Automating identity verification one check at a time

In this episode Legislate interviews James Owusu, Founder & CEO of Checkboard. We touch on James' background in property, the problem Checkboard is solving as well as tips and advice for negotiating contracts.
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Listen to the podcast on your favourite platform and read the transcript below:

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Find out more about Checkboard

Find out more about Legislate

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Charles Brecque

Welcome to the Legislate podcast, where we share the latest insights and trends in property technology, business, building, and contract drafting. Today, we have a wonderful guest, James Owusu, the CEO and founder of Checkboard. In this conversation, we will go into James's background and learn about check board and how they do contracts. So without further ado, James, would you like to introduce yourself?

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The story behind Checkboard

James Owusu:

Charles, thanks for having me. It's a pleasure to have a conversation with you. So my name is James. I'm the founder of Checkboard. My background. I would probably start off with, my property experience. I bought my first property in 2014, when I started my career in financial services, and seven years after that, I continued to buy more properties and I stopped buying properties when I got to nine and a nine property portfolio. And, this was also the same time I decided to start Checkboard. Any questions you are willing to ask or want to understand, about the landlord space, I would say I can safely answer them. And with my experience I started Checkboard to solve the pain I had with rent arrears and wanted to reduce, even eliminate them.

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Charles Brecque:

So as you, built that portfolio of nine properties how were you choosing the properties? Where were they based? And why were you getting rent arrears?

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James Owusu:

Yeah, so that's a very interesting question. I don't, think anybody asked it, in that, way before. So my first property was in London within a a high growth area, in north London. That property was rented out successfully over the seven-year period with only one point in time where I had rent arrears but this was due to the fact that it was a council tenant and there was some mix up between the council making the payments and when we saw the payment. So that was a bit of an anomaly, I would say. The other property that I've got. I'll probably say the one that had rent arrears. I had a property in Blackburn. I was chasing the yield conversation back then with a massive push go to go up north, in the Northern powerhouse. You're going to get a high yield with those properties. Not many people told me that with high yield in property comes significant risks of people just not paying. So it kind of makes sense to have a high yield and ultimately that's when I discovered the challenge of having a distance relationship with your property, you can't easily walk down to it. You might not be fully aware of the challenges in the area. So rent arrears happen because tenants either couldn't afford it or they lost the jobs. Most of them are self-employed. It was slightly tricky as well. And more recently, over the last three or four years, I bought some properties in Norwich. I've got six over there and throughout the COVID pandemic, that was the first time I really experienced rent arrears. Most of it was due to outright fraud, people lying about their incomes, which other referencing companies didn't pick up, or people using a recruiter or a friend to confirm their income, something other referencing companies sadly couldn't pick up. And that leads into, you know, why the Checkboard solution is slightly different and hopefully eliminates more fraud than our competitors. We don't really rely on any, I would say subjective facts. Let's call it that. We rely more on objective facts, which are information that we capture. The applicant's bank account information that is irrefutable because it has happened in the past. It is more data-driven and more facts, more factual than, you know, an email from somebody who might not be the manager or somebody who might not actually work for the company entirely. So that's what we're focused on with Checkboard and why I built it.

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Charles Brecque:

Yeah, that's fascinating. And a part of the chalkboard story I wasn't aware of. So it was a pleasure really to hear that. And so you launched Checkboard, you said you've got a background in property. How did you find a technical partner? You know, how did you go about starting Checkboard after identifying that problem clearly?

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James Owusu:

Yeah. I would say my background is, is I wouldn't call myself a coder, but I knew about a lot of no code solutions. So that was my first point of view. I started building  Checkboard on bubble. When I was able to piece everything together and initially it wasn't actually based on open banking at all. It was actually based on people's bank statements. And you know, what happened? I I validated it by using it myself and I was mainly focused on the speed of it. Because I quickly wanted to find very quickly if you are you the right person to rent my property? And that was my initial objective after validating that with myself and other landlords I know in my network I thought it was time to get a amore technical solution to the product, which involved open banking and the bells and whistles, I'll call it and an uploading document feature and yeah. And I found a technical co-founder at the time. And they got to building, what would be MVP of today's Checkboard. A very challenging journey and putting it all together but yeah, It's so far going in the right direction.

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What's been your favourite moment so far?

Charles Brecque:

That's fascinating. So going from that first bubble version, which you used yourself to now having a MVP and customers what do you think has been your favourite moment so far?

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James Owusu:

My favourite moment so far has been the validation from landlords and agents confirming, this product has actually made their lives amazing, easier. So we will literally look at somebody's income and tell them from the person's income, how long they've been with that employer, and we'll say based on transactions that today they've been paying rent for the last 12 months or so. And they have not missed a payment, which are the objective facts that we obtained from the bank.

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Charles Brecque:

So I think, being able to provide objective data is really valuable. How would that work? For example, with. Let's say students or people who don't yet have that history. Are they part of your target group as well, or do you have a different approach for or are they just not the right fit for Checkboard?

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James Owusu:

So at Checkboard we have catered for unemployed people, students, and retired people. We built unique flows for every single type. Of course there are some case that we are yet to come across. So for students essentially within Checkboard, we look to assess is if they have an income, they might have savings. So I given point in time it didn't have any income. They're going to have the student now maintenance grant, which will be sitting in their bank kind of cash. So we can pick this up to work from banking and provide that objective truth. How about a neighbor where they haven't gotten income and they haven't got you know, student loan or maintenance. What we then do is we asked them to invite a Guarantor that would be the person we do the check on. We would check it, they've got the income to afford the rent in case the student can't afford to pay it.

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Charles Brecque:

I guess, the current approach would typically be to use a guarantor anyway but what you're doing on top is providing a more objective experience. So, that makes perfect sense. And since you've been working with clients and overcoming those edge cases, how has your understanding of the problem or your vision around the solution evolved?

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James Owusu:

Since launching Checkboard. Wow.That's, that's quite an interesting question as well. So originally, we started with the understanding that we’d have to cater for referencing and all the checks that an agency needs. One thing we didn't account for is international students.

Essentially meaning people who are moving to the UK to rent a property may not have a bank account. If somebody is not based in the UK, it's quite challenging to capture backgrounds from a different country. So we are exploring ways of doing this to enable people who are moving to the UK from other countries to have a seamless and easy journey.

Charles Brecque:

And where do you see Checkboard going over, the next three, five years and do you think you will continue growing in property or will you also expand to other forms of checks?

James Owusu:

Interestingly we have had quite a number of enquiries from other industries. So fortunately with a name, like a Checkboard, as I'm sure you can relate to with Legislate, people think of your product and think, oh, what other things can you do? And we are looking into expanding to other forms of checks, like KYB checks. So for a big enough contract we can help alleviate concerns on both sides with a quick, KYB check. We are also looking at employment checks for teachers, doctors, nurses in the healthcare industry as well.

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Charles Brecque:

I guess it's one step at a time.

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James Owusu:

Yeah. I think that's exactly that, taking it one step at a time.

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What are the key contracts you interact with the most?

Charles Brecque:

And you mentioned contracts and business partners, as a CEO, what are the key contracts that you interact with on a daily basis or at least the most frequently?

James Owusu:

I would probably say employment contracts for my team. I've got partnership contracts. I'm aware that they doKYB checks on me, but you know, I'm soon to start doing KYB checks on them. AndI think personally, I've also got the landlord contracts, so.

Charles Brecque:

And you don't have a background in law, right?

James Owusu:

Yeah. I really don't have a background in law. I mean, whenever I see a contract, the first thing I do is quickly read through it and look for the cancellation terms. That's one of the biggest things I look for.

Charles Brecque:

And I don't have a background in Law either but, I think the key thing that I wanted to highlight is, that it's not just lawyers who create, process and manage contracts.

And, in those contracts with your partners are there any common objections that you find in the contract negotiation phase?

James Owusu:

I have yet to come across contracts where I've been able to negotiate them.

I mean, most of the time I'm negotiating the price of a contract, right?That's the first and the most common thing to negotiate. Outside of that, cancellation clauses or the term of a contract, for example.

But as most of my contracts are supplier agreements it is a slightly more different because I'm buying a service from a company which is much bigger than Checkboard and they've got standard agreements.

A lot of contracts that I tend to come across within the employment space, like employment contracts tend to have different employee requirements, which I'm sure you probably have.

You know, you just have to kind of negotiate or have the contracts to tailor it to what you've negotiated during interviews.

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Charles Brecque:

Sure. What would be your, tips or piece of advice for a first time negotiator?

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James Owusu:

First time employee or first time CEO?

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Charles Brecque:

Rule number one in negotiation isask another question

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James Owusu:

I think from an employee's perspective. It doesn't really harm to just ask the question. If you have, you know, a requirement or something you'd like to achieve, or you might ask for a higher salary, which is one thing that most people look at, but another piece that a lot of people fail to request is more holidays or a more flexible agreement in terms of working from home. As an employer, it kind of depends on the road. It really depends on what you're trying to achieve and what you are looking for.

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Charles Brecque:

So, I think the key insight here is, don't be afraid to ask and listen to understand what the bigger picture is.

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James Owusu:

Yeah, definitely.

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Charles Brecque:

Great. So we've got a couple of minutes left. But before we close with a closing question, is there a question you'd like to ask me?

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James Owusu:

It'd be quite interesting if you can briefly share your experience and then how you came about Legislate. It’s something I think people would love to hear including myself.

Charles Brecque:

Definitely. So similar to you, I experienced the problem first hand of negotiating contracts quickly enough to close the deal. I wasn't a lawyer. I'm not a lawyer, but I was doing business development and during contract negotiations, I would work closely with our lawyers, the other side’s lawyers and it just would always seem to last too long for simple, low value contracts, which were too low value for it to be a priority of the other side effectively. I wanted to solve this problem withLegislate to allow the business users to reach an agreement without needing a lawyer by their sides. So we’re allowing business users who aren't lawyers to create, manage, and negotiate and sign contracts by themselves, without lawyers. We solved this by identify technology which allows us to manage high volumes of contracts and also at the same time, make use of contract data very easily.

We’ve been experiencing quite a lot of traction in property because there's a lot of landlords in the UK, at least creating lots of tenancy agreements and other related documents. And really what  we're trying to do is allow everyone to tailor contracts which meet their requirements and are legally compliant and, and doit in such a way that it's a much better experience for everyone. It's a much safer experience and everyone saves time, saves money.

So yeah, that's been the journey and we're, also exploring other areas including employment and small businesses where, they will have lots of legal documents to create, but not necessarily the legal resources to do this effectively.

James Owusu:

That sounds super amazing. It just reminded me of how many times I've put together contracts on Rocket lawyer, which were probably not fit for purpose. But I had to make the edits myself. SoI'm quite looking forward to the next time I need to put in place the contract using Legislate.

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If you were being sent a contract to sign today, what would impress you?

Charles Brecque:

Really what we're trying to do is give you the framework to make those edits and not have to worry about the implications in the contract. So it’s now time for the closing question, which we ask every single guest of the podcast. It you were being sent a contract to sign today, what would impress you?

James Owusu:

What would impress me? Ooh, the layout of the contract is one very important thing. I think a lot of contracts have a very scattered layout. It's quite hard to kind of find the information that you're looking for.

Structure is probably to me the most important point, because being able to quickly identify the points thatI'm looking for and to be able to quickly and easily go through the contract and assimilate the information with ease is very important for me and somethingI'll definitely be impressed by.

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Charles Brecque:

So contracts, which are easy to read and well structured.

James Owusu:

Yeah.

Charles Brecque:

I think it's something that we haven't a hundred percent done, at Legislate but it’s something which is really important for our users and for our vision. Thank you very much, James, for your time.

James Owusu:

It's been a pleasure. Thanks.

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