“Hire the Right People” with Gregor Watson

I had the pleasure of interviewing Gregor Watson is chairman and co-founder of Roofstock, the №1 marketplace for buying and selling…

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I had the pleasure of interviewing Gregor Watson is chairman and co-founder of Roofstock, the №1 marketplace for buying and selling single-family rental (SFR) homes. In his capacity at Roofstock, Watson oversees the development of the proptech company’s platform. He also spearheads Roofstock’s expansion efforts in both domestic and international real estate markets. Watson is a serial real estate and technology entrepreneur who has founded or co-founded multiple enterprises, including 1 Sharpe Capital, a billion-dollar hedge fund; 643 Capital Management, a leading SFR private equity platform; and Dwell Finance, the first institutional bridge lender sold to Blackstone.

Jean: Thank you so much for joining us! Can you share your story about how you became a startup founder?

I’ve always been an entrepreneur. I became the co-founder and chairman of Roofstock by finding a pain point in the market. I was attempting to sell 500 homes that were part of a 1,500-home portfolio in Dallas using the traditional brokerage model, which allows you to only sell one property at a time to a local buyer. The entire portfolio of SFR homes was only exposed to investors in the Dallas/Fort Worth area. At that time in the cycle, the world was starved for yield and the best buyer wasn’t exactly someone down the street. More likely, that buyer was located in another region of the country or perhaps on the other side of the world.

Not only was this process slow and frustrating to me, it was extremely inefficient. At that point, I realized that the world had moved on from the traditional way of transacting and investing in real estate. Out of frustration with the inefficiencies in the industry, I created Roofstock and became its co-founder.

Jean: What do you think makes your company stand out? Can you share a story?

At Roofstock, we have simplified the acquisition and management of real estate while breaking down the traditional geographic barriers to investing. Since we knew that this remote investing model would work for institutional investors, we created a more liquid real estate market. What was surprising is that we started breaking down geographic barriers for individual, retail investors in the process. My hunch was that millennials–especially those working in the tech sector–would welcome the ability to invest remotely online. If given the opportunity, I was sure they would want to acquire properties in affordable markets with healthy returns, while continuing to rent and live in high-priced areas where their jobs, friends, employers and nightlife are located, such as San Francisco and New York City.

For instance, buying a $3-million flat in New York City isn’t attainable for most 27-year olds. But buying a $100,000 home in Texas while you’re renting in Brooklyn makes sense. However, I didn’t know if people were willing to transact online at such high dollar prices from a retail standpoint. This is a big decision for anyone, particularly a millennial who has managed to save between $20,000 and $30,000, who wants to use it for buying their first property. The solution was to build a trusted brand that empowers people to feel more comfortable buying online. Today, the comfort levels associated with buying such a high-priced ticket item have increased substantially because of our proven business model. As a results, millennials and others living in high-priced areas now have the opportunity to acquire their first investment property, which is a powerful wealth-building tool.

Jean: Are you working on any exciting projects now?

Recently, we acquired an additive piece to our offering: Dallas-based Streetlane Homes, one of the only property management firms in the U.S. certified by leading institutional lenders in the as an approved property manager for large (SFR) home portfolios. Streetlane Homes has the ability to be operational in new markets within 30 to 45 days and is poised to expand to other cities to service additional institutional investor clients.

This acquisition enables us to provide direct, transparent feedback to our clients on their real estate investments through Roofstock. With this new in-house property management solution, we can handle any issues when they arise, and with much greater speed.

The goal for Roofstock has always been to separate investing from operations and the addition of Streetlane enables us to separate investing from operations. Simultaneously, we have hands-on oversight over of our investors’ SFR properties.

This acquisition has also given us the ability to provide institutional pricing to retail investors, with respect to insurance, property management, repairs, maintenance, and mortgage financing.

As I previously mentioned, Roofstock’s goal has been to provide as much liquidity to the real estate transaction as possible, and to make the transaction as frictionless as possible. The acquisition of Steetlane will drive costs down and allow us to provide better pricing to consumers. If we can get costs down to the point where they’re competing with the Blackstones of the world as a retail investor, we have done our job.

Jean: What do you think makes a startup successful?

It’s all about the people! If you don’t have the right team, you’re not going to win. You also need to have the right attitude because the right attitude develops the right culture, and the right culture empowers people. You can’t build a team that can move quickly and stay together in tough times, without the right attitude.

Jean: What is one piece of advice you would give a new and upcoming startup?

Generally speaking, young entrepreneurs are primarily worried about dilution in fund raising. Instead of focusing on raising venture capital, they should focus on getting the right people around the table, which includes both team members and investors. Pick investors that will make your company better, not ones that will pay the highest price for your company.

Always ask the tough questions, don’t leave any stone unturned and know when you’re not going to have perfect information. Also, know when you need to make a judgement call.

Experienced entrepreneurs quickly try to figure out why a business won’t work so they won’t waste their time, energy and resources.

Jean: Do you have a favorite book that made a deep impact on your life? Can you share a story?

Richard Branson’s always been an idol of mine, and his books are great. He’s candid about what had never been done before in business, building the right culture and the right team, and empowering people. His first book, Losing My Virginity, contained some powerful lessons that deeply impacted my life.

It was important for me to see a successful entrepreneur who was also dyslexic and wasn’t fond of school. He went in, rolled up his sleeves and shook up traditionally stodgy industries.

Good to Great and the Social Sectors by Jim Collins is another great book.

Another book I draw from frequently and read during my college baseball days was, The Mental Keys to Hitting by H.A. Dorfman. It broke down the difference between what you can control and what you cannot control. You can control the approach to your at bat, but you cannot control the result of your at bat. However, you can control your reaction to that result.

That book taught me to focus on the things that are within my control, and not the things that are outside of my control, which applies to business. You can control your approach to building a business, but you cannot control the result of building a business. If you hit the ball at another player, but it hit really hard, you’re out. You may have done everything right mechanically, but you’re out. In business, perhaps you did everything right in theory, but the timing wasn’t right. Perhaps a macroeconomic event impacted your business.

Although you can’t control the outcome, you can control your reaction to that result. You might say to yourself, “OK, I’m out of business. Do I move forward and learn from this, and take it to the next at bat, my next business, my next job, or do I rip down the helmet rack and start throwing things?” One reaction makes you a better player, the other reaction wastes time and energy.

Jean: What are your “5 Lessons I Learned as a Startup Founder” and why. Please share a story or example for each.

  1. Hire the right people. Most problems are people problems.
  2. Pick markets that are massive, and try to be the best in the world at them.
  3. Think Big. Most people limit themselves to how big they think something can be.
  4. Choose your partners carefully. It’s not always about price. Finding the right partner is the most important thing you can do in terms of getting wind in your sails.
  5. Do what you love. Money follows. Finding something that you’re passionate about and you think about all day every day–because you love it–will make you the best in the world.

Jean: Some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why? He or she might see this. 🙂

Spending some time with my heroes like Richard Branson or Howard Shultz from Starbucks would be interesting. They built huge businesses and disrupted markets that were already established, like the airline and coffee industries.

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Jean: This was really inspiring! Thank you so much for your time.

-Published on September 2018

Originally published at medium.com

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