Stay curious, and understand the “why” behind the “no’s”Read more...
Co-founders should be a Venn diagram of skill sets
If you read through our popular Meet the VC series, which profiles hundreds of VCs, you’ll see that an overwhelming majority say the founder and his or her founding team are the biggest factors they consider when investing in a company.
Many want to find that soft skill that’s often not reflected in a resume. For instance, VCs always look for founders who are “resilient” “intuitive” and “courageous.” At the same time, they want to find teams that work well together and complement one another. Team dynamics can make or break a company.
In this series, we’re profiling startup founding teams. We want to know why they chose to work together and why they work so well together.
Our fifth startup teams profile is Knox Financial. For homeowners who are ready to move, Knox provides a wealth-building alternative to selling their properties. The company offers a simple and frictionless process for turning a home into an income property, managing that income property, and securing the appropriate financing for a new home.
David Friedman is the co-founder and CEO of Knox Financial. David is an entrepreneur with experience launching and growing several companies from idea to profitability. Prior to Knox Financial, David co-founded Boston Logic (now Propertybase) and now serves on its Board of Directors. Boston Logic provides software, online marketing, and design services to real estate companies. David holds a Mechanical Engineering degree from Tufts University. David was recently featured in out Today's Entrepreneur section, read more about him here.
Spencer Taylor is the Co-founder and COO of Knox Financial. Spencer's passion has born out of connecting great companies and initiatives with great people to drive change. Spencer is experienced in commercializing ideas from the ground up and building sustainable business models and brands. After graduating from Middlebury College he worked with a multitude of companies to help them package their message and value proposition effectively to attract customers and drive business.
Prior to Knox Financial Spencer co-founded Evaptainers. Evaptainers makes mobile refrigeration technology to keep food fresher, longer using sun and water. He also co-founded and was the CEO of Launcht for more than 5 years. Launcht empowers universities, nonprofits, incubators, competitions, and others to create their own custom white label crowdfunding platforms & open innovation voting competitions.
VatorNews: How did your company come together? And what are the complementary skills you each bring to the table?
David: Spencer Taylor and I met a decade ago. He was working for a competitor of my last company, Propertybase. When he left that job, I tried to hire him. Instead, he launched a startup of his own. A few years later, I tried again and failed to hire him. Finally, in 2015, Spencer came aboard as a member of our senior team. During the intervening years, we’d built a friendship. Working together, we found that our skill sets were complementary in many ways. We sold Propertybase to a private equity firm in 2016. By 2018, we were both looking for our next thing and decided that an idea we’d tossed around for some time, and over several beers, was worth our full-time attention. That idea was Knox.
From day 1, we had an adage at Knox. We say, we’re building a Navy Seal team. The goal state is a group of incredible contributors who have such confidence in the dedication and capabilities of each other, that extraordinary accomplishments become almost commonplace. A Seal team, in a conflict zone, will have the impact of a division while the headcount is dramatically lower. The goal of our Seal Team is that everyone feels they’re on that kind of team and everyone delivers with the expectation that their work will be met with the same level of output from their teammates.
Through this, we’ve developed a group of incredibly experienced and capable professionals. Marc, our head of branding and messaging was VP of Marketing at Betterment. Dan, who leads property management was born into the industry—he’s forgotten more about property management than I know. Monica, our VP of Finance has been with Fidelity and Berkshire Bank, just to name a couple. Jeff, who runs digital demand gen, has been in digital marketing for 20 years - he’s a true demand den ninja. The list goes on.
VatorNews: What are the characteristics/qualities you look for in a founding partner?
David: The number one thing I look for is the agency. Launching a company means building 100 different things from the ground up. Sometimes you follow the blueprints from organizations you’ve been part of in the past. Sometimes you figure it out starting from zero. A great founding partner will take on whatever outcome is needed and figure it out. They’ll call on their network, learn a new software package, source a vendor, you name it—they’ll just get it done.
Many of the things you need to build are easier done the second or, for that matter, tenth time. So, the experience is very important. This isn’t news to anyone. Investors know it. That’s why they like to back experienced founders. When the team is trying to figure out how to do something and someone in the room says, “We hired xyz consulting at my last company and they did a great job and it was pretty cost effective too.” The discussion is usually over. The path has been set.
Spencer: I know it is shocking, but I don't know everything. When you are creating something from nothing you need such a wide variety of skill sets that finding someone who has skills and points of view different than your own is key. Co-founders should be a Venn diagram of skill sets. You need a little overlap so that you can relate and have commonality, but the areas that do not overlap are critical.
VatorNews: How do you make sure you don’t get on each other’s nerves?
David: Enormous Mutual Respect. When you work with anyone, you will not always agree. If you do, that’s a red flag. When you disagree, you should be able to do so productively. You should even be able to argue. When it’s over, you leave knowing that you still hold one another in the highest regard. If that’s not the case, then you need to work on your professional relationship. This is true for any teammates at any company at any stage. If this is missing, you need to work on that relationship.
Spencer: Creative tension is the product key to a co-founder relationship. What keeps creative tension from becoming annoyance is mutual respect and communication. If you have an issue talk about it right away. If you disagree, argue your case, respect the your cofounder's point of view, come to a conclusion, and move on. Open communication is key to keeping a fast-moving co-founder relationship healthy.
VatorNews: What are some lessons learned about working together?
David: Spencer is very good at zero to 1. When you have to go from 0 to 10, the hardest part, and maybe half the effort, is going from 0 to 1. That’s why Peter Thiel called his book Zero to 1. Often, Spencer will spearhead a new initiative and then hand it off to Dave.
Spencer: To play off Dave here he is awesome at 1-9 (he is pretty good at 0-1 as well). I am good at building a raft rapidly, and he takes the raft and turns it into a yacht just as rapidly.
VatorNews: What’s your advice about teams and founding partners to entrepreneurs looking to start a company?
David: People are everything. I think I was told this a dozen times before I experienced it for myself and really learned the lesson.
You can take 2 companies who both make something totally simple, like tires, and compare them. They both have access to the same suppliers, the same software, the same market of buyers. The company with better people will outperform the other.
Innovative startups are often judged (and valued) by their growth rate. I’ve seen the right teammates account for 25% faster growth. The wrong teammates making the wrong decisions will bring that same company to a flat growth curve or worse. Ideas and product market fit are critical. Without the right people to execute, market, and achieve operational excellence, you’re going nowhere.
Spencer: Don’t launch a product. Launch a category. If you are going to face the challenge of starting something new, make sure it is truly new. That way you can have an impact that is commensurate with the work you need to put in to get there.
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Read more from our "Startup Teams" series
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Knox is the smart and frictionless way to turn your current home into an investment property delivering passive income while empowering lifestyle freedom, and superior wealth creation.