Knox - An Easy and Efficient Way to Turn A Property Into An Investment
Knox is a fast-growing fintech company whose platform allows homeowners to turn their property into an investment, manage it, and obtain a suitable investment towards a new home. The company recently completed its seed round with $1.4M raised.
We sat down with Knox’s Co-Founders, Spencer Taylor and David Friedman, to learn more about their backgrounds, what the company does, and the main problems they are solving in Knox's respective space.
To start off, I’d like to learn more about your background. What were you doing leading up to the founding of Knox?
Dave: Back in 2004, I founded a company called Boston Logic. We built an amazing team and grew to become a leading company in the real estate brokerage software space. I sold that company to a private equity firm in 2016 and continue to sit on the board. Boston Logic now operates under the name Propertybase. The company has made 5 acquisitions, has operations on 3 continents, and serves clients in over 60 countries. Knox Co-Founder Spencer Taylor was on our leadership team at Boston Logic.
Spencer: Over the last decade, I’ve founded or led multiple startups across a number of industries, all of which were focused on giving people or small businesses access to services that have traditionally been out of reach for them. I met Dave at a number of events over the years, and he brought me on as Boston Logic’s senior director of client and product success to help grow the company. Knowing that we were providing local and independent real estate brokers with sales and marketing software that allowed them to compete with the world’s largest brokers was incredibly rewarding.
Tell me the story of Knox. What was the a-ha moment?
Dave: A few years ago, I sold a condo that I’d lived in for 10 years. While I lived there, the value went up over $200,000. I thought that was pretty great! However, 4 years after I sold the home, the new owner sold it again for another $200,000 more. I kicked myself for selling when I had.
I had considered converting the home into an income property when I moved out. I looked into the financing, insurance, maintenance contract pricing, and tenant management. In the end, it was just a lot of work. I threw my hands up and sold, only to regret it later.
In a self-deprecating way, I told this story to friends over the next several months. As it turned out, lots of my friends had gone through a similar thought process and almost all of them had reached the same conclusion. They knew their homes would make great investments, but they couldn’t get past the effort required to make the transition. They also didn’t want to take on the work of being a landlord.
I talked with Spencer about it. Growing up in New York City, he heard his parents’ friends constantly lament how much their first apartment was now worth and how they regretted selling it in 1985 for a tiny fraction of its current value.
We realized that if someone could make the process of setting up and owning an investment property frictionless, lots of folks would have an amazing investment opportunity right in front of them.
Where did the name come from?
Dave: One day I was driving up Mass Ave listening to a podcast. It was around the time we were tossing around names for the company we were about to start. We knew we wanted something short and easy to remember while still reminding people of wealth and investment. I’m not sure if the podcast mentioned Fort Knox or something like it, but the name popped into my head. Risking my life, I texted the name suggestion to Spencer. He liked it.
What are some of the core problems Knox is solving through its offering?
Dave: People want to invest in real estate. Often, when it’s time to move, they want to hold on to the home they already own because they know it’ll go up in value. However, they don’t want to take on the burden of being a landlord, finding financing, getting the right insurance, finding tenants, and taking tenant calls at midnight when something goes wrong. Knox solves all of these problems with one product.
Retirees often want to hold on to their real estate, too. Just the other day, I spoke with an 80-year-old couple who were about to move into a retirement community. They’d narrowed the search down to 2 facilities in the same town where they live. They love the community. They have a few considerations. First, they’re staring at a huge capital gains tax bill, a realtor’s fee, and closing costs if they decided to sell their home. Second, they’d like to increase their passive income. Finally, they want to leave a legacy to their kids. Knox solves all of these problems at once.
Then there are lots of folks already own investment property. They come to a time when they can’t or don’t want to manage the property any longer. They’re retiring. They’re moving. You name it. Still, they like the passive income and equity growth and don’t want to give it up. They can simply sign their homes up for the Knox Platform and their problems are solved.
Who are your customers? Any examples you can offer? Any (non-specific) growth numbers you can share?
Spencer: We’ve been thrilled with the response to Knox since we launched our pilot in Boston last month. Our initial customers have been a great mix of young couples moving out of their first homes and retirement age people looking to downsize. The thing they all share is that they know their current homes are good investments and they don't want to miss out on future value. We’ve already signed our first properties, and our pipeline for the coming months is very strong.
What are some of the cool things you’re working on right now at the company?
Dave: In March, we launched our solution for homeowners and landlords specifically. We’re about to launch a partnership offering for real estate brokers. Stay tuned for more information.
What comes next for Knox?
Dave: After completing our Boston area pilot this spring, we plan on rolling out the Knox Frictionless Ownership Platform to cities across the country. We’ll begin to expand 1 additional market at a time. Once we’re humming, we’ll pick up the pace and launch several new markets each month.
What kind of positions are you hiring for right now?
Head of Recruiting - We’re going to need to find a lot of very talented people. Start with the searcher.
Product Manager - A design-focused product manager with startup scaling experience.
Systems integrator/administrator - With experience in Salesforce, Netsuite, Marketing Automation Systems, and Boomi
Data Engineer - With specific experience in real estate data analysis.
Any final thoughts?
Dave: Homeowners who are planning to move should call Knox. They very possibly already own an incredible investment that they never knew they could take advantage of.
At the very least, homeowners should think twice before putting their homes up for sale, and ask themselves four questions I outlined in a recent blog post, “4 Questions Homeowners Should Ask Themselves Before Selling.”