Opinion
Full-Stack Insurtech Startups Will Likely Fail and Burn Cash
“Folks who are attacking, you know, every aspect of this at once are probably not going to get any of them right and burn a lot of money right out the gate.”
Insight
Saroya: Pure lead-gen businesses are not durable long term
“I don't think that you can build a durable business as just a lead gen. You know a lead gen service for a couple of reasons. One, those arbitrage opportunities eventually dissipate. The second is you're not building any brand, like, equity or value, and you're…”
Disclosure
Cover Paid $750,000 Plus Broker Fees to Acquire Cover.com
“So we paid seven 50 for it, and then there were broker fees.”
Assertion Not checkable as stated
Saroya: Proving property existence and condition materially improves loss runs
“We're proving that the property existed in a given time, place, and condition. And that helps materially improve our loss runs.”
Insight
Saroya: Early mobile e-commerce only worked vertical or impulse purchase
“Either you went vertical or you went impulse price purchase.”
Assertion Not checkable as stated
Cover Operated Without Making a Single Hire for 18 Months
“So we didn't make our first hire for probably the first year and a half.”
What-if
Cover.com Would Have Cost $5M–$6M After Series B or C
“And I can guarantee you that if we had tried to buy it after our B or C, we'd be looking at like five, six million dollars.”
Opinion
Saroya: Professional Services' High Returns Are Temporary and Mean-Revert
“The risk adjust returns to being in professional service is like, Managing consulting or banking or private equity are great. But you know, because they're great, I view them as like temporary. And so, you know, I'm looking at it and I'm like, in the long run,…”
Disclosure
Saroya: Stylekick had 400,000 active users by its third YC interview
“With Stylekick, actually, we applied to YC, like, four or five times. We interviewed three times, actually. And by the last time that we interviewed, we had 400,000 active users.”
Assertion Not checkable as stated
Cover Earns $200–$300 Commission on Average $1,600 California Auto Policy
“Like a single auto policy that we sell in California, the average premium is something like 1600 dollars. Just as a distributor of insurance, never mind underwriting or the, you know, moving down the margin stack. You know, we earn anywhere between 203 hundred…”
Assertion Not publicly verifiable
Saroya: Cover reached #1 Canadian insurance app on day two
“You know, we ended up being the number one ranked insurance app in Canada the second day. And during YC, we were actually, like, two weeks into launch, like, we were featured for, like, under the best new apps in the United States, right?”
Assertion Not publicly verifiable
Cover Expanded to 49 States and 30 Carriers in 12 Months
“So we were in 49 states with 30 carriers in under 12 months.”
Assertion Partly supported
Cover Raised $3.2 Million Seed Around YC Demo Day
“So we raised, I mean, we raised 3.2 million bucks. So slightly, some of it before demo day, a lot of it after demo day.”
Disclosure
Saroya: Cover acquires customers exclusively through mobile app stores
“We acquire exclusively through our apps. So the app store, Google play.”
Assertion Supported
Berkshire Hathaway Class B Stockholders Get an 8% Geico Discount
“Geico, for example, has this weird, you know, affiliate discount where if you own a share of Berkshire Class B stock, you get an A percent discount on Geico, right?”
Assertion Not publicly verifiable
Saroya: Natalie Got Stylekick and Cover Featured Simultaneously on US App Store
“She got, you know, style kick and cover featured on the front page of the US app store simultaneously, which I think very few people like Hvette can have claimed to.”
Disclosure
Saroya discloses being an early investor in Lambda School
“One of the folks, the first folks I did it for was Austin at Lambda School. And I ended up being like one of the first investors. It gave me the opportunity to be one of the first investors in Lambda School too.”
Disclosure
Saroya: Cover uses TensorFlow-based camera to catalog property for insurance
“On the home side, it's a computer, so we use a TensorFlow-based camera to identify, catalog your property so that when you need to make a claim there isn't much of a fuss that's put up by an adjuster.”
Disclosure
Saroya: First startup project was a Kinect-based 3D body scanner
“The very first thing that I built with Anand, who's our CTO was actually a body scanner. And so, so we used the, you know, three connect sensors, because it's like a depth sensor webcam, three points of perspective to get a body form. And we thought that we co…”
Disclosure
Saroya: Stylekick grew to 1 million active users through influencer marketing
“We relied heavily on influencer marketing to grow to eventually a million active.”
Assertion Not publicly verifiable
Saroya: Stylekick was featured globally on App Store and ranked #1 in France
“Stylekick itself was you know featured in just about every market you know, on the app store, on the front page repeatedly. We ranked number one for style in like France.”
Disclosure
Saroya: Cover's Co-Founders Still Live Together
“Actually our co-founders still live together.”
