Building a Fast Growth, Cutting-Edge Insurance Brokerage: Karn Saroya, CEO of Cover (Part 5)

Karn Saroya: When it comes to segmentation, it’s exactly what you would expect. 80% of our customers are under the age of 35. A quarter of those are homeowners. We tend to get the types of folks who are accumulating assets over time. They may start with getting an auto insurance policy but very quickly graduate to getting a home policy. >>>

Capital Efficient Entrepreneurship: Neil Vaswani, CEO of Corestream (Part 4)

Sramana Mitra: How many enterprise clients got you to 75,000 end users?

Neil Vaswani: Maybe 10.

Sramana Mitra: What kind of average deal sizes were you closing?

Neil Vaswani: We had some big ones that were 20,000 to 30,000 employees. On average, it was something like 6,000 to 7,000 employees. We had 75,000 end users that were payroll-deducted. We also had more that were not payroll-deducted. We probably had 150,000 that were not payroll-deducted. The important metric for us is, how many payroll slots did we have access to. >>>

Building a Fast Growth, Cutting-Edge Insurance Brokerage: Karn Saroya, CEO of Cover (Part 4)

Sramana Mitra: There’s some reason why you were drawn to insurance? Why insurance?

Karn Saroya: When we were running Stylekick, we worked with some insurance brokers. One day, I walked into one of their offices. This was in Toronto in the financial district. They had multiple floors wedged between investment banks, consulting firms, and private equity shops. >>>

Capital Efficient Entrepreneurship: Neil Vaswani, CEO of Corestream (Part 3)

Sramana Mitra: How did you get it off the ground? You said you raised money right away?

Neil Vaswani: Yes. My co-founder and I wrote up a two-page executive summary. We started spamming VCs. We got some calls back.

Sramana Mitra: What year was this happening?

Neil Vaswani: This is 2005. Not exactly the best time to be raising capital, but we did get some responses. It took us a while to get us warmed up. Eventually, we landed three different suitors who were really interested in funding us. We decided to walk away from one >>>

Building a Fast Growth, Cutting-Edge Insurance Brokerage: Karn Saroya, CEO of Cover (Part 3)

Sramana Mitra: You got an offer to join YCombinator. What was your acqui-hire deal? Was it an earn-out deal?

Karn Saroya: We didn’t completely vest. It was okay with us largely because we had quite a bit of conviction around what we wanted to do next. The team was most comfortable building products at the pace of a startup. The beauty of running a startup is you can be extremely high-leveraged. You can make a huge impact quickly and you can scale very quickly, which is what we wanted to do. >>>

Capital Efficient Entrepreneurship: Neil Vaswani, CEO of Corestream (Part 2)

Sramana Mitra: What year did you start Corestream?

Neil Vaswani: In 2005, I realized that there was this inefficiency in the market. Then in 2005, I sought capital. In 2006, we closed capital. In 2008, we went to market.

Sramana Mitra: Talk to me a little bit about what was the idea. What prompted Corestream?

Neil Vaswani: I remember getting angry with myself every day when I was 24 or 25. I was getting frustrated with myself that I hadn’t started a company yet. It was this burning desire. I knew I would be miserable for the rest of my life if I didn’t start a company. It was >>>

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? >>>

Capital Efficient Entrepreneurship: Neil Vaswani, CEO of Corestream (Part 1)

If you haven’t already, please study our Bootstrapping Course and Investor Introductions page. 

Neil has turned a $3M investment into a ~$10M annual revenue company by addressing a cumbersome piece of workflow in benefits management. Read on to learn how.

Sramana Mitra: Let’s start at the very beginning of your journey. Where are you from? Where were you born, raised, and in what kind of background?

Neil Vaswani: I was born in New York and lived there for a part of my life. My parents are from India. I did live in India for a while and spent some time in Europe. I went to school at Babson College and then moved back to New York City right around 2000. I started Corestream probably about 2006. >>>