people who are walking us around their houses, documenting what they own, sending us videos of themselves washing their vehicles.

A lot of interesting behaviors percolated out of our test. Usually when you’re building consumer products and your expectations around how people are using your products are violated, that’s when you double down. I emailed Aaron Harris at YCombinator. I showed him a quick prototype of what we had built and some of the results coming in. He was super impressed. We moved from Toronto to the Bay Area to join YCombinator. We participated in the 2016 batch. Over the last two years, we’ve raised $33 million.

This segment is part 2 in the series : Building a Fast Growth, Cutting-Edge Insurance Brokerage: Karn Saroya, CEO of Cover
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