Joel Perlman and Rishi Khosla are co-founders of OakNorth, which they launched in September 2015 to provide fast, flexible and accessible debt finance (£500k up to £20m) to entrepreneurs and fast-growth businesses. In the last two years, the bank has grown its loan book to over £550m, attracted over 10,000 retail deposit customers, been listed on The Leap 100, and been named as one of 17 UK fintech businesses that could one day be worth $1bn.
Joel and Rishi previously co-founded Copal Amba, an outsourced research company, which they grew to 3,000 employees across 11 countries before it was acquired by Moody’s Corporation in 2014. At Copal, Rishi’s focus was on the front end and business development. Joel’s was on recruiting the right people and scaling while managing costs and maintaining culture.
Rishi, who’s also an investor and has provided early stage, seed capital to a number of billion-dollar companies (including PayPal and Indiabulls), joined The Supper Club in 2016. Both he and Joel are sharing their insights with members over dinner in coming months.
I caught up with Rishi and Joel to learn more about their approach to scaling a business, their co-founder relationship, and the vision behind their ‘bank for entrepreneurs, by entrepreneurs’.
What were your personal motivations for building and scaling Copal and are they the same for OakNorth?
• Joel: Growing up, I faced a lot of pressure at home to make money. I came from a family of entrepreneurs (my younger brother founded Zumba); and they viewed it with disdain if you didn’t have money so there was a need to “be somebody”. After graduating from the LSE, where I met Rishi, I joined McKinsey but after a couple of years, I began to look at the partners and think: ‘I don’t want to be that guy, I want to hire that guy for my business in the future.”
• Rishi: I was deeply unsatisfied with my first job as an investment banking analyst, and felt the work was repetitive and mind-numbing. When I moved to GE Capital, I worked on an internet fund and pitched directly to Jack Welch, who became a great mentor. I grew hungrier and more aware of what I was capable of and decided to leave my job to join the family office of Lakshmi Mittal, one of the greatest entrepreneurs. Working for Lakshmi allowed me to understand what the possibilities were, and I grew even hungrier. At the time Joel had launched some internet companies in Miami but they had run out of money after the dot com crash – this helped strengthen his resolve to make it no matter what. I had been doing some investing for Lakshmi, and felt that the next big opportunity was ‘Knowledge Process Outsourcing’. I put a call into Joel and pitched the Copal idea, and within 3 months Joel was living in London and we had started the business.
• Joel: We thought unconventionally, planning to not only build the business but to create the market. We were bold and willing to take chances. Within 11 years we had scaled the business to 3,000 people and had sold a portion of it to Moody’s (the remainder would get sold 3 years later).
What lessons from Copal Amba are in your strategy for OakNorth?
• Joel: Avoid dilution and focus on scale; constantly incentivize and empower people to automate to achieve ambitious growth targets; pivot quickly and only focus on the big profit pools rather than trying to do too much at once.
What is your vision for OakNorth and how do you keep yourselves motivated to achieve it?
• Rishi: It has been a phenomenal 18 months for OakNorth. Since its launch in September 2015, the bank has helped over 100 businesses achieve their growth ambitions, growing its loan book to over £550m and directly helping with the creation of over 3,000 new homes and 2,000 new jobs. We hope to continue scaling its loan book and will eventually look to expand to other markets so that it can help entrepreneurs around the world.
• Joel: One of OakNorth’s values is 10x – aiming to offer its customers products and services that are 10 times better than the competition – so the team only dedicate energy to the decisions or activities that will help it achieve that growth objective.
How have you built your team to drive growth?
• Joel: We have six very distinct values and make sure we hire people who are a good fit based on these. We have always preferred to promote from within, hiring at the bottom and nurturing and accelerating talent, rather than hiring at the top or middle.
How do you maintain a healthy work life balance?
• Rishi: It’s important to make time for the things that matter and family is extremely important to both of us. I was once told by a Silicon Valley entrepreneur that in life, you’ll need to juggle many balls but family is the glass ball – that’s the one you can’t drop.
• Joel: A healthy diet and exercise are essential but it can be hard to find the time so we’ve had to find creative ways to stay on top of this. I have a standing up desk while Rishi has a treadmill desk (yes – it’s a real thing!) which enables him to do emails and calls literally on the move! It’s also important to have passions outside of work – this can be food, art, photography, music, etc. – and ideally should be something that’s completely different to your day job.
Describe your relationship as co-founders. How do you make it work for yourselves and your business?
• Rishi: Joel and I met at university and instantly saw similarities in one another. We both excelled at school but felt somewhat like outsiders. We were both hungry, and we were both willing to work as hard as it took to achieve success. We had the same vision but different approaches and motivations, and this is what has enabled us to continue working in sync with one another for so many years.
• Joel: Rishi focuses on the front end, sales and business development, while I focus on the culture, vision, values, delivery, and recruiting the right team members.
If you could go back ten years and give yourself one piece of advice, what would it be?
• Joel & Rishi: Enjoy the ride more.
What’s the best piece of advice you’ve been given?
• Rishi: You’ll need to juggle many balls in life but family is the glass ball – that’s the one you can’t drop. Don’t give up. There were so many times in the early days of Copal Amba when we wanted to quit but we kept each other going and it was 100 per cent worth it. That’s why finding the right business partner is also key! Everything is in the detail; focus on the detail as that’s where one finds important value.