#114 - Karn Saroya

**Craig Cannon** (0:00)
Hey, how's it going? This is Craig Cannon, and you're listening to Y Combinator's podcast. Today's episode is with Karn Saroya.
Karn is the CEO and co-founder of Cover, which was in the YC Winter 2016 batch. Cover is a nationally licensed insurance broker. You can use their app to take a picture of property you want to insure, and they'll connect you with their insurance partners so that you can get the best price and coverage. You can find Karn on Twitter at Karn Saroya. All right, here we go.
All right, so today we have Karn Saroya, the CEO of Cover, which was in the winter 2016 batch of YC. So, Karn, what does Cover do?

**Karn Saroya** (0:36)
First of all, thanks for hosting me. I appreciate it. So you can think of Cover as a multi-line national property insurance entity.
Our customers download our apps. We ask a couple simple underlying questions, and they take pictures and videos of things they want to insure. So this could be cars, they could walk us around their homes, pets, jewelry, electronics. We basically make a market for just a bit, anything you can take a picture of.

**Craig Cannon** (0:59)
And it's processed with computer vision, not humans.

**Karn Saroya** (1:02)
On the home side, it's 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.

**Craig Cannon** (1:14)
Okay, and now is it assessing more than what the object is, or is it just like, this is a bicycle?

**Karn Saroya** (1:20)
No, no, it's actually, I mean, the value of us being a visual app is twofold.
One, we're acting as a sophisticated front-line underwriter. We're proving the property existed in a given time, place, and condition, and that helps materially improve our loss runs. And then for the customer, what it means is that there can't be very much pushback. In the instance of a claim, you have proof that your property existed, and our adjuster can't come back and say that, hey, that television that you're trying to claim is actually something that's like an inferior model or something.

**Craig Cannon** (1:55)
And so are your models constantly adjusting per person? So should I be photographing everything I buy?

**Karn Saroya** (2:02)
So it, again, is just a tool for us. It's not necessarily the central tenet of what we do.
A big part of it is to simplify the onboarding of getting insurance, and making it a bit more natural on native mobile.

**Craig Cannon** (2:15)
And then this is kind of an interesting divergence for you because before you had a style startup, before that you were in consulting. So maybe you should explain how you ended up here because I think it's, yeah, it's interesting.

**Karn Saroya** (2:28)
Yeah, sure. So I was a management consultant in a past life. So I was at Oliver Wyman, specifically in their financial services practice. And I got a CFA at some point. I went to MIT, studied finance. So I was in their finance and risk practice at a little bit of insurance work. It was great. It helped me pick up a little bit of polish the two years that I was there. I certainly can model things and build PowerPoint slide decks.
And that was certainly to my benefit.
I'm appreciative of the experience that I had there. But at the end of the day, I kind of wasn't getting what I wanted out of the experience. The risk-adjusted returns to being in professional services like managing consulting or banking or private equity are great.
But because they're great, I view them as temporary. And so I'm looking at it, and in the long run, eventually, there's a reversion to the mean. And I kind of want to make the jump to something where I'm building things, I'm taking risks, and that just gelled better with my personality.

**Craig Cannon** (3:38)
So did you find that you were struggling to care while you were consulting? Or you just didn't feel there was sufficient upside?

**Karn Saroya** (3:44)
Well, I was learning to code while I was consulting. And so I was like, well, I'd rather be a maker of things than an advisor.
And so it's fine. One of the questions I kept percolating in my head was they're paid millions of dollars to advise banks to do things and to improve operational processes. I kind of wondered why the partners that I worked with just didn't build a bank.
And I posed that question to a couple of the partners, and the answer was, hey, man, we make a lot of money doing this. We're not going to end up taking these risks. Quite frankly, the scope of building a bank is way, way larger than the thing that we focus on, whether it's in an insurance context solvency-related, in the banking context, stress testing-related or operational or something to that effect. And I was like, well, I'd be the guy that wants to build a bank.